Sausalito City Council October 30, 2018
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1 Sausalito City Council October 30, 2018
2 Interim Urgency Marijuana Ordinance JANUARY 9, 2018 Ordinance Amendment and Extension (10 months and 15 days) Original Urgency Ordinance: Ordinance No Ordinance Amendment and Extension: Ordinance No Interim Ordinance effective through November 24, 2018 INTERIM ORDINANCE ALLOWED: Delivery of medical and recreational marijuana into Sausalito, personal indoor cultivation up to 6 plants NOT ALLOWED: Retail sales, dispensaries, and distribution centers REQUIREMENT: Businesses conducting cannabis-related deliveries into Sausalito must register/notify the City
3 Marijuana Regulations Update Provide mechanism to extend interim urgency ordinance a final year Provide update on marijuana regulation activity locally/statewide and request Council feedback and direction: 1. Share any questions the Council believes is important to have answered as part of developing permanent regulations. 2. Provide direction if additional public outreach is necessary and/or to conduct community workshops. 3. Provide initial thoughts on exploring other non-storefront type businesses (i.e. non-storefront retail delivery/distribution).
4 Extension of Interim Urgency Ordinance Original Urgency Ordinance: Ordinance No Days Ordinance Amendment and Extension: Ordinance No Months and 15 Days Effective through November 24, 2018 Final One Year Extension Urgency Ordinance in effect through November 24, 2019 Extension allowed per Government Code section Additional time to develop permanent marijuana regulations
5 STATE LEVEL Cannabis program continues to evolve Currently operating under interim emergency regulations until non-emergency regulations are complete 3 Licensing Authorities: Bureau of Cannabis Control, CA Department of Food and Agriculture, CA Department of Public Health Proposed non-emergency regulations available for review online
6 SAUSALITO TIMELINE & INTERIM MARIJUANA ORDINANCE NOV 2016: General Election (Prop 64) revealed 77.3% of Sausalito voters supported legalization of recreational marijuana OCT 2017: Legislative Committee considers adopting marijuana regulations NOV 2017: Original Interim Urgency Ordinance DEC 2017: Online City survey revealed 73.5% of 307 registered users supported recreational marijuana delivery into Sausalito; Nextdoor survey revealed 82% of 176 responses in support JAN 2018: Amendment and extension of Interim Urgency Ordinance JUN 2018: City Council received progress report on marijuana regulations SEPT 2018: Legislative Committee received update and directed Staff to present update to City Council and request feedback/direction OCT 2018: City Council public hearing
7 DELIVERY OPERATIONS IN SAUSALITO Any person or entity delivering cannabis or cannabis products for medical or adult use in accordance with this subsection E shall register with or notify the City of Sausalito (SMC E.4 Interim Ordinance) 1 delivery business (ONA.life) has registered with/notified the City State licensing records license type, license number, legal business name, premise address, and validity/expiration dates
8 DELIVERY OPERATIONS IN SAUSALITO Delivery services available through online platforms (e.g. Weedmaps) Enforcing registration is a challenge when other surrounding cities and agencies do not require a registration process for marijuana delivery services (Larkspur & Sausalito require registration) Proactive Staff research and enforcement of online platforms will require significant time and is not a singular effort as new delivery businesses emerge. No reported issues with delivery services Weedmaps
9 TAXING CANNABIS AT THE STATE AND LOCAL LEVEL Prop 64 created 2 new state taxes: Cultivation Tax Excise Tax on Retail Price Collected revenue is remitted to the State of CA and is not collected at local level Local ballot measure is required to specifically tax marijuana businesses City of Marysville passed Cannabis Business Tax to help fund general city services at a rate not to exceed 15% of gross receipts for the licensed sale of medical/non-medical marijuana City of San Diego imposed a gross receipts tax for general revenue purposes on non-medical marijuana businesses; tax rate initially set at 5%, increasing to 9% in July 2019, not to exceed 15%
10 Case Study: City of San Rafael s Measure G Commercial Cannabis Business Tax Passed with 82% approval (66.6% needed) 8% cap for tax on gross receipts for cannabis businesses operating within city Allows Council discretion to set different tax rates for cannabis supply chain businesses Revenue from cannabis excise tax remitted directly to city Measure G allows and limits number of medical-related cannabis licenses to testing labs, infused product manufacturing, non-storefront delivery, and distribution businesses San Rafael prohibits retail cannabis and cultivation businesses Estimated potential annual revenue: $1 Million (dependent on multiple variables)
11 City of San Rafael Cannabis Pilot Program Objectives Discreet, low impact and minimal public interface Provide safe patient access Improve transparency and reduce public safely risks Add revenue to support City infrastructure and services Create new jobs, produce artisan products Promote industrial land retention and diversified industrial economy Developing Marijuana Regulations Medical Cannabis ad hoc subcommittee City Council Update City s Business and Professions Code Update Zoning Ordinance Final Step Tax Measure
12 Non-Storefront Retailer (Delivery) Bureau of Cannabis Control (BCC) is responsible for licensing retailers/dispensaries, distributors, testing laboratories, microbusinesses, and temporary cannabis events in CA Non-Storefront Retailer Sells and delivers cannabis or cannabis products to consumers Must have licensed premises premises not open to public Sales are conducted exclusively by delivery October 19: BCC released modified proposed regulations that would preempt cities from not just prohibiting deliveries in their communities, but would disallow cities from regulating deliveries all together
13 Non-Storefront Retailer (Delivery) Interim Urgency Ordinance does not allow for a non-storefront marijuana retailer in Sausalito If the Council would like to consider non-storefront marijuana retail, the process includes: Establishment of regulations and standards for a non-storefront marijuana retail use, including a new use category. Selection of a zoning district in which non-storefront marijuana retail would be allowed. Initiation of Zoning Ordinance, Specific Plan (if applicable) and General Plan Amendments with the Planning Commission and the City Council. Staff would recommend a robust community engagement process. Selection of the total number of available licenses. Initiation of a ballot measure for a commercial cannabis business tax.
14 STAFF RECOMMENDATION 1. Adopt the draft Ordinance to extend the Interim Urgency Ordinance on Marijuana Regulations through November 24, Provide Council Feedback and Direction: a) Share any questions the Council believes is important to have answered as part of developing permanent regulations. b) Provide direction if additional public outreach is necessary and/or to conduct community workshops. c) Provide initial thoughts on exploring other non-storefront type businesses (i.e. nonstorefront retail delivery or distribution).
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