CC 2017-09-26_10a Intro Ordinance_Marijuana Regulations
MEMORANDUM
TO: CITY COUNCIL
FROM: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT: CONSIDERATION OF DEVELOPMENT CODE AMENDMENT
CASE NO. 17-003; AMENDMENTS TO CHAPTER 16.62 OF
TITLE 16 AND CHAPTER 5.95 OF TITLE 5 OF THE ARROYO
GRANDE MUNICIPAL CODE RELATING TO MARIJUANA AND
MARIJUANA DELIVERY SERVICES
DATE: SEPTEMBER 26, 2017
RECOMMENDATION:
The Planning Commission recommends that the City Council introduce the proposed
Ordinance amending Chapter 16.62 of Title 16 and Chapter 5.95 of Title 5 of the Arroyo
Grande Municipal Code relating to marijuana and marijuana delivery services.
SUMMARY OF ACTION:
The proposed Ordinance will 1) prohibit all commercial marijuana activity within the City
except for limited delivery; 2) ban outdoor cultivation; and 3) reasonably regulate indoor
cultivation.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no new direct impact to financial and personnel resources. Although significant
staff time was required to set up the permit process for medical cannabis deliveries, it is
anticipated that minimal impacts related to continued implementation and enforcement
of regulations will remain.
BACKGROUND:
In November 2016, California voters approved Proposition 64 (57.1% Yes and 42.9%
No), the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA). The AUMA
creates a statewide licensing and regulatory program for non-medical commercial
marijuana businesses. The licensing program is similar to the laws adopted in 2015
relating to medical marijuana, and such businesses will need State licenses in order to
operate. Such licenses are to be issued by the State beginning January 1, 2018. A key
aspect of the AUMA is the retention of local control by cities. This local control
component is broadly crafted and includes the ability for a city to develop regulations
that range from prohibiting most activities to regulating land uses through zoning or
other local licensing processes. Under the AUMA, the State cannot issue licenses that
are contrary to these local regulations.
Item 10.a. - Page 1
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT CODE AMENDMENT CASE NO. 17-003
SEPTEMBER 26, 2017
PAGE 2
On June 27, 2017, the City Council considered the need for local regulations for land
uses associated with the adult use of non-medical marijuana. The Council directed the
preparation of an Ordinance to: 1) prohibit all outdoor cultivation, 2) prohibit all
commercial uses except limited delivery services, and 3) regulate personal cultivation
for non-medical marijuana consistent with existing City regulations for medical
marijuana but modified to be consistent with AUMA language (Attachments 1 and 2).
The Planning Commission recommended adoption of the proposed Ordinance on
September 5, 2017 (Attachment 3).
ANALYSIS OF ISSUES:
The proposed Ordinance follows Council direction given on June 27, 2017 after a
presentation, public comment and consideration of the need for local regulations for
land uses associated with the adult use of non-medical marijuana. The Ordinance also
modifies language to refer to cannabis instead of marijuana. Main components of the
Ordinance are:
Personal Cultivation - Indoor
The Arroyo Grande Municipal Code currently contains restrictions on cultivation of
marijuana for medical purposes for a qualified patient living full-time in a single family
detached residence and requires very specific performance standards. The AUMA
requires local jurisdictions to allow up to six plants to be cultivated for medical or non-
medical purposes within a residence and in accessory structures that are enclosed and
secure. The AUMA does contain provisions that authorize a city to enact and enforce
reasonable regulations for such personal cultivation activities. Per the Council’s
direction, the proposed Ordinance allows limited personal cultivation of non-medical
marijuana in the same manner as the City’s current regulations for cultivation for
medical purposes while altering certain definitions to comply with the AUMA. In
particular, the Ordinance amends current sections of the Municipal Code to clarify the
definition of private residences and the requirement to allow cultivation in accessory
structures and removes the prohibition of cultivation in a garage, kitchen, bathroom or
occupied bedroom of the dwelling as it was considered beyond the reasonable
regulation requirement of the AUMA.
The Ordinance language for personal indoor cultivation is as follows:
C. The limited indoor cultivation of six (6) or fewer live cannabis plants for
personal use is permitted within a private residence, or inside an accessory structure to
a private residence located upon the grounds of a private residence that is fully
enclosed and secure, subject to the following restrictions and standards, and only to the
extent such cultivation is authorized by State law:
1. Pursuant to Health and Safety Code Section 11362.2, “private residence”
means a house, an apartment unit, a mobile home, or other similar dwelling. A total of
six (6) living plants may be planted, cultivated, harvested, dried, or processed at a
single private residence at one time.
Item 10.a. - Page 2
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT CODE AMENDMENT CASE NO. 17-003
SEPTEMBER 26, 2017
PAGE 3
2. No more than fifty (50) contiguous square feet of the interior of the private
residence, shall be devoted to the cultivation of cannabis. The cannabis plants being
cultivated shall not exceed 10 feet in height.
3. The area used for cultivation shall comply with California Building, Electrical
and Fire Codes as adopted by City of Arroyo Grande.
4. The cannabis cultivation shall be concealed so that it is not visible from the
exterior of the property, the public right-of-way, and/or neighboring properties.
5. The lighting for the cultivation shall not exceed 1200 watts. The use of
flammable or combustible products, including but not limited to, propane and butane for
cultivation and processing is prohibited. If cultivation is in an accessory structure, light
shall not emanate or be visible from outside the accessory structure.
6. The cannabis cultivation shall not adversely affect the health or safety of the
occupants of other properties in the vicinity by creating dust, glare, heat, noise, noxious
gasses, odor, smoke, traffic, vibration or other impacts and shall not be maintained in a
manner so as to constitute a hazard due to use or storage of materials, processes,
products or wastes.
7. Nothing in this subsection is intended, nor shall it be construed, to preclude
any landlord from limiting or prohibiting cannabis cultivation by tenants.
Personal Cultivation - Outdoor
Following Council direction, the proposed Ordinance prohibits all outdoor cultivation of
cannabis.
Commercial Cultivation
Following Council direction the proposed Ordinance continues to prohibit commercial
cultivation.
Other Commercial Marijuana Businesses
Following Council direction, the proposed Ordinance prohibits commercial cannabis
businesses and activities at this time. These prohibitions are broadly construed and
include all commercial cannabis activities including but not limited to medical cannabis
collectives, cooperatives and dispensaries (including mobile dispensaries).
Deliveries
Following Council direction, the proposed Ordinance allows for a combined total of three
(3) permits to deliver medical and non-medical cannabis within the City limits. To date,
the City has approved one (1) medical marijuana mobile delivery permit as currently
regulated.
The proposed Ordinance minimally modifies the existing in-depth medical marijuana
mobile delivery permit regulations to be consistent with the generally less restrictive
AUMA requirements for non-medical use so that medical users are not held to a more
restrictive standard.
Item 10.a. - Page 3
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT CODE AMENDMENT CASE NO. 17-003
SEPTEMBER 26, 2017
PAGE 4
The proposed Ordinance treats any violation as a misdemeanor unless lowered to an
infraction by the City attorney or a judge. Violations also are considered a separate
offense for each and every day during any portion of which any such person commits,
continues, licenses, or causes a violation. The City can use any enforcement remedies
available under the law and/or the Arroyo Grande Municipal Code and may enforce a
violation by means of civil enforcement through a restraining order, a preliminary or
permanent injunction, nuisance abatement procedures, or by any other means
authorized by law.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Introduce the Ordinance;
2. Modify and introduce the Ordinance; or
3. Provide direction to staff.
ADVANTAGES:
Amending the City’s ordinance to be consistent with the AUMA provides an opportunity
for the public to weigh in on potential use and regulation in the City and ensures that
City rules are clear in light of evolving state legislation. Additionally, the proposed
Ordinance represents a measured approach. Implementation of the proposed
Ordinance will best protect the public health, safety and welfare in that it will allow time
for the State’s regulations to be promulgated and implemented and an opportunity to
see how non-medical marijuana is embraced and integrated into California’s culture and
society, while leaving options to reconsider the industry in the future.
DISADVANTAGES:
The proposed ordinance may be considered to be too conservative in its prohibition of
commercial cannabis businesses and outdoor cultivation and would therefore limit
opportunities within the community for potential operators to compete in the cannabis
market, therefore limiting potential tax revenue for the City.
ENVIRONMENTAL REVIEW:
Staff has reviewed this project in compliance with the California Environmental Quality
Act, and has found that the proposal is exempt pursuant to Sections 15061(b)(3)
(general rule) and 15308 (actions by regulatory agencies for the protection of the
environment) of the Guidelines of the California Environmental Quality Act (CEQA) and
Public Resources Code Section 21083.3(e).
PUBLIC NOTIFICATION:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2. At the time of report publication, no comments
have been received.
Item 10.a. - Page 4
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT CODE AMENDMENT CASE NO. 17-003
SEPTEMBER 26, 2017
PAGE 5
ATTACHMENTS:
1. June 27, 2017 City Council Staff Report
2. June 27, 2017 City Council Meeting Minutes
3. September 5, 2017 Planning Commission Meeting Minutes
Item 10.a. - Page 5
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE AMENDING CHAPTER 16.62 OF
TITLE 16 AND CHAPTER 5.95 OF TITLE 5 OF THE
ARROYO GRANDE MUNICIPAL CODE RELATING TO
MARIJUANA AND MARIJUANA DELIVERY SERVICES
WHEREAS, on January 26, 2016 the City Council of the City of Arroyo Grande adopted
Ordinance No. 675 which added Chapter 16.62 to Title 16 of the Arroyo Grande
Municipal Code (AGMC), prohibiting medical marijuana dispensaries, cooperatives and
collectives, deliveries of medical marijuana, and the cultivation of marijuana within the
City; and
WHEREAS, the City Council subsequently determined that it was appropriate to allow
limited cultivation and strictly regulated deliveries of medical marijuana and on June 28,
2016, adopted Ordinance 678, amending AGMC Chapter 16.62 to allow limited indoor
cultivation of medical marijuana and adding Chapter 5.95 relating to delivery services;
and
WHEREAS, on November 9, 2016, the Adult Use of Marijuana Act (AUMA), also known
as Proposition 64, became effective, authorizing certain personal use and cultivation of
marijuana at a private residence and creating a state licensing and regulatory scheme
for various commercial marijuana activities; and
WHEREAS, the AUMA preserves the authority of cities to regulate or prohibit
commercial marijuana activity, and to reasonably regulate indoor cultivation and ban
outdoor cultivation for personal use within their jurisdictions; and
WHEREAS, the City Council of the City of Arroyo Grande desires to amend and clarify
the provisions in the AGMC relating to marijuana in order to continue to prohibit all
commercial marijuana activity within the City of Arroyo Grande, except for limited
delivery as permitted by Chapter 5.95, to ban outdoor marijuana cultivation and
reasonably regulate indoor marijuana cultivation.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE
DOES ORDAIN AS FOLLOWS:
SECTION 1. The above recitals and findings are true and correct and are incorporated
herein by this reference.
