title
APPEAL OF THE PLANNING COMMISSION APPROVAL OF A COMMISSION USE PERMIT TO ESTABLISH A CANNABIS RETAIL STOREFRONT IN AN EXISTING BUILDING AT 1748 WEST FREMONT STREET (APN 135-080-01) (APPLICATION NO. P23-0049)
recommended action
RECOMMENDATION
Staff recommends that the City Council adopt a resolution to:
Deny the appeal and affirm the Planning Commission’s approval of a Commission Use Permit to allow the establishment of a proposed cannabis retail storefront business within an existing building, in accordance with the findings and subject to the conditions found in the Proposed Resolution.
body
Summary
On September 12, 2024, the Planning Commission heard and approved a Commission Use Permit application for Culture CC Associates 2 Corp/Devon Julian to operate a cannabis retail storefront location within an existing and vacant 5,925+/- square foot industrial building at 1748 West Fremont Street.
On September 23, 2024, the appellant, Shania Taylor, filed an appeal of the Planning Commission’s approval of the project, citing concerns regarding over-concentration, proximity to an existing cannabis business, lack of public necessity, and project impact on surrounding neighborhoods and businesses.
Staff finds that the proposed project is consistent with the City’s Cannabis Ordinance (SMC 16.80.195), meets General Plan policies, and affirmatively makes all seven required use permit findings. Staff recommends that the City Council deny the appeal and affirm the Planning Commission’s approval of a Commission Use Permit.
DISCUSSION
Background
On February 2, 2021, City Council provided staff direction to evaluate the existing cannabis regulatory program (originally established in 2016) and develop recommendations for amendments to address overconcentration, encouragement of certain business types, location requirements and equity program.
On March 1, 2022, the City Council adopted Ordinance 2022-03-01-1601, amendments included:
• Amending business license payment dates
• Adding a cap on the number of retailer operator (storefront) permits (14)
• Clarification of permitting processes
• Clarification of by-right allowances for existing businesses
• Lottery process updates
• Zoning updates and general Code language clean up (i.e. definitions, etc.)
• Removal of location waivers
• Equity Program updates
For storefront retailer and microbusinesses permit types, where concerns existed about the potential impact on public safety, public health, or community character; a controlled expansion provision was established by the Council in 2019. The controlled expansion program allows the City to adapt to an evolving industry and provides the flexibility to accelerate or decelerate industry expansion over time. The controlled expansion also has the benefit of allowing the City to give preference to equity applicants. Per SMC 16.80.195(K)(4), the controlled expansion is accomplished on an annual basis through a lottery process for the following business types:
a. storefront retailer
b. microbusinesses, which include storefront retail and/or cultivation business types
Applicants for the above business types are evenly selected by the lottery process from two pools for a total of four applications per year, as described below:
Equity Pool General Pool
a. One storefront retailer permit a. One storefront retailer permit
b. One microbusiness permit b. One microbusiness permit
The lottery includes an equity component (i.e. Equity Pool) to enable Stockton residents from disadvantaged areas to obtain cannabis business permits. To qualify as an equity applicant, greater than 50% of the ownership, as determined by equity sharing, for the permit must be a resident of Stockton for five years and either live in the SB 535 disadvantaged area or “Kelly Drive Neighborhood” as defined by the City Council or demonstrate low-income status. Applicants for the above business types are evenly selected from 1) a general pool of applicants and 2) an equity pool of applicants.
The subject applicant, Culture CC Associates 2 Corp/Devon Julian, qualified as a general pool applicant and was selected as the retail storefront applicant in the 2022 Commercial Cannabis Lottery under application CP22-00027 (Attachment A - Cannabis Lottery Win Letter). This is one of two retail storefront business applicants awarded eligibility to submit applications in the 2022 lottery.
