Background. February 2016 Board of Supervisors adopts medical marijuana ordinance

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1 Cannabis Roundtable

2 Today s Item Staff and Ad Hoc Committee members will provide a brief report of the recent Cannabis Roundtable activities and meetings. Provide possible direction to staff to return with options regarding the implementation of the Adult Use of Marijuana Act (Proposition 64).

3 Background February 2016 Board of Supervisors adopts medical marijuana ordinance Bans cultivation of outdoor cannabis (adult use and medical) while allowing indoor cultivation of medical cannabis only. Proposition 64 - adult use of recreational marijuana - passed the state of California. Board expressed interest in working with local municipalities

4 Background Cont. On April 2017, the Board selected Supervisors Gregory & Ramos to serve on an Ad Hoc (subsequently the Cannabis Roundtable) with two representatives from each municipality Goal was to work with our local parnters to learn together, discuss potential conflicts, and find potential consistencies in developing a holistic regulatory framework.

5 Cannabis Roundtable May 31, 2017 Discussed Proposition 64, state regulations (current and planned), medical vs. adult use policies, local implications and consideration, and general expectations. Major takeaways: Explicit and broad local taxing and regulatory authority Proposition 64 proposed regulatory scheme similar to existing framework in Medical Cannabis Regulation and Safety Act. State license AND local permission required for commercial purposes

6 Cannabis Roundtable Cont. July 21, 2017 Tour three different types of cannabis related facilities in Oakland Kiva Confections (manufacturing); Dark Heart Nursery (Grow); and Harborside (dispensary/retail) Major takeaways: Best practices followed by businesses largely created by industry in absence of state rules New state requirements under Prop. 64 require new processes and procedures Each type of facility has its own set of challenges Most operate with cash only, posing security and banking challenges

7 Cannabis Roundtable Cont. August 25, 2017 Topics: Retail/Dispensaries; Cultivation; Land Use and Environmental Impacts; and legal/regulatory limitations Major Takeaways: Personal: Indoor: cannot reduce below 6 plants Outdoor: can ban or limit Commercial: can ban or limit 20 total different state license types Limiting by zoning could naturally limit size of businesses Sonoma County has implemented procedure for medical cultivation to obtain local license Sonoma County approved tax prior to implementation of regulations

8 Cannabis Roundtable Cont. September 28, 2017 Topics: taxation; revenue; banking; public health and public safety Major Takeaways: Tax/Revenue/Banking Adult Use will have 15% Excise Tax Effective tax rate Distribution and processing cost of 15% to 30% Limited banking options due to federal law Questions about how much local municipalities will generate from state excise tax Health and Public Safety Implications of youth use; avoiding use in pregnancy and breastfeeding; promoting safe use (avoid driving, educating public on potency Limit cannabis use based on tobacco and alcohol control policies

9 Timeline & Deadlines Prop. 64 went into effect Nov. 8, 2016 Commercial Cannabis: State to issue licenses for businesses Jan. 1, 2018 Non-Commercial Cannabis: County ordinance last passed prior to Prop. 64 implementation

10 Options for Local Jurisdictions Commercial Cannabis Policy choice to allow, prohibit, or remain silent Silent likely means allow General categories of licenses Cultivation Manufacturing Retail Distribution Lab Medical or adult use or both Temporary measures possible

11 Options for Local Jurisdictions Non-Commercial Cannabis Existing ordinance predates Prop. 64 Policy choice to update existing ordinance Indoor regulations Outdoor allow/prohibit and regulations

12 Questions?