TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Quinn Barrow, City Attorney
Liza Tamura, City Clerk
Alexandria Latragna, Policy and Management Analyst
SUBJECT:Title
Consideration of a California Elections Code Section 9212 Report on Impact to the City of a Citizen-Initiated Ballot Measure to Repeal the City’s Existing Prohibition of Commercial Cannabis Activity and Allow Three Cannabis Retail Stores in the City (City Manager Moe).
(Estimated Time: 1 Hr.)
A) RECEIVE REPORT
B) SELECT ONE OF THE TWO FOLLOWING OPTIONS:
1. ADOPT THE INITIATIVE ORDINANCE WITHOUT CHANGE
2. CALL THE ELECTION AND PLACE THE INITIATIVE ON THE BALLOT WITH THE REGULAR GENERAL MUNICIPAL ELECTION ON NOVEMBER 8, 2022
C) DISCUSS AND PROVIDE DIRECTION
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council:
A) Receive a California Elections Code Section 9212 report regarding the impact to the City of a citizen-initiated ballot measure to repeal the City’s existing prohibition of commercial cannabis activity and allow three cannabis retail stores in the City;
B) Select one of the following two options:
1. Adopt the initiative ordinance without change
2. Call the election and place the initiative on the ballot with the regular general municipal election on November 8, 2022; and
C) Discuss and provide direction.
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FISCAL IMPLICATIONS:
The City Clerk’s Office contacted the Los Angeles County Registrar-Recorder/County Clerk’s Office and requested a quote. The approximate cost of the election including the initiative and two scheduled City Council seats on the November 8, 2022, General Municipal Election ballot is $111,911. The addition of the initiative increases the estimate by $19,448. Staff will incorporate the cost provided by the County into the Fiscal Year (FY) 2022-2023 budget. Other costs associated with the November 8, 2022 election such as developing candidate packets, staff time, and voter outreach materials will also be included as part of the FY 2022-2023 budget.
If the initiative passes, business license tax would be collected in accordance with Manhattan Beach Municipal Code Section 6.01.020, along with sales tax.
BACKGROUND:
On October 13, 2021, resident/proponent Derek Glunts filed a “Notice of Intent to Circulate Initiative Petition for the Manhattan Beach Cannabis Regulation and Public Safety Measure” (Cannabis Initiative). If adopted, the Cannabis Initiative would: repeal the City’s existing prohibition of all commercial cannabis activity; require the City to permit three cannabis retailers in the City; and allow the City Council discretion to legalize other cannabis uses. As required by state law, the City Attorney prepared a ballot title and summary for the petition. The proponent published the required information in the City’s adjudicated paper, The Beach Reporter, on November 18, 2021, provided the City with an affidavit of publication, and then began to circulate the petition for signatures. Staff provided a status update of this initiative to the City Council on December 7, 2021, at which time the City Council directed staff to monitor the progress of the initiative, but took no action.
On February 14, 2022, representatives of the proponent submitted 606 initiative petitions to the City Clerk’s Office. As last reported to the Secretary of State on August 30, 2021, the number of registered voters in the City of Manhattan Beach is 26,721. Pursuant to California Elections Code Section 9215, the required number of signatures needed for the initiative to qualify is 10% of registered voters in the City (2,672). After conducting a prima facie review, the City Clerk submitted all petitions including 3,236 signatures to the Los Angeles County Registrar-Recorder/County Clerk’s Office for verification on February 15, 2022.
On April 5, 2022, pursuant to state law, the City Council adopted Resolution No. 22-0047 accepting the certification of sufficiency of signatures for the citizen-initiated ballot measure and directed staff to return within 30 days with a California Election Code Section 9212 report regarding the initiative’s effects on the City.
Section 9212 of the Election Code allows the City Council the opportunity to obtain a report on the impacts of the initiative as they pertain to eight specific areas. Elections Code Section 9212 provides:
a) During the circulation of the petition, or before taking either action described in subdivisions (a) and (b) of Section 9214, or Section 9215, the legislative body may refer the proposed initiative measure to any city agency or agencies for a report on any or all of the following:
1) Its fiscal impact.
2) Its effect on the internal consistency of the city’s general and specific plans, including the housing element, the consistency between planning and zoning, and the limitations on city actions under Section 65008 of the Government Code and Chapters 4.2 (commencing with Section 65913) and 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code.
3) Its effect on the use of land, the impact on the availability and location of housing, and the ability of the city to meet its regional housing needs.
4) Its impact on funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, and open space. The report may also discuss whether the measure would be likely to result in increased infrastructure costs or savings, including the costs of infrastructure maintenance, to current residents and businesses.
