TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Anne McIntosh, Community Development Director
Laurie B. Jester, Planning Manager
Angelica Ochoa, Associate Planner
SUBJECT:Title
Consideration of Amendments to the Municipal Code and the Local Coastal Program to Prohibit All Commercial Cannabis Activity in the City, and to Allow Limited Indoor Cannabis Cultivation Consistent with State Law (Community Development Director McIntosh).
CONDUCT PUBLIC HEARING AND INTRODUCE ORDINANCE NOS. 17-0024 AND 17-0025, AND ADOPT URGENCY ORDINANCE NO. 17-0025-U
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Recommended Action
RECOMMENDATION:
Staff recommends that after conducting and closing the public hearing, the City Council: (1) Introduce Ordinance No. 17-0024 amending the Municipal Code and Ordinance No. 17-0025 amending the Local Coastal Program to prohibit all commercial cannabis activity (both medical and non-medical) in all zones in the City, deliveries, outdoor cultivation, and allow indoor cannabis cultivation consistent with State law; and
(2) Adopt Urgency Ordinance No. 17-0025-U.
EXECUTIVE SUMMARY:
On September 13, 2017, the Planning Commission conducted a duly noticed public hearing and adopted Resolution No. 17-07 recommending that the City Council adopt the proposed text Amendments to Title 10 and Title A to prohibit commercial cannabis and allow limited indoor cannabis. The amendments to Title 4 do not require Planning Commission review.
Adoption of these Ordinances will maintain the City’s existing prohibition on commercial cannabis activities and ensures that the City will maintain local control over cannabis businesses once the State commences to issue licenses for commercial cannabis activity on January 1, 2018. At a later date, the City Council may provide additional direction to allow some commercial cannabis activities. In that event, an amendment consistent with City Council direction will be presented to the Commission for review. The California Coastal Commission is required to review and certify the Local Coastal Program Amendment prior to Ordinance No. 17-0025 becoming effective, which will not occur until after January 1, 2018. Therefore, an Urgency Ordinance has been prepared to bridge the gap and maintain local control in the Coastal Zone.
FISCAL IMPLICATIONS:
There is no direct fiscal impact associated with the adoption of the attached Ordinances. However, responding to state licensing authorities and ongoing code enforcement may require additional staff time.
BACKGROUND:
A. The Compassionate Use Act and Related Statutes
In 1996, the voters of the State of California approved Proposition 215 entitled “The Compassionate Use Act of 1996” (“CUA”) to enable seriously ill Californians, under the care of a physician, to legally possess, use, and cultivate cannabis for medical use under State law. In 2003, the California Legislature adopted SB 420, entitled the Medical Marijuana Program (“MMP”), which permits qualified patients and their primary caregivers to associate collectively or cooperatively to cultivate cannabis for medical purposes without being subject to criminal prosecution under the California Penal Code. Neither the CUA nor the MMP required or imposed an affirmative duty or mandate upon a local government to allow, authorize, or sanction the establishment of facilities that cultivate medical cannabis within its jurisdiction.
In 2015, Governor Brown signed into law the Medical Cannabis Regulation and Safety Act (“MCRSA”). The MCRSA established State licensing requirements for medical cannabis businesses and safety and testing standards for medical cannabis and medical cannabis products. The MCRSA established a dual licensing scheme whereby a medical cannabis business was required to obtain both a local license and a State license to legally operate in the State. The MCRSA allowed a city to maintain local control over whether medical cannabis businesses could operate in its jurisdiction.
B. The Control, Regulate and Tax Adult Use of Marijuana Act of 2016
The Control, Regulate and Tax Adult Use of Marijuana Act (“the AUMA”) was approved by a majority of California voters on November 8, 2016. As a result, it is now legal for persons 21 years of age or older to: (1) smoke or ingest cannabis or cannabis products; (2) possess, process, transport, purchase, obtain, or give away to persons 21 years of age or older 28.5 grams (one ounce) of cannabis, or eight grams of concentrated cannabis; and (3) possess, plant, cultivate, harvest, dry or process up to six cannabis plants for personal use in, or upon the grounds of, a private residence.
