In June 2017, Governor Brown signed Senate Bill 94, the Medicinal and Adult-Use Cannabis Regulation

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* CIT WICO City Council Agenda Report Meeting Date: September 19, 2017 TO: Honorable Mayor and City Council CC: Mark Orme, City Manager Debbie Presson, City Clerk Michael O'Brien, Chief of Police

1 * CIT WICO City Council Agenda Report Meeting Date: September 19, 2017 TO: Honorable Mayor and City Council CC: Mark Orme, City Manager Debbie Presson, City Clerk Michael O'Brien, Chief of Police FROM: Vincent C. Ewing, City Attorney BY: Norma Copado, Deputy City Attorney RE: Update on SB 94 and Prop 64 REPORT IN BRIEF: In June 2017, Governor Brown signed Senate Bill 94, the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("SB 94" or the "MAUCRSA"). SB 94 reconciles the Control, Regulate and Tax Adult Use of Marijuana Act (Proposition 64 or AUMA) with Proposition 215 and the Medical Cannabis Regulation and Safety Act (MCRSA). SB 94 creates one regulatory structure for cannabis activities. The City Council's current directive is to explicitly prohibit commercial cannabis activity citywide; therefore, most of the provisions of SB 94 will not be applicable to any enacted local ordinances concerning commercial cannabis activity. However, in light ofthe state's efforts to reconcile the two state laws and two separate regulatory schemes for medical and recreational cannabis, the City Attorney and the Community Development Department revisited the City's codes with the proposed draft ordinance reviewed by the City Council in May 2017 to be referred to the Planning Commission to ascertain whether the City Council prefers: 1. A stand-alone ordinance for the personal of medical marijuana, and to allow outdoor of same, as it exists pursuant to Chapter of the Chico Municipal Code; or 2. Proceed with the draft ordinance previously reviewed and referred to the Planning Commission in May 2017, with the understanding that minor revisions may need to be made to be consistent with SB 94 (i.e., changes to definitions); or 3. Streamline all marijuana related laws into one City ordinance (i.e., repeal Chapter and revise the proposed ordinance previously presented to The City Council), to (a) allow for the personal of medical and non-medical/recreational marij uana, but indoors only, (b) have one permitting scheme for both, (c) explicitly prohibit commercial marijuana activity citywide, (d) regulate the smoking of marijuana in public, and (e) ensure consistency with SB 94, the latest state law regulating marijuana (i.e., changes to definitions). Upon The City Council's directive, tile City Attorney will make any necessary changes to a proposed ordinance, which will then be referred to the Planning Commission for review and consideration.

DISCUSSION: Background Currently, per Section 19.02.

2 DISCUSSION: Background Currently, per Section (E) of the Chico Municipal Code, if a proposed use of land is not specifically listed under any zoning district or zone designation as a permitted or conditional use, the land use is not allowed. Commercial businesses, land uses, and activities related to marijuana, whether medical or recreational, are not specifically listed under any zoning district or zone designation, and therefore have been prohibited in the City of Chico. In 2011, the City Council enacted Chapter of the Chico Municipal Code, which regulates the personal of medical marijuana in residential districts. Said is allowed outdoors, and may be cultivated indoors by securing a City permit. On November 8, 2016, AUMA was passed. Effective November 9, 2016, the AUMA legalizes the recreational use of marijuana by persons 21 years of age and over, and the personal of up to six marijuana plants per residence. Generally, AUMA creates a state regulatory licensing system governing the commercial, testing, and distribution of recreational marijuana, and the manufacturing of recreational marijuana products, Under the state's regulatory system, the state will issue marijuana businesses licenses commencing on January 1, However, under AUMA, state licenses cannot be issued to an applicant whose operations would violate the provisions of any local ordinance or regulation. The City is allowed to adopt ordinances regulating recreational marij uana business activities, or to completely ban them. At the City Council meeting on March 7, 2017, the City Attorney made a presentation concerning the City's local regulatory authority per AUMA, the regulatory implications of AUMA, and the City's regulatory options. After The City Council had the opportunity to discuss the City's regulatory options, received input from City staff, and heard public comment, The City Council made three (3) motions directing the City Attorney to draft an ordinance to cover the following general regulatory tenets: (1) Explicitly prohibit all commercial marijuana activity; (2) Implement a permitting and regulatory scheme for indoor personal marijuana ; and (3) Explicitly regulate the locations where smoking of marijuana is prohibited. On May 16, 2017, the City Attorney presented the City Council with a proposed ordinance. A motion was carried to refer the item to the Planning Commission for consideration at a duly noticed public hearing to review and consider the proposed ordinance, make findings, and make a written recommendation to the City Council as to the adoption of the proposed ordinance. SB 94 On June 27, 2017, Governor Brown signed SB 94, creating one state regulatory structure for medical and recreational cannabis use and commercial cannabis activities. SB 94 also retains the provisions of MCRSA and AUMA that granted local jurisdictions control over whether commercial cannabis activity is allowed. Specifically, California Business and Professions Code section provides that SB 94 shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances that completely prohibit the establishment or operation of one or more businesses