5) Its impact on the community’s ability to attract and retain business and employment.
6) Its impact on the uses of vacant parcels of land.
7) Its impact on agricultural lands, open space, traffic congestion, existing business districts, and developed areas designated for revitalization.
8) Any other matters the legislative body requests to be in the report.
The Code further indicates that this report must be presented to the City Council no later than 30 days after the election official certifies the sufficiency of the petition to the City. Additionally, the City Council must choose one of the following two options:
a. Adopt the initiative ordinance without change within 10 days; or
b. Submit the ordinance, without alteration, to the voters by placing the initiative on the ballot at the City’s next regular municipal election, on November 8, 2022. If Council chooses this option, Resolution Nos. 22-0048 and 22-0049 should be adopted.
The Notice of Intent, Initiative, and Ballot Title and Summary for this initiative are available as attachments for this staff report.
DISCUSSION:
Summary of Proposed Measure as Prepared by the City Attorney:
All cannabis dispensaries (retailers) and commercial cannabis activities are currently illegal in Manhattan Beach under Ordinances No. 17-0024 and No. 17.0025-U.
The proposed initiative ordinance would:
1. Require the City Manager to issue a non-discretionary cannabis retail permit to three businesses pursuant to a point based selection process that contains minimum requirements, a 30-day period for applications, quantitative evaluation and ranking criteria, processing deadlines, and tie-breaking rules;
2. Allow permitted retailers to operate in the General Commercial and North End Commercial Districts on property located a specified distance from “sensitive uses” (more than 1,000 feet from schools, youth centers and day care centers that qualify as “sensitive uses” are identified in the Initiative;
3. Allow only permitted retailers to conduct deliveries in the City subject to operational regulations;
4. Legalize commercial cannabis cultivation, manufacturing, distribution, and laboratory testing at the discretion of the City Council, but prohibit cannabis microbusinesses altogether;
5. Impose operational and design requirements on permitted cannabis businesses including, but not limited to, requirements related to security, community relations, odor control, employment, and signage.
6. Require background checks on employees, owners and persons with a financial interest in the cannabis business, and annual reviews conducted by the City Manager;
7. Require the City Manager to make all decisions in reviewing and issuing permits, with the exception of the City Council’s limited role in publicly ranking tied applicants pursuant to the Initiative’s criteria;
8. Impose requirements and restrictions on changes in location and transfer of permits;
9. Authorize the City Manager to develop and enforce additional cannabis business operational requirements or regulations as necessary to protect the public health, safety, and welfare; and
10. Authorize the City Manager to suspend or revoke a commercial cannabis business permit for any material violation of any law or any rule, regulation, and/or standard adopted pursuant to the Initiative, subject to appeal to the City Council.
The Initiative does not impose a tax on cannabis businesses, but businesses receive points if they pledge to provide a direct financial contribution equal to 2% of projected gross receipts to a public school or public park located within the City, and/or to a public or nonprofit community organization serving the City or its residents.
Each time the number of active retailer permit falls below three, the City Manager shall open an additional 30-day application period.
Impacts under California Election Code Section 9212(a)
1. Fiscal impact.
At this time, it is uncertain what the fiscal implications may be. If the initiative passes, there will be fiscal implications which cannot be estimated at this time. At that time, the fiscal implications would be dependent on various provisions within the initiative.
2. Consistency with General Plan and Housing Element. The initiative on its face does not amend the General Plan or Zoning Ordinance and would not cause any internal inconsistencies with the General Plan and zoning.
3. Land Use and Housing. Based on the initiative language, three retail cannabis locations is unlikely to have impacts from a land use standpoint. The City’s existing land use regulations (such as parking and signage) for retail uses would continue to apply, including zoning verification of any proposed new business. The Zoning Ordinance includes parking regulations for retail uses.
In addition to sign regulations in the initiative, the Zoning Ordinance also includes the Sign Code, which provides regulations for the placement and size of signs. Furthermore, California Business and Professions Code sections 26150 - 26156 and the California Code of Regulations section 15040 include advertising and marketing restrictions for cannabis uses as well. The City is able to require proposed operators to verify that they are in compliance with all State as well as local signage regulations.
4. Infrastructure Impacts. The proposed measure would have no direct impact on transportation, schools, public facilities, or infrastructure. The measure would have an indirect impact on these public facilities to the degree that it increases or decreases revenue for the development and maintenance of these facilities.
5. Business Attraction, Retention, and Employment. It is unknown at this time if the initiative will have an impact on business attraction, retention, or employment.