The AUMA established a comprehensive State licensing system to regulate commercial cannabis activity, which is broadly defined to include the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, labeling, transportation, delivery or sale of cannabis and cannabis products. The AUMA retained local control by requiring that a State licensing authority shall not approve an application for a State license for commercial non-medical cannabis activity if approval of the State license will violate the provisions of any local ordinance.
The AUMA allows for the planting, cultivating, harvesting, drying and processing (“cultivation activities”) of up to six cannabis plants in, or upon the grounds of, a private residence, as well as the possession of any cannabis produced by the plants. The AUMA authorizes a city to enact and enforce an ordinance that reasonably regulates those cultivation activities. The AUMA also authorizes a city to completely prohibit cultivation activities outdoors upon the grounds of a private residence unless the California Attorney General determines that non-medical use of cannabis is lawful in the State under Federal law.
C. The Medicinal and Adult-Use Cannabis Regulation and Safety Act
On June 27, 2017, the Governor signed into law Senate Bill 94 which repealed the MCRSA, included certain provisions of the MCRSA in the licensing provisions of the AUMA, and created a single regulatory scheme for both medical and non-medical cannabis known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”). The MAUCRSA retains the provisions in the MCRSA and the AUMA that granted local jurisdictions control over whether cannabis businesses could operate in a particular jurisdiction. Specifically, California Business and Professions Code Section 26200 provides that the MAUCRSA shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances that completely prohibit the establishment or operation of one or more businesses licensed under the State, within that local jurisdiction. Furthermore, the MAUCRSA provides that a State licensing authority shall not approve an application for a State license for a cannabis business if approval of the State license will violate the provisions of any local ordinance or regulation. The MAUCRSA requires that a State licensing authority shall begin issuing licenses to cannabis businesses beginning January 1, 2018. The City is now required to provide the newly created Bureau of Cannabis Control with a copy of any ordinance related to commercial cannabis activity and the contact information for the person designated by the City to serve as the contact person regarding commercial cannabis activity within the jurisdiction.
D. Problems Associated with Cannabis
Cities in California and across the nation have reported negative effects of cannabis related activities. As cannabis plants begin to flower, and for a period of two months or more, the plants produce a strong, unique odor, offensive to many people, and detectable far beyond property boundaries if grown outdoors. This odor can have the effect of encouraging theft by alerting persons to the location of the valuable plants, and creating a risk of burglary or robbery, and creating the potential for violent acts related to such criminal activity. By prohibiting commercial cannabis activity within City limits, the City is protecting the public health, safety and welfare. In Denver, burglary or attempted burglary accounted for 64% of cannabis-industry-related crime while theft accounted for another 11% of cannabis-industry-related crime in 2014. Overall, cannabis businesses make up less than 1% of all businesses in Denver but account for approximately 11% of all reported business burglaries from 2012-2015.
A 2016 study, “A Micro-Temporal Geospatial Analysis of Medical Cannabis Dispensaries and Crime in Long Beach California” found that an increase of one dispensary per square mile related to a 0.4% to 2.6% increase in property crime. Additionally, greater densities of medical cannabis dispensaries were related to higher rates of violent crimes in areas adjacent to the dispensary locations. The 2016 study found that a citywide decline in dispensaries from the March 2012 peak of 37 dispensaries to the August/September 2013 low of 5 dispensaries, was associated with a decline of 182.5 violent crimes per year and 219.3 property crimes per year. Comparatively, an equivalent drop of alcohol outlets was associated with a decline of only 26.2 violent crimes and 113.9 property crimes per year. These results suggest that local agencies that enact and enforce bans on dispensaries will reduce crime in neighborhoods next to where the dispensaries are located.
Unregulated cultivation enterprises often utilize substandard electrical wiring to avoid detection by illegally and dangerously diverting electricity. Some cities that allow cannabis cultivation operations have reported that the electrical use at these locations often surpasses what the electrical grid can withstand. In addition, indoor cannabis cultivation requires extensive amounts of water, aggravating California’s drought conditions. According to the California Department of Fish and Wildlife, cannabis plants use six to eight gallons of water per plant, per day. Indoor cannabis cultivation can also produce dangerous levels of mold because of the combination of warm temperatures and high humidity found in many indoor cultivation operations.
