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AN URGENCY ORDINANCE AMENDING TITLES 5 AND 16 OF THE STOCKTON MUNICIPAL CODE RELATING TO MEDICAL CANNABIS BUSINESSES
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RECOMMENDATION
Staff recommends that the City Council review and adopt an Urgency Ordinance amending Title 5, Chapter 5.100, section 5.100.080 and Title 16, Chapter 16.80, sections 16.80.195(A)(1) and 16.80.195(B)(1) to:
1. Increase the number of available medical cannabis dispensary permits by two (2), which would increase the citywide dispensary cap for a total of 6 dispensaries; and
2. Limit the number of Conditional Use Permit (CUP) applications that may be processed consistent with the number of available Operator Permits under the applicable cap.
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Summary
With the passage of Measure P last November, approximately 60 businesses made inquiries regarding the City’s regulation of medical cannabis businesses. However, only two (2) CUP applications have been received (one dispensary and one cultivation site) even though the ordinance defines CUP requirements and there are no existing restrictions on applications. It appears there may be confusion about the permit process that caused a delay in potential businesses filing permit applications. This report will provide an overview of the newly enacted ordinance and allow the City Council to consider proposed ordinance changes. The overview and proposed change to increase the citywide limit on cannabis businesses would resolve any existing confusion and afford equal opportunity to potential applicants without negative impact to current applicants. Amendments to specify the number of CUP applications that may be processed will clarify how applications will be forwarded for consideration of Operator Permits and avoid unnecessary workload. An urgency ordinance was prepared to make the changes immediately.
DISCUSSION
Background
Currently, two medical cannabis dispensaries operate within the City, and are the only lawfully established cannabis businesses in Stockton. Prior to the adoption of Measure P, the previous regulations included a ‘Request for Proposals’ process that scored and ranked potential operators based on certain criteria. Only the top three dispensary operators were selected to apply for CUPs and Operator Permits. Subsequently, the City adopted an ordinance prohibiting all medical cannabis businesses. Only two of the CUPs had been legally established, which granted them the entitlement necessary to continue despite the prohibition.
On June 28, 2016, the Council adopted Resolutions 2016-06-28-1503-01 and 2016-06-28-1503-02 to place two qualified initiatives (Measures P and Q) before voters on the November 8, 2016 General Election ballot. The two initiatives sought to remove the prohibition on medical cannabis (marijuana) dispensaries, allow medical cannabis cultivation businesses within the City, and allow an increase to the business license tax on medical cannabis and marijuana-related businesses. Both measures were approved by the voters.
Measure P did three things: lifted the ban on medical cannabis dispensaries, expanded the maximum number of medical cannabis dispensaries, and allowed the establishment of medical cannabis cultivation locations. Measure P amended Chapters 5.10, 16.20, 16.80 and 16.240 of the Stockton Municipal Code (SMC) to:
• Remove the prohibition on dispensaries;
• Allow up to four (4) medical cannabis dispensaries in certain commercial and industrial zones, including the two (2) existing dispensaries;
• Allow up to four (4) cultivation sites in industrial zones;
• Impose location restrictions for dispensaries and cultivation operations, including distances from sensitive locations;
• Require a CUP, Operator Permit, and permits for all employees;
• Prohibit dispensary owners/operators from owning/operating cultivation operations within the City; and
• Prohibit cultivation owners/operators from owning/operating dispensary operations within the City.
As enacted, Measure P requires two types of permits for medical cannabis businesses: a CUP approved by the Planning Commission, and an Operator Permit approved by the Chief of Police. The CUP must be obtained prior to applying for an Operator Permit. The measure also sets zoning standards that restrict the location of dispensaries and cultivation facilities, including separation distances from sensitive land uses and from other cannabis businesses. A map that shows the areas available for these businesses, accounting for the land use limitations, is included as Attachment A - Measure P Maps.
Measure P limits the number of dispensary Operator Permits to four citywide (including the two existing dispensaries) and not more than two in any Council District. The measure operates differently from the prior permitting procedure by defining the land use requirements for a CUP and the initial RFP process is no longer a part of the process. The initial step now begins with an application for a CUP. The change in process may be a source of confusion and may explain why only two out of 60 inquirers filed a CUP application to date. Because there is no limit on the number of CUP applications, there is the potential for Community Development to issue a CUP to more operators than would be eligible for Operator Permits. If too many CUPs are approved, it could result in additional confusion, a substantial amount of unnecessary work, and delay the issuance of Operator Permits.
Proposed Changes
The public hearing and proposed change to increase the citywide limit on cannabis businesses would resolve existing confusion and afford equal opportunity to potential applicants without negative impact to current applicants. Amendments to specify the number of CUP applications that may be processed will clarify how applications will be forwarded for consideration of Operator Permits and avoid unnecessary workload. An urgency ordinance was prepared to make the changes immediately, streamline the process and resolve confusion most expeditiously. Under this process, applications for CUPs would be accepted based on the date of application submittal, and no applications in excess of the available number of Operator Permits would be accepted (Attachment B - Proposed Ordinance - Redline Version.
Government Code section 36937 provides that an ordinance may take effect immediately if it is one that is adopted for the immediate preservation of the public peace, health or safety, contains a declaration of the facts constituting the urgency, and is passed by a four-fifths vote of the City Council.
ENVIRONMENTAL CLEARANCE
These amendments are categorically exempt from environmental review pursuant to CEQA Guidelines Section 15061(b)(3) as there is nothing in this Ordinance or its implementation that could reasonably have any significant effect on the environment.
FINANCIAL SUMMARY
There are no anticipated financial impacts with this ordinance amendment.
Attachment A - Measure P Maps
Attachment B - Proposed Ordinance - Redline Version