HomeMy WebLinkAboutItem #2 CODE-1058-2017 (Cannabis) PLANNING COMMISSION AGENDA REPORT
SUBJECT: Review boundaries of seven proposed Cannabis Business Zones (CBZ) - generally located
in the Mid-Higuera Plan Area, the Broad Street Corridor Plan Area, the Orcutt Road Area,
the Airport Area, the Margarita Area, the Higuera Commerce Park Area, and the
Sacramento Drive Area – where certain cannabis business activities would be allowed
consistent with the City’s Zoning Regulations
PROJECT ADDRESS: Citywide BY: Michael Codron, Community
Development Director
Rachel Cohen, Associate Planner
Phone: 781-7475
e-mail: rcohen@slocity.org
FILE NUMBER: CODE-1058-2017 FROM: Doug Davidson, Deputy Director
RECOMMENDATION: Adopt a resolution recommending the City Council approve the boundaries
of seven proposed Cannabis Business Zones (see Attachment 1, Draft Resolution).
SITE DATA
Applicant City of San Luis Obispo
Representative Michael Codron, Community
Development Director
Zoning Various
General Plan Various
Environmental
Status
Exempt per Business and Professions
Code Section 26055(h)
SUMMARY
On May 15, 2018, the City Council adopted an ordinance amending the City’s Municipal Code to
regulate cannabis business operations in the City. The regulations require a two -step process that first
requires a certification process to identify eligible business operators, and then approval of a land use
permit for the specific site. The ordinance will not go into effect unless the residents of the City approve
a revenue measure on the November 2018 election ballot that provides for the taxation of various
cannabis business activities. Implementation of the ordinance also requires the establishment of overlay
zones where cannabis business activities may be allowed. This report identifies and recommends that
the Planning Commission forward the boundaries of seven proposed Cannabis Business Overlay Zones
Meeting Date: July 25, 2018
Item Number: 2
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Cannabis Business Zones (CBZ)
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(CBZ) to the City Council for approval.
1.0 COMMISSION’S PURVIEW
The Commission is tasked with the following:
1. Review the project in terms of its consistency with the General Plan, Zoning Regulations, and
applicable City standards.
2. Provide a recommendation to City Council.
2.0 BACKGROUND
As part of the process to develop the City’s cannabis business regulations, the use of overlay zones was
identified as a way to more precisely control where cannabis business activities could occur. Certain
areas, such as the Downtown Core, were determined to be inappropriate for cannabis business activities.
Other areas of the City, such as the Foothill corridor, may include appropriate zoning but are too close
to residential neighborhoods, schools, the college campus, or other incompatible uses.
Some cities in California have relied entirely on buffers from certain sensitive uses to establish where
cannabis business may be located. This alternative was not pursued because buffers from residences,
schools, day care businesses, are difficult to measure consistently and can change over time. In addition,
in a compact urban city like San Luis Obispo, the use of buffers alone could leave very little land
available for cannabis business activities, which could have a negative impact on land values and result
in the displacement of other business types.
In consideration of these factors, staff analyzed various areas of town that had the appropriate
combination of zoning and separation from sensitive uses and published maps with overlay zone
boundaries for public comment. Staff provided various outreach efforts including the posting of the
proposed maps online (www.slocity.org/cannabis), posting a notification in the Tribune, and sending out
a letter to all property owners within the overlay zone boundaries (see Attachment 3, Copy of the
Notification Letter). A set of seven CBZ zones are now recommended to be established in preparation
for the commencement of cannabis business activity within the City.
3.0 PROJECT INFORMATION AND ANALYSIS
Cannabis business activity includes a variety of permit types, including:
• Retail sales, storefront
• Retail sales, non-storefront
• Manufacturing
• Cultivation
• Distribution
• Testing
• Microbusiness
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Ordinance 1647 (2018 Series) (Attachment 2) establishes the zones where various business types are
allowed. A business located within a CBZ zone may only be permitted if the underlying zoning allows
for the proposed business type, as follows.
Cultivation is limited to 70,000 square feet total – cumulatively within the City.
Manufacturing is limited to non-volatile processes. Only 3 storefronts for retail sales are allowed
cumulatively in the City, and they must be located along arterial streets.
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Microbusinesses have unique requirements because they must include at least three of the major licensed
activities (e.g. cultivation, manufacturing, and retail sales). Similar to warehouse stores, a micro-business
in the M or BP zone may have a retail storefront as long as less than 50% of the gross receipts of the
business come from storefront retail sales. These retail “warehouse” stores would be subject to the limit
of three storefronts citywide and would have to be located along an arterial road.
3.1 Mid-Higuera Area
The Mid-Higuera CBZ generally follows the boundaries of the Mid-Higuera Area Plan, except that the
area does not extend south of South Street. In addition, the boundary does not extend to the east side of
Parker Street because of adjacent residential uses. The first maps that were published of this area did
include all of Parker Street, but based on public feedback staff contracted the boundaries. In addition,
the boundaries were expanded to include some land zoned Service Commercial beyond the northern
edge of the Mid-Higuera Area boundary.
The Mid-Higuera Area includes Service Commercial and Retail Commercial zoning. Higuera Street is
an arterial road. Therefore, staff expects that one of the City’s three possible retail storefronts will be
located in this area.
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3.2 Broad Street Corridor
The Broad Street Corridor CBZ generally follows the boundaries of the Broad Street Corridor Plan. This
plan area includes residentially zoned land within the CBZ boundary. As a result, the maps depict a
300’foot buffer. Retail stores are required to be located outside of the residential buffer area depicted on
the map, however, other cannabis businesses that do not include customer visitation may be permitted
in these areas.
The Broad Street Corridor Area includes Service Commercial and Retail Commercial zones and Broad
Street is an arterial road. Therefore, staff expects one of the City’s three retail storefronts to be located
in this area.
3.3 Orcutt Road Area
The Orcutt Road Area is contiguous with the Broad Street Corridor Area but there is no pedestrian or
vehicle circulation between the two areas. In addition, there is a service alley and significant grade
change between the residential land above (Villa Rosa and Moylan Terrace) and the services and
manufacturing area located on McMillan Street and Duncan Street. The zoning in this area is Service
Commercial and Manufacturing. Orcutt Road is an arterial road and one of the City’s three retail
storefronts could be located in this area.
3.4 Airport Area
The Airport Area is the largest CBZ and includes land along Tank Farm, South Higuera, Broad Street,
Suburban and local streets within the area. South Higuera, Tank Farm Road, and Broad Street are arterial
roads. Service Commercial zoned land along these streets within the Airport Area CBZ would be
appropriate for one of the City’s three retail storefronts.
There is one area with residentially zoned land in the Airport Area located along Tank Farm Road close
to Broad Street. The site is currently developed with the Hidden Hills Mobile Home Lodge. A 300-foot
buffer from this property is depicted on the CBZ map for reference.
3.5 Margarita Area
The Margarita Area includes land that is zoned Business Park on the south side of Prado Road. This is
undeveloped land with significant infrastructure requirements precedent to development. This area is
separated from residential land in the area by Prado Road. Prado is an arterial road, however, Business
Park Zoning does not allow for a retail storefront. A retail store could be developed in this area if it were
part of a microbusiness and retail sales constituted less than 50% of the gross receipts of the business.
3.6 Higuera Commerce Park
The Higuera Commerce Park is an area zoned Service Commercial that includes a variety of light
manufacturing, design and production offices, and other similar uses. The area is characterized by
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relatively high employee density, with low-scale offices and on-site parking. The area is bordered by
Prado Road and South Higuera Street, which are both arterial roads and therefore it would be possible
for a retail storefront to be located in this area. This area is likely to see a variety of other cannabis
business activities with properties suitable for distribution centers, testing labs, and manufacturing.
3.7 Sacramento Drive
The Sacramento Drive area is very similar to the Higuera Commerce Park area except that the lots are
generally larger and there are a larger variety of business types in this area, from telecommunications to
food manufacturing. The zoning is primarily Manufacturing and storefront retail sales would not be
permitted either as a stand-alone operation or as part of a microbusiness.
4.0 ENVIRONMENTAL REVIEW
Business and Professions Code section 26055, subdivision (h), as amended by SB 94 (otherwise known
as the Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA)), provides that the
California Environmental Quality Act (“CEQA”) does not apply to the adoption of an ordinance, rule,
or regulation by a local jurisdiction that requires discretionary review and approval of permits, licenses,
or other authorizations to engage in commercial cannabis activity, so long as the discretionary review
includes any applicable environmental review pursuant to CEQA. Future applications for commercial
cannabis business activities in the City will be subject to CEQA, per the normal environmental review
process.
5.0 OTHER DEPARTMENT COMMENTS
City staff has convened a steering committee made up of the City Attorney, Police Chief, Fire Chief,
Finance Director and Community Development Director to review all aspects of the City’s cannabis
business regulatory program. The recommendations included in this report have been vetted with the
steering committee and are consistent with the ordinance approved by the City Council in May 2018.
6.0 ALTERNATIVES
6.1 Continue the item. An action to continue the item should include a detailed list of additional
information or analysis required.
6.2 Deny the item. Deny the project based on findings of inconsistency with State law, the
General Plan, Zoning Regulations and/or other pertinent City standards. This action is not
recommended because the approval of the city’s overall cannabis regulations anticipates the
establishment of overlay zones where cannabis business activities would be allowed.