On September 12, 2024, the Stockton Planning Commission conducted a duly noticed hearing, considered and approved by a vote of 4-2 (Commissioners Boparai and Vielma dissenting and Commissioner Rizvi absent) (Attachment B - Resolution No. 2024-09-12-0502) a Commission Use permit to operate a cannabis retail storefront location within an existing and vacant 5,925+/- square foot industrial building at 1748 West Fremont Street (Attachment C - Location Map). The site has a General Plan designation of Industrial (Attachment D - General Plan Land Use Map) and a zoning designation of Industrial, Limited (IL) (Attachment E - Zoning Map). The site is bound to the north by Interstate 5 and to the south, east, and west by similar light industrial uses.
The approved project complies with all City Development Code regulations, including location requirements, for cannabis retail storefront operators. The Stockton Police Department also reviewed the application and indicated no concerns with the proposed project. If the approval is upheld, a formal security plan and lighting plan will be submitted and reviewed by the Police Department as part of the Operators Permit process.
No members of the public in attendance during the public hearing provided verbal comment. Council Member Villapudua submitted written correspondence in objection to the Project; no additional public comments or e-mails were received.
On September 23, 2024, the applicant, Shania Taylor, filed an appeal of the Planning Commission’s approval of the project, citing the over-concentration of cannabis in the community, proximity to an existing cannabis business, lack of public necessity, and that the Project would have an impact on the surrounding neighborhoods and businesses. (Attachment F - Applicant Appeal)
Present Situation
The appellant, Shania Taylor, is requesting that the City Council overturn the Planning Commission’s approval, thereby denying the Commission Use Permit, citing the over-concentration of cannabis in the community, proximity to an existing cannabis business, no public necessity, and that the Project would have an impact on the surrounding neighborhoods and businesses.
As reflected in staff’s analysis provided below, the Project complies with all applicable provisions of the Stockton Municipal Code and exceeds the minimum location requirements outlined in SMC Section 16.80.195. Findings in the affirmative were made by the Planning Commission as the Project would strengthen the integrity of the surrounding area by locating its operation within a vacant existing building, provide new employment opportunities, and generate additional tax revenue for the City General Fund.
In accordance with SMC Section 16.100.040(G)(1), the City Council may affirm the Planning Commission’s action and deny the appeal or reverse and overrule the Commission’s action by approving the appeal with four (4) concurring votes (a majority vote). The evidentiary record and subsequent appeal analysis fail to support the reversal of the Planning Commission’s approval; therefore, staff recommends the City Council deny the appeal and affirm the Planning Commission’s conditional approval.
Staff Analysis
Stockton Municipal Code (SMC) Section 16.80.195 provides a land-use process for permitting cannabis business types and standards for development, which includes location restrictions. The SMC imposes a limit on the total number of permits allowed citywide for storefront retailers (maximum of 14) as well as other measures to regulate market expansion in the City (i.e. to prevent over-concentration), those include the Commercial lottery program described above, zoning restrictions, and minimum location (separation) requirements (some in excess of State law). These measures also lead to other restraints outside of City regulations, such as limited market availability of retail space in allowable zones that meet location requirements.
Location Requirements
Per SMC 16.80.195(A)(6), the following location requirements apply to all cannabis retail storefront operations.
a. No retailer operator shall be established or located within 300 feet, measured from the nearest property lines of each of the affected parcels, of any existing residential zone or use.
b. At the time the Use Permit is issued, no retailer operator shall be established or located within 600 feet of any of the following: A public or private academic school for students in kindergarten through 12th grade, nursery school, preschool, or childcare facility; A public park, playground, recreational area, or youth facility; Religious facilities; or Drug abuse, or alcohol recovery/treatment facility.
c. No retailer operator shall be established or located within 1,000 feet of any of the following: Existing cannabis storefront retailer operator; Existing RDC (Retailer, Distributor, Cultivation), RDM (Retailer, Distributor, Manufacturer), and/or RCM (Retailer, Cultivation, Manufacturer) microbusiness operator. “Existing” indicates the possession of an approved use permit.
All distances are measured in a straight line from the closest point between property lines. As of the time of Planning Commission approval, staff confirmed that the project met all the above-listed location requirements. Based on available information and research, there are no:
• Existing residential zones or uses within 300-feet of the Project’s property lines;
• K-12 public or private schools, nursery schools, preschools, or childcare facilities;
• Public parks, playgrounds, recreational areas, or youth facilities;
• Religious facilities; or
• Drug abuse or alcohol recovery/treatment facilities.
