HomeMy WebLinkAbout04-04-2017 Item 13, Adoption of Ordinance regarding Medical CannabisMeeting Date: 4/4/2017
FROM: Christine Dietrick, City Attorney
Michael Codron, Community Development Director
SUBJECT: ADOPTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF SAN LUIS OBISPO MAINTAINING STATUS QUO BY EXPRESSLY
CODIFYING AND AFFIRMING THE CITY’S AUTHORITY TO ENFORCE
ITS CURRENT PERMISSIVE ZONING, LICENSING, PERMITTING AND
REGULATORY POLICIES PROHIBITING MARIJUANA USES,
ACTIVITIES, AND OPERATIONS, EXCEPT AS OTHERWISE PERMITTED
UNDER THE COMPASSIONATE USE ACT, THE MEDICAL CANNABIS
REGULATORY AND SAFETY ACT, OR THE CONTROL, REGULATE, AND
TAX ADULT USE OF MARIJUANA ACT PENDING COUNCIL DIRECTION
AND CONSIDERATION OF PERMANENT REGULATIONS
RECOMMENDATION
Adopt Ordinance No. 1633 (2017 Series) maintaining status quo by expressly codifying and
affirming the City’s authority to enforce its current permissive zoning, licensing, permitting and
regulatory policies prohibiting marijuana uses, activities, and operations, except as otherwise
permitted under the Compassionate Use Act, the Medical Cannabis Regulatory and Safety Act,
or the Control, Regulate, and Tax Adult Use of Marijuana Act pending Council direction and
consideration of permanent regulations.
DISCUSSION
On March 14, 2017, the City Council voted 5 – 0 to introduce Ordinance No. 1633 (2017 Series)
(Staff Report from that meeting – Attachment “A”). Ordinance 1633 (Attachment “B”) preserves
current City policy and authority to prevent issuance of state licenses for marijuana activities
within the City while staff works in a thoughtful manner to craft a well-informed regulatory
approach that considers state medical and recreational licensing and regulatory requirements,
community input and desires around marijuana operations and activities in the City, Council
direction and coordination with the City’s recently initiated Zoning Code update, in response to
the complexity and newness of the state regulatory construct, uncertainties in prospective federal
enforcement priorities, and the evolving local landscape of marijuana regulation. The ordinance
explicitly clarifies that personal cultivation of up to six plants, whether recreational or medicinal,
is allowed in the City in both indoor and outdoor locations, as contemplated by Proposition 64.
FISCAL IMPACT
There is no fiscal impact associated with maintaining the current status quo relative to cannabis
and cannabis-related uses within City limits; however, due to the passage of Proposition 64, the
City is likely to experience an increase in enforcement activities related to marijuana use and
higher demand on public safety.
Packet Pg. 163
1213 13
ALTERNATIVES
1.The Council could reject the proposed Ordinance though this is not recommended as the
Council voted unanimously to introduce it and the need to maintain the status quo by
expressly codifying and affirming the City’s authority to enforce its current permissive
zoning, licensing, permitting and regulatory policies prohibiting marijuana uses,
activities, and operations still exists.
2.The Council could continue final adoption of the proposed Ordinance and provide
direction to staff for revisions.
Attachments:
a - Staff Report: 03-14-2017 Item 01 Marijuana Regulation
b - Ordinance 1633
Packet Pg. 164
1213 13
Meeting Date: 3/14/2017
FROM: Christine Dietrick, City Attorney
Michael Codron, Community Development Director
Prepared By: Anne Russell, Interim Assistant City Attorney
SUBJECT: MARIJUANA REGULATION
RECOMMENDATION
1. Introduce an Ordinance (Attachment A) maintaining status quo (as discussed below) by
expressly codifying and affirming the City’s authority to enforce its current permissive
zoning, licensing, permitting and regulatory policies prohibiting marijuana uses, activities,
and operations, except as otherwise permitted under the Compassionate Use Act, the Medical
Cannabis Regulatory and Safety Act, or the Control, Regulate, and Tax Adult Use of
Marijuana Act pending Council direction and consideration of permanent regulations; and
2. Direct staff to monitor developments in other jurisdictions and at the federal level, engage the
community regarding various land use and taxation alternatives that may be appropriate, and
return with recommended changes to the City’s Municipal Code.
DISCUSSION
Report in Brief
In May 2014, in anticipation of the passage of state legislation legalizing and providing for the
state licensing of medical marijuana operations and activities and following neighborhood
complaints relating to marijuana cultivation, staff presented regulations to Council that would
have expressly prohibited dispensaries (brick and mortar or mobile) and limited and regulated
personal or collective medical marijuana cultivation activities. Council opted not to pursue those
regulations after hearing public concerns and, instead, proceeded with regulation directly
addressing only the potential nuisance/odor effects of cultivation activities.