SECTION 2. Chapter 16.62 of Title 16 of the Arroyo Grande Municipal Code is hereby
retitled “CANNABIS” and amended in its entirety to read as follows:
Item 10.a. - Page 6
ORDINANCE NO.
PAGE 2
16.62.010 - Purpose and findings
A. By adoption of this Chapter, it is the City Council’s purpose and intent, to:
prohibit commercial cannabis activity, including medical cannabis dispensaries,
cooperatives and collectives; outdoor cultivation of cannabis; permit deliveries of
cannabis in accordance with Chapter 5.95 of this Code; and to reasonably
regulate the ability of individuals to cultivate not more than six (6) cannabis
plants indoors for personal noncommercial use, as permitted by the Adult Use of
Marijuana Act (AUMA, Proposition 64), and Health and Safety Code Sections
11362.1 and 11362.2. These regulations are adopted pursuant to the AUMA
and the City of Arroyo Grande’s authority under Article XI, Section 7 of the
California Constitution, in order to promote the health, safety, and general
welfare of the residents and businesses within the City of Arroyo Grande and
prevent adverse impacts which such activities may have on nearby properties
and residents. B. Pursuant to the City of Arroyo Grande’s police powers
authorized in Article XI, Section 7 of the California Constitution, the City has the
power to regulate permissible land uses within its boundaries and to enact
regulations for the preservation of public health, safety and general welfare of its
residents and community. Further, pursuant to Government Code Sections
38771 through 38775, the City also has the power through the City Council to
declare actions and activities that constitute a public nuisance.
16.62.020 Application.
The provisions of this chapter shall apply generally to all property within the boundaries
of the City wherein any of the conditions herein specified are found to exist. However,
nothing in this chapter is intended, nor shall it be construed, to burden any defense to
criminal prosecution under the provision of State law relating to the use of medical
cannabis. .
16.62.030 Administration.
The Chief of Police, or the Chief’s designee and/or the Director of Community
Development, or the Director’s designee, are charged with the responsibility of
administering this chapter and exercising the authority conferred thereby.
16.62.040 Definitions.
Consistent with the definitions set forth in State laws relating to cannabis, including but
not limited to the Medicinal and Adult-Use Cannabis Regulation and Safety Act
(Business and Professions Code Sections 26000 et. seq.), the following words shall
have the following meaning:
“Accessory structure” means a legally existing fully enclosed detached structure no
larger than that is fully enclosed with walls for all perimeters of the building, including,
Item 10.a. - Page 7
ORDINANCE NO.
PAGE 3
without limitation, a storage shed located on the same legal parcel as a private
residence.
“Commercial cannabis activity” means any cultivation, possession, manufacture,
distribution, processing, storing, laboratory testing, packaging, labeling, transportation,
delivery or sale of cannabis or cannabis products, including but not limited to medical
cannabis cooperatives and collectives.
“Cultivation” shall have the meaning as set forth in Business and Professions Code
Section 26001 (l) and also means the planting, growing, harvesting, drying, processing
or storage of one (1) or more cannabis plants or any part thereof in any location, indoor
or outdoor, including a fully enclosed and secure building.
“Delivery” shall have the meaning as set forth in Business and Professions Code
Section 26001 (p) (m).
“Dispensary” shall mean any facility, location, establishment or similar entity that
cultivates, distributes, delivers, supplies or processes cannabis for medical purposes
relating to a qualified patient or primary caregiver, pursuant to State law and in
accordance with Health and Safety Code Section 11362.5 et seq. A dispensary shall
include a dispensing collective or cooperative and shall include a mobile dispensary and
delivery service.
“Cannabis” means all parts of the plant genus Cannabis savita Linnaeus, Cannabis
indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin,
whether crude or purified, extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture or preparation of the plant, its seeds or resin, and
includes “cannabis”, “medical cannabis”, “cannabis product” and “medical cannabis
product”, as otherwise defined in Business and Professions Code Sections 26001 (f)
and (ai).
“Primary Caregiver”. This shall have the meaning set forth in Health and Safety Code
Section 11362.7(d).
“Qualified Patient”. This shall have the meaning set forth in Health and Safety Code
Section 11362.7(f).
16.62.050 – Cultivation
A. Except for limited indoor cultivation for personal use as provided in
subsection C herein and as permitted by Health and Safety Code Section 11362.2, no
person or persons owning, leasing, occupying, or having charge or possession of any
parcel of real property in the City of Arroyo Grande, including primary caregivers and
qualified patients, collectives, cooperatives or dispensaries, shall allow such parcel to
be used for the cultivation of cannabis. Cultivation of cannabis in violation of this
chapter within the City of Arroyo Grande for any purpose is prohibited, and is expressly
declared to be a public nuisance.
B. The prohibition contained in this section is intended to constitute an
express prohibition on all outdoor and indoor cultivation of cannabis in the City of Arroyo
Grande, except for limited indoor cultivation for personal use.
C. The limited indoor cultivation of six (6) or fewer live cannabis plants for
personal use is permitted within a private residence, or inside an accessory structure to
a private residence located upon the grounds of a private residence that is fully
Item 10.a. - Page 8
ORDINANCE NO.
PAGE 4
enclosed and secure, subject to the following restrictions and standards, and only to the
extent such cultivation is authorized by State law:
1. Pursuant to Health and Safety Code Section 11362.2, “private residence”
means a house, an apartment unit, a mobile home, or other similar dwelling. A total of
six (6) living plants may be planted, cultivated, harvested, dried, or processed at a
single private residence at one time.
2. No more than fifty (50) contiguous square feet of the interior of the private
residence, shall be devoted to the cultivation of cannabis. The cannabis plants being
cultivated shall not exceed 10 feet in height.
3. The area used for cultivation shall comply with California Building, Electrical
and Fire Codes as adopted by City of Arroyo Grande.
4. The cannabis cultivation shall be concealed so that it is not visible from the
exterior of the property, the public right-of-way, and/or neighboring properties.
5. The lighting for the cultivation shall not exceed 1200 watts. The use of
flammable or combustible products, including but not limited to, propane and butane for
cultivation and processing is prohibited. If cultivation is in an accessory structure, light
shall not emanate or be visible from outside the accessory structure.
6. The cannabis cultivation shall not adversely affect the health or safety of the
occupants of other properties in the vicinity by creating dust, glare, heat, noise, noxious
gasses, odor, smoke, traffic, vibration or other impacts and shall not be maintained in a
manner so as to constitute a hazard due to use or storage of materials, processes,
products or wastes.
7. Nothing in this subsection is intended, nor shall it be construed, to preclude
any landlord from limiting or prohibiting cannabis cultivation by tenants.
16.62.060 Commercial Cannabis Activity, Medical Cannabis Collectives,
Cooperatives and Dispensaries Prohibited
A. Except as provided in Section 16.62.070 related to deliveries, all
commercial cannabis activity, including but not limited to medical cannabis collectives,
cooperatives and dispensaries (including mobile dispensaries), are not permitted in or
upon any premises in the City of Arroyo Grande.
B. A medical cannabis dispensary shall not include the following uses, so
long as such uses comply with this code, Health and Safety Code Section 11362.5 et
seq., and other applicable law:
1. A clinic licensed pursuant to Chapter 1 of Division 2 of the Health and Safety
Code.
2. A health care facility licensed pursuant to Chapter 2 of Division 2 of the Health
and Safety Code.
3. A residential care facility for persons with chronic life-threatening illness
licensed pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code.
4. A residential care facility for the elderly licensed pursuant to Chapter 3.2 of
Division 2 of the Health and Safety Code.
5. A hospice or a home health agency licensed pursuant to Chapter 8 of Division
2 of the Health and Safety Code.
Item 10.a. - Page 9
ORDINANCE NO.
PAGE 5
16.62.070 – Deliveries.
It shall be unlawful for any person to deliver cannabis or cannabis products or engage in
activities that constitute delivery of cannabis or cannabis products anywhere within the
boundaries of in the City of Arroyo Grande unless the cannabis delivery service and
each delivery driver is licensed in accordance with the provisions of Chapter 5.95 of this
Code.
Notwithstanding any provision of this chapter, nothing herein is intended to prohibit the
transportation of cannabis or cannabis products on public roads by a licensee duly
licensed and acting in compliance with Division 10 of the Business and Professions
Code (Business and Professions Code Sections 26000 et. seq.)
16.62.080 Violations and penalties.
A. Any person that violates any provision of this chapter shall be guilty of a
separate offense for each and every day during any portion of which any such person
commits, continues, licenses, or causes a violation thereof, and shall be punished
accordingly.
B. A violation of any provision of this chapter shall be subject to any
enforcement remedies available under the law and/or the Arroyo Grande Municipal
Code. In addition, the City may enforce a violation of this chapter by means of civil
enforcement through a restraining order, a preliminary or permanent injunction,
nuisance abatement procedures, or by any other means authorized by law.
Notwithstanding any other provision of this Code, no conduct which is protected from
criminal prosecution pursuant to the Compassionate Use Act (Health and Safety Code
Sections 11362.5) and/or the Medical Marijuana Program Act (Health and Safety Code
Sections 11362.7-11362.85) shall be made subject to criminal prosecution by this Code.
Violation of any provision in this chapter is a misdemeanor unless the city attorney
authorizes issuance of an infraction citation or files a complaint charging the offense as
an infraction; or the court, upon the prosecutorial recommendation of the city attorney,
determines that the offense is an infraction.
SECTION 3. Chapter 5.95 of Title 5 of the Arroyo Grande Municipal Code is hereby
amended in its entirety to read as follows:
Chapter 5.95 – CANNABIS DELIVERY SERVICES
5.95.010 - Definitions
For the purposes of this chapter the following words and phrases shall have the
meanings respectively ascribed to them by this section:
“City” shall mean the City of Arroyo Grande.
“Chief of Police” shall mean the Chief of Police of the City of Arroyo Grande or his or her
designee.
Item 10.a. - Page 10
ORDINANCE NO.
PAGE 6
“City Manager” shall mean the City Manager of the City of Arroyo Grande or his or her
designee.