The closest cannabis business is located approximately 1,100 away feet as the crow flies at 1550 West Fremont Street (Attachment G - Approved Cannabis Business Locations).
Despite exceeding minimum separation distances as required by the Municipal Code, an issue raised by some Planning Commissioners related to the proposed location being in the vicinity of another Cannabis Retailer Storefront (approximately 1,100 feet between the two parcels) and concerns approval of the new use could result in possible over-concentration. The SMC does not define “over-concentration” as applied to cannabis business types; however, increased minimum separation distances, elimination of location waivers, utilization of a lottery to select applicant for specific business types are all existing methods that help regulate the concentration of cannabis businesses in the City. The proposed Commission Use permit meets all of these regulatory standards.
Commission Use Permit
A Commission Use Permit is required for a cannabis retail storefront business. SMC Section 16.168.050 requires seven (7) general findings of fact to grant CUP approval.
Staff’s analysis and the Planning Commission’s approved findings are as follows:
1. Finding: The proposed use is allowed within the subject zoning district with the approval of a use permit and complies with all other applicable provisions of this Development Code and the Municipal Code.
Staff Analysis: The proposed cannabis retail storefront use (i.e., use) is conditionally allowed in the IL Zone with approval of a Commission Use Permit. As conditioned, the cannabis retail storefront use will be in conformance with the development standards outlined in Title 16 of the Municipal Code. Adequate off-street parking spaces have been integrated into the site design and will be provided for the proposed use.
The proposed project meets the location requirements set forth in SMC 16.80.195(A)(6). The project is not located within 300 feet of any existing residential zone or use. The project is not located within 600 feet of any park, school providing K-12 instruction, day care center, or youth center, childcare center, child care, in-home (family day care home), religious facilities, or drug abuse or alcohol recovery/treatment facility.
2. Finding: The proposed use would maintain or strengthen the integrity and character of the neighborhood and zoning district in which it is to be located.
Staff Analysis: The proposed cannabis retail storefront business would operate within an existing building situated near several other light industrial uses. It would fill an existing vacant building, which would help strengthen the integrity and security of the surrounding area by providing added security due to the nature of the land use. The proposed use would also align with the intent of the general plan to attract employment and tax-generating businesses that support the economic diversity of the city.
3. Finding: The proposed use would be consistent with the general land uses, objectives, policies, and programs of the General Plan and any applicable specific plan or master development plan.
Staff Analysis: The General Plan Land Use Map designates the subject site as Industrial. The Industrial designation is intended to accommodate a wide variety of industrial uses, including, but not limited to, uses with nuisance or hazardous characteristics, warehousing, light manufacturing, and other related uses. The proposed use is a cannabis retail storefront business where cannabis products will be sold on-site, which is consistent with the intent described in the General Plan for the Industrial land use designation. The zoning district of Industrial, Limited (IL) is also consistent with the City’s General Plan Industrial land use designation for the project site.
Additionally, the project is consistent with the following General Plan goals and policies:
• Goal LU-6: To provide for orderly, well-planned, and balanced development.
• Goal LU-4: Attract and retain companies that offer high-quality jobs with wages that are competitive with the region and state.
• Goal CH-3: Expand opportunities for local enterprise, entrepreneurship, and gainful employment.
• Policy LU-4.2: Attract employment and tax-generating businesses that support the economic diversity of the city.
The proposed use furthers the above goal and policy since it would provide for a business type that generates tax revenue for the City of Stockton’s general fund and expands opportunities for employment and entrepreneurship.
4. Finding: The subject site would be physically suitable for the type and density/intensity of use being proposed, including the provision of services (e.g., sanitation and water), public access, and the absence of physical constraints (e.g., earth movement, flooding, etc.).
Staff Analysis: The proposed project has been analyzed by all applicable departments, and it has been determined that all existing streets and public accessways are adequate to serve the project. The site will have access to existing City utility services, which are presently available at the site. Further, a Building Permit for a tenant improvement is required for the proposed cannabis facility, and the project will be required to comply with all applicable Building Code standards.
