CC 2017-10-10_09i Adopt Ordinance_Cannabis 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: OCTOBER 10, 2017
SUMMARY OF ACTION:
The 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.
RECOMMENDATION:
It is recommended that 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 services.
BACKGROUND:
In November 2016, California voters approved Proposition 64, the Control, Regulate,
and Tax Adult Use of Marijuana Act (AUMA).
On June 27, 2017, the City Council directed the preparation of an Ordinance to prohibit
outdoor cultivation and all commercial uses, except to allow limited delivery services,
and regulation of personal cultivation for non-medical marijuana consistent with existing
City regulations for medical marijuana. The Planning Commission recommended
adoption of the Ordinance on September 5, 2017. The City Council introduced the
ordinance, without modification, on September 26, 2017.
The ordinance is now before the Council for adoption. The Ordinance will become
effective thirty (30) days after final passage of the Ordinance.
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CITY COUNCIL
CONSIDERATION OF DEVELOPMENT CODE AMENDMENT CASE NO. 17-003
OCTOBER 10, 2017
PAGE 2
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Adopt the Ordinance as proposed;
2. Modify and reintroduce the Ordinance;
3. Provide direction to staff.
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.
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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:
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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,
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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
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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.
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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.
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“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.
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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.
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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
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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.
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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.
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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. 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.
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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.
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.
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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
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.
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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
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.
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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.
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.
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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.
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.
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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.
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.
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___________________________________
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
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