“Cannabis” means all parts of the plant genus Cannabis savita Linnaeus, Cannabis
indicia, or cannabis ruderalis, whether growing or not; the seeds thereof; the resin ,
whether crude or purified, extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture or preparation of the plant, its seeds or resin, and
includes “cannabis”, “medical cannabis”, “cannabis product” and “medical cannabis
product” as defined in Business and Professions Code Sections 26001 (f) and (ai).
“Cannabis Delivery” or “Delivery” means the commercial transfer of cannabis or
cannabis products to a customer from one location to another. “Delivery” also includes
the use by a retailer of any technology platform owned and controlled by the retailer.
“Delivery” shall also have the meaning set forth in Business and Professions Code
Section 26001 (p).
“Cannabis Delivery Driver’ shall mean any individual who drives or operates a cannabis
delivery vehicle in which cannabis or cannabis products are delivered.
“Cannabis Delivery Service” means a person or persons engaged in the business of
owning, controlling or operating one or more cannabis delivery vehicles which transport,
carry, or deliver cannabis or cannabis products in such cannabis delivery vehicle, or
cannabis delivery vehicles, anywhere within the City of Arroyo Grande.
“Cannabis Delivery Vehicle” means a motor vehicle, as that term is defined in the
Vehicle Code of the State of California, used for the transportation of cannabis or
cannabis products.
“Person” includes any person, firm, association, organization, partnership, joint venture,
business trust, corporation or company.
“Primary Caregiver”. This shall have the meaning set forth in Health and Safety Code
Section 11362.7(d).
“Qualified Patient”. This shall have the meaning set forth in Health and Safety Code
Section 11362.7(f).
5.95.020 - Cannabis Delivery Service License Required; Limitation on Number of
Licenses, Criteria and Granting of Licenses
Every cannabis delivery service shall obtain a cannabis delivery service license from the
City prior to any operation within the City. The Chief of Police may grant or cause to be
granted up to three cannabis delivery service licenses to operate in the City of Arroyo
Grande.
Cannabis delivery service licenses shall be issued based upon an open application
process. The Chief of Police shall give public notice of the opening of a 30 day period
during which applications for cannabis delivery services will be accepted by having such
notice published in a newspaper of general circulation pursuant to Government Code
Section 6061 and posting the notice on the City’s website. Applications shall be signed
under penalty of perjury that the applicant has personal knowledge of the information
being submitted and that it is true.
Item 10.a. - Page 11
ORDINANCE NO.
PAGE 7
Granting of cannabis delivery service licenses shall be made at the sole discretion of
the Chief of Police. The Chief of Police shall rank the applications received using the
criteria contained in this section, based upon those that best meet the needs of the
community and will deliver services and operate in a manner that will protect the public
health and safety. The highest ranked qualified applicants equal to the number of
available cannabis delivery service licenses shall be granted licenses pursuant to this
chapter. The decision of the Chief of Police shall be final.
When the Chief of Police has reviewed qualified applications within two years of any
open application process under the provisions of this section and less than three
licenses are active, at the discretion of the Chief of Police, review may be limited to
applications previously submitted through the prior open application process.
In addition to the information required in section 5.95.050, applicants shall address the
following criteria, which shall be used by the Chief of Police as a basis for granting
cannabis delivery service licenses:
The applicant shall describe their experience in the cannabis delivery service
business, including their knowledge of applicable cannabis laws and regulations.
The applicant shall describe its plan and procedures for safely and securely
delivering cannabis and cannabis products. This shall address procedures for
preventing theft or diversion of cannabis and cannabis products.
The applicant shall demonstrate knowledge relating to where and how the cannabis
and cannabis products they deliver is cultivated, various strains of cannabis, and its
experience, if applicable, growing those strains or comparable agricultural products.
The applicant shall describe its plan for keeping records required by this chapter.
The applicant shall describe steps taken to ensure quality, including the purity and
consistency of the cannabis and cannabis products it delivers. This shall include
labeling, packaging and how it ensures consumer safety by testing for biological and
chemical contaminants, pursuant to state or federal standards for food, drugs or
tobacco. It shall also include details regarding procedures used to prepare any
cannabis edibles to comply with State food safety requirements, as well as the
source of cannabis used in edible products.
The applicant shall describe their personnel procedures and hiring practices,
including the manner in which they ensure that employees are familiar with their
procedures for safely and securely delivering cannabis and cannabis products,
procedures to prevent theft or diversion, as well as the employee’s knowledge of
applicable cannabis laws and regulations. If the applicant maintains an employee
handbook, copies shall be provided with the application.
Item 10.a. - Page 12
ORDINANCE NO.
PAGE 8
Cannabis delivery service licenses are not transferable. They shall be deemed
terminated if the owner or operator who was granted a license discontinues or
suspends delivery operations for a period of more than thirty days without
permission obtained from the Chief of Police.
When the State Bureau of Cannabis Control within the Department of Consumer Affairs
has commenced issuing licenses pursuant to the Medicinal and Adult-Use Cannabis
Regulation and Safety Act (Business and Professions Code Sections 26000 et. seq.), all
cannabis delivery services operating in the City shall also present proof to the Chief of
Police that it has been issued required state license(s).
5.95.030 - Cannabis Delivery Service License Exemptions
A. A primary caregiver engaged in the delivery of cannabis to a qualified
patient for which they are the primary caregiver is exempt from a requirement for a
cannabis delivery service license.
B. A qualified patient engaged in the transportation of cannabis solely for his
or her own personal use is exempt from a requirement for a cannabis delivery service
license.
5.95.040 – Fees, Business Licenses, and Term
A. Every cannabis delivery service licensed by the City shall pay application
and license fees as stated in the City’s Master Fee Schedule. Upon approval of the
cannabis delivery service license application, the cannabis delivery service shall pay the
fee as stated in the City’s Master Fee Schedule per cannabis delivery vehicle, and the
City shall issue a cannabis delivery vehicle license sticker for each properly insured
cannabis delivery vehicle. The annual cannabis delivery service license renewal fee
shall be as stated in the City’s Master Fee Schedule per year, and the annual fee per
cannabis delivery vehicle for the license sticker as stated in the City’s Master Fee
Schedule. Each applicant shall also present to the City the prescribed amount set by the
Department of Justice of the State of California for the processing of the applicant’s
fingerprints.
B. Each applicant for a cannabis delivery driver’s permit shall pay to the City,
application fees and annual permit fees as stated in the City’s Master Fee Schedule.
The annual renewal permit fee shall also be as stated in the Master City’s Fee
Schedule. Each applicant shall present to the City the prescribed amount set by the
Department of Justice of the State of California for the processing of the applicant’s
fingerprints.
C. Each cannabis delivery service shall pay all applicable business license
fees as required by Chapter 5.02 of this code, and pay any other applicable taxes
pursuant to Federal, State and local law.
D. Term. All licenses and stickers issued to cannabis delivery services and
cannabis delivery drivers shall be for the period of no more than one calendar year, and
shall expire at midnight on the 31st day of December, subject to annual renewal by the
Chief of Police. Initial annual fees shall be prorated based upon when in the year it is
Item 10.a. - Page 13
ORDINANCE NO.
PAGE 9
issued, however, application fees and annual fees shall not otherwise be subject to
reductions or refunds.
E. Prior to any renewal the Chief of Police shall review the licensee or
permitee for satisfactory performance and compliance with the provisions of this Code
during the preceding year, and also confirm the continuing validity of all information that
was submitted by the licensee or permittee during the initial application process.
5.95.050 – Cannabis Delivery Service License Application
A. In addition to submitting information relating to the selection criteria in
section 5.95.020, every application for a cannabis delivery service license submitted in
response to an open application process shall contain:
1. Name and address of the applicant.
2. If the applicant is a corporation, the names and addresses of its directors.
Copies of any relevant Articles of Incorporation, and any medical cannabis
collective/cooperative agreement and membership forms shall be submitted with the
application.
3. Area within which the delivery service proposes to operate.
4. Kind and amount of public liability and property damage insurance
covering each vehicle to be used for cannabis and cannabis products delivered within
the City.
5. Owner’s trade name and business address.
6. Listing of all vehicles to be used for cannabis delivery within the City, their
make, model (year), license plate number and Vehicle Identification Number.
B. Whenever an employee of a cannabis delivery service files an application
for a cannabis delivery driver’s permit, or renewal hereof, with the City, the employer
cannabis delivery service shall within 10 days after the filing of the application by the
employee with the City, submit to the City by first class U.S. mail copies of the results
and other records pertaining to the testing of the employee for the use of alcohol and
controlled substances conducted pursuant to mandatory controlled substance and
alcohol testing certification program required by Section 5.95.200.
5.95.060 - Investigation of Cannabis Delivery Service Application
A. All applications submitted as part of a cannabis delivery service open
application process shall be referred to the Chief of Police for investigation in order to
determine if the applicant is qualified. The Chief of Police shall obtain a copy of the
applicant’s criminal record in the United States, if any, and may obtain the criminal
record, if any, in any other country, if obtaining such foreign criminal record is feasible.
B. The Chief of Police in making determinations relating to granting cannabis
marijuana delivery licenses may also demand personal references from applicants and
may make such further investigation of applicants as deemed appropriate.
Item 10.a. - Page 14
ORDINANCE NO.
PAGE 10
5.95.070 - Insurance Requirements
The insurance required before a cannabis delivery service license can be issued shall
insure the public against any loss or damage that may result to any person or property
from the operation of any cannabis delivery vehicle used by the cannabis delivery
service in its business as such. The amount of insurance shall not be less than
$1,000,000.00 per occurrence combined single limit for bodily injury and property
damage. The City, its officers, agents and employees shall be named as additional
insureds on any policy. Insurance shall include contractual liability to cover liability
assumed in contract, shall include a severability of interest or equivalent wording, and
shall specify that insurance coverage afforded to the City shall be primary.
5.95.080 - Insurance Certificate Prerequisite to Issuance
No cannabis delivery service license shall be issued until the applicant first files with the
City a certificate of insurance, on a form acceptable by the City. Said certificate shall
provide evidence of insurance in amounts and with conditions acceptable to the City
and shall be approved by the City Manager. The cannabis delivery service insurance
shall remain in force during the entire term of the license, and if such insurance is
canceled or terminated, it shall be grounds for revocation or suspension of the license
until a valid certificate is furnished to the City.
5.95.090 - Hold Harmless Agreement
As a condition of the license, each cannabis delivery service shall execute an
agreement indemnifying and holding harmless the City, its officers, agents and
employees from any and all damages, claims, liabilities, costs including attorney’s fees,
suits or other expenses resulting from and arising out of said cannabis delivery service
operations. The agreement shall provide that the cannabis delivery service agrees to
defend, at it sole expense, any action against the City, its officers, agents and
employees and reimburse the City of any court costs and attorney fees that the City
may be required to pay as a result of any such action or issuance of the license. The
City, may, at its sole discretion, participate at its own expense in the defense of any
action, but such participation shall not relieve the licensee of its obligations hereunder.
