Report Prepared by: Scott McBride, City Manager
Title
SUBJECT: Review and Discuss Potential Updates to Chapter 20.144.170 Regulations of Commercial Cannabis Activities - Commercial Cannabis Business Permits Update
REPORT IN BRIEF
Review and discuss potential updates to Chapter 20.44.170 Regulation of Commercial Cannabis Activities - Commercial Cannabis Business Permit Required including consideration of cannabis consumption lounges, modifications to permitting process for non-retail cannabis business permits, establishing a process to allow for scoring changes in the event of an error, clarify timing for the established Cannabis Business Application List based on final determination of an appeal, and other amendments creating a separate chapter within the Zoning Code for Cannabis.
RECOMMENDATION
Review and provide Staff direction on revisions and/or next steps.
Body
CITY COUNCIL PRIORITIES
The City Council previously discussed updates to Chapter 20.144.170 and adopted Ordinance 2550. There were additional items the council wished to discuss which are included in this report.
DISCUSSION
The City Council has actively worked to modify the City’s Zoning Ordinance, Chapter 20.44.170 Regulation of Commercial Cannabis Activities - Commercial Cannabis Business Permits so that they closely follow emerging market trends or address local issues.
In March 2023 the City Council considered several topics for potential policy modifications. Those included potentially increasing the number of retail permits, modifications during an appeal process to consider alternative sites, and updates to local ownership requirements. There was also interest in future later phase updates to be considered separately.
In July 2023 the City Council held a public hearing regarding modifications to increase the number of retail permits offered. Following the public hearing and significant public discourse when considering Ordinance 2550 the council decided to not increase the number of retail permits. The other recommended modifications were approved, allowing modifications to an application location during an appeal process. There were additional items the council requested as a secondary update. This report is intended to bring those back for discussion and possible staff direction.
Consumption Lounges
Council discussed this as a possible update to the ordinance. Research has been completed by Staff. The California State Legislature approved Assembly Bill AB 374 which would have created a framework for this type of use. However, in October the bill was vetoed by the Governor citing concerns over impacts to employee’s exposure to smoking.
There are many local agencies that are continuing to adopt local ordinances which allow for this type of activity. It should be noted that the state must also review and approve under their separate permitting process. State regulations only allow a consumption lounge at retail locations. The lounge is limited to products sold at the location.
Should the Council wish to add this as an additional local permit type only the five permitted commercial cannabis retail businesses would be eligible. Due to this limit staff is recommending the next step be outreach to the five retail cannabis businesses to assess their interest in this option. Based on their feedback and interest Staff can bring the item back for policy direction.
Modifications to permitting process for non-retail cannabis business permits.
There is no cap on the number of non-retail cannabis businesses that wish to conduct permitted activities such as cultivation, manufacturing, distribution, or testing. Since there is no cap, it is not a merit-based process. There has been discussion to change the approval process from the current commercial cannabis permit process considered by the Planning Commission to a lower-level approval body such as the Site Plan Review Committee. This committee has similar permit authority established in Chapter 20.64-1, and Chapter 20.64.050 which explains the committee composition and roles. Appeals could still be heard by the Planning Commission and if necessary, the City Council if a commission decision is appealed.
This change in process would significantly decrease processing time since public hearings are not part of the site plan process. It should be noted that these business types are only permitted in Business Park, Light Industrial, and Heavy Industrial zones which the exception of Distribution which may also be conducted in a General Commercial Zone meeting certain requirements. Testing Laboratories are also permitted in some commercially designated zones.
Establishing a process to allow for scoring changes.
The current merit-based process uses a scoring rubric established by the Council and points are awarded by the review committee. Currently the merit-based process does not include any process to reconsider or make changes to a score in the event of an error, information clarification, confirmation, or similar circumstances.
The Council may recall that this specific issue was part of an appeal of the fifth commercial cannabis permit. Since no process allowed scoring changes it was not modified.
Clarify timing for the established Cannabis Business Application List based on final determination of an appeal.
The ordinance currently has a process to establish a qualified commercial cannabis application list for retail businesses. This list requires that any permit vacancies during the period use the qualified applications from the list in their ranking order. It’s valid for one year form the date the last available permit is issued by the Planning Commission.
This process does not take into consideration an appeal process. The list could potentially expire while the appeal process plays out. There are several options to make modifications to this section to allow for the qualified list to remain effective for a longer term. That may potentially speed up selection if a selected applicant fails to meet performance or opening requirements specified in their permit.
Other amendments
Staff recommends creating a separate chapter within the Zoning Code for Cannabis
The cannabis sections are currently located under Chapter 20.44.170 - Special Land uses. Given the length and complexity of the section and subsections it would be easier to follow as a separate chapter.
IMPACT ON CITY RESOURCES
None at this time.
ATTACHMENTS
1. Presentation December 18, 2023
2. Presentation July 20, 2023
3. Presentation March 20, 2023
4. City of Ojai Ordinance
5. City of Port Hueneme Ordinance