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HomeMy WebLinkAboutItem 4a. Amendments to Municipal Code regarding Cannabis Business Retail Storefront Operations and Overlay Zones for Annexed East Airport Area PLANNING COMMISSION AGENDA REPORT SUBJECT: REVIEW PROPOSED AMENDMENTS TO THE MUNICIPAL CODE MODIFYING RULES FOR CANNABIS BUSINESS RETAIL STOREFRONT OPERATIONS AND REVIEW OF EXPANSION OF THE CANNABIS BUSINESS OVERLAY ZONES TO INCLUDE THE RECENTLY ANNEXED EAST AIRPORT AREA BY: Alex Fuchs, Cannabis Business Coordinator FROM: Tyler Corey, Deputy Director Phone Number: 805-783-7877 Phone Number: 805-781-7169 Email: afuchs@slocity.org Email: tcorey@slocity.org APPLICANT: City of San Luis Obispo REPRESENTATIVE: Alex Fuchs RECOMMENDATION Adopt a resolution recommending the City Council introduce and approve Ordinances to amend the Municipal Code modifying specific rules for commercial cannabis retail storefront operations and to expand the Cannabis Business Overlay Zones to include recently annexed areas east of Broad Street in the Airport Area Specific Plan . 1.0 COMMISSION'S PURVIEW Review the recommended amendments to the Municipal Code and the expansion of the Cannabis Business Overlay Zones and make a recommendation to City Council for the introduction and adoption of Ordinances for the proposed changes to the City’s Cannabis Business Program. 2.0 SUMMARY The City Council has directed staff to return annually with an update on the City’s Cannabis Business Program. The annual update is an opportunity for staff to recommend policy and regulatory changes to improve the commercial cannabis application and operational processes. It is also an opportunity for existing cannabis businesses to request changes based on their experiences operating in the City. The next annual Cannabis Business Program update is scheduled before City Council on March 7, 2023. Staff will present, for Council’s consideration, proposed amendments to Chapter 17.86 and Chapter 9.10 of the Municipal Code to modify certain rules for commercial cannabis retail storefront operations. The proposed amendments are a follow-up to Council direction provided at the last annual Cannabis Business Program update in October 2022. Staff will also present a proposed expansion to the Cannabis Business Overlay Zones to include a recently annexed area east of the airport along Broad Street. The intent is to expand the opportunities for cannabis businesses to be permitted in appropriately zoned areas of the City. Meeting Date: 2/8/2023 Item Number: 4a Time Estimate: 60 Minutes Page 9 of 35 Item 4a CODE-0046-2023 Planning Commission Report – February 8, 2023 Both items require changes to the City’s Zoning Regulations and the Zoning Map which fall under the purview of the Planning Commission. This report presents the background and justification for the proposed amendments and recommendation to adopt a Resolution (Attachment A) recommending Council introduce and adopt Ordinances (Exhibit A and Exhibit B to the Resolution) approving the proposed amendments. 3.0 PREVIOUS REVIEW At the last annual Cannabis Business Program update in October 2022, Council provided direction to further evaluate and return with recommended amendments to cannabis retail storefront policies including the expansion of retail storefront operational hours, allowance of medical cannabis users aged 18-20 to access retail storefronts, and to allow retail storefronts to also include delivery operations. 4.0 PROJECT ANALYSIS The next annual Cannabis Business Program update on March 7, 2023, consists of five parts: 1) review of operator permit changes; 2) tax revenue forecast updates; 3) recommendation to expand the Cannabis Business Overlay Zones; 4) recommendations to modify the requirements for retail storefront operations described above; and 5) recommendation to update the merit criteria and application evaluation process. The merit criteria and evaluation process updates do not fall under the purview of the Planning Commission but are mentioned in the report for context and transparency purposes. 4.1 Expansion of the Cannabis Business Overlay Zones In September 2018, City Council approved the establishment of the Cannabis Business Overlay Zones (CBZs) consisting of seven separate designated areas where commercial cannabis activities may be permitted. For reference, Attachment B is a map of the City showing all the CBZs in green. The CBZs contain an appropriate mixture of zoning types for commercial cannabis activities; separation from sensitive land uses like schools, daycare facilities, and public parks; and properties fronting an arterial street required for retail storefront operations. Staff periodically evaluates areas of the City that may be suitable to permit commercial cannabis activities. In March 2020, City Council approved the annexation of what is referred to in the Airport Area Specific Plan (AASP) as the East Airport Area. The East Airport Area is made up of 33 parcels (23 of which are developed), 58.31 acres of land, is within the AASP, and is zoned Service Commercial (C-S) throughout. The