5.95.100 - Revocation or Suspension of Cannabis Delivery Service License
A cannabis delivery service license or a renewal thereof may be revoked or suspended
if the license holder:
A. Has knowingly made a false statement in a material matter either in his or
her application or in any reports or other documents furnished by him or her to the City.
B. Does not maintain and operate his or her cannabis delivery vehicle and
other equipment in the manner and in the condition required by law and applicable
regulations.
C. Is required to register as a sex offender under the provisions of Section
290 of the California Penal Code.
D. Has been convicted of any offense relating to the use, sale, possession or
transportation of narcotics or habit-forming drugs.
Item 10.a. - Page 15
ORDINANCE NO.
PAGE 11
E. Has utilized drivers who are under suspension, revocation or probation by
the Department of Motor Vehicles for a cause involving the safe operation of a motor
vehicle, or have been convicted of any of the following offenses: driving while
intoxicated; or reckless driving involving bodily injury.
F. Has been convicted of any offense punishable as a felony, or has been
convicted within a 10-year period immediately preceding the crime of theft in either
degree.
G. Has been convicted of any offense involving moral turpitude.
H. Utilizes drivers who have been involved in any motor vehicle accident
causing death or personal injury.
I. Utilizes drivers who have been involved in three or more motor vehicle
accidents.
J. Failed to pay required license fees.
K. Has violated any provision of this chapter or engaged in any conduct that
adversely affects the health, welfare or safety of the community.
5.95.110 - Revocation Procedures
A. The City may give notice to a cannabis delivery service of its intention to
revoke a cannabis delivery service license. If deemed it will be a hazard to the health,
safety or welfare, for the cannabis delivery service to continue operations pending a
revocation hearing, the City may suspend the license and all rights and privileges
thereunder until the hearing on revocation. The notice shall specify a time and place at
which a hearing will be held before a hearing officer designated by the City Manager.
The hearing officer may be a department head, or his or her designee, or other
disinterested person. The employment, performance evaluation, compensation and
benefits of the hearing officer, if any, shall not be directly or indirectly conditioned upon
the determinations made by the hearing officer.
The hearing shall be conducted not less than seven days after the date of the notice,
unless the operator agrees to a shorter period of time. Unless the cannabis delivery
service consents, a hearing must be held within 14 days of a suspension. The notice
shall specify the reasons for the proposed revocation in sufficient detail so as to fully
inform the cannabis delivery service of the reasons which have caused the notice to be
given, and if the cannabis delivery service license has been suspended the reasons for
such suspension. A copy of the notice shall be sent to the Chief of Police.
B. The cannabis delivery service and Chief of Police shall each have the right
to be represented by counsel, to call and examine witnesses, cross-examine witnesses,
and argue their respective positions. The proceedings shall be informal, and strict rules
of evidence shall not apply. All evidence shall be admissible which is of the kind that
reasonably prudent persons rely on in making decisions.
C. The hearing officer shall render a recommended decision in writing to the
City Manager, and include the reasons therefore. The City Manager may accept, or
modify the hearing officer’s recommendation and the decision of the City Manager shall
be final.
Item 10.a. - Page 16
ORDINANCE NO.
PAGE 12
5.95.120 - Cannabis Delivery Service Operating Requirements
A. Deliveries shall be directly to the residence or business address of the
person ordering the cannabis or cannabis products. Any other delivery or transaction is
prohibited. In accordance with Business and Professions Code Section 26090(d) the
customer requesting delivery shall maintain a copy of the delivery request and make it
available to law enforcement officers upon request.
B. No cannabis delivery service shall permit any person other than a
cannabis delivery vehicle driver, licensed in accordance with this chapter, to operate
any of its cannabis delivery vehicles in which cannabis is delivered within the City.
C. In accordance with the requirements of Business and Professions Code
Section 26090(c), during delivery, licensees shall maintain a physical copy of the
delivery request and shall make it available to law enforcement officers upon request.
Each cannabis delivery service shall maintain a written record of every request for
delivery, including the name of the requestor, the address for the delivery, the quantity
and type of cannabis or cannabis products requested, the date and time the delivery
request is received, the cannabis delivery vehicle that is assigned to make the delivery,
and the cannabis delivery driver that is assigned to make the delivery.
D. Each cannabis delivery service shall assure that every cannabis delivery
driver shall have a copy of the record of the delivery request during the delivery of any
cannabis or cannabis products in the City. Employees delivering cannabis or cannabis
products shall carry a copy of the delivery services license and present it and the
employee’s identification to law enforcement officers upon request. Deliveries shall only
occur between the hours of 10:00 a.m. and 7:00 p.m., or as otherwise permitted by
State law or regulations adopted by the Bureau of Cannabis Control.
E. Other than displaying required cannabis delivery vehicle license stickers,
delivery vehicles shall not contain advertisements for commercial cannabis activities nor
shall it advertise the name of the dispensary.
F. Delivery drivers shall not transport cannabis in excess of any applicable
limits established by the Bureau of Cannabis Control.
G. Each cannabis delivery service shall maintain, for a minimum of three
years, a written accounting or ledger of all cash, receipts, credit card transactions, and
reimbursements, (including any in-kind contributions) as well as records of all
operational expenditures and costs incurred by the cannabis delivery service in
accordance with generally accepted accounting practices and standards typically
applicable to business records, which records shall be subject to audit or inspection by
the City upon request.
H. Each cannabis delivery service shall keep current the information
furnished under Section 5.95.050.The information shall be furnished to the City.
I. All products delivered shall have been tested in a manner consistent with
the procedures described in the cannabis delivery service application, as required by
Section 5.95.020, or applicable State law.
5.95.130 - Cannabis Delivery Driver’s Permit - Required
Every cannabis delivery driver who drives a cannabis delivery vehicle for which a
cannabis delivery service license is required or has been issued shall obtain a cannabis
Item 10.a. - Page 17
ORDINANCE NO.
PAGE 13
delivery driver’s permit from the City prior to driving a cannabis delivery vehicle within
the City.
5.95.140 - Application
A. Every applicant for a cannabis delivery driver’s permit must be employed
or have an offer of employment by a licensed cannabis delivery service. Every
cannabis delivery driver shall file an application for a cannabis delivery driver’s permit
on a form supplied by the City.
B. For cannabis delivery drivers employed by a cannabis delivery service,
employer cannabis delivery service shall comply with subsection B of Section 5.95.050
of this chapter. An applicant for a cannabis delivery driver’s permit shall immediately
upon the filing of an application inform the employer of the requirements of this section
and of subsection B of Section 5.09.050.
5.95.150 - Referral of Application to Chief of Police
The application for a cannabis delivery driver’s permit shall be referred to the Chief of
Police, who shall make the same type of investigation as set forth in Section 5.95.060
and approve or disapprove the application.
5.95.160 - Procedure on Disapproval
A. Within 15 days after notification of disapproval, an applicant may appeal to
the City Manager, in writing, from the disapproval of the Chief of Police, giving the
reasons in full as to why the permit should be issued in spite of the disapproval. A copy
of the appeal shall be sent by applicant to the Chief of Police and City Manager at the
same time.
B. The City Clerk shall set a hearing on the appeal of the applicant, and shall
fix a time and a date certain, within 30 days after the receipt of applicant’s appeal by the
City (or such longer time as applicant shall agree to) to hear and consider the appeal of
applicant. The City Clerk shall notify the applicant, Chief of Police and City Manager of
the time and place of hearing at least seven days prior to the date of the hearing.
C. A hearing officer designated by the City Manager shall hear the appeal.
The hearing officer may be a department head, or his or her designee, or other
disinterested person. The employment, performance evaluation, compensation and
benefits of the hearing officer, if any, shall not be directly or indirectly conditioned upon
the determinations made by the hearing officer.
D. All testimony at the hearing shall be given under oath or affirmation. The
applicant and Chief of Police shall have the right to be represented by counsel.
Applicant and Chief shall each have the right to call and examine witnesses, cross-
examine witnesses and argue their respective positions. The proceeding shall be
informal, and the strict rules of evidence shall not apply, and all evidence shall be
admissible which is of the kind that reasonably prudent persons rely on in making
decisions.
The hearing officer shall determine the order of procedure and shall rule on all
objections to admissibility of evidence. Applicant and Chief of Police shall each be
Item 10.a. - Page 18
ORDINANCE NO.
PAGE 14
given a full and fair hearing. The hearing officer shall render a recommended decision in
writing to the City Manager, and include the reasons therefore within 10 days after the
close of the hearing. The City Manager may accept, or modify the hearing officer’s
recommendation and the decision of the City Manager shall be final.
5.95.170 – Issuance.
Upon receipt of the approval of the City, it shall issue to the applicant a cannabis
delivery driver’s permit, which shall be in the form of a card containing the permitee’s
name, photograph and right index fingerprint.
5.95.180 - Notice of Revocation – Suspension - Procedures.
The City may give a notice of intention to revoke a cannabis delivery driver’s permit, and
may suspend such permit pending a hearing, as in the case of a cannabis delivery
service license, and the procedures for revocation, and the rights of the parties shall be
the same, insofar as applicable as in the case of revocation of a cannabis delivery
service license.
5.95.190 - Automatic Suspension of Cannabis Delivery Driver’s Permit.
Any cannabis delivery driver’s permit issued hereunder shall be automatically
suspended and be null and void during any period of time that the cannabis delivery
driver’s State motor vehicle operator’s license is suspended, revoked, or for any other
reason is invalid or inoperative.
5.95.200 - Mandatory Controlled Substance and Alcohol Testing Program.
A. Every cannabis delivery service shall develop and adopt a mandatory
controlled substance and alcohol testing certification program in compliance with
Government Code Section 53075.5 and in accordance with the procedures set forth in
Part 40 (commencing with Section 40.1) of Title 49 of the Code of Federal Regulations.
A copy of the mandatory controlled substance and alcohol testing certification program
adopted pursuant to this section shall be delivered to the Chief of Police and City
Manager.
B. The employer cannabis delivery service’s mandatory controlled substance
and alcohol testing certification program shall contain a provision that, while the
employer cannabis delivery service license is in effect, the employer cannabis delivery
service shall, upon request of the City, make available for inspection copies of all results
and other records pertaining to the testing for the use of alcohol and controlled
substances conducted pursuant to the mandatory controlled substance and alcohol
testing certification program required by this section.