7.0 ATTACHMENTS
1.Draft Resolution and Exhibit
2.Council Ordinance #1647 (2018)
3.Copy of Notification Letter
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ATTACHMENT 1
R ______
RESOLUTION NO. PC-XXXX-18
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF
SAN LUIS OBISPO, CALIFORNIA, RECOMMENDING THAT THE
CITY COUNCIL ADOPT AN ORDINANCE TO AMEND THE CITY’S
ZONING CODE AND ZONING MAP TO DESIGNATE SEVEN AREAS
OF THE CITY AS CANNABIS BUSINESS OVERLAY ZONES IN SEVEN
SEPARATE AREAS OF THE CITY WHERE CANNABIS BUSINESSES
MAY BE ALLOWED TO OPERATE AS MAY BE ALLOWED OR
CONDITIONALLY ALLOWED BY THE UNDERLYING ZONING
DISTRICT AND THE RULES AND REGULATIONS ESTABLISHED IN
THE CITY’S MUNICIPAL CODE (CODE-1058-2017)
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
July 25, 2018; and
WHEREAS, said public hearing was held for the purpose of formulating and forwarding
recommendations to the City Council of the City of San Luis Obispo regarding Cannabis Business
Overlay Zones; and
WHEREAS, notices of said public hearing were made at the time and in the manner
required by law; and
WHEREAS, overlay zones are recommended as a more precise way to establish the
locations in the City where cannabis business activities may be appropriate; and
WHEREAS, the proposed overlay zones are sufficient in size to allow for a variety of
cannabis business activities to occur in various locations of the City; and
WHEREAS, the locations of the zones have been established in consideration of adjacent
uses, and, all new cannabis businesses are subject to a requirement to obtain a land use permit,
which is a process that provides for notification of neighboring property owners, businesses, and
residents, and ensures compatibility of uses through the imposition of conditions of approval such
as limited hours of operation; and
WHEREAS, the Planning Commission has duly considered all evidence, including the
testimony interested parties, and the evaluation and recommendations of staff presented at said
hearing.
NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of
San Luis Obispo as follows:
SECTION 1. Finding. The proposed “CBZ” overlay zoning is intended to more precisely
implement the rules and regulations associated with cannabis business activity in the City, as
detailed in Chapter 17 and Chapter 9 of the City’s Municipal Code.
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Resolution No. _____ (2018 Series) ATTACHMENT 1
Page 2
SECTION 2. Environmental Review. The project is exempt from environmental review
per the Business and Professions Code (Section 26055(h)) because the project includes the
adoption of ordinances, rules, or regulations for the purpose of regulating cannabis business
activity in the City. The City’s cannabis business regulations require discretionary review and
approval of permits, licenses, or other authorizations to engage in commercial cannabis activity.
Future applications for commercial cannabis business activities in the City will be subject to
CEQA, per the normal environmental review process.
SECTION 3. Recommendation. The Planning Commission hereby recommends that the
City Council adopt an ordinance: (1) amending the City’s Zoning Map to designate properties that
will be included in the CBZ, in seven separate areas of the City as depicted in Exhibit A which is
incorporated herein by this reference; and (2) amending San Luis Obispo Municipal Code Section
17.06.020 adding the Cannabis Business Overlay Zone as a zoning designation.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 25th day of July 2018.
____________________________________
Doug Davidson, Secretary
Planning Commission
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ORDINANCE NO. 1647 (2018 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING THE MUNICIPAL CODE TO
ESTABLISH ZONING (CHAPTER 17) AND PUBLIC PEACE, MORALS
AND WELFARE (CHAPTER 9) REGULATIONS FOR COMMERCIAL
CANNABIS BUSINESSES AND PERSONAL CULTIVATION, AND
DETERMINING THAT THE AMENDMENTS ARE STATUTORILY
EXEMPT FROM ENVIRONMENTAL REVIEW PURSUANT TO
BUSINESS AND PROFESSIONS CODE SECTION 26055 (h) (CODE-1058-
2017)
WHEREAS, the voters of the State of California approved the Compassionate Use Act in
1996 to provide a defense to criminal prosecution for the cultivation, possession and use of
marijuana for medical purposes. Subsequently, the Medical Marijuana Program Act (MMPA)
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 enacted the Medical Cannabis Regulation and Safety Act;
and
WHEREAS, on November 8, 2016, California voters approved Proposition 64, the Adult
Use of Marijuana Act, a voter initiative, which legalized adult personal recreational use, possession
and cultivation of cannabis in California, and created a comprehensive regulatory and dual
licensing system for commercial cannabis activity in the State effective January 2018; and
WHEREAS, Proposition 64 was passed by 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 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, in 2017 the City Council adopted
Ordinance 1633, amending Chapter 9.10 of the Municipal Code to maintain the status quo while
the city conducted public outreach, by limiting outdoor cultivation and expressly prohibiting all
commercial and industrial recreational and medical marijuana/cannabis-related uses, activities,
businesses, or operations within the city; and
WHEREAS, City staff has conducted extensive public outreach; and
WHEREAS, after review of the information gathered by staff during public outreach, the
City Council directed staff to recommend and draft amendments to the Municipal Code to permit
commercial cannabis activities within the City; and
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WHEREAS, in 2017, the California legislature passed, and Governor Brown signed
Senate Bill 94, which enacted the Medicinal and Adult-Use Cannabis Regulation and Safety Act
("MAUCRSA"), repealed the Medical Cannabis Regulation and Safety Act ("MCRSA") but
incorporated certain provisions of MCRSA into the licensing provisions established by Proposition
64;and
WHEREAS, before any commercial cannabis activities in the City can begin, revision of
Title 17, Zoning, and repeal and replacement of Title 9, Public Peace, Morals and Welfare (Chapter
9 .10,) is required; and
WHEREAS, as part of the process to permit commercial cannabis activity in the City, the
City desires to update Title 9 and Title 17 and establish regulations for the operation of cannabis
businesses, consistent with current state law and City permitting and land use requirements; and
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
March 28, 2018 and March 29, 2018, for the purpose of considering amendments to Title 17
(Zoning Regulations) of the Municipal Code to establish land use regulations for the operation of
commercial cannabis businesses, and making recommendations to the City Council regarding such
amendments.
WHEREAS, the amendments were scheduled to be considered at regular, duly noticed
meeting of the City Council on May 1, 2018; and
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows/or that (whatever action is needed):
SECTION 1. Findings. Based upon all the evidence, the Council makes the following
additional findings.
a) The proposed amendments to Title 17 are consistent with the City's General Plan.
b) The proposed amendments to Title 17 are consistent with existing zoning practices
in the City, so that commercial cannabis activities will be permitted only in zones
which already allow for similar uses, such as retail, manufacturing and laboratories,
consistent with existing performance standards and levels of planning review
applicable to similar uses.
c) The amendments Title 9 and to Title 17 enacted by this ordinance promote the
public health, safety, convenience, and welfare of the City by creating clear and
complementary land use, business operations, and personal conduct standard and
requirements to ensure the safe and orderly implementation of Propositions 64 and
Senate Bill 94 in the City, taking into consideration the unique local circumstances
and needs of City residents, as well as law enforcement and regulatory enforcement
staff.
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d) The proposed amendments establish reasonable regulations regarding the
establishment of commercial cannabis businesses in the City, are consistent with
State law, maintain local control over land use and balance the City's competing
interests in allowing certain commercial and research-related cannabis activities
desired by the majority of voters, with the public health, welfare, and safety
concerns of the City.
e) 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. Until July 1, 2019, Business and Professions Code
section 26055, subdivision (h), as amended by SB 94, provides that the California Environmental
Quality Act ("CEQA") does not apply to the adoption of an ordinance, rule, or regulation by a
local jurisdiction that requires discretionary review and approval of permits, licenses, or other
authorizations to engage in commercial cannabis activity, so long as the discretionary review
includes any applicable environmental review pursuant to CEQA. The proposed ordinance is
subject to a statutory exemption from CEQA because the City requires discretionary review and
approval, including applicable environmental review pursuant to CEQA, of permits, licenses or
other authorizations to engage in commercial cannabis activity.
SECTION 3. This Ordinance shall be known as the "Cannabis Land Use and Business
Regulation Implementation Ordinance."
SECTION 4. Chapter 9.10 of the City of San Luis Obispo's Municipal Code is hereby
repealed and replaced in its entirety as set forth in Exhibit A.
SECTION 5. Chapter 17 .99 of the City of San Luis Obispo' s Municipal Code is hereby
added as set forth in Exhibit 8.
SECTION 6. Chapter 17.22, Table 9 of the City of San Luis Obispo's Municipal Code is
hereby amended as set forth in Exhibit C.
SECTION 7. Chapter 17.100 of the City of San Luis Obispo's Municipal Code is hereby
amended as set forth in Exhibit D.
SECTION 8. No land use or operator permits under the terms of the provisions adopted
and/or amended herein shall be issued and no commercial cannabis business operators shall be
allowed in the City after the effective date of this ordinance unless and until the voters of the City
approve a cannabis revenue measure.
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 validity 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
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the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable
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
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 1st day of May, 2018, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the 15th day of May, 2018, on the following vote:
AYES: Council Members Gomez, Pease and Rivoire,
Vice Mayor Christianson and Mayor Harmon
NOES: None
ABSENT: None
ATTEST:
City Clerk
J. Christine Dietric
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 77~ day of ~~ , ?.J)\<i;, .
Teresa Purrington
City Clerk
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Ordinance No. 1647 (2018 Series)
EXHIBIT A
Chapter 9.10 Cannabis Regulations
9.10.010
9.10.020
9.10.030
9.10.040
9.10.050
9.10.060
9.10.070
9.10.080
9.10.090
9.10.100
9.10.110
9.10.120
9.10.130
9.10.140
9.10.150
9.10.160
9.10.170
9.10.180
9.10.190
9.10.200
9.10.210
9.10.220
9.10.230
9.10.240
9.10.250
9.10.260
9.10.270
9.10.280
9.10.290
9.10.010
Purpose and Intent.
Definitions
Personal Cultivation Limited
Commercial Cannabis/City Permit and State License Required
Regulations and Fees
Display and Production of Permits
Commercial Cannabis Operator Permit Application Procedures and Requirements.
Renewal of Permit
Suspension or Revocation of Permit
Appeal
Right to Occupy and Use Property for Commercial Cannabis Activity
Prohibition on Transfer of Commercial Cannabis Operator Permits .
Records and Reporting.
Inspection and Enforcement.
Outdoor Commercial Cannabis Cultivation and Activities Prohibited
Indemnification, Insurance, Reimbursement, Consent
Compliance with Laws
Permit Violation
Permit Compliance Monitoring
Permit Holder Responsible for Violations by Employees or Agents
Consumption or Use Prohibited On-site and In Public
Concurrent Alcohol Sales or Service Prohibited
Minors
Sale of Cannabis , Cannabis Products or Cannabis Accessories by Vending Machine
prohibited
Security Measures
Limitations on City's Liability.