On January 14, 2016, following the 2015 passage of the Medical Marijuana Regulation and
Safety Act (MMRSA), the Council revisited the issue of medical marijuana regulation in
response to language in MMRSA suggesting that cities that did not take affirmative action to
prohibit marijuana cultivation could become subject to sole state licensing authority.1 The City
Council adopted Resolution No. 10683 (Attachment E), which reaffirmed that the City’s
longstanding interpretation that its permissive zoning code prohibited marijuana businesses,
operations and uses, including commercial cultivation of medical marijuana and directed the
State not to issue any licenses under MMRSA (MCRSA) in the City.
Since the Council’s last action, the statewide initiative legalizing certain recreational marijuana
activities and providing for the comprehensive regulation and licensing of commercial marijuana
1 That language was later determined to be unintended remnant language and was the subject of clean up legislation
that reaffirmed local control provisions, but the City’s resolution remains operative.
Packet Pg. 165
13
businesses was passed. Unfortunately, due to some language in the initiative that does not
provide the same express deference to permissive zoning bans that was included in MCRSA, it is
now necessary and advisable for the council to expressly address marijuana regulation via
adoption of an ordinance.
Given the complexity and newness of the state regulatory construct, uncertainties in prospective
federal enforcement priorities ,and the evolving local landscape of marijuana regulation, staff
desires to act in a thoughtful manner calculated to yield a well-informed regulatory approach that
considers state medical and recreational licensing and regulatory requirements, community input
and desires around marijuana operations and activities in the City, Council direction and
coordination with the City’s recently initiated Zoning Code update. Accordingly, staff is
recommending that the Council adopt an ordinance preserving current City policy and authority
to prevent issuance of state licenses for marijuana activities within the City, while providing
input to staff on the nature and scope of desired regulations, if any, that Council wishes staff to
pursue regarding medical and recreational marijuana.
This report outlines current city law, policy, and practice and some questions on which Council
guidance and input is sought in defining a regulatory approach going forward.
Background
State Medical Marijuana Initiatives
In 1996, California voters passed the Compassionate Use Act, providing a defense to state
criminal prosecution for the cultivation, possession and use of marijuana for medical purposes.
The Medical Marijuana Program Act established a voluntary participation, State-authorized
medical marijuana identification card and registry database for verification of qualified patients
and their primary caregivers.
In 2015, the State Legislature approved the Medical Marijuana Regulation and Safety Act
(MMRSA). MMRSA created an extensive statewide regulatory and licensing system for the
cultivation, manufacture, testing, dispensing, distribution and transport of medical marijuana,
effective January 1, 2016. It exempted from its licensing scheme, medical marijuana cultivation
by individual qualified patients and primary caregivers with no more than five qualified patients.
MMRSA also created a dual licensing scheme, whereby State medical marijuana licenses would
be issued to operators only if they were operating in compliance with local regulation, and would
not be issued to operators in jurisdictions that prohibited medical marijuana uses and activities
(either expressly or under principles of permissive zoning2). In 2016, the State Legislature
updated MMRSA by approving AB 21 and SB 837 to address issues not previously addressed in
prior legislation and changed the name of MMRSA to the Medical Cannabis Regulation and
Safety Act (MCRSA).
2 Permissive Zoning Principles generally provide that the interpretation of uses in each zone are intended to permit
similar types of uses within each zone. In the case of the City of San Luis Obispo, interpretation shall not be used as
a substitute for the amendment procedure (i.e. an ordinance amendment adding a use) as a means of adding new
types of uses to a zone; hence if not specifically identified as an allowed use, the use is disallowed in any zone in the
City.
Packet Pg. 166
13
State Recreational Marijuana Initiative
In November 2016, California voters passed Proposition 64, the Control, Regulate, and Tax
Adult Use of Marijuana Act (Prop 64 or AUMA). Prop 64 legalized under California law non-
medicinal/recreational marijuana use for those 21 years of age and over, and established the
Bureau of Marijuana Control within the Department of Consumer Affairs to regulate and license
the marijuana industry. In the absence of a local ordinance either banning or regulating a specific
commercial marijuana activity, the State could issue a license to an existing business (expected
to begin January 2018), which could result in the City’s inability to preclude state licensed
operations that may be undesirable from operating within City jurisdiction. Reliance on
permissive zoning to prohibit or enforce against such operations may no longer be sufficient
once state license issuance begins because AUMA does not contain the same express language as
the MCRSA relating to permissive zoning. Analyses and an FAQ of Proposition 64 are included
as Attachments B, C and D.