area is on the east side of Broad Street, bounded by Farmhouse Lane and Kendall Road, including Allene Way, Morabito Place, and Prospect Street. Figure 1 is zoning map showing the boundaries and streets that make up the East Airport Area. When the CBZs were initially developed, staff considered areas of the city with land use types that are appropriate for cannabis operations, are free of sensitive uses, and have properties that front an arterial street. The East Airport Area is consistent with the se Page 10 of 35 Item 4a CODE-0046-2023 Planning Commission Report – February 8, 2023 considerations used to develop and establish the initial Cannabis Business Zones and represents an opportunity to provide more locations where cannabis activities may occur. Figure 1. East Airport Area 4.2 Requested Changes to Cannabis Retail Storefront Operations Staff has received direction from Council to evaluate changes to three specific retail storefront operational policies. The requested changes include: 1) extending hours of operation; 2) allowing medical cannabis users aged 18-20 to access storefronts; 3) and allowing storefronts to also deliver. In October 2022, staff presented the requested changes to City Council with the annual Cannabis Business Program update. Council provided direction to further evaluate and return with recommendations for their consideration. 4.2.1 Extend Storefront Operating Hours Existing storefront retailers are requesting extension of the operating hours from 9:00am - 8:00pm to 7:00am - 9:00pm. The City currently has the most restrictive retail storefront hours of operations based on an analysis of other cities throughout California as shown in Table 1 below. The requested change in operating hours is within the City’s authority since the State of California allows all permitted cannabis businesses to operate between 6:00am – 10:00pm, daily. Extending the retail storefront operating hours increases access to cannabis and cannabis products for recreational users and allows operators to better serve the community. Extending the operating hours is also anticipated to result in an increase in tax revenue generation. Page 11 of 35 Item 4a CODE-0046-2023 Planning Commission Report – February 8, 2023 4.2.2 Allow Medical Cannabis User Aged 18-20 to Access Storefronts The City’s cannabis regulations only allow delivery to medical cannabis users aged 18- 20 but does not allow those users to access retail storefronts. The requested change is within the City’s authority since the State of California allows adults aged 21+ and medical cannabis users aged 18+ with a valid physician’s recommendation to purchase cannabis in retail storefronts. The City is the only agency that does not allow medical users aged 18-20 to access storefronts when compared to the other cities as shown in Table 1 below. Access is dependent upon the type of state license held by the retailer which would be verified by the City before approving such change, if approved by Council. The City’s current regulations restrict the ability of medicinal cannabis patients aged 18 -20 to obtain medicine from businesses within the City that may be deemed necessary for certain individuals by a licensed physician. 4.2.3 Allow Storefronts to Also Deliver The current administrative regulations prohibit storefronts from also operating a delivery service in the City. Again, the requested change is within the City’s authority, since the State of California allows a business to conduct both types of operations. The City is only agency shown in Table 1 that does not allow retail storefronts to also deliver. If approved by Council, the administrative regulations for the Cannabis Business Program would be updated via City Manager report to explicitly allow retail storefront operators to engage in delivery services. The City of Morro Bay and the City of Grover Beach who also have retail storefront operations allow storefronts to also engage in delivery services. Under state law, the City cannot restrict retailers licensed in other jurisdictions from delivering to customers within the City. There are about a dozen delivery services located outside City limits that are licensed to deliver within the City. Staff anticipates that allowing existing retail storefronts to also deliver will reduce the number of outside delivery services operating in the City. Because of this, there will likely be minimal increase in tax revenue if approved. However, if approved, existing operators may opt to open delivery- specific locations in the City under a separate operating permit which would increase one - time application fee revenue and on -going permit renewal fees. Application fees are $26,699 and permit renewal fees are $44,310 for the 2022 -23 fiscal year. 4.2.4 Outreach for Requested Operational Changes Staff conducted outreach to Cal Poly, Cal Poly’s Associated Students, Inc. (ASI), Cuesta College, existing cannabis operators, and the City’s Police Department as part of the evaluation. As a public institution, Cal Poly will not be taking a position. ASI also stated they will not take