6. Vacant Land. With the exception of structures recently demolished in preparation for an imminent construction project, the City does not currently have any vacant land. The maximum of three retail locations allowed by the initiative are likely to locate in already-developed commercial properties within the City that routinely have tenant vacancies.
7. Agricultural Lands, Open Space, Traffic Conditions, Business Districts, and Revitalization Areas. There are no agricultural lands within the City. Retail uses are not permitted in open spaces, such as parks, beaches, and the Greenbelt. The maximum of three retail locations that would be allowed by the initiative is expected to be consistent with traffic conditions associated with retail uses. Retail uses are already permitted in the zoning districts referenced by the initiative. The City does not have any designated revitalization areas. In summary, it is not anticipated that the initiative would have any impacts on the above-mentioned criteria.
8. Other Matters Requested by City Council. Council directed staff to analyze the impact of the initiative on the health and safety of the residents, visitors, and businesses in Manhattan Beach.
Health Impact:
Staff consulted with the Beach Cities Health District (BCHD), which provided the attached Cannabis Policy Brief and identified both short-term and long-term adverse effects on youth.
BCHD argues that, “the negative health impacts on youth are especially concerning as cannabis potency has drastically increased over the years.”
The BCHD identifies the following negative health effects on youth:
Short-Term Adverse Effects
• Increased heart rate
• Anxiety
• Memory impairment
• Impaired ability to perform complex tasks
• Difficulty thinking and problem solving
• Decreased alertness
• Impaired ability to drive
Long-Term Effects
• Mental health: The BCHD states, “The amount of cannabis use, the age at first use and genetic vulnerability have shown to influence the likelihood of psychosis. Daily high potency cannabis use can increase the risk of developing psychosis by five times compared to those who have never used cannabis. There is also a higher association between cannabis and schizophrenia; people who start using cannabis at an earlier age and use it more frequently, have a higher chance of developing schizophrenia.”
• Brain: Disruptions in the cognitive process that is used for learning and memory, pleasure and reward, motion and motor control, appetite, sleep, and reproduction and fertility.
• Lungs: Smoking cannabis causes chronic bronchitis.
The BCHD stated, “Substance use, especially among youth, is a concern in the Beach Cities of Hermosa Beach, Manhattan Beach and Redondo Beach. Data shows that accessibility and social norms of acceptability play a large role in youth use and initiation of cannabis.” Additionally, according to the CATO Institute, states that have legalized cannabis have higher and increasing rates of use prevalence, but these patterns existed prior to legalization. According to the Prevention Research Center at the Pacific Institute for Research and Evaluation, recreational cannabis legalization in California was associated with an increase in adolescent marijuana use in 2017-2018 and 2018-2019. They indicate, “Evidence-based prevention programs and greater local control on retail marijuana sales may help to reduce marijuana availability and use among adolescents.”
In addition to the adverse health impacts listed above, BCHD indicated that since cannabis-infused edibles are packaged to look like versions of popular food or candy, emergency room visits have increased among children. California has also seen a rise in emergency room visits related to cannabis poisoning among children. According to the Washington Poison Center, exposures during the first nine months of 2020 increased 44% in children ages 0-5 years old and 20% in adults ages 21-59, as compared to the first nine months in 2019.
Safety Impact:
Given that the legalization of marijuana for recreational purposes is still a relatively recent phenomenon, previous crime study efforts have been focused on medical marijuana legalization, and the number of studies focused on recreational use and crime are limited and inconclusive. For instance, one particular study that explored the neighborhood-level impact of retail cannabis outlets on crime in Washington state found modest but statistically significant increases in property crime in census block groups containing new retail stores. However, this study points out that additional research is needed to further explore the association.
CONCLUSION:
After receiving the Section 9212 report, Council must choose one the following two options:
1. Adopt the ordinance, without alteration, within 10 days of tonight’s meeting.
2. Call the election to consolidate with the regular municipal election on November 8, 2022.
Additionally, Council may want to consider directing staff and the City Attorney to draft alternative ballot measures for future Council consideration.
PUBLIC OUTREACH:
After analysis, staff determined that public outreach was not required for this issue.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines. Section 15378(b) of the California Environmental Quality indicates that the definition of a “Project” does not include submittal of proposals to a vote of the people of the state or of a particular community that does not involve a public agency sponsored initiative. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Notice of Intent an Initiative
2. Ballot Title and Summary
3. Beach Cities Health District Cannabis Policy Brief
4. Resolution No. 22-0048 - Calling Election and Directing Impartial Analysis
5. Resolution No. 22-0049 - Consolidation w/County to Conduct the Election