Ban, Regulate or Do Nothing?
If the Council ultimately desires to consider allowing and regulating certain medical and/or
recreational marijuana uses or activities within the City, it will take a substantial amount of time
to conduct public outreach regarding the appropriate contours of City regulation and to draft
comprehensive zoning, licensing, tax and other municipal code provisions relating to commercial
and/or medical marijuana activities within the City. Thus, staff is recommending that the Council
adopt an ordinance reflecting the current status quo in the City until staff and the Council can
receive input from residents as to how best address this issue.
Prop 64 allows local governments to ban some or all commercial recreational marijuana
activities, to reasonably regulate some or all commercial recreational activities, or to do nothing
and default to the operation of state law. Given the lack of statutory authority to rely on
permissive zoning under AUMA, doing nothing creates an undesirable level of ambiguity and
lack of guidance to staff in processing City business license, building permit and land use
applications, as well as in responding to public safety and code enforcement complaints
involving marijuana uses and activities in the City. Relying on permissive zoning also increases
the potential that state licenses could be issued to existing or newly established businesses,
compromises the City’s ability to oppose the issuance of such licenses, and subjects the City to
an increased potential for legal challenge if permits, licenses or land use entitlements for
marijuana uses and activities are denied or enforcement actions pursued. Accordingly, staff does
not recommend that the Council do nothing and this report focuses on maintaining the City’s
current policies and practices to deny marijuana uses in the City, while seeking direction from
the Council regarding a proposed approach to define and pursue code amendments that would
permit and regulate some degree of commercial marijuana operations in the City.
Permissible Commercial Use Regulation
The State is preparing to issue 19 different types of commercial marijuana related licenses. 13 of
them deal with cultivation, depending on size, and whether indoor, outdoor or mixed; two deal
with manufacturing (one requires the use of non-volatile solvents for the manufacturing process
while the other may involve use of volatile solvents, with increased risk of explosion and fire),
and one each for testing, retailer, distributor, and microbusiness (less than 10,000 square feet).
Packet Pg. 167
13
The City can ban or regulate some or all the different licensed activities [H&S 11362.2 (b), B&P
26200]. Typical regulations would include local zoning and land use requirements, business
license requirements, standards to reduce secondhand smoke exposure, and adopting (in addition
to the state’s minimum standards) additional regulations for health and safety, environmental
protection, testing, security, food safety, and worker protection [B&P 26201].
The City can also allow or ban smoking, vaporizing and ingesting on licensed retailer or
microbusiness premises subject to specified conditions [B&P 26200 (d); B&P 26200 (a)]. The
City’s current regulations prohibit smoking and control secondhand smoke, including tobacco,
marijuana, and e-cigarette smoke and vapors, in public and other places under Chapter 8.16 of
the Municipal Code.
As mentioned above, the Council can adopt additional health and safety, environmental
protection, testing, security, food safety, and worker protections beyond those imposed by a state
license [B&P 26201], and to impose taxes in addition to those imposed by the State. Imposition
of new taxes requires voter approval. If the Council wishes to pursue any or all of these
regulatory options, it will take time to seek public input as to the appropriate scope of permitting
and regulation and to identify and analyze, and then draft appropriate regulations.
While the state is investigating the feasibility of creating classifications of nonprofit licenses, a
city may issue temporary (12 month- which may be renewed) local licenses to nonprofit entities
primarily providing specified marijuana to low income persons, subject to specified conditions.
At this time, the City has not received any such requests, and would not entertain such a request
until permanent regulations are adopted.
Permissible Personal Use Regulation
To give the City Council an idea of the scope of its authority to allow or prohibit certain
activities related to personal marijuana use, staff provides the following list, related both to
cultivation activities and non-cultivation activities:
Permissible Non-Cultivation Related Regulation
• The City cannot prevent transportation of marijuana or marijuana products on public
roads in the City [B&P 26080 (b], but can ban deliveries to individuals and properties
within the City. [B& P 26090 (c)]
• The City can ban marijuana use in publicly owned, leased or occupied buildings. [H&S
11362.45(g)]
Permissible Regulation of Cultivation for Personal Use
• The City cannot ban indoor cultivation of six or less plants per residence (not per
resident) [Health and Safety Code (H&S) section 11362.2(b) (2); H&S 11362.1 (a)(3)]
• The City can adopt reasonable regulations to regulate such indoor cultivation. [H&S
11362.2(b)(1)]
• The City can limit or entirely ban outdoor cultivation of marijuana (medical or
recreational) if it chooses, or allow it, but adopt reasonable regulations, such as setback
and/or screening requirements. [H&S 11362.2 (b) (3); Business and Professions Code
Packet Pg. 168
13
(B&P) 26200 (a)].
