HomeMy WebLinkAboutO-1673 amending Chapter 9.10 regulations for commercial Cannabis Business, Businesses and Personal CultivationORDINANCE NO. 1673 (2019 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING THE MUNICIPAL CODE PUBLIC
PEACE, MORALS AND WELFARE (CHAPTER 9.10) REGULATIONS
FOR COMMERCIAL CANNABIS BUSINESS, BUSINESSES AND
PERSONAL CULTIVATION
WHEREAS, the City of San Luis Obispo adopted on December 3, 2019, in the Council
Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, an amendment to the
Municipal Code, Chapter 9.10, Regulations for Commercial Cannabis and Personal Cultivation
(Exhibit A); and
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Section 9.10.070, subsection A of the San Luis Obispo Municipal Code is
hereby amended as reflected in Exhibit A.
SECTION 2. Section 9.10.070, subsection B of the San Luis Obispo Municipal Code is
hereby amended as reflected in Exhibit A.
SECTION 3. Ordinance Number 1647 (2018 Series) is hereby amended and superseded
to the extent inconsistent herewith.
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 portion would have been adopted irrespective of
the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared
invalid or unenforceable.
0 1673
Ordinance No. 1673 (2019 Series) Page 2
SECTION 5. 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 3rd day of December 2019, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the 141h day of January 2020, on the following vote:
AYES:
NOES:
ABSENT:
ATTEST:
Council Member Christianson, Pease, Stewart, Vice Mayor Gomez and
Mayor Harmon
None
None
Cluw~~ Teresa Purri-
City Clerk
stin e Di e trick:
ity Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this 12..-f\ day of f~y , 2020 .
~
0 1673
Ordinance No. 1673 (2019 Series) Page 3
Exhibit A -Section 9.10 -Cannabis Regulations
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 ofillegal 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.
0 1673
Ordinance No. 1673 (2019 Series) Page4
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
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. Stale defined terms. Words or te1111s used in this chapter that arc 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
meamngs:
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 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.
01673
Ordinance No. 1673 (2019 Series) Page 5
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.
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 6
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
nny 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 c1nopt such fonns, 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 Permit Posted and Vi ible. 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 C:ommercial C:annahis 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.
0 1673
Ordinance No. 1673 (2019 Series) Page 7
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 or any other period established by
City Manager. The City Council will, by resolution, adopt criteria by which all applications
will be reviewed, applicants qualified and, in the case ofretail and cultivation businesses, also
ranked. Those applicants that are selected will have the opportunity to apply for a use permit
as outlined in Section 17.86.080. Each application shall designate at least one responsible
party. If a person is not selected to receive a commercial cannabis operator permit, the person
may reapply during the next annual application period or any subsequent application period
established by the City Manager.
B. Application Submittal Timeframe. A person may only submit one application per permit type,
per application period, for a commercial cannabis operator permit, during the annual
application period designated by resolution of the city council or any subsequent application
period established by the City Manager. An Applicant who is unsuccessful in any application
period may submit another application in any subsequent application period. The commercial
cannabis operator permit will be valid for twelve 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 Section 17.86.080, will be approved.
C. Grounds for Automatic Disqualification.
In addition to any other reason that may be established by the City Council as a basis for
disqualification, an applicant shall be disqualified from applying for, or obtaining, a
Commercial Cannabis Operator Permit if:
1. The applicant fails to timely file an application during the annual application period.
2. The Responsible Party refuses to sign the application and agree to be personally responsible
for compliance, and personally liable for failure to comply, with the provisions of this
chapter.
3. The applicant, or any of its officers, directors or owners, or any person listed in the
application, has been convicted of a felony or offense referenced in Business 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 stat, 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 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.
0 1673
Ordinance No. 1673 (2019 Series) Page 8
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 Oeadline. 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 of renewal.
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 departmenls ur divisions, shall inunedialdy,
concurrently revoke, terminate, or suspend, respectively, the Commercial Cannabis
Operator Permit. Such automatic suspension makes it illegal for 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.
0 1673
Ordinance No. 1673 (2019 Series) Page 9
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, umesolved 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.
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 10
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 appeal able to the City Council in accordance with Chapter 1.20 of this Code.
C. E ffect 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 prececient 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 Transfer of Commercial Cannabis Operator Permits.
A. Business .Restricti on 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 Ca1rnabis Operator
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
0 1673
Ordinance No. 1673 (2019 Series) Page 11
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
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 12
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 rnles the City Council by resolution or
ordinance.
9.10.140 Inspection and Enforcement.
A. Un cheduled Inspection during Busines 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.
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 13
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 conunercial cultivation for adult recreational use or medicinal purpus~s. 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,
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 14
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 Jaw or local law with respect to the operation of a Commercial Cannabis
Activity
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.
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 15
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, vaping, 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.
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 16
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.
b. Retail-Non-Storefront {Delivery Services). Retail-Non-Storefront (Delivery Services)
Commercial Cannabis Business shall not operate between the hours of 10 PM and 6 AM.
c. Commercial Other than Retail. All Commercial Cannabis Activity other than Retail is
prohibited between the hours of 10 PM and 7 AM.
9.10.260 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.
0 1673
Ordinance No. 1673 (2019 Series) Page 17
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
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.
0 1673
Ordinance No. 1673 (2019 Series) Page 18
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 ofthis 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 viohltion of this chr1pter may he
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.
0 1673