Fees Deemed Debt to City
Violation and Penalties
Severability
Purpose and Intent.
A. It is the primary purpose and intent of this Chapter to protect the health, safety, and welfare
of the residents of the City of San Luis Obispo from the negative impacts of illegal
commercial and non-commercial cannabis activity, and of state authorized cannabis
activity, by enforcing City ordinances, rules and regulations consistent with applicable
State law, including, but not limited to, the Compassionate Use Act, the Medical Marijuana
Program Act, the Adult Use of Marijuana Act, and the Medicinal and Adult Use of
Cannabis Regulatory and Safety Act.
B. This Chapter is not intended to, and shall not be construed to, prohibit or interfere with any
right, defense or immunity under Health and Safety Code Section 11362.5 (the
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EXHIBIT A
Compassionate Use Act), or under Health and Safety Code Section 11362.7 et. seq. (the
Medical Marijuana Program Act).
C. This Chapter is not intended to, and shall not be construed to, prohibit or interfere with any
right , defense or immunity of any person 21 years of age or older relating to the adult
personal possession or cultivation of cannabis or marijuana consistent with the provisions
of the Control, Regulate and Tax Adult Use of Marijuana Act, and the Medicinal and Adult
Use of Cannabis Regulatory and Safety Act.
D. Nothing in this Chapter shall be construed to authorize the cultivation, possession or use
of marijuana for any purpose inconsistent with state or local law.
E. Any reference to California statutes includes any regulations promulgated thereunder and
is deemed to include any successor or amended version of the referenced statute or
regulation.
9.10.020 Definitions
A. State defined terms . Words or terms used in this chapter that are defined words or terms in
Business and Professions Code Section 26001, or Health and Safety Code Section 11362 .7 (the
Statutes") shall have the meanings ascribed to them in the Statutes as they now read, or as they
may be amended to read. These state defined words and terms include, but are not limited to,
"cannabis," "cannabis accessories," "cannabis concentrate," "cannabis products,"
"commercial cannabis activity," "cultivation," "delivery," "distribution," "license," "live
plants," "manufacture," "operation," "person," "premises," "sell," "sale," "to sell." Some of
these terms are also set forth in Chapter 17 .100 of this code. In the event of conflict in the
definitions, the definitions in Chapter 17 .100 shall control; provided the terms defined in
subsection B below shall control over any other definition.
B. City defined terms. The following words or terms used in this chapter have the following
meanmgs:
1. "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.
2. "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.
3 . "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
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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.
4. "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.
9.10.030 Personal Cultivation Limited
A. Maximum Six Plants Outdoors Per Parcel. It shall be unlawful for any person to plant,
cultivate, harvest, dry, process, maintain, possess or store outdoors, more than six ( 6) live
cannabis plants on any parcel containing one or more private residences . This limitation on
outdoor personal cannabis activities applies per parcel, regardless of the number of residents
in each private residence, and regardless of the number of residences on the parcel. This
limitation applies to cannabis live plants for either adult recreational use or medicinal purposes.
Outdoor personal cultivation shall comply with applicable provisions of chapter 17 .99 of this
Code.
B. Maximum Six Plants Per Private Residence, Indoors and Outdoors/ It shall be unlawful
for the cumulative total of cannabis plants per private residence, indoors and outdoors, to
exceed six ( 6) cannabis live plants, regardless of number of persons residing in the private
residence. This limitation applies to cannabis live plants for either adult recreational use
or medicinal purposes. Any live cannabis plants grown indoors shall comply with
applicable provisions of Chapter 17 .99 of this Code.
C. No Outdoor Cultivation on Parcel without Private Residence. It shall be unlawful for any
person to plant, cultivate, harvest, dry, process, maintain, possess or store any cannabis
live plants outdoors on a parcel that does not have a private residence used for residential
dwelling purposes by the person cultivating the cannabis live plants.
D . Neighborhood Impacts of Personal Cultivation . There shall be no exterior evidence of
cannabis cultivation occurring at the property visible by normal unaided vision from a
public place or the public right-of-way and any outdoor cultivation shall comply with
provisions of Chapter 17.99.040 of this code. Personal cultivation of cannabis, for
recreational adult use or for medicinal purposes, shall not create odors, dust, heat, noise ,
light, glare smoke or other impacts to people of normal sensitivity living, working or
lawfully present in the vicinity of the personal cultivation site. Impacts that cross the
nearest property line of any other parcel, beyond that parcel on which the personal
cultivation is conducted, or that are visible or noticeable with normal unaided vision, from
a public place or the public right of way, or from any separately owned, leased or
controlled private residence or business on the same parcel as the private residence
responsible for the personal cultivation, are unlawful.
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E. No Hazardous Personal Cultivation. Personal cultivation, harvesting, drying, or processing
of cannabis, for recreational adult use or medicinal purposes, that uses or stores hazardous or
toxic chemicals or materials, creates hazardous or toxic products or wastes, or uses volatile
processes or other methods or substances that pose a significant risk to public health or safety,
is prohibited and unlawful.
9.10.040 Commercial Cannabis/City Permit and State License Required
A. City Commercial Cannabis Operator Permit Required. No person shall engage in Commercial
Cannabis Activity or have an ownership interest in, operate, or manage, a Commercial
Cannabis Business without obtaining and continuously maintaining a Commercial Cannabis
Operator Permit pursuant to this chapter.
B. Commercial Cannabis Operator Permit and State License(s) Required. It shall be unlawful for
any person to own, conduct, manage, operate, engage or participate in, work or volunteer at a
Commercial Cannabis Activity or Commercial Cannabis Business that does not have a valid
Commercial Cannabis Operator's Permit issued pursuant to this chapter and other City permits
or licenses required by this Code, in addition to the appropriate license(s) required by state law
to conduct the Commercial Cannabis Activity. Any Commercial Cannabis Business or
Commercial Cannabis Activity conducted without all required City and state permits and
licenses is prohibited and unlawful and is hereby declared to be a public nuisance.
9.10.050 Regulations and Fees.
The City Council shall by resolution or ordinance adopt such forms, fees, regulations and
procedures as are necessary to implement this Chapter with respect to the application and
qualification for, and the selection, future selection, investigation, process, issuance, renewal,
revocation, and suspension of, Commercial Cannabis Operator Permits.
9.10.060 Display and Production of Permits
A. Dual Permits Posted and Visible. A copy of the Commercial Cannabis Operator Permit issued
by the City of San Luis Obispo pursuant to this Chapter, together with a copy of the appropriate
state license(s) for the Commercial Cannabis Activity being conducted, shall be posted and
readily visible to the public at all times, at each location where Commercial Cannabis Activity
occurs .
B. Production of Originals for Inspection. Any owner, operator , employee or person in charge of
a Commercial Cannabis Activity shall produce for inspection and copying, upon request of a
City inspector, code enforcement officer, or City police officer during normal operating hours,
the original of the current and valid City of San Luis Obispo Commercial Cannabis Operator
Permit and the appropriate, current and valid license(s) of the State of California for the
Commercial Cannabis Activity(ies) or Commercial Cannabis Business( es) being conducted .
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9.10.070 Commercial Cannabis Operator Permit Application Procedures and
Requirements
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 Chapter 17.99. 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.
B. Application Submittal Timeframe. A person may only submit one application for a
Commercial Cannabis Operator Permit during the annual application period designated by
resolution of the City Council. The Commercial Cannabis Operator permit will be valid for
twelve (12) months. Once a permit is obtained, 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 Chapter 17 .99, 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:
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 any felony or offense referenced in Business and
Professions Code Section 26057; 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 has had a commercial cannabis license suspended or revoked
by the State of California or any city or county in any state, within the three years
preceding the date the application is filed, or 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, suspension or revocation may be engaged (actively or
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passively) in the 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.
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 12 months of issuance. The
permit is activated by the issuance of a use permit for the Commercial Cannabis Activity
pursuant to Chapter 17.99 , together with all other applicable City permits and state 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.
9.10.080 Renewal of Permit
A. Renewal Application Filing Deadline. An application for renewal of a Commercial Cannabis
Operator Permit shall be filed at least sixty (60) calendar days, but not more than one hundred
twenty (120) calendar days, prior to the expiration date of the permit with the City Manager or
his/her designee. If the complete application and fees are timely submitted but the City does
not act to approve or reject the renewal prior to expiration, the permittee may continue to
operate under the expired permit until the City approves or rejects the application for renewal.
B. Rejection of Renewal Application . An application for renewal of a Commercial Cannabis
Operator Permit shall be rejected if any of the following exists:
1. The Commercial Cannabis Operator Permit is revoked at the time of the application or
renewal.
2 . The applicant conducted unpermitted commercial cannabis activities in the City or
continued to conduct formerly permitted commercial cannabis activities after
expiration of the permit, other than as expressly permitted by this section.
3. Any of the grounds for disqualification for prequalification set forth in Section
9.10.070(C) above , or as established by the City Council, exist at the time of application
for renewal, or date ofrenewal.
4. The permittee fails to renew any required State of California license(s), or the State
revokes or suspends the license. Revocation, termination, non-issuance or suspension
of a license issued by the State of California, or any of its departments or divisions,
shall immediately, concurrently revoke, terminate, or suspend, respectively, the
Commercial Cannabis Operator Permit. Such automatic suspension makes it illegal for
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a Commercial Cannabis Business or Activity to operate within the City of San Luis
Obispo until the State of California, or its respective department or division, reinstates
or issues the State license.
An application for renewal of a Commercial Cannabis Operator Permit may be denied if any of
the following exists:
1. The application is filed less than sixty (60) days before its expiration.
2. The applicant has received an administrative citation for violating any provision of this
Code relating to its Commercial Cannabis Activity(ies) in the City during the last
twelve months, and the administrative citation has not been resolved in the applicant's
favor by date of application for renewal. A pending, unresolved appeal of an
administrative citation shall not result in rejection of an otherwise timely and complete
application , but resolution of an appeal in a manner that upholds the violation against
the applicant during the application review period shall result in the immediate
rejection of the application.