Prior to 2015, the City received odor complaints relating to outdoor cultivation of marijuana
asserted to be for personal/medicinal use. Thus, the City adopted an ordinance adding Chapter
8.22 to the Municipal Code (Attachment F-Council Reading File). While not specifically
directed toward marijuana, the Chapter prohibits uses or activities causing persistent offensive
odors to emanate across property or parcel lines. Those existing provisions would continue to
apply to any outdoor cultivation otherwise allowed under state law and not prohibited by local
law. As previously noted, prior to adopting the odor nuisance regulations in 2014, and prior to
passage of MCRSA or Proposition 64, Council considered, but opted not to adopt, proposed
medical marijuana regulations limiting outdoor cultivation. From a historical enforcement
perspective, the City has not pursued enforcement action (either criminal or code enforcement)
against non-commercial medicinal marijuana cultivation activities (i.e., small indoor and/or
outdoor grows limited to qualified patients and caregivers for the personal use of qualified
patients), that are not in violation of otherwise applicable nuisance regulations.
Under MCRSA, there are exemptions from the licensing and regulatory provisions for
cultivation of marijuana up to 100 square feet per qualified patient for personal medical use or up
to 500 square feet for a primary caregiver of up to five qualified patients for those patients’
personal medical use. However, there is case law supporting a city’s right to prohibit outdoor
medical cannabis cultivation entirely. With the passage of Proposition 64, indoor and outdoor
cultivation of up to six plants for recreational use became legal in California, but that law also
expressly permits a local agency to regulate or entirely prohibit outdoor cultivation. However,
an agency must adopt an express prohibition to do so.
Based on current law and historic city enforcement practice, as well as public input and Council
direction when staff last presented outdoor cultivation regulations for Council consideration, the
ordinance currently presented by staff does not propose complete prohibition on outdoor
cultivation for personal use. Rather, the ordinance includes a uniform, express limit on outdoor
cultivation of six plants per residence, regardless of whether cultivation is for personal medical
or recreational use. Thus, if adopted as proposed, limited outdoor cultivation for personal use
would be allowed, to the extent that it does not otherwise violate city odor nuisance provisions or
otherwise applicable city regulations. Commercial activities that could otherwise be licensed
under MCRSA or AUMA would be prohibited pending public outreach and the drafting of
comprehensive regulations. If the Council wishes to prohibit outdoor cultivation entirely
pending further consideration, it may do so by directing staff to incorporate the following
language into the ordinance:
A person may not plant, cultivate, maintain or store any marijuana plant outdoors at any
location within the City.
Some issues to consider in determining whether to prohibit outdoor cultivation entirely versus
allowing some limited outdoor cultivation consistent with state law are that the latter approach
may increase neighborhood disputes, complaints, and need for City involvement. In addition, the
law defines “private residence” to include apartment units, mobile homes, and other forms of
higher density development where personal use cultivation and closer interaction of residents
Packet Pg. 169
13
may result in increased likelihood for negative interactions regarding the activity.
What Should SLO Do in the Long Term?
The issues the Council will need to consider are extensive and input from residents and
stakeholders is critical to the Council’s ultimate decision. Before staff can draft final regulations,
if any, the Council will need to determine whether all or some commercial marijuana uses should
be banned; whether some uses should be banned and others regulated; and whether a distinction
should be made between commercial medical marijuana and commercial recreational marijuana
uses. Staff is not requesting that Council provide final direction at this meeting, but Council
input on areas of policy on which it would like staff to focus public outreach, environmental
review and other considerations is extremely helpful.
Staff has put together a project plan to guide additional research and a public engagement
process to help answer this question (Attachment C). Staff has brainstormed a series of questions
that should be posed in the process and on which staff seeks initial Council input, as follows:
1. Does the Council want to permit cannabis and cannabis related uses in the City?
2. What types of cannabis and cannabis related uses should be allowed in the City and subject
to what limitations [i.e., broader personal and/or commercial cultivation (indoor and/or
outdoor); manufacturing; testing; retail/dispensary (recreational or medical only; storefront
or non-storefront); distribution; if any or all the foregoing, subject to size, number and/or
location limitations, etc.]?
3. How should the City regulate the delivery of recreational or medical marijuana?
4. Does the City wish to permit or require any level of vertical integration of cannabis related
uses permitted (“seed-to-sale” businesses, with a single licensee holding licenses in more
than one state licensing category)?