DISCUSSION:
A. The City’s Current Cannabis-Related Regulations
Currently Manhattan Beach Municipal Code Section 10.60.160 and Local Coastal Program Section A.60.160 expressly prohibit medical marijuana dispensaries and commercial medical marijuana activities anywhere in the City. In addition, Section 10.60.160 and A.60.160 prohibits the indoor and outdoor cultivation of both medical and non-medical marijuana for commercial or non-commercial purposes.
Further, Municipal Code Chapter 4.136 expressly prohibits the delivery of marijuana and marijuana products to or from the City and no person is authorized to conduct or perform any delivery of any marijuana, in which the delivery either originates or terminates in the City. Mobile dispensaries are also prohibited from operating in the City by Chapter 4.136. Section 4.136.040 also reiterates the City’s prohibition on indoor and outdoor cultivation of marijuana for commercial or non-commercial purposes.
In addition, Municipal Code Chapter 4.117, relating to the regulation of smoking in multi-unit housing, contains a carve-out exception which permits persons to smoke marijuana in multi-unit housing so long as they hold a valid medical marijuana identification card issued by the State Department of Health Services, which identifies persons who are authorized to engage in the medicinal use of marijuana and his or her designated primary caregiver, if any.
B. The Proposed Ordinances Prohibit all Types of Cannabis Businesses and Activities
The proposed Ordinances would amend Municipal Code Chapters 4.136 and 4.117, delete Section 10.60.160 and add Chapter 10.82, as well as amend the Local Coastal Program to delete Section A.60.160 and add Chapter A.82 to expressly prohibit commercial cannabis activity and uses, whether for medical or non-medical purposes. The proposed Ordinances would also explicitly prohibit outdoor cultivation of cannabis throughout the City, and allow limited indoor cultivation of cannabis at private residences. The proposed Ordinances also prohibit the delivery of cannabis and cannabis products, which originate or terminate in the City. The proposed Ordinances would not prohibit any person from transporting cannabis through the jurisdictional limits of the City for delivery to a person located outside the City, where such transport does not involve delivery within the jurisdictional limits of the City; the City is not authorized to prohibit these activities under State law.
Specifically, the proposed Ordinances would amend Municipal Code Chapter 4.136, relating to medical marijuana delivery to more broadly prohibit all commercial cannabis activities. The proposed Ordinances also would delete Municipal Code Section 10.60.160 and Local Coastal Program Section A.60.160 relating to medical marijuana dispensaries and replace these regulations by adding Chapter 10.82 and A.82 to more broadly prohibit commercial cannabis activities for both medical and non-medical cannabis.
The proposed Ordinances would add the definition of commercial cannabis activity to both Chapter 4.136 and Chapters 10.82 and A.82. Commercial cannabis activity is broadly defined to include the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and/or cannabis products, for medical, non-medical, or any other purposes, and includes the activities of any business licensed by the State under Division 10 of the Business and Professions Code. Commercial cannabis activity does not include the cultivation, possession, storage, manufacturing, or transportation of cannabis by a qualified patient for his or her personal medical use so long as the qualified patient does not provide, donate, sell or distribute cannabis to any other person. Commercial cannabis activity also does not include the cultivation, possession, storage, manufacturing, transport, donation or provision of cannabis by a primary caregiver, exclusively for the personal medical purposes of no more than five specified qualified patients for whom he or she is the primary caregiver, but who does not receive remuneration for these activities except for compensation in full compliance with Health and Safety Code section 11362.765.
The proposed Ordinances would amend Municipal Code Chapter 4.136 and add Chapters 10.82 and A.82 to specifically prohibit the City from approving an application for a business license for commercial cannabis activity, which would prohibit both medical and non-medical cannabis businesses, whether or not for profit, from operating in the City. Further, the propose Ordinances would prohibit landlords from permitting a tenant to conduct commercial cannabis activity on his or her property.