C. The employer cannabis delivery service’s mandatory controlled substance
and alcohol testing certification program shall, at a minimum, require every cannabis
delivery driver to submit to testing at least once every year and submit to mandatory
testing following citation for a moving violation or being involved in a vehicle accident.
Item 10.a. - Page 19
ORDINANCE NO.
PAGE 15
D. Failure to comply with the requirements of this section constitutes grounds
for denial, revocation or suspension of a cannabis delivery service license pursuant to
this chapter. The procedures for denial, suspension or revocation shall be the same as
those prescribed for suspension or revocation of a cannabis delivery service license
elsewhere in this chapter.
5.95.210 - Grounds for Denial, Revocation or Suspension of Cannabis Delivery
Driver’s Permit.
The granting of a cannabis delivery driver’s permit or a renewal thereof may be denied
and an existing permit may be revoked or suspended if the permit holder or applicant:
A. Has knowingly made a false statement in a material matter either in his or
her application or in any reports or other documents furnished by him or her to the City.
B. Does not maintain and operate his or her cannabis delivery vehicle and
other equipment in the manner and in the condition required by law and applicable
regulations.
C. Is required to register as a sex offender under the provisions of Section
290 of the California Penal Code.
D. Has been convicted of any offense relating to the use, sale, possession or
transportation of narcotics or habit-forming drugs.
E. Within the three-year period immediately preceding the application has
been under suspension, revocation or probation by the Department of Motor Vehicles
for a cause involving the safe operation of a motor vehicle, or has been convicted of any
of the following offenses: driving while intoxicated; or reckless driving involving bodily
injury.
F. Has been convicted of any offense punishable as a felony, or has been
convicted within a 10-year period immediately preceding the crime of theft in either
degree.
G. Has been convicted of any offense involving moral turpitude.
H. Has been involved within the two years immediately preceding the
application in any motor vehicle accident causing death or personal injury.
I. Has been involved in three or more motor vehicle accidents within the
year immediately preceding the application.
J. Failed to pay required permit fees.
K. Has violated any provision of this chapter.
5.95.220 - Additional Cannabis Delivery Driver Conditions.
In addition to the conditions and grounds for the issuance and retention of a cannabis
delivery driver’s permit issued pursuant to this chapter, a cannabis delivery driver’s
permit shall be issued and retained subject to the following conditions:
A. The cannabis delivery driver shall be at least 21 years old prior to
issuance of a cannabis delivery driver’s permit.
Item 10.a. - Page 20
ORDINANCE NO.
PAGE 16
B. Employment, or an offer of employment, as a cannabis delivery driver has
been made by a licensed cannabis delivery service.
C. The cannabis delivery driver’s permit shall become void upon termination
of employment of the cannabis delivery driver.
D. The cannabis delivery service employer shall notify the City upon
termination of employment of a cannabis delivery driver.
E. The cannabis delivery driver’s permit shall state the name of the cannabis
delivery service employer.
F. The cannabis delivery driver shall return the cannabis delivery driver’s
permit to the City upon termination of employment.
G. The cannabis delivery driver shall not test positive pursuant to the
employer cannabis delivery service’s mandatory controlled substance and alcohol
testing certification program.
5.95.230 - Cannabis Delivery Driver Duties
A. No cannabis delivery driver shall permit any person other than another
cannabis delivery vehicle driver, who has been issued a permit in accordance with this
chapter, to operate the cannabis delivery vehicle in which cannabis or cannabis
products are delivered within the City.
B. Each cannabis delivery driver shall have a copy of the record of the
delivery request during the delivery of any cannabis or cannabis products in the City.
SECTION 4. In accordance with the requirements of Business and Professions Code
Section 26055(f), a copy of this Ordinance shall be provided to the Bureau of Cannabis
Control within the California Department of Consumer Affairs. The City Manager shall
also designate a member of the City staff to be the contact person for State licensing
authorities regarding commercial cannabis activity within the City, and provide the
Bureau with that person’s name and contact information.
SECTION 5. This Ordinance is exempt from CEQA pursuant to CEQA Guidelines
Section15061(b)(3) which is the general rule that CEQA applies only to projects which
have the potential for causing a significant effect on the environment and CEQA does
not apply where it can be seen with certainty that there is no possibility that the activity
may have a significant effect on the environment.
SECTION 6. A summary of this Ordinance shall be published in a newspaper published
and circulated in the City of Arroyo Grande at least five (5) days prior to the City Council
meeting at which the proposed Ordinance is to be adopted. A certified copy of the full
text of the proposed Ordinance shall be posted in the office of the City Clerk. Within
fifteen (15) days after adoption of the Ordinance, the summary with the names of those
City Council members voting for and against the Ordinance shall be published again,
and the City Clerk shall post a certified copy of the full text of such adopted Ordinance.
SECTION 7. This Ordinance shall take effect and be in full force and effect thirty (30)
days after its passage.
Item 10.a. - Page 21
ORDINANCE NO.
PAGE 17
SECTION 8. If any section, subsection, sentence, clause, or phrase of this Ordinance is
for any reason held to be invalid or unconstitutional by a decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining
portions of this Ordinance. The City Council hereby declares that it would have passed
this Ordinance and each and every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether any portion of the
ordinance would be subsequently declared invalid or unconstitutional.
On motion by Council Member ______, seconded by Council Member _______, and by
the following roll call vote to wit:
AYES:
NOES:
ABSENT:
the foregoing Ordinance was adopted this ____ day of _______, 2017.
Item 10.a. - Page 22
ORDINANCE NO.
PAGE 18
___________________________________
JIM HILL, MAYOR
ATTEST:
___________________________________
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
____________________________________
JAMES A. BERGMAN, CITY MANAGER
APPROVED AS TO FORM:
___________________________________
HEATHER K. WHITHAM, CITY ATTORNEY
Item 10.a. - Page 23
MEMORANDUM
TO: CITY COUNCIL
FROM: JAMES A. BERGMAN, CITY MANAGER
TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR
BEAU PRYOR, ACTING CHIEF OF POLICE
SUBJECT: CONSIDERATION OF A STAFF PRESENTATION, RECEIVE PUBLIC
COMMENT, AND PROVIDE KEY POLICY DIRECTION TO STAFF
CONCERNING THE DEVELOPMENT OF LOCAL REGULATIONS FOR
NON-MEDICAL MARIJUANA INCLUDING LAND USES UNDER THE
CONTROL, REGULATE, AND TAX ADULT USE OF MARIJUANA ACT
D ATE: JUNE 27, 2017
ISSUE:
Although soon to be allowed and regulated by State law as a result of the adoption of
Proposition 64, the City has not yet considered the need for local regulations for land
uses associated with the adult use of non-medical marijuana. Potential land uses that
may be allowed by the State if such uses are not regulated or prohibited by a city
include personal indoor and outdoor cultivation, commercial indoor and outdoor
cultivation, distribution facilities, delivery services, retail sales, testing laboratories, and
manufacturing facilities. Although the City’s zoning ordinance only allows those uses
expressly identified, the lack of established City policy can create situations that may be
detrimental to the public health, safety, and welfare. Direction from the Council will allow
staff to develop draft regulations that can be reviewed by the Planning Commission and
considered for adoption by the Council.
RECOMMENDATION:
It is recommended that the City Council: 1) receive an analysis of issues including
preliminary recommendations from staff, 2) receive public comment, and 3) direct staff
to develop an ordinance regulating personal indoor cultivation and restricted deliveries
in a manner similar to the City’s medical marijuana regulations and prohibit all other
non-medical marijuana related land uses at this time.
BACKGROUND:
In November 2016, California voters approved Proposition 64 (57.1% Yes and 42.9%
No), the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA). The stated
purpose of the AUMA is to establish a comprehensive system to legalize, control and
regulate the cultivation, processing, manufacturing, distribution, testing, and sale of non-
ATTACHMENT 1
Item 10.a. - Page 24
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 2
medical marijuana, including marijuana products, for use by adults 21 years of age and
older, and to tax the commercial growth and retail sale of marijuana.
The AUMA creates a statewide licensing and regulatory program for non-medical
commercial marijuana businesses, including retail sales, cultivators, manufacturers,
distributors, and testing labs. The licensing program is similar to the laws adopted in
2015 relating to medical marijuana, and such businesses will need State licenses in
order to operate. Such licenses are to be issued by the State by January 1, 2018. A key
aspect of the AUMA is the retention of local control by cities. This local control
component is broadly crafted and includes the ability for a city to develop regulations
that range from prohibiting most activities to regulating land uses through zoning or
other local licensing processes. Under the AUMA, the State cannot issue licenses that
are contrary to these local regulations.
ANALYSIS OF ISSUES:
The AUMA gives cities the ability to determine the appropriateness of land uses related
to personal cultivation and commercial cultivation, processing, and sales of non-medical
marijuana. Under the AUMA, cities can no longer ban indoor cultivation for non-medical
use and must allow cultivation of up to six plants per residence. The City may permit
this use through “reasonable” regulation. Cities retain the authority to regulate and ban
all other cultivation and commercial marijuana activities.
Key Questions for Direction
1. Does the City want to establish regulations on the personal indoor cultivation of
non-medical marijuana?
2.Does the City want to allow the personal outdoor cultivation of non-medical
marijuana?
a.If personal outdoor cultivation of non-medical marijuana is to be permitted
by the City, what level and topics of regulations should be developed?
3.Does the City want to potentially allow any of the following land uses associated
with commercial non-medical marijuana?
a.Cultivation
b.Manufacturing Facilities
c.Volatile Manufacturing Facilities
d.Distribution Facilities
e.Testing Laboratories
f.Retail Sales Locations
g.Delivery Services
Below is a summary of issues followed by a table of staff’s preliminary
recommendations for Council’s consideration.
Item 10.a. - Page 25
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 3
Personal Use
The AUMA makes it legal for persons 21 years of age or older to smoke or ingest
marijuana products, as well as possess, process, transport, purchase, obtain, or give
away to persons 21 years of age or older, without any compensation, 28.5 grams of
marijuana (1.005 ounces), or 8 grams of concentrated marijuana, including as contained
in marijuana products.1 They can also possess, cultivate, harvest, dry or process up to
six living marijuana plants for personal use.
Personal Cultivation - Indoor
The Arroyo Grande Municipal Code currently contains restrictions on cultivation of
marijuana for medical purposes for a qualified patient living full-time in a residence and
requires very specific performance standards. The AUMA requires local jurisdictions to
allow up to six plants to be cultivated for medical or non-medical purposes within a
residence and in accessory structures that are enclosed and secure. The AUMA does
contain provisions that authorize a city “to enact and enforce reasonable regulations to
reasonably regulate the actions and conduct.”