3 . The Commercial Cannabis Business has not been in regular and continuous operation
in the three (3) months immediately prior to the renewal application.
4 . The Commercial Cannabis Business fails to conform to the requirements of this
Chapter, any regulations adopted pursuant to this Chapter or the conditions imposed as
part of any Use Permit or zoning requirements under Chapter 17 .99 of this Code.
5. The Commercial Cannabis Operator Permit is suspended at the time of application or
renewal.
C. Effect of Rejection of Application for Renewal. Operations to Cease Pending Appeals. If a
renewal application is rejected, the Commercial Cannabis Operator Permit expires on the
expiration date set forth in the permit, even if an appeal has been filed. All commercial cannabis
activities in the City under the expired permit must stop until all appeals have been exhausted.
A person or entity whose renewal application is rejected, and loses his /her/its appeal, must go
through the annual Commercial Cannabis Business Operator Permit application process.
9.10.090 Suspension or Revocation of Permit.
In addition to any other penalty authorized by law, a Commercial Cannabis Operator Permit may
be suspended or revoked if the City finds, after notice to the permittee and opportunity to be heard,
that the permittee or his or her agents or employees has violated any condition of the permit
imposed pursuant to, or any provision of, this chapter.
1. Upon a finding by the City of a first permit violation within any five-year period, the
permit shall be suspended for thirty days.
2. Upon a finding by the City of a second permit violation within any five-year period,
the permit shall be suspended for ninety days.
3. Upon a finding by the City of a third permit violation within any five-year period, the
permit shall be revoked.
9.10.100 Appeal.
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A. Qualification. Ranking of Retailers and Cultivators. A decision of the City to not qualify an
applicant for a Commercial Cannabis Operator Permit, or to rank applicants for retail or
cultivation licenses, or to allow qualified applicants with the highest rankings the first
opportunity to apply for a Commercial Cannabis Operator Permit, shall be the final action of
the City and not appealable.
B. Non-renewal, Revocation or Suspension. A decision of the City to reject an application for
renewal, or to revoke or suspend a Commercial Cannabis Operator Permit, is appealable to the
City Manager. An appeal must be filed with the City Manager within ten working days after
the renewal has been denied, suspended or revoked. A decision of the City Manager or his or
her designee is appealable to the City Council in accordance with Chapter 1.20 of this Code.
C. Effect of Suspension. During a period of license suspension, the Commercial Cannabis
Business shall remove from public view, all cannabis and cannabis products, and shall not
conduct any Commercial Cannabis Activity.
D. Revocation. Notice to State. Pursuant to Business and Profession Code Section 26200 (c), the
City Manager or his or her designee shall promptly notify the Bureau of Cannabis Control
within the Department of Consumer Affairs, upon City's revocation of any local license,
permit, or authorization for a state licensee to engage in commercial cannabis activity within
the City.
9.10.110 Right to Occupy and to Use Property for Commercial Cannabis Activity.
As a condition precedent to the City's issuance of a Commercial Cannabis Operator Permit
pursuant to this Chapter, any person intending to open and operate a Commercial Cannabis
Business shall provide evidence satisfactory to the City of the applicant's legal right to occupy and
to use the proposed location for the proposed use, together with the approval of a use permit from
the City for cannabis activity at the location. In the event the proposed location is owned by or to
be leased from another person, the applicant for a permit under this Chapter shall provide a signed
and notarized statement from the property owner agreeing to the operation of a Commercial
Cannabis Business on the property.
9.10.120 Prohibition on Tran sf er of Commercial Cannabis Operator Permits.
A. Business Restriction to Location on Permit. It shall be unlawful for any person to transfer a
Commercial Cannabis Operator Permit to a location not specified on the permit, or to operate
a Commercial Cannabis Business at any place or location other than that identified on the
Commercial Cannabis Operator Permit issued pursuant to this Chapter.
B. Transfer or Assignment Prohibited. No person or entity shall encumber, mortgage, lien,
hypothecate, give, bequeath, sell, assign or transfer, by operation of law or otherwise, any
portion of the ownership or control of a Commercial Cannabis Business or a Commercial
Cannabis Operator Permit to any person who does not have a Commercial Cannabis Operator
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Permit from the City prior to the effective date of any action described in this sentence. The
Commercial Cannabis Operator Permit 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. Assignment Null and Void. Any attempt to transfer, sell, assign, give, or lien, or any transfer,
sale, assignment, gift or lien, of a Commercial Cannabis Operator Permit issued pursuant to
this Chapter, by operation of law or otherwise, in violation of this chapter, is prohibited. Any
such action immediately voids, nullifies and terminates the Commercial Cannabis Operator
Permit, which shall be of no further force or effect.
9.10.130 Records and Reports.
A. City Access to Records. Subject to the Health Insurance Portability and Accountability Act
(HIP AA) regulations, each Commercial Cannabis Business shall allow City of San Luis
Obispo officials to have access to the Commercial Cannabis Business's books, records ,
accounts, and any and all data relevant to its permitted activities for the purpose of conducting
an audit, examination or inspection. Books, records, accounts, and any and all relevant data
will be produced no later than twenty-four (24) hours after receipt of the City's request or
within a reasonable time as authorized in writing by the City.
B. Annual Audit. Each Commercial Cannabis Business shall file with the City Manager or his /her
designee an audit of its financial operations for the previous fiscal year, complete and certified
by an independent certified public accountant in accordance with generally accepted auditing
and accounting principles. The audit shall include but not be limited to a discussion, analysis,
and verification of each of the records required to be maintained pursuant to this Chapter. The
information contained in the audit shall be made available in standard electronic format which
shall be compatible with programs and software used by the City, and which can easily be
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imported into either Excel, Access or any other contemporary software designated by the City
Manager.
C. Inventory Control system. All Commercial Cannabis Businesses shall maintain an inventory
control and reporting system that accurately documents the present location, amounts, and
descriptions of all cannabis and cannabis products for all stages of the growing and production
or manufacturing, laboratory testing and distribution processes until sold or distributed. All
Commercial Cannabis Businesses shall maintain records of all sales or transfers of cannabis
and cannabis products.
D. Employee Registry. Each owner and/or operator of a Commercial Cannabis Business shall
maintain a current register of the names and the contact information (including the name,
address, and telephone number) of all employees currently employed by the Commercial
Cannabis Business and shall disclose such register to any City of San Luis Obispo official upon
request.
E. Reporting and Tracking of Product and of Gross Sales. Each Commercial Cannabis Business
shall have in place a point-of-sale tracking system to track and to report on all aspects of the
Commercial Cannabis Business including, but not limited to, such matters as cannabis
tracking, inventory data, and gross sales (by weight and by sale) and shall ensure that such
information is compatible with the City's record-keeping systems. The system must have the
capability to produce historical transactional data for review by the City of San Luis Obispo.
All information provided to the City pursuant to this sub-Chapter shall be confidential and
shall not be disclosed, except as may otherwise be required under law.
F. Maintenance of Records. All records required by this Chapter shall be maintained by the
Commercial Cannabis Business for a period of not less than seven (7) years and shall otherwise
keep accurate records of all Commercial Cannabis Business activity and provide such records
for inspection consistent with this Code or any rules the City Council by resolution or
ordinance.
9.10.140 Inspection and Enforcement.
A. Unscheduled Inspection during Business Hours . The City Manager or his/her designee and any
other City of San Luis Obispo official or inspector charged with enforcing any provisions of
this Code, may enter a Commercial Cannabis Business at any time during the hours of
operation without notice for the purpose of inspecting the Commercial Cannabis Business for
compliance with the provisions of this Code, the terms and conditions of the Commercial
Cannabis Operator Permit or any other City permit or state license, including inspection of the
recordings and records maintained pursuant to this Chapter or the applicable provisions of
State law. The right to inspect under this inspection includes the right to copy recordings and
records.
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B. Interference with Inspection. It is unlawful for any person who owns, operates, manages or is
employed by, or has any responsibility over the operation of, a Commercial Cannabis Business,
to refuse to allow, or to impede, obstruct, or interfere with, an inspection by the City, or the
City's review or copying ofrecordings (including audio and video recordings) and records, or
to conceal, destroy, alter or falsify any recordings or records.
C. Obtaining Samples. The City Manager or his/her designee or any other person charged with
enforcing the provisions of this Chapter may enter the location of a Commercial Cannabis
Business at any time during the hours of operation and without notice to obtain samples of
cannabis and cannabis products to test for law enforcement and/or public safety purposes. Any
samples obtained by the City of San Luis Obispo shall be logged, recorded, and maintained in
accordance with City of San Luis Obispo Police Department standards for evidence. At all
other times, the City Manager or his/her designee may enter the location of a Commercial
Cannabis Business to obtain samples of cannabis upon reasonable notice, as otherwise
authorized by law or pursuant to a warrant.
9.10.150 Outdoor Commercial Cannabis Cultivation and Activities Prohibited.
A. Outdoor Commercial Cultivation prohibited. Outdoor commercial cannabis cultivation,
including, but not limited to, cultivation in greenhouses, hoop structures, and by mixed light
(part daylight/part artificial light), is prohibited and unlawful. This section prohibits all outdoor
commercial cannabis cultivation, including cultivation for profit or not for profit cultivation,
and including commercial cultivation for adult recreational use or medicinal purposes. For
purposes of this section, outdoor cultivation of cannabis by cooperatives is prohibited. All
commercial cannabis cultivation shall be conducted only inside a fully enclosed structure by a
person or entity with a Commercial Cannabis Operator Permit, a City use permit, and
appropriate State license(s). See also Section 17.99.050 G 3 of this Code .
B. Outdoor Commercial Cannabis Activities Prohibited. Outdoor storage, harvesting, drying,
processing, or manufacturing of commercial cannabis or cannabis products is prohibited and
unlawful.