The proposed Ordinances also include a catch-all exception that states the proposed Ordinances shall not prohibit any commercial cannabis activity that the city is required by State law to permit within its jurisdiction pursuant to the MAUCRSA. Business and Professions Code section 26054(c) provides that it shall not be a violation of local law for a manufacturer of cannabis accessories to possess, transport, purchase or otherwise obtain cannabis and cannabis products as necessary to conduct research and development related to the cannabis accessories. This catch all exception would ensure that the City is not prohibiting activities that it is preempted from prohibiting pursuant to State law.
Under the proposed Ordinances, violations of Chapters 4.136, 10.82 and A.82 may be charged as an infraction or a misdemeanor at the discretion of the City Prosecutor. The proposed Ordinances also permit the City to issue administrative citations for such violations.
C. The Proposed Ordinances Prohibit Cannabis Cultivation to the Extent Allowed Under State Law
The proposed Ordinances amend Municipal Code Chapter 4.136 and add Chapter 10.82 and A.82 to prohibit outdoor cannabis cultivation. Consistent with State law, the proposed Ordinance allows the indoor cultivation of up to six cannabis plants for personal use in a private residence, or inside a fully enclosed and secured structure located at the residential site. As proposed, a “fully enclosed and secure structure” is defined to mean a space within a building, greenhouse or other structure which has a complete roof enclosure supported by connecting walls extending from the ground to the roof, which is secure against unauthorized entry, provides complete visual screening, and which is accessible only through one or more lockable doors and inaccessible to minors.”
D. The Proposed Ordinances Exempt the Personal Use of Cannabis to the Extent Allowed Under State Law
Consistent with State law, the proposed Ordinances contain exemptions that allow persons 21 years of age or older to: smoke or ingest cannabis or cannabis products; possess, process, transport, purchase, obtain, or give away to persons 21 years of age or older 28.5 grams (one ounce) of cannabis, or eight grams of concentrated cannabis; and possess, plant, cultivate, harvest, dry or process up to six cannabis plants for personal use in a private residence, or inside an accessory structure located upon the grounds of a private residence.
The proposed Ordinances restate state law relating to the smoking of cannabis, informing residents and visitors alike that, in accordance with Health and Safety Code Section 11362.3, it is unlawful for any person to smoke or ingest cannabis or cannabis products in a public place, or in any location where smoking tobacco is prohibited. The proposed Ordinances also amend Municipal Code Section 4.177.020 to eliminate the carve-out exception to the City’s regulation of smoking in multi-unit housing, which permits persons to smoke marijuana so long as they hold a valid medical marijuana identification card issued by the State Department of Health Services. This change was included in the proposed Ordinances in order to comply with the MAUCRSA. As currently enacted, the carve-out exception would likely be pre-empted by Health and Safety Code Section 11362.3 which provides that cannabis smoking is prohibited in all locations where smoking of tobacco is prohibited. Therefore, the proposed Ordinance removes this carve-out exception in order to strictly comply with the MAUCRSA.
PUBLIC OUTREACH/INTEREST:
Notice was provided for both the Planning Commission and City Council public hearings through the publication of ¼ page display ads in the Beach Reporter. No public comments were received for the Planning Commission meeting and as of the writing of this report no comments have been received.
ENVIRONMENTALREVIEW:
The proposed Ordinances are not a “project” for purposes of the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines (14 CCR § 15000 et seq.). Since the ordinances would prohibit all commercial cannabis uses, it would not result in any direct physical change in the environment, or reasonably foreseeable indirect physical change in the environment.
LEGAL REVIEW:
The City Attorney has reviewed this report and approved as to form the ordinances.
Attachments:
1. Ordinance No. 17-0024 (Amendment to Municipal Code, Titles 10 and 4)
2. Ordinance No. 17-0025 (Amendment to Local Coastal Program, Title A)
3. Urgency Ordinance No. 17-0025-U (Amendment to Local Coastal Program, Title A)
4. Resolution No. PC 17-07
5. Planning Commission staff report, attachments and draft minutes