3 licensed under the state. SB 94 continues to provide that a state licensing authority shall not approve an application for a state license for a business to engage in commercial cannabis activity i f approval of the state license will violate the provisions of any local ordinance or regulation. SB 94 requires that a state licensing authority begin issuing licenses to marijuana businesses January 1, 2018, Pursuant to SB 94, the City is now required to provide the newly created Bureau of Cannabis Control (the "Bureau") with a copy of any ordinance related to commercial cannabis activity and the contact information for the person designated by the City to serve as the contact person regarding commercial cannabis activity within the jurisdiction. Additionally, SB 94 requires the Bureau to first notify the contact person for the City that it has received an application from a prospective cannabis business to operate in the City. The City must then notify the Bureau if the applicant is compliant with local ordinance(s). If the City does not respond within sixty (60) business days of said notification, the result is a rebuttable presumption that the applicant is in compliance with local ordinance(s), and the state may issue a license to the cannabis business. Matters for City Council's Consideration In response to the enactment of SB 94, the City Attorney and the Community Development Department revisited the City's codes and the proposed draft ordinance reviewed by the City Council May 2017 to be referred to the Planning Commission for the following reasons: 1. To ascertain whether any changes need to be made to the proposed ordinance to now also be consistent with SB 94. a. It appears the changes will be minor in nature since the City Council's directive is to ban commercial cannabis activity citywide; and 2. To be consistent with state law in its effort to consolidate separate state laws concerning medical and recreational marijuana, from an administrative and enforcement perspective, is it better for the City to also streamline its laws concerning marijuana regulations, so as to have one ordinance regulating all marijuana related laws? a. While the intent of Chapter 19.77, of Medical Marijuana, is to not interfere with the rights of qualified patients and their primary caregivers to possess or cultivate medical marijuana for personal, medical use pursuant to state law, Chapter 19.77, allows for the of medical marijuana outdoors. The City Council's directive concerning the draft ordinance in response to AUMA's allowance of personal of marijuana for recreational use was to explicitly prohibit the outdoor personal of marijuana. i. Does the City Council also want to restrict the personal of medical marijuana indoors? ii. Does the City Council want to continue to allow for outdoor? iii. Will the City be more e fficient if it has one permitting scheme for the personal of both medical and recreational marijuana (with minor deviations for each to be consistent with state law)?