5. Should local taxation be pursued?
6. Should staff study and present information related to the economic and fiscal impacts of
allowing cannabis related uses, and the impacts of maintaining the prohibition indefinitely?
7. What qualifications should be required of business operators?
8. What limitations, if any, should apply to marketing and advertising?
9. Can private businesses offer space for their patrons to consume cannabis?
10. Should regulatory fees consistent with cost recovery policies be pursued to pay for the
expenses to administer any permit requirements?
If Council wants staff to pursue outreach and regulation in this area, in addition to information
on the questions above, staff will obtain and return to Council with additional background
information regarding public safety impacts and revenue expectations to inform the outreach
process, which will include answers to questions, such as:
1. If cannabis uses are permitted, such as a dispensary and/or cultivation, what additional
public safety resources would be needed to ensure public safety?
2. What would the costs be for additional enforcement related to these types of businesses?
3. Should residents anticipate more crime if cannabis uses are permitted in the City?
4. What has SLOPD’s experience been with cannabis grows and/or delivery services in the
City to date?
Packet Pg. 170
13
5. How much money could the City expect to generate from cannabis taxation?
If the Council directs staff to pursue development of a regulatory structure, staff will begin the
research and outreach process and begin to address the questions above.
Consequences of Complete Ban
If the City Council chooses to ban cultivation or retail sale of marijuana, the City will not be
eligible for grants otherwise available from the excise and cultivation taxes generated by Prop
64. These grants are available to assist with law enforcement, fire protection or other local
programs addressing public health and safety associated with implementation of Prop 64. While
the taxes to be generated are significant (15% excise tax on gross receipts and cultivation taxes
based on weight per various plant part), the amount that will be available for grants is unknown.
The taxes go first to reimbursing various state agencies for costs incurred for carrying out their
respective duties under Prop 64. The next $25-65 million (increases annually by $10 million for
first 5 years) is earmarked for specific state agencies. Of what is left over after those
distributions, only 20% is available for grants. In 2022 (after the first 4 years of operation) the
first $50 million of that 20% goes to the California Highway Patrol and after 2028 the
Legislature may allocate funds to programs other that those specified, with a provision that any
revisions cannot result in a reduction of the funds from the amount allocated to each account in
fiscal year 2027-28. [Revenue and Taxations Code (R&T) Section 34019 (f)(3)(C) and (D), and
R&T 34019 (h)]. These taxes are in addition to any other tax imposed by the City. [ R&T 34021]
CONCURRENCES
The Police Department has reviewed and concurs with the recommendations in this report.
Notwithstanding the changes in California law, the Federal Controlled Substances Act makes it
unlawful under Federal law for any person to cultivate, manufacture, distribute or dispense, or
possess with intent to manufacture, distribute or dispense, marijuana. There is no exemption for
medical marijuana. While recent comments by the Department of Justice and the Attorney
General have not signaled any immediate or significant changes to Federal enforcement
approach at this point, there have been comments made that have caused some speculation that a
more aggressive federal enforcement position may be forthcoming in the states that have
legalized marijuana for recreational use. Taking a measured approach to local regulation will
allow the City time to evaluate and incorporate any subsequent federal enforcement guidance
into any regulatory or taxation measures the Council might want to consider.
ENVIRONMENTAL REVIEW
The adoption of the proposed Ordinance maintains the status quo and does not make any change
in the current or historic policy or practice of the City, and the whole of such action is not an
activity which may cause direct or reasonably foreseeable indirect physical change in the
environment under Public Resources Code Section 21065 or California Environmental Quality
Act (“CEQA”) Guidelines Section 15378 (a) and, therefore is exempt from, and not a project
subject to, environmental review. Even if the adoption of the proposed Ordinance codifying
existing law is determined to constitute approval of a project under CEQA, and even if the
project is not subject to any statutory or categorical exceptions, as a matter of common sense, it
Packet Pg. 171
13
can be seen with certainty that there is no possibility that the activity in question, the adoption of
an Ordinance expressly codifying existing law and practice, may have a significant effect on the
environment under CEQA guidelines section 15061 (b) (3).
FISCAL IMPACT
There is no fiscal impact associated with maintaining the current status quo relative to cannabis
and cannabis-related uses within City limits; however, due to the passage of Proposition 64, the
City is likely to experience an increase in enforcement activities related to marijuana use and
higher demand on public safety.
Existing resources available in the Community Development Department budget, and included in
the scope of work of the Zoning Regulations update, will be used to support the public
engagement process. Because of the unique and complicated nature of this effort, outreach and
drafting of any regulations, tax measures, and fees should Council provide this direction, will be
led by the City’s Special Projects Manager.