an official position on the operational changes. Staff did not receive a response back from Cuesta College. The existing cannabis operators that did provide comment are supportive of the requested changes and are interested in continuing their operations within the City. The Police Department, initially, expressed concerns with verification and enforcement of allowing medical cannabis users aged 18-20 to access retail storefronts. But, after review of the State of California’s Department of Cannabis Control’s Code of Regulations for retail customers, the Police are supportive of the three requested changes. If approved, any Page 12 of 35 Item 4a CODE-0046-2023 Planning Commission Report – February 8, 2023 code violations found during the quarterly compliance inspections or reported to the City would be subject to disciplinary action including revocation of operator permits. Staff also reached out HdL Companies (HdL) who provides contracted consulting services to the City for commercial cannabis operations about the direction provided to evaluate the proposed changes. HdL has extensive experience assisting local agencies with developing, implementing, and administering cannabis programs throughout California. From their experience, most cities align their policies with state regulations established by the Department of Cannabis Control and opt not to establish more restrictive local policies. 4.2.5 Comparative Agency Analysis Staff reviewed the cannabis regulations for nine other cities used in the past to compare and recommend changes to the City’s Cannabis Business Program. Of the nine other agencies, the City has the most restrictive hours of operation, is the only city that does not allow 18-20 medical cannabis users to access storefronts, and is the only city that does not allow storefronts to also deliver. Table 1. Comparison of Retail Storefront Operational Policies 4.2.5 Recommended Actions for the Proposed Changes Based on the feedback received, authority provided by state regulations to local agencies, and the comparative agency analysis; staff recommends amending the City’s Municipal Code and updating the cannabis administrative regulations to implement the proposed changes. The hours of operation and the age limitation for entry into retail storefronts are detailed in both Chapter 9.10 (Cannabis Regulations) and Chapter 17.86 (Regulations for the Specific Land Uses and Activities) of the Municipal Code. Allowing retail storefronts to also deliver is an administrative regulation that would be updated internally. Page 13 of 35 Item 4a CODE-0046-2023 Planning Commission Report – February 8, 2023 5.0 ENVIRONMENTAL REVIEW The recommended actions were reviewed in accordance with the California Environmental Quality Act (CEQA) Guidelines. The recommended actions are determined to be exempt from environmental review pursuant to the General Rule (CEQA Guidelines Section 15061(b)(3), which exempts activities that can be seen with certainty to have no possibility for causing a significant effect on the environment. The expansion of the Cannabis Business Overlay Zones will not have a significant physical effect on the environment because the inclusion of a portion of the Airport Area Specific Plan east of Broad Street does not alter the development standards for those land use types. The proposed amendments to Chapter 17.86 and Chapter 9.10 of the Municipal Code constitute minor modifications to the rules governing commercial cannabis business retail storefront operations and do not have a significant effect on the environment. Project specific environmental review will be required for any new commercial cannabis operation. Any new or existing retailer applying for a delivery permit would be required to comply with all applicable state and local law, including a showing of CEQA compliance or exemption. 6.0 OTHER DEPARTMENT COMMENTS City staff convened a steering committee comprised of representatives from the City Attorney’s office, Police Department, Finance Department, Community Development Department, and City Administration. The steering committee reviewed the proposed changes to the Cannabis Business Program and support the recommendations in this report. 7.0 ALTERNATIVES 1. Recommend the City Council not adopt recommended Municipal Code Amendments and CBZ designation in the East Airport Area. This is not recommended as it does not align with the City Council’s overall cannabis goal to obtain and retain qualified cannabis business operators in the City. 2. Modify the Recommendation. The Planning Commission may modify the recommended action. 