9.10.160 Indemnification, Insurance, Reimbursement, Consent.
As a condition of approval of any Commercial Cannabis Operator Permit issued pursuant to this
Chapter, the permittee shall, at a minimum:
A. Execute an agreement to protect, indemnify, defend (at its sole cost and expense with counsel
approved by City), and hold the City of San Luis Obispo and its officers, employees, attorneys,
representatives, and agents harmless from and against any and all claims, demands, losses,
damages, injuries, costs, expenses (including attorneys' fees) fines, penalties, or liabilities
arising from, related to or associated with: the issuance of a Commercial Cannabis Operator
Permit or use permit; the permitting or approving the operation of a Commercial Cannabis
Activity; the collection of any fees , taxes, or charges from a Commercial Cannabis Business;
the Commercial Cannabis Business's or any of its owners', operators', managers', employees,
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or agents' violation of any federal , state or local laws ; the City 's suspension, revocation or
refusal to renew the Commercial Cannabis Operator Permit.
B. Maintain insurance with standard City coverages and limits, but with additional conditions
thereon deemed necessary by the City Attorney.
C. Reimburse the City of San Luis Obispo for any and all costs , expenses, attorney fees, fines ,
penalties and court costs that the City of San Luis Obispo may be required to pay as a result of
any legal challenge related to the City's approval of a Commercial Cannabis Operator Permit
pursuant to this Chapter or any other City permit or the City of San Luis Obispo's approval of
the operation of a Commercial Cannabis Activity. The City of San Luis Obispo may, at its
sole discretion, participate at its own expense in the defense of any such action, but such
participation shall not relieve the obligations imposed under this Chapter.
D . Consent to unscheduled inspections , production of records and recordings, and obtaining of
samples of cannabis and cannabis products by authorized City officials during normal
operating hours as provided in this chapter.
9.10.170 Compliance with Laws.
The Commercial Cannabis Business shall operate all times in compliance with all applicable state
and local laws, regulations, and any specific , additional operating procedures or requirements
which may be imposed as conditions of approval of the Commercial Cannabis Operator Permit or
use permit or state license(s). Nothing in this Chapter shall be construed as authorizing any action
which violates state law or local law with respect to the operation of a Commercial Cannabis
Activ ity
9.10 .180 Permit Violation.
Compliance with all local and state cannabis-related laws shall be a condition of a City
Commercial Cannabis Operator Permit and it shall be a violation of a Commercial Cannabis
Operator Permit for a permittee or his or her agents or employees to violate any local or state -
cannabis-related law.
9.10.190 Permit Compliance Monitoring.
Compliance with this chapter shall be monitored by the San Luis Obispo police department, Code
Enforcement staff and/or any other duly authorized agent of the City. Any compliance checks
pursuant to this chapter shall be in addition to any under any other ordinances, regulations or
permits . At least four compliance checks of each cannabis retailer shall be conducted during each
twelve-month period. At least two compliance checks of each commercial cannabis business other
than a retailer shall be conducted during each twelve-month period . The cost of compliance
monitoring shall be incorporated into the annual renewal fee.
9.10.200 Permit Holder Responsible for Violations By Employees or Agents.
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The responsible person and any entity to whom a Commercial Cannabis Operator Permit is issued
pursuant to this Chapter shall be responsible for all violations of the regulations and ordinances of
the City of San Luis Obispo, committed by the permittee, any employee or agent of the permittee,
which violations occur in or about the premises of the Commercial Cannabis Business, even if the
responsible person is not present. Violations by an employee or agent may result in the termination
or non-renewal of the permit by City.
9.10.210 Consumption or Use Prohibited On-site and in Public/Cannabis Event
Prohibited
A. It is unlawful for any person or entity:
1. To sell, give, exchange, dispense or distribute cannabis or cannabis products for on-site
consumption, use or sampling on any business premises; or
2. To consume or use cannabis or cannabis products, whether by smoking, vapmg,
inhaling, eating, drinking or any other means:
a. in, on or about the premises of any Commercial Cannabis Business;
b . in, on or about any publicly owned or operated property; any place open to,
or accessible by the public; any place smoking is prohibited; or any place
visible from any public place with normal unaided vision.
c . in on or about any other business, club,cooperative or commercial event,
regardless if open to the public or only to members, ticket holders or event
invitees;
d . any location where an entry or other fee is charged to attendees or to the
host or where a thing of value or consideration is received or exchanged,
directly or indirectly, for or related to the provision of cannabis.
B. It is unlawful for any person to conduct a Cannabis Event in the City.
9.10.220 Concurrent Alcohol or Tobacco Sales or Service Prohibited.
A. No person shall dispense, serve, store, give away or consume, or cause or permit the sale,
dispensing, serving, giving away or consumption of alcoholic beverages or tobacco in or on
the premises of a Commercial Cannabis Business.
B. No person shall conduct any Commercial Cannabis Activity at any location where alcohol is
sold or served.
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 21 years of age shall be allowed on the premises of a Commercial Cannabis
Business having either an "A" or "M" license or both.
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C. 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.
D. 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 (21) years
of age.
9.10.240
prohibited
Sale of Cannabis Products or Cannabis Accessories by Vending Machine
A. No person shall locate, install, keep, maintain or use, or permit the location, installation,
keeping, maintenance or use on his, her or its premises of any cannabis vending machine used
or intended to be used for the purpose of selling any cannabis products or cannabis accessories
therefrom.
B. No person, business, or other entity shall sell, offer for sale, or display for sale any cannabis
product by means of a self-service display or vending machine. All cannabis products shall be
offered for sale exclusively by means of vendor/employee assistance.
C. "Vending machine" means any electronic or mechanical device or appliance the operation of
which depends upon the insertion of money, whether in coin or paper bill, or debit or credit
card, or other thing representative of value, which device or appliance dispenses or releases
cannabis, cannabis product(s) and/or cannabis accessories .
9.10.250 Security and Public Safety Measures.
A. The City Manager or his /her designee(s) is authorized to promulgate all regulations necessary
to implement the requirements and fulfill the purposes and policies of this Chapter, including
but not limited to enforcement, background checks for applicants, approval and enforcement
of a Commercial Cannabis Activity security plan, including audio and video recordings of
operations , and verification of compliance.
B. Every Commercial Cannabis Activity and every Commercial Cannabis Activity shall have a
security plan approved by the Chief of Police or designee prior to issuance of a City
Commercial Cannabis Operator Permit.
C. Hours of Operation.
a . Retail -Storefront. Retail-Storefront Commercial Cannabis Business shall not
operate between the hours of 8 PM and 9 AM.
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9.10.260
b. Retail-Non-Storefront (Delivery Services). Retail-Non-Storefront (Delivery
Services) Commercial Cannabis Business shall not operate between the hours of 10
PMand6AM.
c. Commercial Other than Retail. All Commercial Cannabis Activity other than Retail
is prohibited between the hours of 10 PM and 7 AM.
Limitations on City's Liability.
The City shall not be liable for issuing, or failing or refusing to issue, suspending, revoking or
failing to renew a Commercial Cannabis Operator Permit pursuant to this Chapter or otherwise
approving or disapproving the operation of any Commercial Cannabis Business pursuant to this
Chapter.
9.10.270 Fees Deemed Debt to City.
The amount of any fee, cost or charge imposed pursuant to this Chapter shall be deemed a debt to
the City of San Luis Obispo that is recoverable in any court of competent jurisdiction.
9.10.280 Violation and Penalties.
A. Misdemeanor. Each violation of the provisions of this chapter shall be a misdemeanor and is
punishable as provided in Section 1.12.030 of this code.; 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. Any violation of the provisions of
this chapter by any person is also subject to administrative fines as provided in Chapter 1.24
of this code .
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. If the City of San Luis Obispo finds, based on substantial record evidence, that any person has
engaged in Commercial Cannabis Activity in violation of Chapter 9 .10, the City shall fine that
person as follows. Each day that person without a Commercial Cannabis Operator Permit
offers cannabis or cannabis products for sale or exchange shall constitute a separate violation
and assessed a fine in accordance with Sections 1.12.080 and 1.24.070(A) of this code.
E. 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
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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.
F. 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.
G. 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.
H. The remedies set forth in this chapter are cumulative and in addition to any and all other 1
remedies available at law or equity, whether set forth elsewhere in the San Luis Obispo
Municipal Code, or in state or federal laws, regulations, or case law. In addition to other
remedies provided by this chapter or by other law, any violation of this chapter may be
remedied by a civil action brought by the City attorney, including but not limited to
administrative or judicial nuisance abatement proceedings, civil or criminal code enforcement
proceedings, and suits for injunctive relief. The remedies provided by this chapter are
cumulative and in addition to any other remedies available at law or in equity.
9.10.290 Severability.
If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter is for
any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs,
sentences, clauses or phrases of this chapter or the rules adopted hereby. The City Council of the
City of San Luis Obispo hereby declares that it would have adopted each section, subsection,
subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that any one or
more other sections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared
invalid or unenforceable.
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Chapter 17.99: Cannabis
17.99.010 -Purpose
17.99.020 -Applicability
17.99.030 -Definitions
17.99.040 -Personal Cultivation
17.99.050 -Commercial Cannabis Businesses
17.99.010 Purpose.
The purpose of this Chapter is to protect the public health, safety, and welfare, enact strong and
effective regulatory and enforcement controls in compliance with State of California law, protect
neighborhood character, and minimize potential for negative impacts on people, communities, and
the environment within the City if San Luis Obispo by establishing land use requirements and
development standards for cannabis activities. Cannabis Activity, as defined in Chapter
17 .100.030 ("Definitions" "C"), includes the cultivation, possession, manufacturing, processing,
storing, laboratory testing, labeling, transporting, distribution, delivery, or sale of cannabis or a
cannabis product for either personal or commercial use . Therefore, this Chapter recognizes that
cannabis activities require land use controls due to State legal constraints on cannabis activity, and
the potential environmental and social impacts associated with cannabis activity. Nothing in this
Article is intended to affect or alter federal law, which identifies marijuana (cannabis) as a
Schedule I Controlled Substance.