Depending on Council direction, if the Council desires to allow any type of marijuana use within
the City’s boundaries, such allowable activities could be considered to be regulated through
business license requirements and could also be taxed subject to voter approval. Additional
technical consultant resources to study the feasibility and challenges associated with potential
taxation or business license regulation of marijuana commercial activities may be recommended
to develop final recommendations to Council.
Finally, the Council should be aware that if the City ultimately chooses to adopt a permanent ban
on commercial cultivation or retail sale of marijuana, the City will not be eligible for grants that
otherwise may available from the excise and cultivation taxes generated by Prop 64. These
grants are available to assist with law enforcement, fire protection or other local programs
addressing public health and safety associated with implementation of Prop 64. While the taxes
to be generated are likely significant, the amount that will be available for grants is unknown and
uncertain at this point because there are significant statutory priorities and earmarks for funding
through at least 2028.
ALTERNATIVES
1. Do nothing. Staff does not recommend this alternative. If the City has no express ban or
regulatory scheme, the City may not be able to preclude the issuance of a State license to
operate a marijuana business in the City, even if such a business is not in the City’s best
interests to allow and leaves the application and enforcement of current city law ambiguous.
2. Provide more specific direction on future alternatives. The City Council could be more
specific about its goals for a future regulatory scheme, however, this alternative is not
recommended because there are still uncertainties associated with the various alternatives. In
addition, future decision-making will benefit greatly from public engagement efforts to
answer certain questions about community preferences associated with the options for
licensing and taxation of cannabis related activities.
Packet Pg. 172
13
3. Provide direction to incorporate language in the proposed ordinance to prohibit all
outdoor cultivation. Language to implement this direction is included in the report and
would prohibit all recreations and medical marijuana cultivation within the City.
Attachments:
a - Ordinance Preserving City Authority to Prohibit Marijuana Uses and Activities
b - Briefing-Prop64
c - FAQ League CA Cities Prop 64 Adult Use of Marijuana
d - Memo League CA Cities Adult Use Marijuana Act
e - Resolution 10683 (2015 Series)
f - Council Reading File - 03-17-2015 Council Agenda Report - Code Amendment - Odor
Nuisance
Packet Pg. 173
13
O ______
ORDINANCE NO. 1633 (2017 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, CODIFYING AND REAFFIRMING CURRENT
CITY LAW, POLICY AND PRACTICE BY EXPRESSLY PROHIBITING
ALL COMMERCIAL AND INDUSTRIAL RECREATIONAL AND
MEDICAL MARIJUANA USES, ACTIVITIES AND OPERATIONS AND
LIMITING OUTDOOR CULTIVATION OF MEDICAL AND
RECREATIONAL MARIJUANA WITHIN THE CITY
WHEREAS, in 1996, California voters approved Proposition 215, entitled “The
Compassionate Use Act of 1996”, providing a defense to state criminal prosecution for specified
medical marijuana use, and the Medical Marijuana Program Act established a voluntary
participation, State-authorized medical marijuana identification card and registry database for
verification of qualified patients and their primary caregivers; and
WHEREAS, in 2015, the State Legislature approved the Medical Marijuana Regulation
and Safety Act (“MMRSA”), which created an extensive statewide regulatory and licensing system
for the cultivation, manufacture, testing, dispensing, distribution and transport of medical
marijuana. MMRSA exempted from its regulatory and licensing system, certain medical marijuana
cultivation by individual qualified patients and primary caregivers with no more than five qualified
patients. In 2016, the State Legislature updated MMRSA by approving AB 21 and SB 837 to
address issues not previously addressed in prior legislation and changed the name of MMRSA to
the Medical Cannabis Regulation and Safety Act (MCRSA); and
WHEREAS, under MCRSA, the State will not issue licenses to operators in jurisdictions
that prohibit medical marijuana uses and activities, either expressly or under principles of
permissive zoning; and
WHEREAS, the City historically has relied on permissive zoning principles to decline
permitting of marijuana businesses and uses within the City, and reaffirmed that position by
adoption of Resolution 10683 on January 14, 2016; and
WHEREAS, on November 8, 2016, California voters passed Proposition 64, entitled “The
Control, Regulate, and Tax Adult Use of Marijuana Act” (“AUMA”). AUMA legalized under
California law non-medicinal/recreational marijuana use for those 21 years of age and over, and
created a comprehensive regulatory, licensing and tax system for the non-medical marijuana
industry, including 19 different types of licenses for cultivation, manufacturing, testing, retailer,
distributor and microbusiness; and
