HomeMy WebLinkAbout09-04-2018 Item 1 Establish Cannabis Business Locations Meeting Date: 9/4/2018
FROM: Michael Codron, Community Development Director
Prepared By: Rachel Cohen, Associate Planner
SUBJECT: CANNABIS OVERLAY ZONES
RECOMMENDATION
As recommended by the Planning Commission, introduce an ordinance to adopt seven Cannabis
Business Overlay Zones (CBZs) establishing the locations where cannabis business activity may
be permitted within the City of San Luis Obispo.
DISCUSSION
Background
On May 15, 2018, the City Council adopted Ordinance 1647 (2018 Series) establishing overall
regulations fo r cannabis businesses in the City and identifying the zones where various business
types are allowed (Council Reading File). The regulations establish a two-step process that first
requires certification of eligible business operators, and then approval of a land use permit for the
specific site.
The overall cannabis 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, further defining where cannabis business activities may be allowed.
On July 25, 2018, the Planning Commission reviewed the boundaries of seven proposed
Cannabis Business Overlay Zones (CBZs), made modifications and forwarded its
recommendation to the City Council for approval.
CBZ Basics
The seven proposed CBZs have been identified
as areas that are appropriate for cannabis
business activity (full color maps can be found in
Attachment B). A cannabis business may only be
established within these zones following a two-
step process. First, the business must be certified
as eligible through the City’s application process,
and second, the business must obtain the
appropriate land use permit and State license for
its specific location.
The location of the CBZs takes into account
buffers required by State law, buffers required by
the City’s ordinance, and other potential land use
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conflicts. Going forward, the use of overlay zones is intended to improve awareness and
understanding of where cannabis businesses may operate within the City. The overlay zones will
also ensure consistent application of the City’s standards and prevent cannabis businesses from
being located in areas of the City that have previously been deemed inappropriate.
If the City Council approves the establishment of the proposed CBZs, t he process for a business
or property owner to identify an eligible location for a cannabis business would be to:
1. Locat e available property within a CBZ;
2. Ensure that the property is also zoned appropriately for the type of business to be conducted;
3. Ensure that the City and State requirements for buffers from sensitive land uses can be met ;
and
4. Proceed with the applicatio n process to be established by the City.
Buffers
State Law requires buffers of 600 feet from any cannabis business to any school, park, day care
center, or youth center. These buffers must be maintained in order for a business to get its State
license. The City’s ordinance works in conjunction with State mandated buffers to ensure land
use compatibility between cannabis businesses and adjacent land uses. The following table
summarizes the City’s buffers, and how buffers and overlay zones function in conjunction with
one another.
Type of Business City Buffer State Buffer
Retail Store • 1,000 feet from any other retail store,
school or park.
• 600 feet from any day care center,
and
• 300 feet from residential zoning
located within the overlay zone only
• 600 feet from any
school, park, day care
center, or youth center
Cultivation • None • 600 feet from any
school, park, day care
center, or youth center
Manufacturing • None • 600 feet from any
school, park, day care
center, or youth center
Distribution • None • 600 feet from any
school, park, day care
center, or youth center
Testing • None • 600 feet from any
school, park, day care
center, or youth center
Non-Storefront
Retail
• None • 600 feet from any
school, park, day care
center, or youth center
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As noted in the table, the City’s ordinance only requires buffers for retail stores, however,
businesses will still need to comply with State required buffers in order to receive their State
license. While there is no buffer from residential uses in State law, the City has established a
300-foot buffer between residentially zoned land and retail stores. However, this buffer only
applies from residential zoning that occurs within that same overlay zone. There are two
locations where this occurs, one is in the Broad Street Corridor CBZ, and the other is in the
Airport Area CBZ.
Cannabis Business Zones
The Planning Commission carefully reviewed and discussed each of the proposed CBZs.
Modifications were made to the Higuera Commerce Park CBZ to pull the zone boundary back
from Prado Road due to residential land uses across Prado. In addition, the South Higuera Street
CBZ was pulled back from the street frontage south of Vachell Lane due to a school site located
at the corner of Los Osos Valley Road and South Higuera Street. Finally, the Co mmission pulled
back the CBZ boundary off of Orcutt Road in the Duncan-McMillan CBZ because of the
proximity of residential uses.
Each of these adjustments reduce the number of parcels available for a cannabis retail store. This
has created some concern that the number of available properties for a retail storefront is too
limited. Staff has had some feedback from prospective business operators that there is limited
property available within the proposed CBZs for retail stores. As a result, staff will continue to
monitor the situation and may propose additional CBZs if determined to be necessary to support
the establishment of three retail stores as allowed by the regulations.