17.99.020 Applicability.
Nothing in this Article shall be construed to allow any conduct or activity relating to the
cultivation, distribution, dispensing, sale, or consumption of cannabis that is otherwise illegal
under local or state law, statute, rule or regulation. It is neither the intent nor the effect of this
chapter to condone or legitimize the illegal use, consumption or cultivation of cannabis under state
or local law and nothing herein is intended to interpret, alter, interfere with or in any way affect
otherwise applicable federal law .
17.99.030 Definitions.
See Section 17.100 Definitions of this code. Terms used in this ordinance that are defined terms
under state cannabis statutes or regulations shall have the same meaning as the respective state
definition, as now defined or as the definition may be amended by the state in the future, except
as otherwise specifically provided in Section 17.100 Definitions of this code or Chapter 9.10,
Cannabis Regulations, of this code.
17.99.040 Personal Cultivation.
A. Indoor Personal Cultivation.
Indoor personal cultivation of cannabis does not require a permit and is allowed in all private
residences subject to all the following minimum performance standards:
1. All indoor personal cultivation shall occur only inside a private residence or fully-enclosed
and secure accessory building or structure to a private residence. Accessory building or
structure for indoor personal cultivation of cannabis does not include a greenhouse or hoop
structure.
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2. Structures and equipment used for indoor cultivation, such as indoor grow lights, shall
comply with all applicable building, electrical and fire code regulations as adopted by the
City.
3. All accessory buildings and structures used for indoor cultivation shall comply with the
City's Zoning Regulations and Building Codes.
4. Indoor personal cultivation of cannabis may occur inside a dwelling and/or an accessory
building or structure, subject to the following restrictions:
a. The cumulative cultivation for cannabis shall not exceed six (6) cannabis plants per
private residence.
b. All personal cultivation shall be conducted by persons 21 years of age or older, and
the cumulative total of cannabis plants per private residence, indoor and outdoor,
shall not exceed six ( 6) cannabis plants, regardless of the number of persons
residing on the property.
5 . Personal cultivation of cannabis shall not interfere with the primary occupancy of the
building or structure, including regular use of kitchen(s) or bathroom(s).
6 . Cannabis cultivation must be concealed from public view at all stages of growth and there
shall be no exterior evidence of cannabis cultivation occurring at the property visible with
normal unaided vision from any public place, or the public right-of-way. Personal
cultivation of cannabis shall be shielded to confine light and glare to the interior of the
structure.
7. Nothing in this section is intended, nor shall it be construed, to preclude any landlord from
limiting or prohibiting personal cultivation of cannabis by tenants.
8. Nothing in this section is intended, nor shall it be construed, to authorize commercial
cultivation of cannabis at a private residence .
9. Personal cultivation of cannabis shall not create: offensive odors or excessive dust, heat,
noise, light, glare, smoke, traffic, or hazards due to the use or storage of materials,
processes, products or wastes, or other unreasonable impacts to persons of normal
sensitivity who are living, working or lawfully present in the vicinity of the personal
cultivation.
10 . Cannabis cultivation areas in a private residence shall be locked at all times when the
cultivator is not present.
B. Outdoor Personal Cultivation.
Outdoor personal cultivation of cannabis does not require a permit and is allowable at all private
residences, subject to all of the following minimum performance standards:
1. Outdoor personal cultivation of cannabis is not permitted in the front yard between the
public right of way and the private residence. Outdoor personal cultivation is only
permitted in a rear or side yard that is entirely enclosed by a solid, opaque fence that is
associated with a private residence used for residential purposes.
2 . The cannabis plants shall be placed at a minimum setback of five (5) feet from the edge of
canopy to the property line.
3 . Cannabis cultivation must be concealed from public view at all stages of growth and there
shall be no exterior evidence of cannabis cultivation occurring at the property visible by
normal unaided vision from a public place or the public right-of-way. Cultivation may
occur within a greenhouse or hoop structure (as long as it complies with the performance
standards), but mixed light cultivation is prohibited.
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4. All outdoor personal cultivation shall be conducted by persons 21 years of age or older.
5. The cumulative total of cannabis plants cultivated outdoor shall not exceed six (6) cannabis
plants per parcel containing a private residence, regardless of the number of persons
residing on the property, and regardless of the number of private residences on the parcel.
6. Nothing in this section is intended, nor shall it be construed, to preclude any landlord from
limiting or prohibiting cannabis cultivation by tenants.
7. Nothing in this section is intended, nor shall it be construed, to authorize commercial
cultivation of cannabis at a private residence outdoors.
8. Outdoor personal cultivation of cannabis shall not create : offensive odors or excessive dust,
heat, noise, light, glare, smoke, traffic, or hazards due to the use or storage of materials,
processes, products or wastes, or other unreasonable impacts to people of normal
sensitivity living, working or lawfully present in the vicinity of the personal cultivation.
17.99.050 Commercial Cannabis Businesses
A. Commercial Cannabis Operator Permit.
1. No person or entity shall operate or conduct a commercial cannabis activity or commercial
cannabis business without first obtaining both a Commercial Cannabis Operator Permit
from the City pursuant to Chapter 9.10, Cannabis Regulations, of this code and a use permit
from the City pursuant to this chapter to conduct the commercial cannabis activity at a
specific location. Any permit authorizing commercial cannabis activity pursuant to this
chapter shall be conditioned upon the holder obtaining and maintaining a City Commercial
Cannabis Operator Permit and the appropriate state license for the activity.
2. A commercial cannabis activity pursuant to this chapter may be transferred , assigned, or
bequeathed, by operation of law or otherwise as described in Chapter 9.10 Section
9 .10.120 .
3. The Commercial Cannabis Operator Permit must be renewed each year.
4 . Expiration of the use permit shall be consistent with Chapter 17 .58, Section 17.58.030(C).
B. No Vested Right to Operate. No person shall have any entitlement or vested right to operate
a cannabis business solely by virtue of licensing under these regulations. Operation of cannabis
activity(ies) requires both the approval of a Conditional Use Permit and a Commercial Cannabis
Operator Permit under Chapter 9 .10 of this code, which is a revocable privilege and not a right in
the City. The applicant bears the burden of proving that all qualifications for licensure have been
satisfied and continuously maintained prior to conducting a cannabis business at an otherwise
allowed location within the City.
C. State Application Required. Filing a local application for cannabis activity(ies) with the City
does not constitute an application with the State of California. A separate state application and
license process must be followed through with the State.
D. Application Requirements . All commercial cannabis activities require qualification through
the commercial cannabis operator selection approval process in Chapter 9 .10, Cannabis
Regulations, of this code, a state license and a use permit for a specific location pursuant to this
chapter. The application for a use permit shall include the following information:
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1. Site plan, floor plans, and a general description of the nature, square-footage, parking and
type of cannabis activity(ies) being requested.
2. An operations plan including :
a. A security plan to the approval of the Chief of Police, pursuant to criteria approved
by resolution of the City Council, including but not limited to on-site security
measures both physical and operational and, if applicable, security measures for the
delivery of cannabis associated with the commercial cannabis business and
payment of taxes and fees;
b. Plan for restriction of access by minors;
c. Employee safety and training plan;
d. Odor, noise and light management plan;
e. Estimated energy usage and energy efficiency plan;
f. Estimated water usage and water efficiency plans; and
g. Waste management plan.
h . For retail sales, provide an educational material dissemination plan.
3. Proposed signage:
a. Must comply with City's Sign Regulations for size, area and type of sign, no
exceptions allowed.
b. Internal illumination of signs is prohibited.
c. No portion of the cannabis plant may be used in any sign visible from the public
right-of-way.
d. Provide sign size, height, colors, and design of any proposed signage at the site.
e. Must include a sign inside the premises that states: "Smoking, ingesting, vaping,
eating or consuming cannabis or cannabis products on this site or in a public place
is prohibited."
f. Must include a sign at each entrance of a retail storefront that prohibits persons
under 21 years of age from entering .
4. An analysis that demonstrates neighborhood compatibility and a plan for addressing
potential compatibility issues .
5. Applications for retail storefronts shall include a vicinity map showing at least one
thousand ( 1000) feet of surrounding area and the distances to the following uses: any pre-
school, elementary school, junior high school, high school, public park or playground, six
hundred (600) feet from any licensed daycare center, and three hundred (300) feet from a
residentially zoned area. Youth centers do not require a buffer. Distance shall be measured
from the nearest point of the property line of the site that contains the commercial cannabis
activity to the nearest point of the property line of the enumerated use using a direct
straight-line measurement.
6. Proof of ownership, option to purchase , (or lease agreement or option to lease with
landowner's express written consent to the proposed commercial cannabis activity(ties) to
be conducted on the premises) or other proof of right to apply for the permit at the location;
7. A list of all other uses on the property.
E. Commercial Cannabis Development Standards
Each Cannabis business is required to meet the following standards:
1. Qualification through the Chapter 9 .10, Cannabis Regulations, commercial cannabis
operator selection process to apply for a commercial cannabis operator permit. Submittal
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of a use permit application to conduct the commercial cannabis business within the zones
specified for each type of commercial activity listed below.
2. Commercial cannabis facilities shall be allowed in areas demarcated with CAN overlay
zoning and as allowed in the underlying zone for each type of commercial cannabis
activity.
3. All commercial cannabis facilities shall be sited and/or operated in a manner that prevents
cannabis odors from being detected offsite. Commercial cannabis activities shall not create
offensive or excessive odors, dust, heat, noise, light, glare, smoke, traffic, or hazards due
to the use or storage of materials, processes , products or wastes, or other unreasonable
impacts to people of normal sensitivity living, working or lawfully present in the vicinity
of the commercial facility.
4 . All commercial cannabis operations must be concealed from public view at all times and
there shall be no exterior evidence of cannabis or cannabis products occurring at the
property, visible with normal unaided vision from any public place, or the public right-of-
way. Commercial manufacturing of cannabis or cannabis products shall be shielded to
confine light and glare to the interior of the structure.
5. All commercial cannabis facilities shall include adequate measures that address
enforcement priorities for commercial cannabis activities including restricting access to the
public and to minors and ensuring that cannabis and cannabis products are only obtained
from and supplied to other permitted licensed sources within the State and not distributed
out of State.
