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HomeMy WebLinkAboutItem 6c. Second Reading of O-1722 amending Title 9, Chapter 10 (Cannabis Regulations) Item 6c Department: Community Development Cost Center: 4003 For Agenda of: 11/1/2022 Placement: Consent Estimated Time: N/A FROM: Michael Codron, Community Development Director Prepared By: Alex Fuchs, Cannabis Business Coordinator SUBJECT: SECOND READING OF ORDINANCE NO. 1722 (2022 SERIES) AMENDING TITLE 9, CHAPTER 10 (CANNABIS REGULATIONS) OF THE CITY OF SAN LUIS OBISPO MUNICIPAL CODE RECOMMENDATION Adopt Ordinance No. 1722 (2022 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, Calif ornia, Amending Chapter 9.10 (Cannabis Regulations) of the Municipal Code for Commercial Cannabis Operator Permits and Personal Cultivation” clarifying the requirements for applying, obtaining, activating, and renewing commercial cannabis operator permits in the City. POLICY CONTEXT As noted, throughout the development, implementation, and administration of the Cannabis Business Program, this new process is being refined over time, based on operational and administrative experience, as well as cannabis business operator and public input. The amendments to Chapter 9.10 (Cannabis Regulations) are meant to clarify existing City intent and interpretation of the regulations governing commercial cannabis business operations. The amendments are consistent with overall goals of the Cannabis Business Program and are in the spirit of City Council’s goals for the program to protect the community’s character and quality of life while ensuring cannabis businesses operations are well run and sustainable. The updates to the Cannabis Regulations are also consistent with Chapters 9.10 and 5.10 of the Municipal Code and Section 17.86.080 of the Zoning Code. DISCUSSION On October 18, 2022, City Council introduced Ordinance No. 1722 (2022 Series), amending Title 9, Chapter 10 of the Municipal Code amending the City’s Cannabis Regulations to further clarify the requirements for applying, obtaining, activating, and renewing commercial cannabis operator permits. The following is a summary of the amendments to specific sections of Chapter 9.10 (Cannabis Regulations) of the Municipal Code as detailed in Attachment A. Page 18 of 175 Item 6c 1. Definitions (9.10.020) Definitions for the following terms have been added: Applicant, Financial Interest Holder, Majority, Operator, Owner, Principal(s), Primary Principal, and Social Equity Owner. These terms were previously defined in the Cannabis Business Operator Permit Application but were not codified within the Chapter 9.10 Cannabis Regulations. These changes are meant to provide clarity, consistency and transparency of expectations. 2. Commercial Cannabis Operator Permit Application Procedures and Requirements (9.10.070) The Grounds for Automatic Disqualification (9.10.070(C)) has been expanded to clearly state that conviction of any felony or offense related to the application for or operation of cannabis businesses (whether or not specifically referenced in Business & professions Code Section 26057), or criminal misconduct, in the five years prior to the submittal of an application for a permit. Additionally, any false or misleading statements or omissions made by the Applicant in the application process is grounds for immediate notice of automatic disqualification of the application and / or revocation of any permit issued. Subsection D has been amended to extend t he timeline to activate an Operator Permit from 12 months to 24 months from the date of issuance. However, if a permit is not activated within the allotted time frame, the section continues to provide that failure to activate within the specified timeframe is deemed an abandonment, causing the automatic lapse of the permit. Failure to timely activate would requ ire the applicant must submit a new application would prohibit an applicant from operating in the City until a subsequent application is approved and a permit activated. 3. Suspension of Revocation of Permit (9.10.090) and Appeal (9.10.100) The section has been amended to provide clarity that immediate revocation of a permit is at the time of application and continuously remains an available penalty for criminal or regulatory misconduct following the activation of a permit and at any time upon discovery of proof that an applicant provided false or misleading statements during the application process upon which the City relied in issuing the permit. The appeal processes applicable to revocations is now more clearly detailed in section 9.10.100(E). 