8.0 ATTACHMENTS A – Draft Resolution Recommending Council Action on Updates to the City’s Cannabis Business Program B – Cannabis Business Zones Map Page 14 of 35 R ______ RESOLUTION NO. _____ (2023 SERIES) A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, RECOMMENDING THE CITY COUNCIL INTRODUCE AND ADOPT AN ORDINANCE AMENDING CHAPTER 17.86 AND CHAPTER 9.10 OF THE MUNICIPAL CODE MODIFYING SPECIFIC RULES FOR COMMERCIAL CANNABIS BUSINESS RETAIL STOREFRONTS AND INTRODUCE AND ADOPT AN ORDINANCE AMENDING THE ZONING MAP TO EXPAND THE CANNABIS BUSINESS OVERLAY ZONES (CODE-0046-2023) WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chambers of City Hall, 990 Palm Street, San Luis Obispo, California on February 8, 2023, for the purpose of reviewing and making recommendations to the City Council of San Luis Obispo to amend the Municipal Code modifying specific rules for commercial cannabis business retail storefront operations and to amend the Zoning Map for the Cannabis Business Overlay Zones; and WHEREAS, notices of said public hearing were made at the time and in the manner as required by law; and WHEREAS, the Planning Commission has duly considered all evidence presented by City staff and public commentors at said hearing. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. Based upon all the evidence presented, the Planning Commission makes the following findings: 1. The amendments to Chapter 17.86 and Chapter 9.10 of the Municipal Code modifying specific rules for commercial cannabis business retail storefronts are consistent with State of California’s Department of Cannabis Control regulations. 2. The amendments to Chapter 17.86 and Chapter 9.10 of the Municipal Code modifying specific rules for commercial cannabis business retail storefronts establish reasonable regulations for the operation of commercial cannabis retail storefront businesses in the City. 3. The amendment to the City’s Zoning Map expanding the Cannabis Business Overlay Zones to include the East Airport Area intends to provide more locations that may be appropriate for commercial cannabis activities to occur, as detailed in Chapter 17.86 and Chapter 9.10 of the Municipal Code. Page 15 of 35 Resolution No. _____ (2023 Series) Page 2 R ______ 4. The City requires discretionary review and approval of permits, licenses, and other authorizations necessary to engage in commercial cannabis activity. Such review and approval include applicable environmental review. SECTION 2. Environmental Review. The recommended actions were reviewed in accordance with the California Environmental Quality Act (CEQA) Guidelines. The recommended actions are determined to be exempt from environmental review pursuant to CEQA Guidelines Section 15061(b)(3), the General Rule exemption which exempts activities that can be seen with certainty to have no possibility for causing a significant effect on the environment. The expansion of the Cannabis Business Overlay Zones will not have a significant effect on the environment because the inclusion of the East Airport Area does not alter the development standards for those land use types. The proposed amendments to Chapter 17.86 and Chapter 9.10 of the Municipal Code constitute minor modifications to the rules governing commercial cannabis business retail storefront operations and do not have a significant effect on the environment. Project specific environmental review will be required for any new commercial cannabis operation located within the East Airport Annexation Area and for any new commercial cannabis delivery applications approved by the City as part of the City’s existing permitting processes. SECTION 3. Recommended actions. The Planning Commission does hereby recommend the City Council: 1. Introduce and adopt an Ordinance amending Chapter 17.86 and Chapter 9.10 of the Municipal Code modifying specific rules for commercial cannabis business retail storefront operations as shown in Exhibit A; and 2. Introduce and adopt an Ordinance amending the Zoning Map to expand the Cannabis Business Overlay Zones to include the East Airport Area as shown in Exhibit B. Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this 8th day of February, 2023. ___________________________ Tyler Corey, Secretary Planning Commission Page 16 of 35 Resolution No. _____ (2023 Series) Page 3 R ______ EXHIBIT A ORDINANCE NO. _____ (2023 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING CHAPTER 17.86 (REGULATIONS FOR SPECIFIC LAND USES AND ACTIVITES) AND CHAPTER 9.10 (CANNABIS REGULATIONS) OF THE MUNICIPAL CODE MODIFYING SPECIFIC RULES FOR COMMERCIAL CANNABIS BUSINESS RETAIL STOREFRONT OPERATIONS WHEREAS, on May 1, 2018, the City Council of the City of San Luis Obispo adopted regulations allowing for the operation of commercial cannabis businesses and personal cultivation in the City; and WHEREAS, Municipal Code Chapter 17.86 and Chapter 9.10 establishes the hours of operations and the age restrictions for access to commercial cannabis retail storefronts operating in the City; and WHEREAS, the City currently has two permitted commercial cannabis retail storefronts operating in the City; and WHEREAS, the permitted commercial cannabis retail storefronts requested the City expand the hours of operations from 9:00 a.m. and 8:00 p.m., daily to 7:00 a.m. and 9:00 p.m., daily; and to allow individuals 18 to 20 years of age who have a valid physician’s recommendation for medicinal cannabis to access retail storefronts; and WHEREAS, on October 18, 2022, City Council directed staff to further evaluate and return with recommendations addressing