4 CONCLUSION: iv. Whether doing so will provide City staff enforcing said laws clear, uniform guidance?' The City Attorney seeks direction from the City Council as to whether it has a preference as to the following to ensure the City's ordinance is enacted before January 1,2018: 1. A stand-alone ordinance and separate regulatory scheme for the personal of medical marijuana, and continue to allow for the outdoor of same, as it exists pursuant to Chapter ofthe Chico Municipal Code; or 2. Proceed with the draft ordinance previously reviewed and referred to the Planning Commission in May 2017, with the understanding that minor revisions may need to be made to same to be consistent with SB 94; or 3. Streamline all marijuana related laws into one City ordinance (i.e., repeal Chapter and revise the proposed ordinance previously presented to the City Council), to (a) allow for the personal of medical and recreational marijuana -- indoors only, (b) have one permitting scheme, (c) explicitly prohibit commercial cannabis activity citywide, (d) regulate the smoking of marijuana in public, and (e) ensure consistency with SB 94. ATTACHMENT: Table A - Personal of Medical and Recreational Marijuana ' Two ordinances may be exploited by those who do not wish to comply, which may create enforcement and prosecutorial challenges for the City.

TABLE A PERSONAL CULTIVATION OF MEDICAL AND RECREATIONAL MARIJUANA Terms and Provisions Existing Chapter 19.77, Medical Marijuana Proposed New Chapter 19.

5 TABLE A PERSONAL CULTIVATION OF MEDICAL AND RECREATIONAL MARIJUANA Terms and Provisions Existing Chapter 19.77, Medical Marijuana Proposed New Chapter 19.75, Marijuana Regulations Major Differences or Similarities to Consider Whether the City wants to Streamline/Reconcile Personal of Medical and Recreational Marijuana Intent of Law To allow personal of medical marijuana To prohibit commercial marijuana activity, whether the marijuana The allowed under each is restricted for limited, personal use for medical is for medical or purposes recreational purposes, and to establish a permitting regulatory scheme for the personal of recreational marijuana Rights of Landlords Does not preclude any landlord from limiting or prohibiting medical Occupants, if tenants, must obtain property owners' consent to cultivate Similar, but proposed Chapter requires written proof of property owner's consent marijuana or other related activities by tenants Zoning District Medical marijuana Recreational marijuana Same may be cultivated may be cultivated in in residential zoning districts residential zoning districts only Outdoor Allowed, within an enclosed side or Not Allowed Existing Chapter allows for, and favors, outdoor back yard, and the plants are located and screened so that they are not visible from any adjacent public or private property Indoor Allowed, with a City-issued Indoor Permit. Allowed, with City Permit Each allowed with a permit, but existing Chapter favors outdoor but only upon two

6 findings: (1) outdoor is not feasible; and (2) property owner consents Amount of Marijuana allowed to be An area of no more than fifty square feet is devoted to No more than six (6) plants Amount is quantifiable with each. Cultivated the of the marijuana Cross-References None 1. Acknowledges I f commercial and recreational to other Chico Municipal Code Provisions allowance ofpersonal of medical marijuana for medical marijuana regulation is to be streamlined, the proposed Chapter will continue to be purposes, pursuant to Chapter 19.77, but internally comprehensive. while needing to amend provisions to limits all other medical marijuana activity. remove references to Chapter to be internally consistent 2. Acknowledges only outdoor that is allowed is pursuant to Chapter In addition to conditions imposed against permit to prevent nuisancess designates that may not cause public nuisances as designated in Chapter 1.14 Appeal Rights if Permit Denied recreational marijuana personal City Has Right to Modify or Revoke Permit recreational marij uana personal Conditions imposed against Minimal Comprehensive recreational marij uana personal Permit to Prevent Nuisance

7 Inspection Authority No, upon notice recreational marij uana personal Explicit Grounds for Denial of Permit Minimal, comprehensive recreational marijuana personal Penalty Provision Subject to General Penalty Provision, which is an Enumerates all remedies available, and makes a violation Proposed Chapter explicitly provides the City with all available remedies should there be a violation Infraction, Subject punishable as a to an misdemeanor Administrative Citation; may be abated as a public nuisance

City Council Agenda Report Meeting Date: March 7, 2017

City Council Agenda Report Meeting Date: March 7, 2017 City Council Agenda Report TO: CC: FROM: BY: RE: Honorable Mayor and City Council Mark Orme, City Manager Debbie Presson, City Clerk Vincent C. Ewing, City Attorney Norma Copado, Deputy City Attorney City