4. Prohibition on Transfer of Commercial Cannabis Operator Permits (9.10.120) The section has been expanded to include a three-year moratorium prohibiting majority transfer of ownership after a permit is activated . A majority transfer is defined as a transfer of ownership in aggregate of 50% or more to persons that are not Applicants, Owners, or Financial Interest Holders as identified during the application process. Additionally, transfers of any interest in a business is prohibited from the time of application through the activation of a permit. Page 19 of 175 Item 6c The section has also been expanded to prohibit any transfer within three years following the activation of the permit that results in a reduction or elimination in the number or percentage of Social Equity Owners when compared to the original application. After the three-year period, transfers that result in a reduction of the number of Social Equity Owners or would reduce the Social Equity Ownership percentage below a 2% minimum are prohibited. Such transfers must be reported and verified by the City for approval. Owners, Permit Holders, and Financial Interest Holders in a retail storefront are also proposed to be prohibited from obtaining ownership interests of any kind in more than one storefront operated in the City. If adopted, any transfer that violates this section will immediately void or terminate the business’ operating permit of any permitted business whose designated parties violate the provision . 5. Inspections and Enforcement (9.10.140) Any commercial cannabis business found in violation of Chapter 9.10 throughout the application and permitting process will be subject to the enforcement provisions of this chapter. Public Engagement A draft Ordinance was brought before City Council on October 18, 2022, as a Public Hearing item, as part of the Annual Cannabis Program Update. The draft Ordinance was also provided to existing commercial cannabis operator permit holders for review and comment. CONCURRENCE A Steering Committee and Cannabis Team of City staff members from Administration, City Attorney’s office, Community Development Department, Finance Department, and Police Department convened to guide the process of developing updates and regulations for consideration by the City Council. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended action in this repot because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. The adoption of the cannabis regulatory changes is an administrative activity of a government agency that will not result in direct or indirect physical impact on the environment. FISCAL IMPACT Budgeted: Yes Budget Year: On-going Funding Identified: Yes Page 20 of 175 Item 6c Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ 0 $ 0 $ 0 $ 0 State Federal Fees Other: Total $ 0 $ 0 $ 0 $ 0 There is no fiscal impact to adopt Ordinance No. 1722 (2022 Series) amending Chapter 9.10 of the Municipal Code. ALTERNATIVES Council could decide not to adopt Ordinance No. 1722 (2022 Series) amending Chapter 9.10 of the Municipal Code. This action is not recommended because the amendments were presented at a duly noticed public meeting and a draft of the Ordinance was introduced by City Council action taken on October 18, 2022. ATTACHMENTS A - Ordinance No. 1722 (2022 Series) Page 21 of 175 O ______ ORDINANCE NO. 1722 (2022 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING CHAPTER 9.10 (CANNABIS REGULATIONS) OF THE MUNICIPAL CODE FOR COMMERCIAL CANNABIS OPERATOR PERMITS AND PERSONAL CULTIVATION WHEREAS, on November 8, 2016, California voters approved Proposition 64, the Adult Use of Marijuana Act, which created a comprehensive regulatory and dual licensing system for commercial cannabis activity in the State of California effective January 2018; and WHEREAS, Proposition 64 was passed by a sixty-seven percent (67%) of the voters in the City of San Luis Obispo; and WHEREAS, prior to the passage of Proposition 64, the City took the position that commercial cannabis activity was prohibited in the city under the principles of permissive zoning, which holds that uses that are not expressly allowed or conditionally allowed under zoning regulations are prohibited within the City; and WHEREAS, after the passage of Proposition 64, the City Council of the City of San Luis Obispo adopted on April 4, 2017 in the City Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, an Ordinance No. 1633 (2017 Series), amending Chapter 9.10 of the Municipal Code to maintain the status quo while the City conducted public outreach; and WHEREAS, the City Council of the City of San Luis Obispo adopted on May 22, 2018 in the City Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, an Ordinance No. 1647 (2018 Series), amending Title 9 (Public Peace, Morals, and Welfare) and Title 17 (Zoning Regulations) of the Municipal Code allowing for Commercial Cannabis Business and personal cultivation activities in the city; and WHEREAS, the City Council of the City of San Luis Obispo adopted on January 14, 2020 in the City Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, an Ordinance No. 1673 (2019 Series), amending Chapter 9.10 (Cannabis Regulations) of the Municipal Code modifying the Commercial Cannabis Operator Permit application procedures and requirements; and WHEREAS, the City Council of the City of San Luis Obispo adopted on February 2, 2021 in the City Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, an Ordinance No. 1691 (2021 Series), amending Chapter 9.10 (Cannabis Regulations) and Chapter 5.10 (Cannabis Business Tax) of the Municipal Code establishing an expiration date and registration requirements for all cannabis Operator permits; and Page 22 of 175 Ordinance No. 1722 (2022 Series) Page 2 WHEREAS, after administration and operation of the commercial cannabis program, staff has identified necessary changes to Chapter 9.10 of the Municipal Code to clarify the application and operational requirements for commercial cannabis permit holders; and WHEREAS, the City Council of the City of San Luis Obispo on September 20, 2022 in the City Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, considered the recommended changes to Chapter 9.10 of the Municipal Code and held a public meeting to review and discuss the proposed changes. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows: SECTION 1. Section 9.10.020, subsection B of the San Luis Obispo Municipal Code is hereby amended to read as follows: B. City defined terms. The following words or terms used in this chapter have the following meanings: 1. “Applicant” means the individual or entity applying for the Comme rcial Cannabis Business Operator Permit, including each entity or individual identified as part of the Applicant team or who is an Owner or Principal of an entity applying for a Permit. 2. “Commercial Cannabis Business” means any person or entity engaging in any business, operation or activity which is Commercial Cannabis Activity under state law in the City. 3. “Commercial Cannabis Operator Permit” means a permit required by the City of San Luis Obispo pursuant to this chapter to conduct Commercial Cannabis Activity or a Commercial Cannabis Business in the City. 4. “Financial Interest Holder” means a person or entity (other than a Social Equity Owner) who has less than a 10% aggregate ownership interest in the Commercial Cannabis Business, has no active or passive direction, control, or management of the Commercial Cannabis Business, and otherwise meets the definitions of Financial Interest Holder as set forth in the Department of Cannabis Control Medicinal and Adult -Use Commercial Cannabis Regulations California Code of Regulations Title 4 Division 19. Department of Cannabis Control. For purposes this Chapter, the aggregate ownership threshold herein shall supersede any current (20%) or subsequently amended State threshold for a Financial Interest Holder. 5. “Majority “means more than half. An equal number does not constitute a Majority. Page 23 of 175 Ordinance No. 1722 (2022 Series) Page 3 6. “Operator” means an Applicant that has been permitted and conducts or conducted active cannabis operations in the City. 7. "Owner" means any of the following: a. A Primary Principal b. A Social Equity Owner c. Any person or entity engaged actively or passively in the direction, control, or management of any Commercial Cannabis Business d. If available evidence indicates that an individual qualifies as an Owner, the City may notify the Applicant or licensee that it must either: 1) disclose the individual or entity as an Owner and submit written acknowledgement that the Owner will be subject to the requirements of the application and this Chapter 9.10; or, 2) produce a written attestation under oath, along with any supporting documentation, demonstrating that the individual does not qualify as an Owner. 8. “Principal(s)” means the individual(s), entities, and/or individual members of any entity, identified as part of the Applicant team in the Commercial Cannabis Operator Permit application. 9. “Primary Principal” means an individual or entity that has a 10% or greater ownership interest, or has an immediately actionable entitlement to such interest, in the Applicant business, Commercial Cannabis Business, including, but not limited to partners, members, officers, directors, and stockholders of every corporation, limited liability company, or general or limited partnership that owns, or has an immediately actionable entitlem ent to, at least 10% of the stock, capital, profits, voting rights, or membership interest of the Commercial Cannabis Business or that is one of the partners in the Commercial Cannabis Business. Managers of a Commercial Cannabis Business with the authority to establish, modify or control operational and policy directives and/or business operations plans for the business, whether by means of ownership or contractual authority, shall also be considered Primary Principals. On site retail managers without such authority shall be considered employees and not Primary Principals. 10. “Responsible Party(ies)” shall be one or more individuals who have an ownership interest in a Commercial Cannabis Activity and are designated to be personally responsible for compliance with all terms and conditions of the Commercial Cannabis Operator Permit, all other permits required by the City, and all ordinances and regulations of the City. Any person having an ownership interest of more than fifty percent in a Commercial Cannabis Activity shall be designated a Responsible Party on the application. If no individual owns more than fifty percent of a Commercial Cannabis Activity, the individual owning the largest share shall be a Responsible Party, and if multiple individuals have the same percentage interest, each one shall be a Responsible Party. More than one individual can be designated a Responsible Party. Page 24 of 175 Ordinance No. 1722 (2022 Series) Page 4 11. “Social Equity Owner” means the Principal(s) of a Commercial Cannabis Business with 2% equity or higher who earned at or below the median household income at the time the Operator’s Commercial Cannabis Operator Permit application