requests to modify the regulations for hours of operations and access restrictions for medicinal cannabis customers 18 to 20 years of age; and WHEREAS, the State of California’s Department of Cannabis Control’s Code of Regulations allows licensed cannabis retailers and delivery businesses to operate between the hours of 6:00 a.m. and 10:00 p.m. and allows licensed cannabis retailers who possess either an M-designation license or and A- and M-designation license to sell medicinal cannabis goods to individuals who are at least 18 years of age and who possess a valid physician’s recommendation; and WHEREAS, City staff conducted extensive public outreach for the requested changes submitted by the permitted commercial cannabis retail storefronts; and WHEREAS, consistent with State of California regulations and the feedback collected during the public outreach component of the requested changes evaluation, the City desires to in continue to support existing and future commercial cannabis retail storefront operations by amending Chapter 17.86 and Chapter 9.10 of the Municipal Code; and Page 17 of 35 Resolution No. _____ (2023 Series) Page 4 R ______ WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on February 8, 2023, for the purpose of considering updates to the City’s commercial cannabis program including amending Chapter 17.86 and Chapter 9.10 of the Municipal Code for retail storefront operations and making recommendations to the City Council regarding such amendments. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. Based upon all the evidence presented, the Council makes the following findings. 1. The proposed amendments to Chapter 17.86 and Chapter 9.10 are consistent with State of California’s Department of Cannabis Control regulations. 2. The proposed amendments establish reasonable regulations for the operation of commercial cannabis retail storefront businesses in the City. 3. The proposed amendments continue to promote the public health, safety, and welfare of the City as they relate to commercial cannabis business operations. 4. The City requires discretionary review and approval of permits, licenses, and other authorizations necessary to engage in commercial cannabis activity. Such review and approval include applicable environmental review. SECTION 2. Section 17.86.080 (E)(10), Retail—Storefront, of the San Luis Obispo Municipal Code is hereby amended as follows: 10. Retail—Storefront. a. Commercial cannabis storefront retail may be conditionally permitted, subject to the requirements of this section and the obtaining and maintaining of a commercial cannabis operator permit, and the appropriate state license, in the following zones: i. Retail commercial (C-R); ii. Service commercial (C-S); b. Development Standards. i. Compliance with subsection (E)(5) of this section, Commercial Cannabis Development Standards. Page 18 of 35 Resolution No. _____ (2023 Series) Page 5 R ______ ii. Only three retail storefronts, which must front arterial streets, will be allowed within the city. Selection of the retail commercial cannabis operator will be selected from qualified commercial cannabis operators as set forth in Chapter 9.10, Cannabis Regulations. One of the retail storefronts shall have a medicinal license and may also have an adult use license. iii. Retail storefronts shall be located at least one thousand feet from any preschool, elementary school, junior high school, high school, public park or playground, six hundred feet from any licensed day care cen ter, and three hundred feet from any residentially zoned area. Youth centers do not require a buffer. Distance shall be measured from the nearest point of the property line to the nearest point of the property line of the enumerated use using a direct straight-line measurement. iv. Retail storefronts must be separated from each other by at least one thousand feet. v. Hours of operation shall be limited between nine seven a.m. to eight nine p.m. vi. Retail storefronts that possess a valid State of California cannabis retailer license with an A-designation mMust include a sign at each entrance of a retail storefront that prohibits persons under twenty-one years of age from entering. Retail storefronts that possess a valid State of California cannabis retailer license with an M-designation or both an A-designation and an M-designation must include a sign at each entrance of the retail storefront that prohibits persons under twenty-one years of age from entering unless the person is at least eighteen years of age and is also in possession of a valid physician’s recommendation for medicinal cannabis. SECTION 3. Section 9.10.230, Minors, of the San Luis Obispo Municipal Code is hereby amended as follows: A. Minors shall not be allowed on the premises of a commercial cannabis business having either an “A” or “M” license, or both, even if accompanied by a parent or guardian. B. No person under twenty-one years of age shall be allowed on the premises of a commercial cannabis business having either an “A” or “M” license or both. C. No person under twenty-one years of age