6. The use permit to be issued under this chapter shall include, but is not limited to, the
following conditions:
a. The obtaining and maintaining of the Commercial Cannabis Operator Permit and
appropriate state license.
b. Payment of all applicable current and future state and local taxes and all applicable
commercial cannabis fees and related penalties established by the City Council,
including but not limited to application, administrative review, inspection, etc.
c. The Commercial Cannabis Operator permit or a controlling interest in the permit
may not be assigned, transferred or bequeathed, by operation of law or otherwise,
unless permitted as described in Chapter 9.10, and the permit shall terminate
automatically on such event.
d. Any Commercial Cannabis Operator permit issued pursuant to this chapter and
Chapter 9.10 expires after one year, unless renewed .
e. Prohibition of on-site consumption of cannabis at: 1) at a commercial cannabis
business or commercial cannabis activity location; 2) any other business, club or
cooperative or event, regardless if open to the public or only to members; and 3)
anywhere an entry or other fee is charged to attendees or the host or thing of value
or consideration is received or exchanged.
f. Prohibition of the possession, storage, sale, distribution or consumption of
alcoholic beverages on the premises, or the holding of license from the State
Division of Alcoholic Beverage Control for the sale of alcoholic beverages, or
operating a business that sells alcoholic beverages, on or adjacent to the commercial
cannabis activity site.
g. No cannabis products or cannabis accessories may be displayed in windows or
visible from the public right-of-way or from places accessible to the general public
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h. Prohibition of minors and persons under the age of 21 on the premises, even if
accompanied by a parent or guardian.
1. Outdoor storage of cannabis or cannabis products is prohibited.
F. Commercial Cultivation
1. Commercial cannabis cultivation. Commercial cannabis cultivation may be conditionally
permitted indoors only, subject to the requirements of this section and the obtaining and
maintaining of a Commercial Cannabis Operator's Permit pursuant to Chapter 9.10 ,
Cannabis Regulations, of this code and appropriate state license, in the following zones:
a. Service Commercial (C-S)
b. Manufacturing (M)
c. Business Park (BP)
2. A maximum of 70,000 square feet of cumulative canopy area (includes total canopy of
either horizontal or vertical growing situations) for cultivation and nurseries shall be
allowed for indoor commercial cannabis cultivation in the City within the zones identified
above, including Microbusinesses under Subsection L below.
3. Outdoor commercial cannabis cultivation, including but not limited to cultivation in
greenhouses, hoop structures, and by mixed light (part daylight/part artificial light), is
prohibited. All commercial cannabis cultivation shall be conducted only inside a fully
enclosed legally permitted structure that meets all applicable building and other codes.
4. Commercial cannabis cultivation conditional permits include the following:
a. Specialty Cultivator -A maximum of no more than 5,000 square feet of canopy
of indoor cultivation (either in horizontal or vertical growing situations) and
includes processing.
b. Small Cultivator -A maximum of no more than 10,000 square feet of canopy of
indoor cultivation (either in horizontal or vertical growing situations) and includes
process mg.
c. Nursery-Cannabis -A maximum of no more than 10,000 square feet of indoor
propagation area (either in horizontal or vertical growing situations).
5. Development Standards:
1. Compliance with Subsection E. Commercial Cannabis Development Standards.
2. Canopy areas shall be easily identifiable for inspection and measurement. Each
unique area included in the total canopy calculation shall be separated by an
identifiable boundary such as an interior wall or by at least 10 feet of open space
(see "Canopy" definition in Chapter 17.100).
3. All indoor cannabis cultivation shall be designed to accomplish zero net energy use
from the start of the operation.
4. Pesticides and fertilizers shall be properly labeled, stored, and applied to avoid and
prevent contamination through erosion, leakage, or inadvertent damage from
rodents , pests , or wildlife.
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G. Manufacturing
1. Manufacturing (non-volatile) Permissible. Non-volatile cannabis or cannabis products
manufacturing may be conditionally permitted indoors only, subject to the requirements of
this section and the obtaining and maintaining of a Commercial Cannabis Operator Permit
pursuant to Chapter 9 .10, Cannabis Regulations, and appropriate state license, in the
following zones:
a. Service Commercial (C-S)
b. Manufacturing (M)
c. Business Park (BP)
2. Manufacturing (volatile) Prohibited . Cannabis or cannabis products manufacturing
involving volatile solvents, processes, compounds or substances is prohibited
3 . Development Standards:
1. Compliance with Subsection E. Commercial Cannabis Development Standards.
2. Outdoor manufacturing of cannabis or cannabis products is prohibited.
3. A complete description of all products used in the manufacturing process including
the cannabis supply chain, liquids , solvents, agents, and processes.
4. Storage protocol and hazard response plan.
5. Employee safety and training equipment plan, plus Materials Safety Data Sheet
requirements, if any.
H. Distribution
1. Commercial cannabis distribution may be conditionally permitted, subject to the
requirements of this section and the obtaining and maintaining of a Commercial Cannabis
Operator Permit pursuant to Chapter 9 .10, Cannabis Regulations, and appropriate state
license, in the following zones:
a. Service Commercial (C-S)
b. Manufacturing (M)
c. Business Park (BP)
2. Development Standards:
1. Compliance with Subsection E. Commercial Cannabis Development Standards.
I. Testing Laboratory
1. Commercial cannabis testing may be conditionally permitted, subject to the requirements
of this section and the obtaining and maintaining of a Commercial Cannabis Operator
Permit pursuant to Chapter 9 .10, Cannabis Regulations, and appropriate state license, in
the following zones:
a . Service Commercial (C-S)
b. Manufacturing (M)
c. Business Park (BP)
d. Office (0)
2. Development Standards:
1. Compliance with Subsection E . Commercial Cannabis Development Standards .
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2. The cannabis testing laboratory, as proposed, will comply with all the requirements
of the State for the testing of cannabis, including dual licensure and participation in
an authorized track and trace program.
3. The owners, investors, permittees, operators, and employees of the cannabis testing
laboratory will not be associated with, nor have any financial interest in, any other
form of commercial cannabis activity.
4. The cannabis testing laboratory is accredited by an appropriate accrediting agency
as approved by the State and further described in Health and Safety Code Section
5238 and as it may be amended.
5. The cannabis testing laboratory operating plan demonstrates proper protocols and
procedures for statistically valid sampling methods and accurate certification of
cannabis and cannabis products for potency, purity, pesticide residual levels, mold,
and other contaminants according to adopted industry standards.
J. Retail -Storefront
1. 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:
a. Retail Commercial (C-R)
b. Service Commercial (C-S)
2. Development Standards:
1. Compliance with Subsection E. Commercial Cannabis Development Standards.
2. Only 3 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.
3. Retail storefronts shall be located at least one thousand (1000) feet from any pre-
school, elementary school, junior high school, high school, public park or
playground, six hundred (600) feet from any licensed day care center, and three
hundred (300) 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.
4 . Retail storefronts must be separated from each other by at least 1,000 feet.
5. Hours of operation shall be limited between 9:00 am to 8:00 pm.
6 . Must include a sign at each entrance of a retail storefront that prohibits persons
under 21 years of age from entering.
K. Retail -Non-Storefront (Delivery Services)
1. Commercial cannabis non-storefront retail may be conditionally permitted, subject to the
requirements of this section and the obtaining and maintaining of a Commercial Cannabis
Operator Permit pursuant to Chapter 9 .10, Cannabis Regulations, and the appropriate state
license, in the following zones:
a. Service Commercial (C-S)
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b. Manufacturing (M)
c. Business Park (BP)
2. Development Standards:
1. Compliance with Subsection E. Commercial Cannabis Development Standards.
2. Hours of delivery shall be limited between 6:00 am to 10:00 pm.
L. Microbusiness
1. Microbusinesses fall into two groups as described below and may be conditionally
permitted, subject to the requirements of this section and the obtaining and maintaining of
a Commercial Cannabis Operator Permit pursuant to Chapter 9.10, Cannabis Regulations,
and the appropriate state license, in the following zones.
a. Microbusinesses with no more than 50% of the gross receipts being from
cultivation, distribution and manufacturing are allowed in the following zones:
1. Retail Commercial (C-R)
b . Micro businesses with no more than 50% of the gross receipts being from storefront
retail sales are allowed in the following zones:
1. Manufacturing (M)
2. Business Park (BP)
c. Microbusinesses located in the Service Commercial (C-S) zone are not limited by
gross sales receipts from cultivation, distribution, manufacturing or retail sales.
2. Microbusinesses are subject to the 70,000 square feet of canopy cultivation city-wide
limitation (either in horizontal or vertical growing situations) and the limit of 3 retail
storefronts fronting arterial streets city-wide set forth in Subsection J above.
3. Development Standards:
1. Compliance with Subsection E. Commercial Cannabis Development Standards.
2. A maximum of 70,000 square feet of cumulative canopy for cultivation and
nurseries shall be allowed for indoor cultivation in the City within the allowed land
use zones.
3. All indoor cannabis cultivation shall be designed to accomplish zero net energy use
from the start of the operation.
4. Pesticides and fertilizers shall be properly labeled, stored, and applied to avoid and
prevent contamination through erosion, leakage, or inadvertent damage from
rodents, pests, or wildlife.
5. Only 3 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.
6. Any Microbusiness with a retail storefront shall require a Planning Commission
Use Permit.
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7 . Retail storefronts shall be located at least one thousand (1000) feet from any pre-
school, elementary school, junior high school, high school, public park or
playground, six hundred (600) feet from any licensed day care center, and three
hundred (300) 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.
8. Retail storefronts must be separated from each other by at least 1,000 feet.
9. Hours of retail shall be limited to between 9:00 am to 8:00 pm and delivery shall
be limited to between 6:00 am to 10 :00 pm.
10 . Must include a sign at each entrance of a retail storefront that prohibits persons
under 21 years of age from entering.