was approved by the City. 12. “Cannabis Event” means a public or private event where compensation is provided or exchanged, either directly or indirectly or as part of an admission or other fee for service, for the provision, hosting, promotion or conduct of the event where consumption of cannabis is part of the activities. SECTION 2. Section 9.10.070, subsections A, B, C, and D of the San Luis Obispo Municipal Code are hereby amended to read as follows: A. Application. A person shall apply for a Commercial Cannabis Operator Permit by submitting an application to the City during the annual application period. The City Council will, by resolution, adopt criteria by which all applications will be reviewed, applicants qualified and in the case of retail and cultivation businesses, also ranked. Those applicants that are selected will have the opportunity to apply for a use permit as outlined in Section 17.86.080. Each application shall designate at least one Responsible Party. If a person is not selected to receive a Commercial Cannabis Operator Permit, the person may reapply during the next annual application period or any subsequent application period established by the city manager except as otherwise prohibited by this Chapter. B. Application Submittal Timeframe. A person may only submit one application per permit type, per application period, for a Commercial Cannabis Operator Permit, during the annual application period designated by resolution of the city council or any subsequent application period established by the city manager. An Applicant who is unsuccessful in any application period may submit another application in any subsequent application period, except as otherwise prohibited by this Chapter. The Commercial Cannabis Operator Permit will be valid for twelve months. Once a permit is activated, the Applicant can apply annually for renewal. There is no guarantee that an Applicant will receive a Commercial Cannabis Operator Permit in the first instance. Due to limitations on the number of certain permits, even a highly ranked Applicant for a retail or cultivation permit may not receive a Commercial Cannabis Operator Permit and even an Applicant who receives a Commercial Cannabis Operator Permit is not guaranteed that any subsequent, required land use permit, as outlined in Section 17.86.080, will be approved. C. Grounds for Automatic Disqualification. In addition to any other reason that may be established by the City Council as a basis for disqualification, an Applicant shall be disqualified from applying for, or obtaining, a Commercial Cannabis Operator Permit if: Page 25 of 175 Ordinance No. 1722 (2022 Series) Page 5 1. The Applicant fails to timely file an application during the annual application period. 2. The Responsible Party refuses to sign the application and agree to be personally responsible for compliance, and personally liable for failure to comply, with the provisions of this chapter. 3. The Applicant, or any of its officers, directors or Owners, or any person listed in the application, has been convicted of a felony or offense referenced in Business and Professions Code Section 26057, or of any other crime related to the application for or operation of a cannabis business; or has been subject to fines, penalties, or sanctions for cultivation or production of a controlled substance on public or private lands or for unauthorized commercial cannabis activities as specified in Business and Professions Code Section 26057 or for any other criminal misconduct related to the application for or operation of a cannabis business; or has been disqualified from obtaining, or has had a commercial cannabis license suspended or revoked by the state of California or any city or county in any state for misconduct related to a cannabis business. The foregoing restrictions shall apply within the five (5) years preceding the date the application is filed, and for any additional period of time during which an Applicant is ineligible to apply for a state cannabis license. No person who has been convicted of such a felony or offense, or subject to such fines, penalties, sanctions, disqualification, suspension or revocation of a cannabis permit or license, may be engaged (actively or passively) in the application for, or operation, management or ownership of any Commercial Cannabis Business. A conviction within the meaning of this chapter means a plea or verdict of guilty or a conviction or diversion following a plea of nolo contendere. 4. The Applicant made one or more false or misleading statements or omissions in the application process. The foregoing shall result in immediate notice of automatic disqualification of the application, and/or revocation of any permit issued to the Applicant as the result of the misleading statements or omissions. 