5. Finding: The establishment, maintenance, or operation of the proposed use at the location proposed and for the time period(s) identified, if applicable, would not endanger, jeopardize, or otherwise constitute a hazard to the public convenience, health, interest, safety, peace, or general welfare of persons residing or working in the neighborhood of the proposed use.
Staff Analysis: The proposed land use will require the applicant to adhere to all applicable Building and Fire Codes, and additional requirements established by the State of California, Department of Cannabis Control. The Department of Cannabis Control issues annual licenses and regulates cannabis retail storefront to ensure safe practices. The applicant will also be required to obtain and maintain an Operator’s Permit from the City that requires the business owner to develop and maintain a security and lighting plan that is reviewed annually by the Police Department.
All cannabis operations for the proposed retail storefront will occur indoors in an Industrial zone. Appropriate security provisions will be incorporated into the project operations plan, including electronic surveillance and on-site security. The site will use an activated carbon filtration system to prevent any odors from spilling outside of the facility.
For the above reasons, the establishment, maintenance, or operation of the proposed land use activity would not endanger, jeopardize, or otherwise constitute a hazard to the public convenience, health interest, safety, or general welfare of persons residing or working in the neighborhood of the proposed use.
6. Finding: The design, location, size, and operating characteristics of the proposed use would be compatible with the existing and future land uses on-site and in the vicinity of the subject property.
Staff Analysis: The proposed cannabis retail storefront business would be located in an existing building in an industrial area adjacent to other light industrial uses and does not raise any potential issues related to parking, as the site will have its own parking lot with ample off-street parking spaces and a private driveway off West Fremont Street. The proposed use is commercial and raises no potential issues related to compatibility with the existing and future land uses on-site and in the vicinity of the subject property.
7. Finding: The proposed action would be in compliance with the provisions of the California Environmental Quality Act (CEQA) and the City’s CEQA Guidelines.
Staff Analysis: The proposed project will occupy an existing building. The project is categorically exempt from the CEQA, pursuant to CEQA Guidelines section 15301(a) (Existing Facilites) since the project will occupy an existing facility and no expansion of use is proposed.
These findings address the four concerns identified by the appellant:
|
Appellant Concern |
CUP Finding that Addresses Concern |
|
Over-concentration of cannabis in the community |
1 - Meets all codified requirements designed to prevent over-concentration |
|
Proximity to an existing cannabis business |
1 - Meets all codified requirements and exceeds minimum separation distances from sensitive uses and other cannabis businesses |
|
Lack of public necessity |
3 - Meets General Plan goals to provide for orderly, well-planned, and balanced development; is considered a company/industry that offers high-quality jobs with competitive wages; and expands opportunities for local enterprise, entrepreneurship, and gainful employment. |
|
Impact on surrounding neighborhoods and businesses. |
2 - Attracts employment and generates taxes to support the local economy 5 - Won’t endanger, jeopardize, or constitute a hazard to the public convenience, health interest, safety, or general welfare of persons residing or working in the neighborhood |
ENVIRONMENTAL CLEARANCE
The proposed project is categorically exempt from CEQA, pursuant to CEQA Guidelines section 15301(a) (Existing Facilities) since the project will occupy an existing facility and no expansion of building or site is proposed.
PUBLIC COMMENT
Notice for this item was published in the Record, and a mailed meeting notice has been sent to all property owners within a 300-foot radius of 1748 West Fremont Street, on November 9, 2024. No written comments have been submitted from the time of the appeal to the preparing of this staff report.
FINANCIAL SUMMARY
Approval of the project would provide the City’s General Fund with additional revenue collected through the Cannabis Business Tax which is currently 5% of revenue earned by the business.
Attachment A - Cannabis Lottery Win Letter
Attachment B - Planning Commission Resolution No. 2024-
Attachment C - Location Map
Attachment D - General Plan Land Use Map
Attachment E - Zoning Map
Attachment F - Applicant Appeal
Attachment G - Approved Cannabis Business Locations