CANNABIS DIALOGUE WORKSHOP NO. 4 MAY 11, 2017 WORKSHOP NO. 2 RECAP OF WORKSHOP #3 LESSONS LEARNED FROM CALIFORNIA AND NEVADA TOWN OF TRUCKEE
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1 WORKSHOP NO. 2 community development department RECAP OF WORKSHOP #3 On April 13th, the Truckee Town Council hosted the third is a series of four workshops for the Cannabis Dialogue. The purpose of this workshop was to discuss personal and commercial cultivation and to gather community feedback. Approximately 80 people participated and a large number provided public comment on cultivation topics. Town staff also provided information on lessons learned from several Colorado and Oregon cities who have already tackled a number of cannabis issues. The Council asked for more lessons learned information from California and Nevada cities who have allowed cannabis businesses. Town staff has compiled the enclosed information to assist the Council s understanding of these issues. LESSONS LEARNED FROM CALIFORNIA AND NEVADA The Town of Truckee has previously prohibited all medical marijuana businesses; however, other cities across the State and certain cities in Nevada have allowed these businesses. We can look to them to understand how their cities have addressed the cannabis industry and learn from their successes and challenges. The enclosed tables depictsseveral cities in both California and Nevada and how they have chosen to regulate and tax medical cannabis. Most importantly, staff asked each jurisdiction what types of lessons they could pass on to us. As you will see, there is a high level of variation in how these cities approach regulating cannabis businesses.
2 CANNABIS REGULATIONS ALLOWED USES ZONING DISTRICTS ALLOWED TAXATION OTHER FEATURES RENO, NV Prohibits smokiung or consumption of cannabis on premises of cannabis establishment Separation requirements: 1,000 from public/private school (pre-12) and 300 from community facility Requires a security plan at application submittal All applications go through discretionary Council review Display of cannabis/products is prohibited Allows permission for entry to and reasonable inspection of the establishment by the license division, chief of police, fire chief, or their designees with or without notice Production facility Cultivation facility Independent testing laboratory Arterial Commercial Community Commercial Industrial Industrial Commercial Industrial Business Downtown Reno Regional Center Overlay District Redfield Regional Center Overlay District South Virginia Street Transit Corridor Overlay District State taxes medical sales at 2%, unclear if local jurisdictions can modify Proposed bills show tax increasing to 5% for medical and 10% for recreational City Council review is required for medical cannabis businesses. The Council has the authority to place conditions of approval on any license issued, which may include, by way of example, and without limitation***: - A limitation of the products and services to be produced or sold - Hours of operation - Accounting requirements - Restrictions on signs and advertisements - Acknowledgement that the applicant and the property owner understands applicable federal, state local laws - Hold Harmless agreement - Surety bond - Certificate of insurance - Addressing the current federal priorities relating to the conflict between state and federal marijuana laws Plumb Lane Crossing Overlay District Cannot be adjacent to residentially zoned parcels (***These are summaries of ordinance sections; RMC Chapter 5.21 should be consulted for the actual language) East 4th Street Transit Overlay District North Virginia Street Overlay District Proposed state legislature would allow medical facilities to sell recreational cannabis WA) do not allow medical and recreational sales within same facility Other states (CO, OR, State recreational bill prohibits personal cultivation within 25 miles of a dispensary SPARKS, NV Regulates personal cultivation - no fees, but must register with the city to cultivate Traffic study required with submittal for any project which will generate more than 80 pm peak hour trips Separation requirements: 1,000 from public or private schools (pre-12), 300 from community facilities, 1,000 substance abuse centers within Industrial zones are required to be located on a parcel within 1,000 of the following intersection: McCarran Blvd and Glendale Blvd; McCarran Blvd and Greg St; or Rock Blvd and Glendale Ave may not apply for major diviations to separation requirements Production/ manufacturing Cultivation Testing facility : Commercial, Mixed Use Commercial and Industrial zoning districts Production, cultivation and testing facilities: Industrial Hours of operation limits and location limits depending on zoning district in which business is located. No drive throughs; no on-site consumption Businesses must submit biproducts/waste disposal plan and public safety plan Limits the number of dispensaries, limits production, cultivation and testing facilities to Industrial zoning districts only Limits hours of deliveries for loading and unloading Allows every official and police officer access to every part of the premises at any time when business is open and at all other reasonable times Requires annual inspections Personal/self growers are required to register with the City