5. Any person listed on the application is a licensed physician making patient recommendations for medical or medicinal cannabis pursuant to State law. 6. Any person listed in the application is less than twenty-one (21) years of age. D. Duration and Activation of Permit. Each Commercial Cannabis Operator Permit issued pursuant to this Chapter shall expire twelve (12) months after the date of its activation. The permittee may apply for renewal prior to expiration in accordance with this chapter. Each Commercial Cannabis Operator Permit must be activated within twenty-four (24) months of issuance. The permit is activated by the issuance of a use permit for the Commercial Cannabis Activity pursuant to Chapter 17.86, together with all other applicable City permits and state Page 26 of 175 Ordinance No. 1722 (2022 Series) Page 6 licenses, and the Commercial Cannabis Operator thereafter opening and continuously operating the Commercial Cannabis Activity. Failure to timely activate the permit shall be deemed abandonment of the permit and the permit shall automatically lapse. In the event that a permit holder fails to timely activate the permit and the permit lapses, the cannabis business shall be required to submit a new application, unless otherwise prohibited from doing so under this Chapter. SECTION 3. Section 9.10.090, subsections D and E of the San Luis Obispo Municipal Code are hereby amended to read as follows: D. Notwithstanding the foregoing, upon finding, at any time following activation of a permit and operation of a cannabis business, of any violation of criminal or regulatory misconduct that would have precluded the issuance of a cannabis permit or state license, or upon a finding that the Applicant or Owner provided false or misleading information in the Commercial Cannabis Operator Permit application that resulted in the issuance of any Operator permit, the permit and right to operate a cannabis business shall be revoked immediately, subject to appeal as set forth in Section 9.10.100(B). E. Notwithstanding the foregoing, upon finding, at any time prior to activation of a permit, of any violation of criminal or regulatory misconduct that would have precluded the issuance of a cannabis permit or state license, or upon a finding that the Applicant or Owner provided false or misleading information in the Commercial Cannabis Operator Permit application that resulted in the issuance of any Operator permit, the permit shall be revoked immediately, subject to notice and informal appeal as set forth in Section 9.10.100(E). SECTION 4. Section 9.10.100, subsection E of the San Luis Obispo Municipal Code is hereby amended to read as follows: E. Revocation – Prior to Operator Permit Activation. A decision of the city to void, nullify or terminate an Operator permit before the Operator permit has been activated in accordance with 9.10.080 (E), shall be the final action of the city and not appealable, except as set forth in this Section. If the date of discovery is prior to activation of the Operator permit, the Applicant shall be provided notice of automatic disqualification and voidance/nullification/termination of the Operator Permit and given an opportunity to respond to the determinations in writing and/or in an informal hearing before the City Manager, upon written request within ten days following notification. The determination of the City Manager shall be final with no further right of appeal. SECTION 5. Section 9.10.120, subsection B, C, D, E, F, and G of the San Luis Obispo Municipal Code are hereby amended to read as follows: Page 27 of 175 Ordinance No. 1722 (2022 Series) Page 7 B. Transfer or Assignment Prohibited. It shall be unlawful and a violation of this Chapter to encumber, mortgage, lien, hypothecate, give, bequeath, sell, assign or transfer, by operation of law or otherwise, any portion of the ownership , financial interest, or control of a Commercial Cannabis Business or a Commercial Cannabis Operator Permit to any person who does not have a Commercial Cannabis Operator Permit from the city. Prior to the effective date of any transfer or other action described in this section. The Commercial Cannabis Operator Permittee proposing such an action shall: 1. Notify the City in writing of the proposed action, comply with applicable regulations and provide such information as the City reasonably requests regarding the identity and qualifications of persons involved, and pay all applicable fees and charges; and 2. Provide proof that the proposed lender, lienholder, recipient, heir, buyer, assignee, transferee, or other potential recipient of any portion of the ownership or control, at the time of the notice and effective date of the proposed action, is qualified by the City to apply for a Commercial Cannabis Operator Permit and the proposed action is conditioned on the City issuing to the person a new or amended Commercial Cannabis Operator Permit. 