WHEREAS, AUMA allows local governments to ban recreational marijuana businesses
entirely, or regulate such businesses, and to reasonably regulate cultivation through zoning and
other public health and safety laws, including prohibiting outdoor cultivation outright, but AUMA
does require local governments to allow limited indoor cultivation in private residences; and
Packet Pg. 174
13
Ordinance No. _____ (2017 Series) Page 2
WHEREAS, despite the changes in California law, the Federal Controlled Substances Act
still makes it illegal under federal law for any person to cultivate, manufacture, distribute or
dispense, or possess with intent to manufacture, distribute or dispense, marijuana, and the future
of federal government enforcement actions under a new Presidential administration is uncertain
in states that have legalized the recreational use of marijuana; and
WHEREAS, it will take a substantial amount of time: to conduct public outreach regarding
the direction the City should take regarding both medical and recreational marijuana businesses;
to draft comprehensive zoning and other regulations relating to commercial recreational and/or
medical marijuana activities within the City; to determine whether to pursue certain taxes related
to commercial recreational marijuana; and to analyze the potential impacts and health and safety
issues relating to such businesses, including, but not limited to, environmental, water, indoor
electrical fire hazards, mold, odors and criminal activity; and
WHEREAS, AUMA does not contain the protective language relating to permissive
zoning that MCRSA does, and, in the absence of an express ordinance either prohibiting or
regulating non-medical marijuana business or activities, the City could become subject to State
licensing of marijuana businesses and activities within its jurisdiction and/or may not be able
preclude the State from issuing licenses to marijuana businesses anywhere in the City; and
WHEREAS, it is unclear to the full extent to which AUMA and MCRSA may conflict,
how state regulatory provisions ultimately may reconcile the two licensing structures, and whether
the provisions of AUMA will control over MCRSA; and,
WHEREAS, the City has had odor complaints relating to outdoor cultivation of marijuana,
resulting in the addition of Chapter 8.22 to the Municipal Code, prohibiting persistent offensive
odors from emanating across property or parcel lines; and
WHEREAS, the City currently prohibits smoking and controls secondhand smoke,
including marijuana smoke and vapors, in public and other places under Chapter 8.16, of its
Municipal Code; and
WHEREAS, the City Council wishes to preserve its ability to continue its current
licensing, permitting, regulation and enforcement practices regarding marijuana uses within its
boundaries in order to receive and consider council direction and public outreach to define the
appropriate nature and scope of regulations.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The foregoing recitals are adopted by the City Council as findings in support
of the Ordinance.
SECTION 2. This Ordinance constitutes an exercise of the City’s police powers under the
California Constitution and codifies existing law, policy and practice in the City of San
Luis Obispo prohibiting marijuana uses and activities.
Packet Pg. 175
13
Ordinance No. _____ (2017 Series) Page 3
SECTION 3.
Chapter 9.10 is added to the San Luis Obispo Municipal Code, to read as follows:
Chapter 9.10 MARIJUANA REGULATION
9.07.010 Purpose and Intent
A. The purpose and intent of this chapter is to maintain the status quo while the city
conducts public outreach by limiting the outdoor cultivation, and prohibiting
manufacturing, processing, laboratory testing, labeling, storing and wholesale and
retail distribution and sale of recreational and medical marijuana to protect the health,
safety and welfare of the city consistent with state law.
B. This chapter is not intended to, nor shall it be construed as, prohibiting or interfering
with any right, defense or immunity afforded to qualified patients or their caregivers
relating to medical marijuana under the Compassionate Use Act of 1996, the Medical
Marijuana Program Act, the Medical Cannabis Regulatory and Safety Act and other
applicable California law.
C. This chapter is not intended to, and shall not be construed as, prohibiting or interfering
with any right, defense or immunity of any individual relating to the recreational use
or possession or indoor cultivation of marijuana as permitted by the Control,
Regulation and Tax Adult Use of Marijuana Act; provided, nothing in this subsection
is to be construed to permit actions violating or not permitted by other provisions of
the Municipal Code, including, but not limited to, Chapter 5.01 Business License
Program, Chapter 8.16 Smoking Prohibited and Secondhand Smoke Control, Chapter
8.22 Offensive Odors and Chapter 17.22 Use Regulations.
9.10.020 Limitation of Outdoor Cultivation of Marijuana
No person shall cultivate, plant, grow, maintain or store more than six marijuana plants
outdoors in any location within the City, whether or not located in a greenhouse or other
structure designed or used for such activities.