shall be allowed on the premises of a commercial cannabis business having either an “M” license or both an “A” and “M” license unless the person is at least eighteen years of age and possesses a valid physician’s recommendation for medicinal cannabis. Page 19 of 35 Resolution No. _____ (2023 Series) Page 6 R ______ C. D. Every entrance to an “A” or “M” licensed commercial cannabis business shall be clearly and legibly posted with the following notice: “ENTRY ONTO THESE PREMISES BY PERSONS UNDER 21 YEARS OF AGE IS PROHIBITED BY LAW. VALID PHOTO ID REQUIRED.” Each letter of the notice must be at least two inches high and clearly visible. E. Every entrance to an “M” licensed or both an “A” and “M” licensed commercial cannabis business shall be clearly and legibly posted with the following notice: “ENTRY ONTO THESE PREMISES BY PERSONS UNDER 21 YEARS OF AGE IS PROBIHITED BY LAW UNLESS THE PERSON IS EIGHTEEN YEARS OF AGE OR OLDER AND POSSESSES A VALID PHYSICIAN’S RECOMMENDAITON FOR MEDICINAL CANNABIS. VALID PHOTO ID REQUIRED.” Each letter of the notice must be at least two inches high and clearly visible. D. F. No person, business, or other entity conducting a commercial cannabis activity with either an “A” or “M” state license shall employ any person who is not at least twenty-one years of age. (Ord. 1647 § 4 (Exh. A (part)), 2018) SECTION 4. Section 9.10.250 (C), Security and public safety measures, of the San Luis Obispo Municipal Code is hereby amended as follows: C. Hours of Operation. 1. Retail Storefront. Retail storefront commercial cannabis business shall not operate between the hours of eight nine p.m. and nine seven a.m. 2. Retail Non-Storefront (Delivery Services). Retail non-storefront (delivery services) commercial cannabis business shall not operate between the hours of ten p.m. and six a.m. 3. Commercial Other than Retail. All commercial cannabis activity other than retail is prohibited between the hours of ten p.m. and seven a.m. (Ord. 1647 § 4 (Exh. A (part)), 2018) SECTION 5. Environmental Review. The proposed amendments to Chapter 17.86 and Chapter 9.10 of the Municipal Code was reviewed in accordance with the California Environmental Quality Act (CEQA) Guidelines. The proposed amendments are determined to be exempt from environmental review purs uant to CEQA Guidelines Section 15061(b)(3), the General Rule exemption which exempts activities that can be seen with certainty to have no possibility for causing a significant effect on the environment. The proposed amendments constitute minor modifications to the rules governing commercial cannabis business retail storefront operations and do not have a significant effect on the environment. Any new the retailer-applicant would be required to comply with all applicable state and local law, including a showing of CEQA compliance or exemption. Page 20 of 35 Resolution No. _____ (2023 Series) Page 7 R ______ SECTION 6. Action. The City Council hereby adopts an ordinance amending Chapter 17.86 and Chapter 9.10 of the Municipal Code modifying the hours of operations and access requirements for commercial cannabis retail st orefronts. SECTION 7. Ordinance Number 1647 (2018 Series) is hereby amended and superseded to the extent inconsistent herewith. SECTION 8. 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 invalid or unenforceability shall not affect the validity or enforcement of the remaining provisions 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 21 of 35 Resolution No. _____ (2023 Series) Page 8 R ______ SECTION 9. 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 ____ day of _____ 2023, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ____, 202 3, 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 22 of 35 Resolution No. _____ (2023 Series) Page 9 R ______ EXHIBIT B ORDINANCE NO. _____ (2023 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING THE CITY’S ZONING MAP TO EXPAND THE CANNABIS BUSINESS OVERLAY ZONES WHERE CANNABIS BUSINESSES MAY BE LOCATED AS MAY BE ALLOWED OR CONDITIONALLY ALLOWED BY THE UNDERLYING BASE ZONE AND THE RULES AND REGULATIONS ESTABLISHED IN THE CITY’S MUNICIPAL CODE. WHEREAS, on September 18, 2018, the City Council of San Luis Obispo amended the zoning map and designated areas of the City as Cannabis Business Overlay Zones where commercial cannabis activities may be located and allowed or conditionally allowed by the underlying base zone; and WHEREAS, on March 7, 2020, the City Council of the City of San Luis Obispo approved the annexation of the East Airport Annexation Area Properties (East Airport Commerce Park Association, Senn-Glick) to the City of San Luis Obispo; and WHEREAS, overlay zones supplement the base zone and are used to establish special use or development regulations for a particular area in addition to the provisions of the underlying base zone; and WHEREAS, the expansion of the Cannabis Business Overlay Zones to include the East Airport Annexation Area provides more locations that may be appropriate for a variety of commercial cannabis activities to occur in the City; and WHEREAS, the location of commercial cannabis activities within the East Airport Annexation Area are subject to issuance of a land use permit, which is a process that provides notification for neighboring property owners, businesses, and residents; and ensures compatibility of uses through the imposition of conditions of approval; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing on February 8, 2023 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, for the purpose of considering amending the zoning map to expand the Cannabis Business Overlay Zones and making a recommendation to the City Council regarding such an amendment. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Finding. The expansion of the Cannabis Business Overlay Zones intends to provide more locations that may be appropriate for commercial cannabis activities to occur, as detailed in Chapter 9.10 and Chapter 17.86 of the C ity’s Municipal Code. Page 23 of 35 Resolution No. _____ (2023 Series) Page 10 R ______ SECTION 2. Environmental Review. The proposed expansion of the Cannabis Business Overlay Zones to include the East Airport Annexation Area was reviewed in accordance with the California Environmental Quality Act (CEQA) Guidelines. The proposed expansion is determined to be exempt from environmental review pursuant to CEQA Guidelines Section 15061(b)(3), the General Rule exemption which exempts activities that can be seen with certainty to have no possibility for causing a significant physical effect on the environment. The expansion of t he Cannabis Business Overlay Zones will not have a significant physical effect on the environment because the inclusion of the East Airport Area does not alter the development standards for those land use types. Project specific environmental review will b e required for any new commercial cannabis operation located within the East Airport Area as part of the City’s existing permitting processes. SECTION 3. Action. The City Council hereby adopts an ordinance amending the City’s Zoning Map designating properties that will be included in the Cannabis Business Overlay Zones in eight separate areas of the City as depicted in Exhibit A which is incorporated herein by reference. SECTION 3. 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 invalid or unenforceability shall not affect the validity or enforcement of the remaining provisions of this Ordinance, or any other provi sions 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. SECTION 4. Ordinance Number 1653 (2018 Series) is hereby amended and superseded to the extent inconsistent herewith. Page 24 of 35 Resolution No. _____ (2023 Series) Page 11 R ______ SECTION 5. A summary of this ordinance, together with the names of the 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 ___ day of ______, 2023, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ______, 2023, 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 25 of 35 R ______ Page 26 of 35 Resolution No. _____ (2023 Series) Page 13 R ______ Page 27 of 35 Resolution No. _____ (2023 Series) Page 14 R ______ Page 28 of 35 Resolution No. _____ (2023 Series) Page 15 R ______ Page 29 of 35 Resolution No. _____ (2023 Series) Page 16 R ______ Page 30 of 35 Resolution No. _____ (2023 Series) Page 17 R ______ Page 31 of 35 Resolution No. _____ (2023 Series) Page 18 R ______ Page 32 of 35 Resolution No. _____ (2023 Series) Page 19 R ______ Page 33 of 35 Page 34 of 35 Page 35 of 35 Cannabis Business Program Update Planning Commission February 8, 2023 Recommendation Adopt a resolution recommending the City Council introduce and approve Ordinances to amend the Municipal Code modifying specific rules for commercial cannabis retail storefront operations and to expand the Cannabis Business Overlay Zones to include recently annexed areas east of Broad Street in the Airport Area Specific Plan. Cannabis Business Overlay Zones In September 2018,Council designated seven (7) areas (shown in green)appropriate for commercial cannabis activities.Areas were determined based on the following criteria: 1.Contained land use types appropriate for various commercial cannabis permit types 2.Free of state and locally identified sensitive uses (schools,daycare facilities,residential uses,etc.) 3.Properties fronting an arterial street (required for retail storefront permitting) East Airport Annexation Area In March 2020,Council annexed an area adjacent to the airport along Broad Street referred to as the East Airport Area.The East Airport Area is comprised of: 1.The East Airport Commerce Park Association and the Senn/Glick Development 2.Located within the Airport Area Specific Plan 3.58.31 acres made up of 33 parcels (23 of which are developed) 4.Zoned Service Commercial (C-S-SP) Policy Changes for Retail Storefront Operations 1.Extend Storefront Operating Hours Request to open 2 hours earlier and stay open 1 hour later than currently allowed 2.Allow 18+ Medical Cannabis User Access to Storefronts 18+ medical users are currently prohibited from accessing retail storefronts but can obtain cannabis products from delivery services 3.Allow Storefronts to also