3. Notify the city in writing within ten (10) calendar days of the action becoming final with the names and contact information of the new persons involved, together with a request that the City issue either a new or amended Commercial Cannabis Operator Permit, as applicable. C. Three Year Moratorium on Majority Transfer of Ownership. Notwithstanding any other provision of this subsection, for three years following the date on which the Commercial Cannabis Business activates its Commercial Cannabis Operator Permit in accordance with 9.10.070(D), no transfer of an aggregate ownership interest of 50% or more in a Commercial Cannabis Operator Permit will be permitted to any person or combination of persons who were not Applicants, Owners or Financial Interest Holders of the permit at the time that a Commercial Cannabis Operator Permit was awarded. This restriction shall be cumulative, as to each Commercial Cannabis Operator Permit. No transfer of any interest is permitted in a Commercial Cannabis Business prior to activating the Commercial Cannabis Operator Permit is allowed. D. Prohibition against obtaining ownership in more than one storefront cannabis dispensary. Notwithstanding any other provision of this subsection, it shall be unlawful and a violation of this Chapter for an Owner, permit holder, or Financial Interest Holder of a commercial cannabis retail storefront in the City to be a Owner, permit holder, or Financial Interest Holder in any other commercial cannabis retail storefront in the City. Page 28 of 175 Ordinance No. 1722 (2022 Series) Page 8 E. Prohibition against Social Equity Owner reductions. Notwithstanding any other provision of this subsection, any transfer of ownership within three years of permit activation that will result in the reduction or elimination of the total number of Social Equity Owners or percentage interest of Social Equity Ownership in a Commercial Cannabis Business from the number or ownership percentage proposed in the original Commercial Cannabis Operator Permit applications is prohibited. This prohibition shall include the internal transfer of ownership from one currently permitted Operator to another, and transfers of Social Equity Owner interests of any kind require both prior notice and approval of the City to verify compliance with this section. Thereafter, any transfer, at any time, that would result in reduction of the total number of Soc ial Equity Owners proposed in the original application, or that would result in the total Social Equity Ownership percentage in a Commercial Cannabis Business to be reduced below a minimum of 2%, shall be prohibited. F. Owner and Financial Interest Disclosure. Notwithstanding any other provision of this subsection, all Owners and Financial Interest Holders in any Commercial Cannabis Business shall be disclosed to the City in the application for the Operator permit. Any changes to Commercial Cannabis Business Owners or Financial Interest Holders shall be disclosed to the City when notification is given to the State. G. Assignment Null and Void. Any attempt to transfer, sell, assign, give, or lien, or any transfer, by operation of law or otherwise, or any failure to disclose information as required by this Chapter, is prohibited and a violation of this Chapter, subject to such penalties provided under this Chapter or as otherwise provided for violation of the Municipal Code. Any completed transfer, sale, assignment, gift, or lien, of a Commercial Cannabis Operator Permit issued pursuant to the Chapter, is prohibited. Any such action immediately shall void, nullify and/or terminate the Commercial Cannabis Operator Permit, which shall be of no further force or effect as of the date of any prohibited transfer, sale, assignment, gift or lien. SECTION 6. Section 9.10.140, subsection D of the San Luis Obispo Municipal Code is hereby amended to read as follows: D. Violation and enforcement anytime during application and permitting process. Notwithstanding any initial verification of compliance of the Commercial Cannabis Operator Permit application and commercial cannabis activity with the provisions of this Chapter, any Commercial Cannabis Business later found to be in violation of any of the requirements of this Chapter at any time during, throughout and after the application and permitting process is subject to the enforcement provisions provided in this chapter. SECTION 7. Ordinance No. 1691 (2021 Series) is hereby amended and superseded to the extent inconsistent herewith. Page 29 of 175 Ordinance No. 1722 (2022 Series) Page 9 SECTION 8. Environmental Review. The California Environmental Quality Act (CEQA) does not apply to the recommended action in this repot because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. The adoption of the cannabis regulatory changes is an administrative activity of a government agency that will not result in direct or indirect physical impact on the environment. SECTION 9. Severability. If any subdivision, paragraph, sentence, clause, or phrase of this Ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the valid ity or enforcement of the remaining portions of this Ordinance, or any other provisions of the city' s rules and regulations. It is the city' s express intent that each remaining portion would have been adopted irrespective of the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable. Page 30 of 175 Ordinance No. 1722 (2022 Series) Page 10 SECTION 10. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage, in The New Times, a newspaper published and circulated in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage. INTRODUCED on the 18th day of October 2022, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ___ day of _____ 2022, on the following vote: AYES: NOES: ABSENT: ___________________________ Mayor Erica A. Stewart ATTEST: _________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: __________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on _____________________. ___________________________ Teresa Purrington City Clerk Page 31 of 175 1010 Marsh St., San Luis Obispo, CA 93401 (805) 546-8208 . FAX (805) 546-8641 PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA, County of San Luis Obispo, I am a citizen of the United States and a resident of the county aforesaid; I am over the age of eighteen years, and not a party interested in the above entitled matter. I am the principal clerk of the printer of the New Times, a newspaper of general circulation, printed and published weekly in the City of San Luis Obispo, County of San Luis Obispo, and which has been adjudged a newspaper of general circulation by the Superior Court of the County of San Luis Obispo, State of California, under the date of February 5, 1993, Case number CV72789: that notice of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, tc wit: Och b� 2-7— in the year 2022. I certify (or declare) under the the penalty of perjury that the foregoing is true and correct. Dated at San Luis Obispo, California, this day 1-77 of _CC k_1p %o0e_. 2022. Michael Gould, New Times Legals Proof of Publication of CITY OF SLO ORDINANCE NO.1722 (2022 SERIES) AN ORDINANCE Of THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO. CALIFORNIA, AMENDING CHAPTER 9.10 (CANNABIS REGULATIONS) OF THE MUNICIPAL CODE FOR COMMERCIAL CANNABIS BUSINESS BUSINESSES AND PERSONAL CULTIVATION NOTICE IS HEREBY GIVEN that the City Council of the City of San Luis Obispo, California, at its Regular Meeting of October 18, 2022, introduced the above titled ordinance upon a motion by Council Member Pease, second by Vice Mayor Christianson, and on the following roll call vote: AYES: Council Member Marx,Pease, Shoresman, Vice Mayor Christianson, and Mayor Stewart NOES: None Ordinance No. 172(O>Series): This is a City Ordinance to amend Chapter 9.10 (Cannabis Regulations) of the Municipal Code to include the following changes: • Definitions 191OO2O1 Definitions for the following terms have been added: Applicant, Financial Interest Holder, Majority, Operator, Owner, Principal(s), Primary Principal, and Social Equity Owner. • CommemullCannabis O t Planpite I" Procedures and R Omm The section has been expanded to clearly state that felony convictions related to the application for or operation of cannabis businesses, including criminal misconduct in the five years prior to the submittal of an application for a permit is grounds for disqualification. The timeline to activate a permit has been extended from 12 months to 24 months from the date of issuance. If a Parma is not activated within the allotted time frame, then the applicant must submit a new application or is otherwise prohibited from operating in the City. • Susoens'on of Revocation f PsDB_J%IOgqQJ and Appeal is 10100) The section has been expanded to include immediate revocation of a permit for criminal or regulatory misconduct following the activation of a permit orfor providing false or misleading statements during the application process. Such revocations would be subject to appeal and the appeal process is now detailed in section 9.10.1On(E). • Prohibition Transfer f Counconfignal Gifinflabig Opilratur Permits 191O12O1 The section has been expanded to include a three-year moratorium on majority transfer of ownership after a permit is activated, transfer of ownership in aggregate of 5O% or more to persons that are not applicants, owners, or financial interest holders as identified during the application process is prohibited and transfers of any musical in a business is prohibited prior to the activation of a permit. The section has also been expanded to prohibit any transfer within three years fallowing the activation of the permit that results in a reduction or elimination in the number or percentage of Social Equity Owners when compared to the original application. After the three-year period, transfers that result in a reduction of the number of Social Equity Owners or would reduce the Social Equity Ownership percentage helm a 2% minimum are prohibited. Such transfers must be reported and verified by the City for approval. Owners, permit holder, and Financial Interest Holders are also prohibited from obtaining ownership of any kind in more than one storefront operated in the City. Any transfer that violates this section will immediately void or terminate the business' operating permit • lidlauctons andEnforcement (a1O14O1 Any commercial cannabis business found in violation at Chapter 9.10 throughout the application and permitting process will be subject to the enforcement provisions of this chapter. A full and complete copy of the aforementioned Ordinance is available far inspection as part of the published agenda packet for the November 1, 2022 Council Meeting, or you may call (805) 781-7100 for more information. NOTICE IS HEREBY GIVEN that the City Council of the City of San Luis Obispo will consider adopting the Ordinance at its Regular Meaning of November 1, 2072 at 5:30 .m. in the Council Chambers at City Hall, 990 Palm Street San Luis Obispa. The City Council meeting will be televised live on Charter Cable Channel 2O and live streaming an the Ciry's YouTube channel btta]// vo u wbe slo iN. Teresa Puaington City Clerk October27,2O22 AGmin & pcaovl/.NiMG Aynin/NIMLOM,e/6USINESS/ Wbk Na6en/qa(d 146