9.10.030 Prohibition of Marijuana-Related Businesses
A. Except as otherwise specifically required by California law, any and all commercial or
industrial recreational and medical marijuana/cannabis-related uses, activities,
businesses, or operations, are prohibited and unlawful within the City of San Luis
Obispo.
B. This prohibition applies to both for profit and nonprofit commercial and industrial uses,
activities, businesses, operations, even if a State license under the Control, Regulate
and Tax Adult Use of Marijuana Act or the Medical Cannabis Regulation and Safety
Act is not required.
C. This prohibition includes, but is not limited to, commercial and/or industrial:
cultivation (both indoor and outdoor); manufacturing; processing; laboratory testing;
Packet Pg. 176
13
Ordinance No. _____ (2017 Series) Page 4
wholesale or retail distribution, delivery and sale; labeling; storage; or permitting of
smoking/vaporizing/ingesting on any business premises, of marijuana/cannabis,
marijuana/cannabis products and all marijuana/cannabis derivatives for any purpose.
9.10.40 Violation and Penalties
A. Misdemeanor. Any violation of the provisions of this chapter shall be a misdemeanor;
provided, that where the city attorney determines that such action would be in the interest
of justice, he/she may specify in the accusatory pleading that the offense shall be an
infraction.
B. Infraction Violation. Where the city attorney determines that, in the interest of justice,
a violation of this chapter is an infraction, such infraction is punishable by a fine not
exceeding one hundred dollars for a first violation, a fine not exceeding two hundred dollars
for a second violation of the same provision within one year, and a fine not exceeding five
hundred dollars for each additional infraction violation of the same provision within one
year.
C. The fine amounts set forth above may be modified, from time to time, by city council
resolution. In no event shall such fine amounts exceed the amounts authorized by state law.
D. Each person committing, causing, or maintaining a violation of this chapter or failing to
comply with the requirements set forth herein shall be deemed guilty of a separate offense
for each and every day during any portion of which any violation of any provision of this
chapter is committed, continued, maintained, or permitted by such person and shall be
punishable accordingly.
E. The violation of any provision of this chapter shall be and is hereby declared to be a
public nuisance and contrary to the public interest. Any public nuisance under this chapter
may, at the city’s discretion, be abated by the city by civil process by means of a restraining
order, preliminary or permanent injunction or in any manner provided by law for the
abatement of such nuisance. The city shall also be entitled to recover its full reasonable
costs of abatement. The prevailing party in any proceeding associated with the abatement
of a public nuisance shall be entitled to recovery of attorneys’ fees incurred in any such
proceeding if the city has elected at the initiation of that individual action or proceeding to
seek recovery of its own attorneys’ fees.
F. In lieu of issuing a criminal citation, the city may issue an administrative citation to any
person responsible for committing, causing or maintaining a violation of this chapter.
Nothing in this section shall preclude the city from also issuing a citation upon the
occurrence of the same offense on a separate day.
G. The remedies set forth in this chapter are cumulative and additional to any and all other
legal remedies available whether set forth elsewhere in the San Luis Obispo Municipal
Code, or in state or federal laws, regulations, or case law
Packet Pg. 177
13
Ordinance No. _____ (2017 Series) Page 5
SECTION 4 The adoption of this Ordinance maintains the status quo and does not make
any change in the current or historic law, policy or practice of the City, and the whole of
such action is not an activity which may cause direct or reasonably foreseeable indirect
physical change in the environment under Public Resources Code Section 21065 or
California Environmental Quality Act (“CEQA”) Guidelines Section 15378 (a) and,
therefore, is exempt from, and not a project subject to, environmental review. Even if the
adoption of this Ordinance codifying existing law is determined to constitute approval of a
project under CEQA, and even if the project is not subject to any statutory or categorical
exceptions, as a matter of common sense, it can be seen with certainty that there is no
possibility that the activity in question, the adoption of the Ordinance codifying existing
law, may have a significant effect on the environment under CEQA guidelines section
15061 (b) (3).
SECTION 5. This Ordinance shall not be interpreted in any manner to conflict with
controlling provisions of state or federal law, including, without limitation, the Constitution
of the State of California. If any section, subsection or clause of this ordinance shall be
deemed to be unconstitutional or otherwise invalid, the validity of the remaining sections,
subsections and clauses shall not be affected thereby.
SECTION 6. 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
Tribune, 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 ____, 2017, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 2017, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Carrie Gallagher
City Clerk
Packet Pg. 178
13
Ordinance No. _____ (2017 Series) Page 6
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, this ______ day of ______________, _________.
______________________________
Carrie Gallagher
City Clerk
Packet Pg. 179
13
Page intentionally left
blank.
Packet Pg. 180
13