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Table 9: Uses Allowed by Zone
Permit Required by Zoning District
Land Use AG C/OS R-1 R-2 R-3 R-4 PF 0 C-N C-C C-D C-R
Cannabis Activity
Specialty Cultivator
Small Cultivator
Nursery
Manufacturing I
Distributor
Microbusiness PC*
Testing PC
Retailer (delivery)
Retailer (storefront) PC
Key : A= Allowed AA= Administrative Approval D = Director's Use Permit
PC= Planning Commission Use Permit Approval Required
C-T C-S M BP
D D D
D D D
D D D
D D D
D D D
D/PC* D/PC* D/PC*
AA AA AA
D D D
PC
* See section 17 .99.050 (L) of the Zoning Regulations for specific requirements per zone. A Planning Commission
use permit is only required if the Microbusiness includes a retail storefront as part of the business.
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Chapter 17.100: Definitions
Cannabis. "Cannabis" or "cannabis product" means all parts of the plant Cannabis sativa
Linnaeus , Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof, the
resin , whether crude or purified, extracted from any part of the plant; and every compound,
manufacture, salt , derivative, mixture , or preparation of the plant, its seeds, or resin. "Cannabis"
also means the separated resin, whether crude or purified, obtained from cannabis plants.
"Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or
cake made from the seeds of the plant, any other compound, manufacture, salt, derivative , mixture,
or preparation of the mature stalks (except the resin extracted therefrom), fiber , oil , or cake , or the
sterilized seed of the plant which is incapable of germination. For the purpose of this division,
"cannabis" does not mean "industrial hemp" as defined by Section 11018 .5 of the Health and
Safety Code.
Cannabis accessories . Any equipment, products or materials of any kind which are used, intended
for use, or designed for use in planting, propagating , cultivating, growing , harvesting,
manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing ,
packaging, repackaging, storing, smoking, vaporizing, or containing marijuana, or for ingesting,
inhaling, or otherwise introducing cannabis or cannabis products into the human body.
Cannabis Activity. Any activity involving cannabis or cannabis products , except for possession
or use , which are regulated under state law. Includes commercial cannabis activity as well as
personal non-commercial cultivation, processing, storing, labeling , or delivery for personal adult
recreational or medicinal use.
Canopy. "Canopy" means all of the following :
1. The totality of an individual plant's aboveground parts , including branches , stems , leaves ,
and flowering structures ;
2. The designated area(s) at a licensed premise that will contain mature plants at any point in
time;
3. Canopy shall be calculated in square feet and measured using clearly identifiable
boundaries of all area(s) that will contain mature plants at any point in time, including all
the space(s) within the boundaries;
4. Canopy may be noncontiguous, but each unique area included in the total canopy
calculation shall be separated by an identifiable boundary such as an interior wall or by at
least 10 feet of open space; and
5. If mature plants are being cultivated using a shelving or stacking system, the surface area
of each level shall be included in the total canopy calculation.
Commercial Cannabis Activity. The cultivation , possession, manufacture, distribution,
processing, storing , laboratory testing , packaging, labeling , transportation, delivery or sale of
cannabis and cannabis products as provided for in this division.
Concentrated Cannabis. The separated resin, whether crude or purified, obtained from cannabis.
Cultivation. Any activity involving the planting, growing , harvesting, drying, curing , grading , or
trimming of cannabis .
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Cultivation, Indoor. Any activity involving the planting, growing, harvesting , drying, curing,
grading, or trimming of cannabis enclosed within a structure using artificial lighting. These
structures do not have any part open to the outside.
Cultivation, Outdoor. Any activity involving the planting, growing , harvesting, drying, curing,
grading, or trimming of cannabis not within an enclosed structure such as open fields, greenhouses,
hoop structures, etc.
Cultivation, Personal. Cultivation of cannabis conducted by an individual strictly for that
individual's personal use, possession, processing, transporting, or giving away without any
compensation whatsoever in accordance with this Code and State law, including but not limited to
Health and Safety Code sections 11362.1 and 11362.2, as may be amended. Except as herein
defined, personal cultivation does not include, and shall not authorize, any cultivation conducted
as part of a business or commercial activity, including cultivation for compensation or retail or
wholesale sales of cannabis.
Delivery . The commercial transfer of cannabis or cannabis products to a customer. "Delivery"
also includes the use by a retailer of any technology platform owned and controlled by the retailer.
Distribution. The procurement, sale, and transport of cannabis and cannabis products between
licensees .
Edible Product. Cannabis product that is intended to be used, in whole or in part, for human
consumption, including, but not limited to, chewing gum, but excluding products set forth in
Division 15 (commencing with Section 32501) of the Food and Agricultural Code. An edible
cannabis product is not considered food, as defined by Section 109935 of the Health and Safety
Code, or a drug, as defined by Section 109925 of the Health and Safety Code
Greenhouse. A fully enclosed permanent or temporary structure that is clad in transparent material
that may contain climate control, such as heating and/or ventilation capabilities, and/or
supplemental artificial lighting, and/or use of both natural and artificial lighting (mixed light) for
cultivation. Cannabis cultivation within a greenhouse is considered outdoor cultivation.
Hoop Structure. A readily removable plastic or fabric covered hoop structure without in-ground
footings or foundations. Cannabis cultivation within hoop structures is considered outdoor
cultivation.
Live Plants. Living cannabis flowers and plants, including seeds, immature plants, and vegetative
stage plants
Manufacturing (Volatile). The production, preparation, propagation, or compounding of
cannabis or cannabis products either directly or indirectly or by extraction methods, or
independently by means of chemical synthesis or by a combination of extraction and chemical
synthesis , using volatile organic compounds, at a fixed location, that packages or repackages
cannabis or cannabis products, or labels or relabels its containers .
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Manufacturing (Non-volatile). The production, preparation, propagation, or compounding of
cannabis or cannabis products either directly or indirectly or by extraction methods, or
independently by means of chemical synthesis or by a combination of extraction and chemical
synthesis, using non-volatile organic or inorganic compounds (see Cannabis Manufacturing
(Volatile)), at a fixed location, that packages or repackages cannabis or cannabis products, or labels
or relabels its containers.
Medicinal Cannabis or Medicinal Cannabis Product. Cannabis or a cannabis product,
respectively, intended to be sold for use pursuant to the Compassionate Use Act of 1996
(Proposition 215), found at Section 11362.5 of the Health and Safety Code, by a medicinal
cannabis patient in California who possesses a physician's recommendation.
Microbusiness. Allows a single business to integrate cultivation, manufacturing, distribution and
retail sales.
Mixed-light Cultivation. Cultivation of cannabis using a combination of natural and supplemental
artificial lighting (e.g . a greenhouse using natural light during the day and artificial light during
the night). Mixed-light cultivation is not allowed.
Nursery (Cannabis). A site that produces only clones, immature plants, seeds, or other
agricultural products used specifically for the planting, propagation, and cultivation of cannabis.
Cultivation as a cannabis nursery shall be indoor only (see Cultivation, Indoor).
Product. See "Cannabis" and "Edible Product" and "Topical Product".
Private residence. A house, an apartment unit, a mobile home, or other similar dwelling.
Sale/Sell/To Sell Any transaction whereby, for any consideration, title to cannabis is transferred
from one person to another, and includes the delivery of cannabis or cannabis products pursuant
to an order placed for the purchase of the same and soliciting or receiving an order for the same,
but does not include the return of cannabis or cannabis products by a licensee to the licensee from
whom such cannabis or cannabis product was purchased.
Retail (Cannabis). Includes storefront and non-storefront (delivery) sale of cannabis and cannabis
products.
Testing Laboratory . A facility, entity, or site in the State of California that offers or performs
tests of cannabis or cannabis products and that is both of the following: 1) Accredited by an
accrediting body that is independent from all other persons involved in the cannabis industry in
the State, and 2) Licensed by the bureau.
Topical Product. Cannabis product that is intended to be used for external use. A topical cannabis
product is not considered a drug as defined by Chapter 109925 of the California Health and Safety
Code.
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Marijuana. See "Cannabis."
Medical Marijuana. See "Medicinal Cannabis ."
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City of San Luis Obispo, Community Development, 919 Palm Street, San Luis Obispo, CA, 93401-3218, 805.781.7170, slocity.org
June 7, 2018
Dear San Luis Obispo Property Owner,
California residents voted in the 2016 election cycle to legalize recreational use of cannabis. This
development vests authority in local municipalities to create their own land use regulations regarding
the production, sale, and distribution of cannabis within their boundaries. On May 15, 2018, the City
Council adopted an ordinance allowing the sale, cultivation, production, distribution and testing of
cannabis within the City with the approval of a cannabis revenue measure.
The City’s Community Development Department is in the process of finalizing the areas of the City
where cannabis businesses may be permitted, called Cannabis Business Overlay Zone Areas. These
areas were selected because 1) they are part of an existing planning area (e.g. Airport Area Specific
Plan, Mid-Higuera Enhancement Plan, South Broad Street Plan, etc.), 2) located away from schools
and residential neighborhoods, and/or 3) are separated from sensitive uses by features that act as
barriers or buffers, such as the railroad, major roadways, creeks or other topographic features. All
cannabis activities and businesses will be subject to existing and proposed City regulations designed
to protect public health and safety.
The purpose of this letter is to advise you that your property is located within a proposed overlay zone.
The Planning Commission that will review the proposed Cannabis Business Overlay Zone Areas at a
regular meeting on Wednesday, July 25, 2018 starting at 6:00 pm at City Hall, located at 990 Palm
Street, San Luis Obispo. At this meeting the Planning Commission will consider the proposed
Cannabis Business Overlay Zone and make a recommendation to City Council. The City Council will
review the proposed Overlay Zone Areas on September 4, 2018 starting at 6:00 pm at City Hall, 990
Palm Street, San Luis Obispo.
You are encouraged to visit the City of San Luis Obispo website page on cannabis regulation
(http://www.slocity.org/government/department-directory/community-development/cannabis) to
learn more about the Cannabis Business Overlay Zone Areas and access the approved regulations.
If you have questions regarding this development, particularly about overlay zones and your property,
contact Rachel Cohen, Associate Planner in the Community Development Department at
rchohen@slocity.org or 805-781-7574.
Sincerely,
Rachel Cohen
Associate Planner
Community Development
919 Palm Street, San Luis Obispo, CA 93401-3218
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