1. Mid-Higuera Area
The Mid-Higuera CBZ generally follows the boundaries of t he 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 Mid -Higuera Area
includes Service Commercial and Ret ail 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.
2. Broad Street Corridor
The Broad Street Corridor CBZ generally follows the bound aries of the Broad Street Corridor
Plan. This plan area includes residentially zoned land within the CBZ boundary. As a result, the
map depict s a 300-foot buffer. Retail stores are required to be located outside of the residential
buffer area depicted on t he 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. 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 addit ion, 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 Manufacturing.
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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.
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 storefro nt.
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 relatively high employee dens ity, with low-scale offices and on-site parking.
The area is bordered by South Higuera Street, which is arterial road. It may 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.
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.
Zoning Regulations
Cannabis businesses must be located in a CBZ and comply with the underlying zoning for the
property upon which the building is established. Cannabis business activity includes a variety of
business types that are only allowed with prior approval of a permit. The following table
highlights the use types, the zones they are allowed to be located in, and the type of permit
required.
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Next Steps
Staff is working on two additional items for the City Council to consider as part of the cannabis
business regulatory program, as follows:
1. Application Requirements and Ranking Criteria (October 2)
2. Cost of Services Study and Fee Schedule (November 13)
In addition, through this overlay zoning process, staff has developed a better understanding of
effect of State required buffers and the buffers established in the City’s regulations. Accordingly,
prior to the effective date of Ordinance No. 1647 (2018 Series), staff intends on bringing back
minor modifications to the buffer sections of that Ordinance in order to be fully consistent with
the CBZ overlay zones as proposed in this Ordinance. Once these items are completed, and if
the residents of San Luis Obispo approve the cannabis business tax on the November ballot, the
City can move forward and launch its regulatory program by opening up the first application
period for cannabis businesses. A target date will be established with the City Council on
October 2.
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 req uires 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.
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FISCAL IMPACT
As legal cannabis sales and production is an emerging industry, staff has worked with two
different consultants, HdL and MuniServices, to develop an estimated amount of revenue to
expect from a cannabis business tax. Optimistically, cannabis business activities would begin at
the earliest in January 2019. However, it is expected to take some time for the City to establish
it s permitting and regulatory protocols, and for businesses to find appropriate properties and
obtain the necessary permits to operate. As a result, tax revenues from Cannabis are anticipated
to increase through the next several years as businesses mature. T he annual projected revenue
from cannabis related businesses is expected to increase over the next several years to an
estimate of $1,500,000. Cannabis business tax revenue estimates have been included in the
City’s Fiscal Health Response Plan presented to Council on April 17, 2018. The plan includes an
estimate of $100,000 in FY 2018-2019 in cannabis tax revenue.
ALTERNATIVES
1. Modify the Proposed Ordinance. The City Council is free to make modifications to the
recommendations presented. The Council can make minor modifications “on the fly” during
the meeting. More significant changes should return to the Council following additional staff
analysis.
2. Continue Consideration of Ordinances to a Future Date. The City Council could direct
staff to conduct addit ional research or outreach on more or more components of the
recommended ordinances. If this alternative is taken, the Council should provide direction to
staff regarding additional information needed to move forward.
3. Direct Staff Not to Move Forward with Overlay Zones. The City Council could decide not
to establish overlay zones. In this case, the zoning of a property would be sufficient to allow
an application to move forward. This alternative is not recommended because there are
certain C-R (Retail Commercial), and C-S (Service Commercial) zones that are located
adjacent to downtown, along Foothill Boulevard, or adjacent to sensitive land uses that
would not be appropriate for cannabis business activity and retail cannabis stores in
particular.
Attachments:
a - Draft Council Ordinance
b - Exhibit A Cannabis Overlay Zone Maps
c - Adopted Cannabis Ordinance (O-1647 (2018 Series))
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R ______
ORDINANCE NO. _____ (2018 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING THE CITY’S ZONING CODE AND
ZONING MAP TO DESIGNATE SEVEN AREAS OF THE CITY AS
CANNABIS BUSINESS OVERLAY ZONES WHERE CANNABIS
BUSINESSES MAY BE LOCATED 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 on July 25, 2018 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo,
California, for the purpose of considering amendments to the zoning code and the zoning map to
establish Cannabis Overlay Zones and making recommendations to the City Council regarding
such amendments;
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 Cannabis 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 neighbor ing property owners, businesses, and
residents, and ensures compatibility of uses through the imposition of conditions of approval; and
WHEREAS, on September 4, 2018, the City Council considered such amendment in a
public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California ;
and
WHEREAS, the City Council 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 ORDAINED by the Council 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.
