CC SR 20171003 03 - Marijuana Prohibition Code Amendment InitiationRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 10/03/2017
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA DESCRIPTION:
Consideration and possible action to initiate code amendment proceedings in order to
prohibit commercial marijuana activities in the City.
RECOMMENDED COUNCIL ACTION:
(1) Initiate code amendment proceedings to amend Title 17 (Zoning) of the Rancho
Palos Verdes Municipal Code in order to prohibit commercial marijuana activities
in the City that will be licensed by the State beginning in January 2018 (Case No.
ZON2017-00430).
FISCAL IMPACT: N/A
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: So Kim, Deputy Director/Planning Managed -"" 2I
REVIEWED BY: Ara Mihranian, AICP, Director of Community Developments
APPROVED BY: Doug Willmore, City Manager''` -1`1
BACKGROUND AND DISCUSSION:
In October 2015, the State legislature adopted the Medical Cannabis Regulation and
Safety Act ("MCRSA") to establish a statewide regulatory system for the licensing and
operation of commercial medical marijuana businesses. However, the MCRSA explicitly
allowed cities to prohibit each of the permitted types of commercial medical marijuana
businesses.
At the November 8, 2016, election, California voters approved Proposition 64, also known
as the Control, Regulate, and Tax Adult Use of Marijuana Act ("AUMA"). AUMA legalized
the limited personal use and possession of marijuana, and preempted cities from
prohibiting the cultivation of up to 6 marijuana plants for personal use indoors at a private
residence.
On November 1, 2016, the City Council adopted Ordinance No. 590U. Ordinance No.
590U prohibited the outdoor personal cultivation of marijuana, and established
reasonable regulations for the indoor personal cultivation of marijuana, pursuant to
AUMA.
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AUMA also established a statewide regulatory system for the licensing and operation of
commercial marijuana businesses for recreational use, which was similar to the medical
marijuana regulatory scheme enacted by the MCRSA. AUMA also explicitly allows cities
to prohibit each of the permitted types of commercial marijuana businesses.
Recently, the State legislature adopted SB 94, also known as the Medicinal and Adult -
Use Cannabis Regulation and Safety Act ("MAUCRSA"). The purpose of SB 94 is to
reconcile the differences between the MCRSA and AUMA, and to bring medical and
recreational marijuana businesses into the same regulatory scheme.
Under the MAUCRSA, on or about January 1, 2018, the State of California will begin
issuing state licenses for commercial marijuana operations (both medical and
recreational). Local governments maintain regulatory and land use authority over all of
these new commercial marijuana operations which the State will be licensing. Cities may
completely prohibit these businesses, allow some but not others, or allow all of them.
Cities may also impose stricter regulations than the state (if a certain business type is
allowed). However, to maintain local control over these businesses, local governments
are advised to expressly determine through local ordinance whether each different type
of business operation will be allowed in a city. For example, a failure to affirmatively
address these operations through local ordinance may reasonably allow commercial
marijuana operations to conduct business in a city pursuant to a valid state license, if that
city does not expressly prohibit that license type.
The City's Municipal Code currently has no regulations regarding the commercial
marijuana activities that will be permitted by the State pursuant to SB 94. SB 94 provides
for twenty different types of licenses for various commercial marijuana activities. The
State marijuana licenses will be for retail sales, cultivation, manufacturing, testing,
distribution and microbusinesses. A State license will be required to engage in any of
these commercial marijuana operations. There will be the same twenty different license
types available for medical and recreational commercial operations, to be distinguished
by either an "A" for adult -use (i.e., recreational) or an "M" for medical use. (Business &
Professions Code § 26050.)
Generally speaking, manufacturing involves the preparation of marijuana products such
as oils and edible products, and distribution involves the transportation of marijuana and
marijuana products between licensed commercial facilities (e.g. transporting marijuana
between the cultivation site and the testing facility). Deliveries of marijuana are covered
by the "retailer" category of licenses.
The specific license types are as follows, with the majority being for various types of
marijuana cultivation:
Type 1
Cultivation; Specialty outdoor; Small.
Type 4
Cultivation; Nursery.
Type 1A
Cultivation; Specialty indoor; Small.
Type 5
Cultivation; Outdoor; Large.
Type 113
Cultivation; Specialty mixed -light; Small.
Type SA
Cultivation; Indoor; Large.
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Type 1C
Cultivation; Specialty cottage; Small.
Type 5B
Cultivation; Mixed -light; Large.
Type 2
Cultivation; Outdoor; Small.
Type 6
Manufacturer 1.
Type 2A
Cultivation; Indoor; Small.
Type 7
Manufacturer 2.
Type 2B
Cultivation; Mixed -light; Small.
Type 8
Testing laboratory.
Type 3
Cultivation; Outdoor; Medium.
Type 10
Retailer
Type 3A
Cultivation; Indoor; Medium.
Type 11
Distributer
Type 3B
Cultivation; Mixed -light; Medium.
Type 12
Microbusiness
SB 94 establishes a dual -licensing scheme by which a business must have both a valid
State license and local government authorization to lawfully operate a marijuana
business. Cities may completely prohibit each of the activities permitted under the various
state license types. Cities may also choose to allow and regulate any of the individual
license types.
The City of Los Angeles are considering regulations for current and future medical
marijuana operators. The regulations may allow for various new commercial cannabis
activity (e.g. dispensary and retailer, microbusiness, indoor commercial, manufacture,
testing, distributer, and cultivation) and grandfathering of limited existing medical
marijuana businesses. Allowance for these types of businesses may be issued by the
newly formed City of Los Angeles' Department of Cannabis Regulation. Should this
ordinance pass, there may be new commercial cannabis along Western Avenue in the
City of Los Angeles.
If the City does not specifically prohibit all commercial marijuana activities prior to January
1, 2018, then businesses that obtain State licenses for commercial marijuana activities
not expressly prohibited by local law reasonably may be able to begin those commercial
operations in the City. Therefore, Staff recommends that the City Council initiate code
amendment proceedings to amend Title 17 to expressly prohibit all commercial marijuana
activities in the City prior to the January 1, 2018, effective date.
ALTERNATIVES:
In addition to the Staff recommendations, the following alternatives are available for the
City Council's consideration:
1. Prohibit all commercial marijuana activities now to maintain local control,
and direct Staff to revisit the issue at a later date to determine whether
certain marijuana business types should be permitted.
2. Identify certain commercial marijuana activities that should be permitted in
the City, and direct Staff to prepare an ordinance to that effect.
3. Direct Staff to take no action at this time.
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