Community Meeting: Local Cannabis Policy in Oroville
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1 Community Meeting: Local Cannabis Policy in Oroville May 24, 2018 Presented by: Neil Hall, Cannabis Lead Kyle Tankard, Consultant
2 Agenda Welcome/Introduction Cannabis 101 Presentation Public Comment Period Q & A
3 About SCI Consulting Group SCIConsultingGroup is a public finance consulting firm with the mission of assisting public agencies with revenue enhancement and annual administration. Serving California public agencies over for 30 Years Revenue Measures Feasibility Analysis/Polling Special Financing District Administration Services Financial Consulting Services Fire, Parks and Recreation, Landscaping and Lighting, Vector Control, Flood Control, Stormwater Management, Undergrounding, Cannabis Health and Safety Regulation and Affordable Housing Successfully implemented over 130 special taxes and assessments, with a 95% success rate.
4 Dynamic History of Cannabis in US Widespread Medical & Industrial use of Cannabis until 1937 Post-Prohibition attitude changes Marihuana Tax Act of 1937
5 Illegal Cannabis in US Boggs Act of 1951 and Narcotics Control Act of 1956 First-time cannabis possession with no stamp tax: 2 10 years Up to $20,000 fine Controlled Substances Act of 1970 Schedule 1 classification
6 Legalization of Cannabis in US The Cole Memo (2013) o 8 criteria to maintain State s right to control o Recently rescinded by AG Sessions The Rohrabacher-Farr Amendment (2014) o Prevents funding for the DOJ or DEA to use arresting or prosecuting patients, caregivers, and businesses that are acting in compliance with state medical marijuana laws
7 Current State Situation
8 Legalization Trends Medicinal cannabis is currently legal in 30 States Recreational Cannabis 2012 Colorado and Washington 2014 Alaska, Oregon and Washington D.C California, Maine, Massachusetts and Nevada 2018 Vermont
9 Recent History of Cannabis in California Proposition 215 Authorized medicinal cannabis use The Medical Marijuana Regulation and Safety Act Three bills co-joined AB 243, AB 266, SB Proposition 64 Authorized non-medicinal cannabis use SB 94 Known as the MAUCRSA Replaced MCRSA and integrates medicinal and adult use regulations and license types
10 Proposition 64 Local Voting Results Statewide = 57.1% Oroville = 51.7% Support
11 5 Main Commercial Cannabis Activities 1. Retail (including delivery) Bureau of Cannabis Control 2. Manufacturing Department of Public Health 3. Cultivation Department of Food and Agriculture 4. Distribution Bureau of Cannabis Control 5. Testing Bureau of Cannabis Control
12 2 Client Types Medicinal Only Medicinal and Adult Use
13 6 Key Elements of Cannabis Implementation 1. Community Research and Outreach (Meetings & Surveys) 2. Health and Safety & Land Use Regulations (Ordinance) 3. Local Industry Selections (Application process) 4. Full Cost Recovery (Application, CUP & Regulatory Fees) 5. Revenue (Taxation Ballot Measure) 6. Monitoring and Compliance (As Defined by Ordinance)
14 Commercial Cannabis Goals for the City of Oroville Balance o o o Health and Safety Regulation Revenue Accessibility Compliance With State Law Encourage and Protect Sustainable Cannabis Businesses o Illegal market Regulated market o o Reasonable Regulations Reasonable Taxation and Fees
15 The Big Three of the Cannabis Industry Retail and Delivery Cultivation Manufacturing
16 and the Supporting Activities Testing Distribution
17 Cannabis Ingestion Methods Inhalation: Smoking
18 Cannabis Ingestion Methods Inhalation: Vaping
19 3. Cannabis Ingestion Methods Oral: Tinctures and Ingestible Oils Oral: Edibles and Drinks
20 Cannabis Ingestion Methods Topicals:
21 Retail Dispensaries
22 Retail Dispensaries
23 Retail Dispensaries
24 Cannabis Cultivation
25 Cannabis Concentrate Manufacturing
26 Cannabis Testing
27 6 Key Elements of Cannabis Implementation 1. Community Research and Outreach (Meetings & Surveys) 2. Health and Safety & Land Use Regulations (Ordinance) 3. Local Industry Selections (Application process) 4. Full Cost Recovery (Application, CUP & Regulatory Fees) 5. Revenue (Taxation Ballot Measure) 6. Monitoring and Compliance (As Defined by Ordinance)
28 1. Community Research and Outreach Determine Local Health and Safety and Land Use Priorities Taxation Rate Engage Stakeholders Law Enforcement, Finance, Planning, School Leaders, Church Leaders, Advocates, Business Leaders, etc.
29 2. Drafting a Regulatory Ordinance Local and unique Dovetail with SB 94 and AB 133 Address local health and safety priorities Ensure State and Federal (Cole memo) compliance Consider business sustainability
30 Ordinance Goals and Structure Political & legal support considerations Typical length and level of detail Include land use or not Pre-empt voter initiative Emphasis Health and Safety Fees Monitoring and Compliance
31 3. Application Process and Processing Application One Step or Two Step Application Selection Choices By Zone Merit-based Scoring Application Selection Optimal Attributes Local Prior Experience Locations Size Other Hybrid
32 4. Fees for Full Cost Recovery Regulatory Fees (Proposition 26 Compliant) Full cost recovery of all agency costs Staffing, processing, review, inspection, background checks, video monitoring, etc. Conduct Proposition 26-compliant fee study No new revenue all costs must be accurate and real!
33 Common Types of Regulatory Fees 1. Application Step 1 Initial Review 2. Application Step 2 Final Review 3. Renewal 4. Annual Monitoring and Compliance (CCBP Fee) 1. Secondary Impacts? And possibly Land Use Fee (CUP/MUP/or?) Business License Fee Neighborhood Enhancement Fee
34 5. Taxation for General Fund Revenue General fund enhancement through taxation Requires balloted tax measure General Tax vs Special Tax Tax Methodology Gross receipts Square footage Inventory weight other
35 Cannabis Business Taxes Rates City of Shasta Lake 6% gross receipts on retail dispensary, 3% nurseries, 3% distribution, 0% testing, $7 per square foot of manufacturing facility, $7-15 per square foot of Cultivation Facility. City of Marysville Cap of 12%, $25/sqft, and $26/sqft. 5% on gross receipts on retail dispensary, $15 per square foot of Cultivation Canopy. Yolo County Cap of 15%, $25/sqft. 4% gross receipts on cultivation, 5% retail, manufacturing, distribution, and testing. City of Davis Cap of 15%. 10% gross receipts tax on all cannabis businesses. City of Dixon 15% gross receipts tax on all cannabis businesses
36 Tax Election Timeline*: November 2018 *Official election calendar not yet finalized by ROV Ballot Measure Filing 20-Jul Final Date to file Resolution of Consolidation 17-Aug 17-Aug 24-Aug 6-Nov Deadline - Arguments in Favor Deadline - Impartial Analysis, Tax Rate Statement Deadline - Rebuttal Arguments Election Day
37 6. Monitoring and Compliance Facility inspections Product testing Security, odor control, video monitoring, etc. Community impacts
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