Currently, the City’s performance standards in place for medical marijuana are as
follows:
•The marijuana is cultivated inside a detached single family dwelling on property
where the qualified patient resides on a full-time basis.
•No more than fifty (50) contiguous square feet of the interior of the dwelling shall
be devoted to the cultivation of medical marijuana. The medical marijuana
cultivation area shall not exceed ten (10) feet in height. These restrictions apply
regardless of how many qualified patients are residing on the property.
1 The AUMA does not allow (1) Smoking or ingesting marijuana or marijuana products in any public place.
(2) Smoking marijuana or marijuana products in a location where smoking tobacco is prohibited. (3)
Smoking marijuana or marijuana products within 1, 000 feet of a school, day care center, or youth center
while children are present at such a school, day care center, or youth center, except in or upon the
grounds of a private residence or in accordance with Section 26200 of the Business and Professions
Code or Chapter 3.5 of Division 8 of the Business and Professions Code and only if such smoking is not
detectable by others on the grounds of such a school, day care center, or youth center while children are
present. (4) Possess an open container or open package of marijuana or marijuana products while
driving, operating, or riding in the passenger seat or compartment of a motor vehicle, boat, vessel,
aircraft, or other vehicle used for transportation. (5) Possess, smoke or ingest marijuana or marijuana
products in or upon the grounds of a school, day care center, or youth center while children are present.
(6) Manufacture concentrated cannabis using a volatile solvent, unless done in accordance with a license
under Chapter 3.5 of Division 8 or Division 10 of the Business and Professions Code. (7) Smoke or ingest
marijuana or marijuana products while driving, operating a motor vehicle, boat, vessel, aircraft, or other
vehicle used for transportation. (8) Smoke or ingest marijuana or marijuana products while riding in the
passenger seat or compartment of a motor vehicle, boat, vessel, aircraft, or other vehicle used for
transportation except as permitted on a motor vehicle, boat, vessel, aircraft, or other vehicle used for
transportation that is operated in accordance with Section 26200 of the Business and Professions Code
and while no persons under the age of 21 years are present.
Item 10.a. - Page 26
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 4
•The area used for cultivation complies with California Building, Electrical and Fire
Codes as adopted by the City of Arroyo Grande.
•The marijuana cultivation is concealed so that it is not visible from the exterior of
the property, the public right-of-way, and/or neighboring properties.
•The lighting for the cultivation shall not exceed one thousand two hundred
(1,200) watts. The use of flammable or combustible products, including but not
limited to, propane and butane for cultivation and processing is prohibited.
•The cultivation of marijuana shall not take place in a garage, kitchen, bathroom
or occupied bedroom of the dwelling.
•The marijuana cultivation shall not adversely affect the health or safety of the
occupants of other properties in the vicinity by creating dust, glare, heat, noise,
noxious gasses, odor, smoke, traffic, vibration or other impacts and shall not be
maintained in a manner so as to constitute a hazard due to use or storage of
materials, processes, products or wastes.
Staff Recommendation 1 - Make current regulations for medical marijuana
applicable to non-medical marijuana.
Rationale – Based upon the lack of significant complaints, current
performance standards appear to be adequately controlling potential
neighborhood compatibility and safety concerns.
Staff Recommendation 2 - Make current indoor medical marijuana performance
standards consistent with the AUMA specifically related to the ability to grow in
all private residences (''private residence" means a house, an apartment unit, a
mobile home, or other similar dwelling) and not just in detached single family
dwellings.
Rationale – Since the AUMA is less restrictive for non-medical use,
medical users should not be held to a more restrictive standard based
upon residence type.
Staff Recommendation 3 – Direct staff to develop policies and definitions
related to indoor cultivation in accessory structures that are enclosed and secure
for cultivation of medical and non-medical marijuana.
Rationale – Since the AUMA prohibits cities from banning indoor
cultivation in accessory structures, regulations need to be created defining
accessory structures and creating development standards related to the
meaning of “enclosed and secure” and location specifications such as
Item 10.a. - Page 27
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 5
setbacks and heights. The less restrictive AUMA language for non-
medical use should be applied to medical users so they are not held to a
more restrictive standard.
Staff Recommendation 4 – Delete the prohibition of cultivation in a garage,
kitchen, bathroom or occupied bedroom of the dwelling for both medical and non-
medical cultivation.
Rationale – The prohibition seems overly restrictive and may not provide
sufficient opportunities to cultivate. In addition, prohibiting cultivation in a
secured garage may violate the AUMA.
Personal Cultivation - Outdoor
The City has experienced neighborhood complaints regarding outdoor cultivation
operations mainly due to odor, glare from artificial lighting, noise, vibration from fans,
and security issues and currently prohibits personal outdoor cultivation of medical
marijuana. Under the AUMA, the City may continue to prohibit outdoor personal
cultivation or allow it with reasonable regulations. Area restrictions and performance
standards related to noise and odors are difficult to meet and water and energy uses
are also potentially problematic.
Staff Recommendation 5 – Prohibit outdoor personal cultivation at this time and
allow for reconsideration as the industry and public familiarity increases.
Rationale – Due to experience gained through staff involvement of issues
surrounding neighborhood compatibility including odors and security, staff
is concerned with the efficacy of performance standards and impacts to
staffing resources already dedicated to currently identified City goals and
projects.
Commercial Cultivation
Commercial Cultivation can occur outdoors, in greenhouses, or in industrial buildings
under artificial lighting. Consideration of impacts from each of these options on
surrounding uses and community character is a key consideration.
A California Department of Food and Agriculture Cannabis Cultivation License would be
required by January 2018 if a local jurisdiction allows commercial cultivation. Some
operations may need to provide documentation of water supply source. Generally,
concerns regarding cultivation from the State Water Board include illegal diversions,
sediment pollution from soil erosion, wetland and riparian impacts from fill and
excavations, impacts from soil additives, trash and domestic waste and tree removal.
However, most of these concerns surround large scale cannabis cultivation operations
in non-traditional farming locations. Due to the unique nature of the City, including 296
acres of agriculturally zoned land, it is possible that there may be a desire by some to
establish commercial non-medical marijuana cultivation operations within the City.
Item 10.a. - Page 28
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 6
Potential community issues could include compatibility situations between agriculture
and sensitive uses, such as schools and residential uses, and include sounds, odors,
dust and chemicals that may accompany agricultural operations and aesthetic changes
to the rural character due to the construction of greenhouses and security fences on
large agricultural properties. This issue is also complicated by the transition of
marijuana from an illegal substance to a crop being regulated by the Department of
Agriculture and the City’s own Right to Farm Ordinance which serves to protect farming
operations from nuisance complaints due to off farm impacts such as odors.
Staff Recommendation 6 – Prohibit commercial cultivation at this time.
Rationale – Due to both experience related to neighborhood compatibility
for small operations and the potential for significantly increased impacts
for larger operations on City agricultural lands surrounded by sensitive
uses, commercial cultivation is not recommended at this time.
Other Commercial Marijuana Businesses
In order to operate commercial medical cannabis uses in the City, a two-step process
would be required in addition to State licensing. First, an approval process would be
established for location, size and types of uses allowed. Second, an applicant would be
required to receive approval of a permit by the City to assure that all regulatory
requirements are met. The State is scheduled to begin accepting license applications in
January 2018 for both recreational and medical marijuana businesses and will also
require a local permit be approved, if the local agency adopts an ordinance allowing for
commercial uses.
In order to reduce potential impacts related to marijuana related brick-and-mortar retail,
manufacturing or testing, jurisdictions can adopt a per capita formula or other limit on
how many dispensaries or retail outlets to allow or to restrict an area to marijuana
related industry. Such limitations would reduce the overall number of businesses and
thus the regulatory burden for the City. This may address impacts to staff resources to
perform necessary audits of marijuana businesses, which may be critical for public
health and safety compliance as well as for financial audit requirements. As businesses
must deal in cash due to federal banking regulations, the City would need verification of
gross revenue and volume of business for any local tax revenue projections.
Regarding dispensaries, State law requires dispensaries and cultivation that contains
storefronts be located a minimum of 600 feet from schools (kindergarten and grades 1-
12, public and private). Local agencies can be more restrictive and include other
sensitive uses such as parks, preschool/daycare centers, and churches. Issues
regarding dispensaries include adverse impacts to surrounding areas that could
potentially be addressed by requiring design standards, limitations on the size and type
of uses, limiting hours of operations, or other methods.
Item 10.a. - Page 29
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 7
Regarding marijuana manufacturing businesses, there are two regulatory levels under
State Law as overseen by the County Environmental Health Services Division
depending on the use of volatile fluids or solvents. Safety of the use of these
compounds is dependent on the care, proper storage, vessel size and vessel orientation
to the manufacturing facility as well as adjacent existing structures. Additionally,
manufacturing processes related to marijuana products require expensive certified
extraction/processing equipment. Allowing marijuana related manufacturing businesses
to operate requires significant attention to permitting and monitoring and ultimately, a
certain acceptance of risk. Alternatively, if such businesses are market driven but
opportunities to establish them are too scarce and/or burdensome, they may operate
illegally, creating potential impacts to public safety as well.
Staff Recommendation 7 – Prohibit dispensaries, manufacturing and related
commercial marijuana businesses at this time.
Rationale – Such uses are not recommended at this time due to limited
land area available for such uses and the proximity to schools and
sensitive uses, as well as rigorous permitting and monitoring requirements
that would significantly impact staff resources already dedicated to
currently identified City goals and projects. If such uses are desired, a tax
mechanism should be in place prior to or concurrent to implementation of
regulations.
Deliveries
To date, the City has nearly approved one medical marijuana mobile delivery permit as
currently regulated. Up to three such permits may be allowed under the City’s current
regulations. A significant amount of Police staff time has gone into ensuring the
regulations are feasible to enforce. While currently restricted to medical marijuana
operations, the regulations could be modified to apply to non-medical operations as
well. Additionally, the number of permits can be increased; however, it has been
indicated by law enforcement agencies that it is more difficult to track and enforce
regulations with a large number of operators, and if mobile delivery operators do not
distribute from a facility inside the jurisdiction.
Staff Recommendation 8 – Allow limited deliveries to be permitted in a manner
similar to the current process and rules in place for medical marijuana deliveries.
Rationale – Limited deliveries are not likely to create adverse impacts as
currently regulated. Additionally, the generally less restrictive AUMA
language for non-medical use should be applied to medical users so they
are not held to a more restrictive standard.
