Cannabis Commercial Licensing Ad Hoc Recommendation, Future Pathway and Alternative Options 11/14/17 1 17-1238 A 1 of 42
Presentation Overview Recap on process addressing cannabis in County The County's current medicinal cannabis ordinances Including commercial ordinance banning medicinal marijuana dispensaries Brief overview of commercial licensing under State law • What other counties and local cities are doing Overview of staff recommendations and other options 12 Next steps in the process 17-1238 A 2 of 42 2
Recap on the Process The Medical Marijuana Advisory Committee was created in March 2016 and has met nine times • In addition to four Board of Supervisors Meetings on the topic The Medical Marijuana Advisory Committee has met on topics ranging from cultivation to niche businesses to taxation and code compliance • Information was obtained from consultants, public, and 20 benchmark communities • The Medical Marijuana Advisory Committee has discussed commercial licensing both medical and recreational at multiple meetings" 17-1238A3of42 3
Personal Use Authorized in County recreational personal use. 4 County may "reasonably regulate" indoor cultivation under Proposition 64. • Indoor cultivation only. • PROPOSITION 64 - Medicinal or Recreational Adult Use MEDICINAL CANNABIS Collective cultivation permitted for up to three patients. Many other conditions must be met as well, such as residency and setbacks. parcel size, and zone district of the parcel. 200-600 square feet depending on the number of patients (200 per patient), Outdoor cultivation for personal use. Ordinance 5000 allows cultivation of • 17-123SA4of42 • Allows six plants per residence (not per person) for medicinal or adult
State License Not Required for Personal Use " 5 " activities .... she is the primary caregiver ... but who does not receive remuneration for these medical purposes of no more than five specified qualified patients for whom he or • "A primary caregiver who cultivates ... cannabis exclusively for the personal to any other person .... Under Prop 64, any adult 21 years or older may possess, personal medical use but who does not provide, donate, sell, or distribute cannabis • "A qualified patient ... who cultivates ... cannabis exclusively for his or her commercial state license will not be required for: Under Business and Professions Code section 26033, a personal consumption. than 1 ounce of cannabis or 8 grams of concentrated cannabis for transport, or give away without any form of compensation no more 17-1238 A 5 of 42
Commercial Use were in operation for 6 months before October 30, 2011, provided that 6 Not authorized in the County. • Distribution of Cannabis for Recreational Adult Use Not authorized to cultivate or manufacture the cannabis sold at dispensary. • operations remain the same as they did in October 30, 2011. enforced against a limited number of medicinal cannabis dispensaries that Commercial Cultivation Ordinance 4999 banned medicinal cannabis dispensaries. • Medical ·cannabis Dispensaries County regardless of whether it is for medicinal or recreational use. Commercial cultivation, either indoor or outdoor, is not authorized in the • 17-1238 A 6 of 42 • At the time of banning, Ordinance 4999 provided that the ban would not be
On June 27, 2017 as part of trailer bill legislation, the State passed S.B. 94, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) . • MAUCRSA streamlined the State's regulation and licensing of medicinal and recreational cultivation, use, and sale of cannabis. <"'2 On September 16, 2017, the State made further amendments with A.B. 133. Agency is still interpreting the new laws. The Bureau of Cannabis Control had released regulations, but pulled them after MAUCRSA. It still plans to adopt regulations before it begins is/suing temporary licenses on January 1, 2018 . • Permanent regulations are expected in "Early 2018." 7 17-1238 A 7 of 42 • No confirmed date for regulations, but expected in late November.
State Law Preserves Local Control MAUCRSA retains local control over any cannabis decisions other than the 6 plants per residence (grown indoors) for personal use . • State cannot issue commercial licenses if activity is not authorized by County. Business and Professions Code section 26200: "This division shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction." 17-1238 A 8 of 42 S
State Commercial Licenses . 9 including consultation with and approval by other agencies. numerous requirements in Business -and Professions Code section 26051.5, Application requires submittal of fingerprints to the Department of Justice and Licenses will only be valid for 12 months. of acknowledgment. commercial activity, which may take the form of a County license or permit or letter • Temporary licenses require authorization from the County to conduct the until January 1, 2018 State will issue separate licenses for commercial medical or adult use for all applications will be available as of December 2017, but none will be issued Bureau of Cannabis Control intends to issue temporary licenses at first and • A-licensees can only do business with other A-licensees and vice versa. . • Same requirements for an M-license or A-license and licensee can have both . either an "M" license or "A" license) except Laboratories licenses ( 17-1238 A 9 of 42
State Commercial Licenses - Process Under Business and Professions Code section 26055, the State cannot issue a license if the commercial activity is prohibited by the County or if the applicant is not in compliance with a local ordinance or regulation. State will automatically deny an application for commercial activity that is banned and will inform the County of the denial. ·� If the State is unsure, the State will notify the County and the County has 60 days to indicate whether the applicant is in compliance with a local ordinance or regulation. If the County informs the State that the applicant is not in compliance, the State must deny the application. 10 17-1238 A 10 of 42
Commercial Activity - Two Themes federal law. Authorization by the State or local government or 11 permissive as prior administration. • Current federal administration has indicated it will not be as . prosecution or from other federal regulatory agencies possession of a State license does not protect a person from federal possession, use, cultivation, distribution, etc. of cannabis is illegal under Local Control: State licensing system preserves local control over Federal Government: Cannabis remains a Schedule 1 drug and regulations cannot afgect independent authority of state agencies. Still, authorization by the County or compliance with County type, how many, where, etc. decide whether to allow commercial cannabis activities and, if so, what commercial cannabis activities. Each local government or its citizens 17-1238 A 11 of 42
Types of Licenses - Section 26050 • Manufacturer 12 • Microbusiness distributors, but not to licensed retailers) • Distributor transport (transports between licensed cultivators, manufactures, and • Distributor (transports, arranges for testing, and conducts quality control) • Retailer (Storefront/Public and Nonstorefront/Not Public) • Testing Laboratory Processing (only trimming, drying, curing, grading, or packaging) With the exception of testing laboratories, a person may apply for and be issued a Nursery (cloning and seed propagation) Specialty cottage - small; outdoor; indoor; or mixed-light • Mixed-light - specialty small; non-specialty small, medium, or large a Outdoor - specialty small; non-specialty small, medium, or large Indoor - specialty small; non-specialty small, medium, or large 12 Cultivation more than one license and each license can be an M-license or A-license. 17-1238 A 12 of 42
"Microbusiness": Cultivating less than 10,000 square feet of cannabis and acting as a licensed distributor, Level 1 manufacturer, and retailer. 112 A microbusiness must comply with all state requirements for licensed cultivators, distributors, Level 1 manufacturers, and retailers to the extent the licensee engages in those activities . • Level 1 manufacturer must use nonvolatile solvents or no solvents. (Level 2 manufacturer my use volatile solvents, which are liquids that vaporize at room temperature.) "Specialty Cottage": Cultivating on a single premises using a combination of natural and supplemental artificial lighting at a maximum threshold to be determined by the licensing authority of 2,500 square feet or less of total canopy size for mixed-light cultivation, up to 25 mature plants for outdoor cultivation, or 500 square feet or less of canopy size for indoor cultivation. 17-1238A13of42 13
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