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
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Resolution No. _____ (2018 Series) Page 2
approval of permits, licenses, or other authorizations to engage in co mmercial 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. Action. The City Council hereby adopts 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 17.06.0 10 by adding the “CBZ - Cannabis
Business Overlay Zone” as a zoning designation.
SECTION 4. 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 p ortion would have been adopted irrespective of
the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
INTRODUCED on the ____ day of _______ 2018, AND FINALLY ADOPTED by the
Council of t he City of San Luis Obispo on the _____ day of _______2018, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
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Resolution No. _____ (2018 Series) Page 3
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo , California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
City Clerk
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SUELDO STTANK FARM RD
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2018/08/23
EXHIBIT A
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THE
Newspaper of the Central Coast
3825 South Higuera • Post Office Box 112 • San Luis Obispo, California 9;
In The Superior Court of The State of California
In and for the County of San Luis Obispo
AD #3 81993 8
CITY OF SAN LUIS OBISPO
COMMUNITY DEVELOPMENT
STATE OF CALIFORNIA
SS.
County of San Luis Obispo
I am a citizen of the United States and a resident of the
County aforesaid; I am over the age of eighteen and not
interested in the above entitled matter; I am now, and at
all times embraced in the publication herein mentioned
was, the principal clerk of the printers and publishers of
THE TRIBUNE, a newspaper of general Circulation,
printed and published daily at the City of San Luis
Obispo in the above named county and state; that notice
at which the annexed clippings is a true copy, was
published in the above-named newspaper and not in any
supplement thereof — on the following dates to wit;
AUGUST 25, 2018 that said newspaper was duly and
regularly ascertained and established a newspaper of
general circulation by Decree entered in the Superior
Court of San Luis Obispo County, State of California, on
June 9, 1952, Case #19139 under the Government Code
of the State of California.
I certify (or declare) under the penalty of perjury that the
foregoing is true and correct.
(SigkAure of Principal Clerk)
DATE: AUGUST 25, 2018
AD COST: $222.72
CITY OFI
' SfII! L[Iffi OBI3Pi}
SAN LUIS OBISPO CITY COUNCIL
NOTICE OF PUBLIC HEARING
The San Luis Obispo City Council invites
all interested persons to attend a public
hearing on September 4, 2018, at 4:00
p.m. in the City Hall Council Chamber,
990 Palm Street, San Luis Obispo, Cali-
fornia, relative to the following:
1. Introduce an Ordinance establishing
boundaries of seven proposed Canna-
bis Business Zones - generally located
in the Mid-Higuera Plan Area, the Broad
Street Corridor Plan Area, the Orcutt
Road Area, the Airport Area, the Margar-
ita Area, the Higuera Commerce Park
Area, and the Sacramento Drive Area —
where certain cannabis business activi-
ties would be allowed consistent with
the City's Zoning Regulations. Case #
CODE -1058-2017
For more information, contact Michael
Codron of the City's Community Develop-
ment Department at (805) 781-7187 or by
email at Lng2QLonAsLQgKyM,
The San Luis Obispo City Council invites
all interested persons to attend a public
hearing on September 4, 2018, at 6:00
p.m. in the City Hall Council Chamber,
990 Palm Street, San Luis Obispo, Cali-
fornia, relative to the following:
2. The City Council will consider an
amendment to the Anholm Bikeway
Plan and an amendment to the Circula-
tion Element of the General Plan. It will
also consider an Addendum to the 2014
Land Use and Circulation Element Final
Program Environmental Impact Report
(SCH# 2013121019). Case #: GENP-1719
-2018 (Anholm Bikeway)
For more information seethe project web-
site: http://www,peakdemocracy.com/3444,
or contact Adam Fukushima of the City's
Public Works Department at (805) 78f-
7590 or by email at aftma�slaclty,
The City Council may also discuss other
hearings or business items before or after
the items listed above. If you challenge the
proposed project in court, you may be limit-
ed to raising only those issues you or
someone else raised at the public hearing
described in this notice, or in written corre-
spondence delivered to the City Council at,
or prior to, the public hearing.
Reports for Ihis meating will be available
for review in the City Clerk's Office and on-
line at www.slocity.oro on Wednesday, Au
gust 29, 2018. Please call the City Clerk's
Olfice at (805) 781-7100 for more Informs.
lion. The City Council meeting will be tele-
vised live on Charter Cable Channel 20
and live streaming on www.slocity.org.
Teresa Purrington, City Clerk
Clly of San Luis Obispo
August 25, 2018 3819938