Licensing, Taxes and Fees
Although the AUMA pre-empted additional sales taxes for marijuana, other excise taxes
may still be levied on medical marijuana, including taxes on cultivation and
Item 10.a. - Page 30
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 8
manufacturing. The AUMA differs from the Medical Marijuana Regulation & Safety Act
(MMRSA) because it does not require evidence of local approval to be submitted with
an application for a State-issued recreational marijuana business license, rather it
provides that a State license cannot be issued if the activity is in violation of local
ordinances.
Retailers who sell cannabis and cannabis products will be required to register with the
State and begin collecting the 15 percent excise tax on their gross receipts by January
1, 2018. Cultivators will also be required to register by January 1, 2018, to collect and
remit the cultivation tax currently set at $9.25 per dry-weight ounce of flowers, and
$2.75 per dry-weight ounce for leaves. Cities are also authorized to impose additional
taxes to cover the costs of services to enforce the marijuana regulation. However, a
ballot measure would need to be prepared and presented to the voters in accordance
with the requirements of Proposition 218. Revenues would be entirely dependent on
the number and extent of businesses allowed to operate in the City.
Public Health and Safety
Many organizations have worked hard to destigmatize marijuana, legitimize the
industry, and assist in the development of regulations to protect public safety. Some
data has emerged regarding potential impacts to public health and safety. Nonetheless,
general consensus likely will not be reached for some time. Generally, there are
reported correlations, dependent on a multitude of various factors which may or may not
be applicable to the decision to locally regulate, regarding potential health and safety
impacts after legalization of recreational marijuana (Attachment 2). Reported impacts
potentially include:
• Increase in homeless population
• Increased marijuana use by teens
• Increase in marijuana-intoxicated driving
• Increase in crime and arrests
• Decreased pricing linked to increased access
• Increased hospitalizations related to marijuana due to accidental ingestion or
overdose
• Misuse of pesticides
Neighboring Jurisdictions and Community Sentiment
Attachment 4 includes a table of the status of marijuana regulation in jurisdictions within
San Luis Obispo County. They vary, with agencies in the midst of conducting research
or gaining public input. The Grover Beach City Council very recently adopted an
ordinance that allows commercial medical cannabis uses in each of the City’s industrial
zones. Commercial medical cannabis uses include: inside cultivation, nurseries,
manufacturing, testing laboratories, transportation, delivery, distribution (includes
storage), and dispensaries (retail sales). The number of dispensaries is limited to two.
All greenhouses and outdoor cultivation and nursery uses are prohibited. They also
adopted a tax on gross receipts for medical and non-medical commercial cannabis uses
Item 10.a. - Page 31
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 9
and a square footage tax on cultivation consistent with Measure L-16 approved by their
voters in the November 2016 election. That tax structure will be implemented in
conjunction with any establishment of commercial cannabis businesses. Currently, the
City of Grover Beach restricts commercial marijuana to medical purposes except for
personal possession and cultivation consistent with AUMA.
MMRSA v. AUMA
Although, this report focuses on non-medical marijuana regulation, the Council may
wish to explore allowing commercial industry if restricted to medical marijuana purposes
similar to the City of Grover Beach. However, it is anticipated that restrictions relative to
medical marijuana under the MMRSA will eventually merge as the State implements its
regulatory scheme for the industry relative to the AUMA starting in 2018 (Attachment 3).
City Options
Both the MMRSA and the AUMA preserve local control with respect to allowing for
reasonable regulation. The City has generally taken a fairly conservative approach to
the regulation of medical marijuana. Public comment during consideration of the
medical marijuana ordinance was very specific to concerns relating to neighborhood
nuisances and the benefits of medical related use. To date, staff has not heard or
received comments or correspondence to indicate strong support or opposition to a
significant expansion of local regulations for non-medical marijuana cultivation or
commercial businesses. Due primarily to potential impacts to public health and to staff
resources, the preliminary recommendation shown in Table 1 is measured, and
primarily keeps the status quo at this time by utilizing existing regulations for personal
indoor cultivation and restricted deliveries. The rationale for staff’s recommendation for
regulation at this point in time, is based on the following ideas:
Unknowns - The State is still in the process of developing its licensing process
and the regulations needed to protect the public health, safety, and welfare.
Without knowing the details of future State regulations, it will be difficult and time
consuming to create effective, enforceable, and fair rules.
Timing – Establishing land uses prior to the voter’s consideration of taxing
opportunities to recoup the cost of mitigating impacts may force the Council to
reallocate funds from current projects and priorities as established in the FY
2017-18 budget.
Another aspect of timing is that unless there is a clear need to create regulations
for an entirely new industry with few comparable experiences of other
jurisdictions, doing so carries much more risk related to minimizing conflicting
land uses.
City Land Use Attributes – Most commercial non-medical marijuana land uses
with the exception of retail sales, will most likely occur on land zoned industrial or
agriculture. The City has a relatively small area zoned for industrial uses (22
Item 10.a. - Page 32
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 10
acres out of 3,795 acres). The industrial zone also allows a mix of uses including
limited residential and is located near school sites.
Land Speculation – Staff is seeing local speculation resulting in substantial
increases in land values. While this is not necessarily considered a detriment,
the potential rapid and singular intensification of the marijuana industry in a
limited area may disrupt the ability of existing local businesses to compete fairly
due to the mostly cash marijuana industry and thus it may be prudent to allow the
industry to stabilize at this time. The following General Plan policies may be
considered applicable:
o Economic Element Policy ED3-4: states: Continue to balance economic
goals with strong policies and programs that promote and maintain the
community’s environment, quality of life, and rural character.
o Land Use Policy LU5-1 Provide for a diversity of retail and service
commercial, offices, residential and other compatible uses that support
multiple neighborhoods and the greater community, and reduce the need
for external trips to adjacent jurisdictions, by designating Mixed Use areas
along and near major arterial streets and at convenient, strategic locations
in the community.
o LU5-6 Allowable uses within the MU category shall not include uses that
adversely affect surrounding commercial or residential uses, or contribute
to the deterioration of existing environmental conditions in the area.
o LU5-8 Provide for different combinations, configurations and mixtures of
commercial, office and residential uses designating the East Grand
Avenue, El Camino Real and Traffic Way corridors as Mixed Use (MU).
Community Character – A major aspect to the uniqueness of Arroyo Grande is its
rural character which is rooted in large areas of prime agricultural soils adjacent
to the Arroyo Grande Creek and the row crops grown in them. Staff believes that
large scale outdoor growing of marijuana will either take place in greenhouses or
behind fences to protect the crops or both. A transition to this type of agricultural
crop should be completed gradually, with input from the farming industry as well
as with the larger community.
Item 10.a. - Page 33
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 11
TABLE 1 Preliminary Staff Recommendations for Non-Medical Marijuana Regulation
Staff Re-
commend
ation No.
Potential Changes To
City Regulations
Prohibit Allow Potential City Regulations If Allowed
1-3 Personal Cultivation (six
plants; Indoors)
Cannot
prohibit
under
AUMA
X
Make current regulations for medical
marijuana applicable to non-medical
marijuana as well
4 Personal Cultivation
outdoor X
Limitation on number and area ; setbacks;
owner authorization; performance measures
for odor, noise, etc.
5 Commercial Cultivation
(Indoor or outdoor) X
Limitation on number and area; ventilation,
setbacks, performance measures for odor,
noise, etc.
6 Retail
X
Limit on number, hours of operation, zoning
district, 600 foot setback for dispensaries
from schools; If taxed, procedure in place for
receiving and depositing large all-cash
payments and appropriate security
arrangements for payment of annual
business license fees and tax payments;
deliveries must be within an enclosed area;
sign limitations.
6 Manufacturing X Limits on energy and water, restrict to level
1
6 Volatile Manufacturing X Strict limitations; monitoring and inspection
schedules
6 Testing Laboratories X Monitoring and Inspection schedules
6 Warehousing/Distribution X Deliveries must be within an enclosed area
7 Delivery Services
X
Make current regulations for medical
marijuana applicable to non-medical
marijuana deliveries as well
In summary, staff believes that a measured approach, combined with seeing how well
the State creates regulations and how non-medical marijuana is embraced and
integrated into California’s culture and society, will best protect the public health, safety,
and welfare while leaving options to reconsider the industry in the near future.
Proposed Process
Direct staff to draft a proposed ordinance for review and recommendation by the
Planning Commission at a public hearing and for consideration by the Council for
adoption.
FINANCIAL IMPACT:
There is no identified direct impact to financial and personnel resources. Depending on
the direction provided by the City Council, there may be significant implications
regarding potential revenue as well as staff resources relating to enforcement of
regulations. This item is not identified in the Critical Needs Action Plan or recently
adopted City Council Goals.
Item 10.a. - Page 34
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 12
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Direct staff to develop an ordinance regulating personal indoor cultivation and
restricted delivers in a manner similar to the City’s medical marijuana regulations
and prohibit all other non-medical marijuana related land uses at this time.
2. Do not make any amendments to the Arroyo Grande Municipal Code that
currently allows for limited uses and/or cultivation of medical marijuana at this
time and monitor developments in other jurisdictions and at the Federal level.
This alternative is not recommended. The Arroyo Grande Municipal Code needs
to either be clarified regarding non-medical marijuana prohibitions or what uses
are allowed, since it currently is focused only on medical marijuana. Doing
nothing could open the door to non-medical marijuana businesses opening in the
City based upon State issued permits.
3. Direct staff to draft amendments to sections of the Arroyo Grande Municipal
Code to expand allowed uses and/or cultivation of marijuana, and prepare a
resolution regarding tax alternatives pertaining to commercial marijuana for a
future ballot measure.
4. Direct staff to proceed in a public engagement strategy on the preferred
approach to marijuana regulation and return to Council in two months for
direction. Given timing considerations, if this option is pursued, an ordinance
may need to be brought back and adopted prior to the issuance of permits by the
State in January, 2018, clarifying that current prohibitions on commercial medical
marijuana activity and outdoor cultivation apply to non-medical marijuana, until
further decisions are made on how to proceed.
5. Provide other direction to staff.
ADVANTAGES:
The advantages of considering amending the City’s ordinance to be consistent with the
AUMA provides an opportunity for the public to weigh in on potential use and regulation
in the City and ensures that City rules are clear in light of evolving state legislation.
DISADVANTAGES:
No disadvantages have been identified for consideration of alternatives for amending
the City’s ordinance for marijuana regulation.
ENVIRONMENTAL REVIEW:
None required.
Item 10.a. - Page 35
CITY COUNCIL
CONSIDERATION OF DEVELOPMENT OF AN ORDINANCE RELATING TO NON-
MEDICAL MARIJUANA
PAGE 13
PUBLIC NOTIFICATION:
A public notice was placed on the City’s website on June 22, 2017. The Agenda was
posted at City Hall and on the City’s website in accordance with Government Code
Section 54954.2. A mention of this discussion was made to the Arroyo Grande and
Grover Beach Chamber of Commerce at their meeting on June 21, 2017.