3 CANNABIS REGULATIONS ALLOWED USES ZONING DISTRICTS ALLOWED TAXATION OTHER FEATURES SACRAMENTO, CA Regulates personal cultivation - no fees, but must register with the city to cultivate Traffic study required with submittal for any project which will generate more than 80 pm peak hour trips Separation requirements: 1,000 from public or private schools (pre-12), 300 from community facilities, 1,000 substance abuse centers within Industrial zones are required to be located on a parcel within 1,000 of the following intersection: McCarran Blvd and Glendale Blvd; McCarran Blvd and Greg St; or Rock Blvd and Glendale Ave may not apply for major deviations to separation requirements. Production/ manufacturing Cultivation Testing facility - moratorium, no more permits to be issued Cultivation - Agricultural, General Commercial, Heavy Commercial, Light Industrial, and Heavy Industrial Manufacturing and Testing Facilities- General Commercial, Heavy Commercial, Light Industrial, Heavy Industrial, Manufacturing Industrial Park, and Manufacturing Research Development Must submit a security plan and neighborhood responsibility plan (to address impacts on the surrounding area) with applciation City officials may enter and inspect the site at any reasonable time; may inspect and demand copies of records (except for private medical records) NEVADA CITY, CA Allows only 1 medical cannabis business with a 12-month review to determine impacts. If there are no impacts, Council may vote to expand the number of dispensaries to 3. If there are impacts or Council takes no action, number of dispensaries will be limited to 1. Separation requirements: 600 from schools and public parks only; does not allow any other medical cannabis related businesses (the city is currently considering allowing other uses, however) General Business (GB) zoning district except within the Historic Overlay District Local Business Light Industrial Dispensary permit does not grant land-use entitlement Permit expires after 12 month Cannot transfer dispensary permit to another business/operator Permit requires hold-harmless agreement with City Must submit storage and transportation plan with permit application Limits hours of operation to between 8am & 8pm No outdoor storage of any products Odor control devices required so that no odor can be detected off-site Security measures required - 24 hour surveillance, safes/vaults, sensors, panic buttons, buzz-in entry only, on-site security personnel, etc. Permit allows city officials to inspect the business/premises at any time during hours of operation without notice Considering adopting an ordinance to allow cultivation, manufacturing, testing facilities, and transportation/ distribution uses - currently in the public comment process SANTA ROSA, CA Allows only 2 dispensaries to be established within first 6 months from when the ordanince was adopted (2005); the City Manager may consider new applications beyond the first 2. Only 2 dispensaries currently exist and the City Manager is not considering new dispensaries Cultivation Manufacturing (nonvolatile only) Testing Facilities Distribution/ Transportation Office Commercial Light Industrial General Industrial Business Park Allows personal cultivation but does not regulate -- growers must abide by state requirements Does not modify the state s separation requirements Does not add additional reguations or requirements beyond those set forth by the state Requires a Neighborhood Meeting Application if cannabis related use occurs within 300 of a residential use The city appears to be considering new regulations for medical and nonmedical cannabis uses
4 WHAT DOES TAXATION LOOK LIKE UNDER PROPOSITION 64? When California voters approved Prop. 64, they also signed on for implementing a State tax on both the sale and cultivation of cannabis and cannabis products. Before any potential local tax is applied to cannabis sales, the State has imposed a 15% tax on both medical and recreational cannabis sales. In addition, there is also a State tax on cultivating both forms of cannabis: $9.25/dry weight ounce on flowers $2.75/dry weight ounce on leaves WHAT ABOUT POSSESSION AND PUBLIC USAGE? Under Prop. 64, persons over 21 years old are allowed to consume (smoke, vape or ingest) or possess, process, transport, purchase or give away up to 1 ounce of cannabis. Functionally, it prohibits all use of cannabis in any public place and only allows marijuana use in private