Deliver Storefronts are currently prohibited from providing delivering services within City limits In October 2022,Staff presented the annual Cannabis Business Program update to Council including recommendation to further evaluate and return with recommendations addressing three (3) operational changes for retail storefronts Comparative Agency Analysis Agency Hours of Operations Allow 18-20 Medical Users Access (Y / N) Allow Storefront Delivery (Y / N) City of San Luis Obispo (Current)9am to 8pm N N City of San Luis Obispo (Proposed)7am to 9pm Y Y City of Morro Bay 7am to 9pm Y N City of Grover Beach 7am to 9pm Y Y City of Santa Ana 7am to 11pm Y Y City of Santa Cruz 7am to 10pm Y Y City of Santa Barbara Varies*Y Y Ctiy of Davis 9am to 9pm Y Y Ctiy of Sacramento 7am to 9pm**Y Y City of Oakland 7am to 10pm***Y Y City of San Francisco 8am to 10pm Y Y California State Regulations 6am to 10pm Y Y *Hours of operation approved on a case-by-case basis **Unless restricted further by City Manager Environmental Review The recommended actions were reviewed in accordance with the California Environmental Quality Act (CEQA)Guidelines.The recommended actions are determined to be exempt from environmental review pursuant to the General Rule (CEQA Guidelines Section 15061(b)(3),which exempts activities that can be seen with certainty to have no possibility for causing a significant effect on the environment. Project specific environmental review will be required for any new commercial cannabis operation as part of the City’s existing permitting processes. Recommendation Adopt a resolution recommending the City Council introduce and approve Ordinances to amend the Municipal Code modifying specific rules for commercial cannabis retail storefront operations and to expand the Cannabis Business Overlay Zones to include recently annexed areas east of Broad Street in the Airport Area Specific Plan. Proposed Municipal Code Amendments Section 17.86.080 (E)(10) –Retail-Storefront Under subsection b.Development Standards. v.Hours of operation shall be limited between nine seven a.m.to eight nine p.m. vi.Retail storefronts that possess a valid State of California cannabis retailer license with an A-designation mMust include a sign at each entrance of a retail storefront that prohibits persons under twenty-one years of age from entering.Retail storefronts that possess a valid State of California cannabis retailer license with an M-designation or both an A-designation and an M-designation must include a sign at each entrance of the retail storefront that prohibits persons under twenty-one years of age from entering unless the person is at least eighteen years of age and is also in possession of a valid physician’s recommendation for medicinal cannabis. Proposed Municipal Code Amendments Section 9.10.230 -Minors A.Minors shall not be allowed on the premises of a commercial cannabis business having either an “A”or “M”license,or both,even if accompanied by a parent or guardian. B.No person under twenty-one years of age shall be allowed on the premises of a commercial cannabis business having either an “A”or “M”license or both. C.No person under twenty-one years of age shall be allowed on the premises of a commercial cannabis business having either an “M”license or both an “A”and “M” license unless the person is at least eighteen years of age and possesses a valid physician’s recommendation for medicinal cannabis. Proposed Municipal Code Amendments Section 9.10.230 –Minors Continued C.D.Every entrance to an “A”or “M”licensed commercial cannabis business shall be clearly and legibly posted with the following notice:“ENTRY ONTO THESE PREMISES BY PERSONS UNDER 21 YEARS OF AGE IS PROHIBITED BY LAW.VALID PHOTO ID REQUIRED.”Each letter of the notice must be at least two inches high and clearly visible. E.Every entrance to an “M”licensed or both an “A”and “M”licensed commercial cannabis business shall be clearly and legibly posted with the following notice:“ENTRY ONTO THESE PREMISES BY PERSONS UNDER 21 YEARS OF AGE IS PROBIHITED BY LAW UNLESS THE PERSON IS EIGHTEEN YEARS OF AGE OR OLDER AND POSSESSES A VALID PHYSICIAN’S RECOMMENDAITON FOR MEDICINAL CANNABIS.VALID PHOTO ID REQUIRED.”Each letter of the notice must be at least two inches high and clearly visible. D.F.No person,business,or other entity conducting a commercial cannabis activity with either an “A”or “M”state license shall employ any person who is not at least twenty-one years of age.(Ord. 1647 §4 (Exh.A (part)),2018) Proposed Municipal Code Amendments Section 9.10.250 (C) –Security and Public Safety Measures C.Hours of Operation. 1.Retail Storefront.Retail storefront commercial cannabis business shall not operate between the hours of eight nine p.m.and nine seven a.m. 2.Retail Non-Storefront (Delivery Services).Retail non-storefront (delivery services)commercial cannabis business shall not operate between the hours of ten p.m.and six a.m. 3.Commercial Other than Retail.All commercial cannabis activity other than retail is prohibited between the hours of ten p.m.and seven a.m.(Ord.1647 §4 (Exh.A (part)),2018)