ATTACHMENTS:
1. Background of issue – history of marijuana regulation
2. Rocky Mountain High Intensity Drug Trafficking Area report on The Legalization of
Marijuana in Colorado
3. California Legislative Analyst’s Office 2017-1018 Budget – The Governor’s Cannabis
Proposals
4. Status of Regulation in neighboring jurisdictions
5. Existing Ordinance No. 678
Item 10.a. - Page 36
Minutes: City Council Meeting Page 6
Tuesday, June 27, 2017
11. OLD BUSINESS
11.a. Consideration of a Staff Presentation, Receive Public Comment, and Provide Key
Policy Direction to Staff Concerning the Development of Local Regulations for Non-
Medical Marijuana Including Land Uses Under the Control, Regulate, And Tax Adult
Use Of Marijuana Act.
City Manager Bergman and Community Development Director McClish presented the staff
report and recommended that the Council: 1) Receive an analysis of issues including
preliminary recommendations from staff; 2) Receive public comment, and 3) Direct staff to
develop an ordinance regulating personal indoor cultivation and restricted deliveries in a manner
similar to the City’s medical marijuana regulations and prohibit all other non-medical marijuana
related land uses at this time.
Mayor Hill invited public comment. Speaking from the public were Patty Welsh, Arroyo Grande,
on behalf of those who need medical marijuana for terminal illnesses, expressed concern with
restrictions on outdoor cultivation, and supported permitted mobile delivery services for medical
marijuana; Jerry Rutiz, commented that he was not here to advocate cannabis use, referred to
spirit of law, and stated that the City Council should not put road blocks in place to continue
putting cannabis in hiding; that the City should allow a brick and mortar store because it would
be easier to regulate and enforce, commented that delivery services could become problematic,
and suggested that the City can implement a tax to receive revenue; Robert Olsen, referred to
the 2016 Colorado study before and after legalization of marijuana use which resulted in an
increase in statistics for traffic deaths, youth use, and emergency services and hospitalizations
related to marijuana use, and recommended the Council stay within the law but do not facilitate
the use of marijuana further due to the enormous social costs; Cynthia Gonzales, representing
Elite Care, referred to the Colorado study and stated she has received information and data that
contradicts the study, commented that teen use is unchanged, there is little impact on traffic
fatalities, that marijuana is used to treat palliative and chronic conditions, referred to a recently
passed Senate trailer bill, stated that medical cannabis will be highly regulated and California
has learned from Colorado’s experience and will want to be a leader; noted that Elite Care is not
a grower, and answered questions about how much cannabis can be delivered per day, per
person and how age verification is determined; Tammy Peluso, representing Elite Care,
provided additional information and clarification on personal outdoor cultivation; how much
product value can be carried by a delivery service and how it is packaged for delivery,
commented on teen use, commented on death statistics, and stated that California is much
more prepared to deal with cannabis; Rob Keim, St. Barnabas, commented on State law as it
relates to cannabis, expressed appreciation for the City’s conservative approach, and asked
questions regarding penalties; Robert Olsen, clarified that his previous comments were related
directly to the use of recreational marijuana; Kevin Gotchal, questioned why only three mobile
delivery permits were allowed in the City as it appears to limit commerce and revenue for the
City; commented on testing labs and stated the City should get in front of the regulations and be
able to enforce them, and commented that the City could benefit from the tax if they considered
that as an option; and Patricia Price, suggested that testing and research might be a good niche
for Arroyo Grande as there are not a lot of related community impacts.
In response to the public comment period, staff responded to questions regarding penalties and
potential revenue sources for certain land uses.
ATTACHMENT 2
Item 10.a. - Page 37
Minutes: City Council Meeting Page 7
Tuesday, June 27, 2017
Action: Mayor Hill moved to direct staff to develop an ordinance regulating personal indoor
cultivation and restricted deliveries in a manner similar to the City’s medical marijuana
regulations and prohibit all other non-medical marijuana related land uses at this time. Council
Member Harmon seconded, and the motion passed on the following roll-call vote:
AYES: Hill, Harmon, Ray, Barneich, Brown
NOES: None
ABSENT: None
12. NEW BUSINESS
None.
13. CITY COUNCIL REPORTS
The Mayor and Council Members provided brief reports from the following committee,
commission, board, or other subcommittee meetings that they attended as the City’s appointed
representative.
(a) MAYOR HILL:
(1) South San Luis Obispo County Sanitation District (SSLOCSD)
(2) Brisco/Halcyon Interchange Subcommittee
(3) Oversight Board to the Successor Agency to the Dissolved Arroyo
Grande Redevelopment Agency
(b) MAYOR PRO TEM BROWN:
(1) San Luis Obispo Council of Governments/Regional Transit Authority
(SLOCOG/RTA)
(2) Integrated Waste Management Authority Board (IWMA)
(3) South County Transit (SCT)
(4) Brisco/Halcyon Interchange Subcommittee
(c) COUNCIL MEMBER BARNEICH:
(1) Zone 3 Water Advisory Board
(2) Homeless Services Oversight Council (HSOC)
(3) Other
(d) COUNCIL MEMBER HARMON:
(1) County Water Resources Advisory Committee (WRAC)
(2) Air Pollution Control District (APCD)
(3) Five Cities Fire Authority (FCFA)
(4) Other: Attended the Visit SLO CAL advisory committee meeting.
(e) COUNCIL MEMBER RAY:
(1) California Joint Powers Insurance Authority (CJPIA)
(2) Economic Vitality Corporation (EVC)
(3) Tourism Marketing Committee
14. COUNCIL COMMUNICATIONS
Council Member Harmon invited everyone to the Heritage Square Park on Tuesday, July 4th at
1:00 p.m. for a patriotic concert in celebration of the July 4th holiday.
Item 10.a. - Page 38
PLANNING COMMISSION
MINUTES
SEPTEMBER 5, 2017
ATTACHMENT 3
AND 759 CASTILLO DEL MAR (TRACT 3048 -HEIGHTS AT
APPLICANT -JAMES AND KA TY REDMOND; REPRESENT,
GROUP". Commissioner George seconded the motion.
AYES:
NOES:
ABSENT:
Fowler-Payne, George, Mack
Schiro
Martin (recused)
Chair Martin returned to the dais.
PAGE 6
Commissioner Schiro mad otion to extend the meeting for 30 minutes to 11 :30 pm. The
motion was seconded ommissioner George. The motion passed on the following roll call
vote:
iro, George, Fowler-Payne, Mack, Martin
None
None
er discussion it was th·e consensus of the Commission to hear Item 8.b.
8.b. CONSIDERATION OF DEVELOPMENT CODE AMENDMENT CASE NO. 17-003;
AMENDMENTS TO CHAPTER 16.62 OF TITLE 16 AND CHAPTER 5.95 OF TITLE 5 OF
THE ARROYO GRANDE MUNICIPAL CODE RELATING TO MARIJUANA AND
MARIJUANA DELIVERY SERVICES
Director McClish presented the staff report and recommended the Planning Commission adopt
a Resolution recommending the City Council adopt the proposed Ordinance amending Chapter
16.62 of Title 16 and Chapter 5.95 of Title 5 of the Arroyo Grande Municipal Code relating to
marijuana and marijuana delivery services and responded to questions from the Commission ..
Commissioner Schiro made a motion to extend themeeting for 30 minutes to 12:00 a.m. The
motion was seconded by Commissioner Mack. The motion passed on the following roll call
vote:
AYES:
NOES:
ABSENT:
Schiro, Mack, Fowler-Payne, George, Martin
None
None
Director McClish continued to answer questions from the Commission regarding indoor or
outdoor.
Chair Martin opened the meeting for public comment.
Cynthia Gonzalez, ElitecareSF, explained the taxing process for delivery of marijuana.
Chief of Police Pryor responded to questions regarding regulations and the process for testing
for suspected drivers "under the influence".
Action: Commissioner Martin moved to adopt a resolution entitled "A RESOLUTION OF THE
Item 10.a. - Page 39
PLANNING COMMISSION
MINUTES
SEPTEMBER 5, 2017
PAGE7
PLANNING COMMISSION OF THE CITY OF ARROYO GRANDE RECOMMENDING THE
CITY COUNCIL ADOPT AN ORDINANCE AMENDING CHAPTER 16.62 OF TITLE 16 AND
CHAPTER 5.95 OF TITLE 5 OF THE ARROYO GRANDE MUNICIPAL CODE RELATING TO
MARIJUANA AND MARIJUANA DELIVERY SERVIES; DEVELOPMENT CODE CASE NO.
17-003; LOCATION -CITYWIDE". Commissioner Schiro seconded the motion. The motion
passed on the following roll call vote:
AYES:
NOES:
ABSENT:
Martin, Schiro, George, Mack
Fowler-Payne
None
9.a. CONSIDERATION OF DRAFT INITIAL STUDY/MITIGATED NEGATIVE DECL
THE BRIDGE STREET BRIDGE REHABILITATION PROJECT
ACTION: Commissioner Mack moved that item 9.a. be continued to a date rtain of September
19, 2017. Commissioner George seconded, and the motion passed on the owing roll call vote:
AYES:
NOES:
ABSENT:
Mack, George, Fowler-Payne, Schiro, Martin
None
None
10. NOTICE OF ADMINISTRATIVE DECISIONS SINC
This is a notice of administrative decision for Mino se Permits, including any approvals,
denials or referrals by the Community Developme irector. An administrative decision must
be appealed or called u for review b Commission b a ma·orit vote.
ARCH 17-007 The Heights at New 3,946 square foot A K. Heffernan
Vista Del Mar primary residence,
Group, LLC 826 square foot
accessory dwelling
unit, and 400 square
foot lanai
PPR 17-012 1091 Ash Established a vacation A C. Turner
Street rental in an existing
single family residence
PPR 17-013 318 Short Established a vacation A C. Turner
Street rental in an existing
residence
In response to C missioner Fowler-Payne's question, Director McClish stated if any member
of the public ts to see an item, staff can present the item. Chair Martin reiterated that
anyone can e into City Hall to review plans. In response to Commissioner Fowler-Payne's
question, o· ctor McClish reported on vacation rentals.
MISSION COMMUNICATIONS I
In re onse to Commissioner Mack's request, staff reported that Popeye's will be presented in
the ear future .
. STAFF COMMUNICATIONS
None
13. ADJOURNMENT
Item 10.a. - Page 40