spaces. The legislation does allow cities and counties to permit pot lounges. A pot lounge is essentially a private business that could allow smoking, vaporizing and ingesting of cannabis or cannabis products. A pot lounge could be established within a retail or microbusiness (i.e. a smoking room for the purposes of cannabis consumption). This option is something the Town Council will discuss in the near future. Prop. 64 also prohibits smoking within 1,000 feet of schools, day care centers or youth centers and while driving or riding in any vehicle. These State taxes will be imposed in addition to local sales tax. However, medical marijuana is exempt from both State and local sales tax. Here s a breakdown of how the taxation structure was created under Prop. 64: APPLIES TO RECREATIONAL ONLY SALES & USE TAX 8.25% + RETAIL PRICE APPLIES TO MEDICAL AND RECREATIONAL STATE EXCISE TAX 15% GROSS RECEIPTS OF RETAIL SALE EFFECTIVE NOVEMBER 9, 2016 EFFECTIVE JANUARY 1, 2018 STATE CULTIVATION TAXES $9.25/OZ FLOWERS $2.75/OZ LEAVES So, if you are interested in buying recreational marijuana in Truckee some day in the future, the starting tax rate you would pay is 23.25% (15% State tax % local sales tax). A medical marijuana patient would pay the 15% State tax plus the purchase price. Under Prop. 64, local jurisdictions are allowed to impose a local tax above the 15% State tax, except it cannot be an additional sales tax. In other words, the Town could impose an excise tax like a business license tax to cannabis businesses operating in Truckee. Depending on how the Town chooses to use these revenues, a special election may be required to approve this tax. The Town will need to determine if an additional tax should be imposed and if so, how much and what would the revenues be used for. The Town of Truckee regulates smoking within Chapter 9.03 of the Municipal Code (Smoking Pollution Control). These regulations were adopted in the early days of the Town s incorporation in the early 1990 s and have not been amended since that time. In looking at the existing regulatory language, the Municipal Code will likely need to be updated to address cannabis use and methods of consumption. The Code currently prohibits smoking in the following locations: Elevators Hospitals and health care facilities Public meeting rooms Theaters Public restrooms Restaurants Private office workplaces Public areas at various places Indoor service lines With respect to the restriction on public areas at various places, this regulation includes the following: All enclosed areas available to and customarily used by the general public and all businesses patronized by the public, including, but not limited to, retail stores, hotels and motels, pharmacies, banks, professional offices and other offices; In public areas of museums and galleries; Retail food marketing establishments, including grocery stores and supermarkets except those areas of such establishments set aside for the serving of food and drink, restrooms, offices, and areas thereto not open to the public; Public schools and other public facilities under the control of a public agency other than the Town are available to and customarily used by the general public; Sports arenas, except in any area designated as a smoking area by the owner, operator, manager, or other person who controls the facility; Within any bingo facility provided, however, that this prohibition does not prevent (1) the designating of a contiguous area within the bingo facility that contains no more than fifty (50%) percent of the seating capacity of the bingo facility as a smoking area or (2) the providing of separate rooms designated as smoking rooms so long as said rooms do not contain more than fifty (50%) percent of the seating capacity of the bingo facility. Prop. 64 prohibits smoking where smoking tobacco is prohibited. With approval of Prop. 64, Town staff will be reviewing the Municipal Code language and will determine what further changes will need to be made to comply with the new cannabis regulations.
5 TOWN OF TRUCKEE RECENT TOWN STAFF TOURS OF CANNABIS BUSINESSES Several Town employees recently toured a few cannabis businesses operating in the Tahoe/Reno region. The purpose of these tours was to help staff better understand how these types of businesses operate and look and what, if any, neighborhood impacts result from their operations. The following pictures show a variety of facilities including a retail medical cannabis dispensary, a processing and distribution facility and a cultivation facility. RETAIL MEDICAL CANNABIS DISPENSARY CULTIVATION AND PROCESSING/DISTRIBUTION FACILITY
6 TOWN OF TRUCKEE CULTIVATION & PROCESSING/DISTRIBUTION FACILITY (CONTINUED) TESTING FACILITY
7 10183 Truckee Airport Road, Truckee, CA Cannabis page: Administration: / Fax: Community Development: / Fax:
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