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COMMISSION USE PERMIT TO ESTABLISH A CANNABIS RETAIL STOREFRONT IN AN EXISTING INDUSTRIAL BUILDING AT 1137 SOUTH STOCKTON STREET (APN 163-260-45) (APPLICATION NO. P23-0255)
recommended action
RECOMMENDATION
Staff recommends that the Planning Commission adopt a resolution:
1. Finding that the project is categorically exempt from the CEQA, pursuant to CEQA Guidelines Section 15301(a) (Existing Facilites), since the project will occupy an existing industrial building facility and no expansion of use is proposed.
2. Approving a Commission Use Permit to allow the establishment of a proposed cannabis retail storefront business within an existing industrial building, in accordance with the findings and subject to the conditions found in the Proposed Resolution.
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Summary
The applicant, Embarc Stockton LLC/Lauren Carpenter, submitted a Commission Use Permit (CUP) application to establish a cannabis retail storeront business on an Industrial, Limited (IL) zoned parcel, located at 1137 South Stockton Street. The proposed cannabis retail storefront would occupy an existing and vacant 3,750 square foot industrial building on a 1.24-acre site.
The applicant participated in the 2023 Commercial Cannabis Lottery program under application number CL23-00009 and was awarded the opportunity to apply for the one annual Cannabis Retail Storefront CUP as a general pool applicant.
The application was thoroughly evaluated against the location restrictions in SMC Section 16.80.195(A)(6) and was found to be in compliance. Additionally, minor site changes with development of the Project conform to the development standards in the SMC.
As conditioned in the accompanying Resolution, the project will comply with all applicable provisions of the Development Code and Municipal Code, including the location requirements outlined in SMC Section 16.80.195(A)(6) which require separation from sensitive uses (i.e. residential zones, parks, schools, etc.).
Further, the proposed project aligns with the following General Plan 2040 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.
As mentioned above, the Project is consistent with the Cannabis Ordinance (SMC 16.80.195), meets General Plan policies, and all required findings for a Use Permit can be made in the affirmative. Therefore, staff recommends the Planning Commission approve the requested Use Permit, subject to conditions.
DISCUSSION
Background
Voters passed Measures P and Q on November 8, 2016, removing the prohibition on medical cannabis dispensaries, and allowing medical cannabis cultivation businesses within the City.
On November 7, 2017, the City Council adopted an ordinance making changes relative to the City’s medical cannabis businesses permitting program; including bans on non-medical cannabis businesses, outdoor personal cultivation, and any cannabis business engaged in delivery, distribution, manufacturing or testing of the product, and certain restrictions on indoor cultivation.
On September 18, 2018, the City Council adopted an Ordinance and Resolution, allowing existing cultivation sites to grow and current dispensaries (storefront retail) to sell adult-use cannabis as a by-right use (no amendment to existing Use Permits) in addition to medical cannabis. Council also increased the number of allowable dispensaries (storefront retail) to five (5).
On March 5, 2019, City Council approved changes to the City’s cannabis regulatory program, via ordinance, to:
• Align State/local regulations
• Allow additional business types
• Establish a method to control the pace of new business openings
• Establish a method to address historic racial inequities.
On July 16, 2019, City Council approved additional Code amendments that:
• Allowed additional by-right allowances for eight (8) existing cannabis businesses (five (5) retail storefront and three (3) cultivator)
• Amended location requirements (i.e. distance from sensitive uses) to align with State requirements.
• Adjusted the cannabis tax rate structure to reflect the current market.
On March 1, 2022, the City Council adopted an Ordinance codifying the following:
• Amending business license payment dates
• Adding a cap on the number of retailer operator (storefront) permits
• 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.)
• Equity Program updates
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
a. One storefront retailer permit
b. One microbusiness permit
General Pool
a. One storefront retailer 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, Embarc Stockton LLC/Lauren Carpenter, qualified as a general pool applicant and was an awarded a lottery win for the retail storefront permit in the 2023 Commercial Cannabis Lottery program under application CP23-00009. This is one of two retail storefront permits awarded in the 2023 lottery.
Present Situation
The applicant requests approval to operate a cannabis retail storefront location within an existing and vacant 3,750+/- square foot warehouse building at 1137 South Stockton Street. (Attachment A - Location Map). The site has a General Plan designation of Industrial (Attachment B - General Plan Land Use Map) and a zoning designation of Industrial, Limited (IL). (Attachment C - Zoning Map)
The site is bound to the north, south, east and west by industrial uses such as truck trailer storage and repair uses.
Per SMC Section 16.80.195.A (Retail Operator Permit - Land Use Process) such use shall be reviewed by the City based on the Use Permit after being awarded a lottery spot from either the general pool or equity pool after submitting intent to apply. The applicant was awarded a spot in the general pool under application CL23-00009 (Attachment D - Cannabis Lottery Win Letter). The proposed Project is consistent with the retail storefront requirements in accordance with SMC 16.80.195.A.
The proposed cannabis retail storefront business includes 3,750 square feet of retail space inside the building, comprised of 1,455 square feet of sales floor area, and remaining square footage for office and ancillary use. (Attachment E - Project Description and Plans) The existing building is located in an industrial area.
The business will operate between 7:00 a.m. and 8:00 p.m. Monday through Sunday. The applicant will employ approximately 17 full-time employees, plus one security guard on-site 24 hours a day. No extraction activities are proposed.
If the Project is approved, a formal security plan and lighting plan will be submitted and reviewed by the Police Department as part of the required Operators Permit application process to ensure safe operations.
The proposed business will provide 12 on-site parking spaces, of which 6 spaces are required by the Code for the retail portion of the business and an additional space required for ancillary uses such as office and storage space, for a total of seven (7) required spaces. The proposed spaces are adequate to service the proposed business.
Staff Analysis
To permit the proposed uses, the Planning Commission is asked to consider approval of a Commission Use Permit. The request and staff analysis are provided below.
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.
Staff has confirmed, to the best of our knowledge, that there are no existing residential zones or uses within 300-feet of the Project property lines. A Motel 6 is in operation south of the project, but beyond the 300-foot radius.
b. At the time the land 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.
Staff has confirmed that, to the best of our knowledge, there are none of the listed uses above within 1000-feet of the Project property lines.
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, RDM, and/or RCM microbusiness operator. Existing indicates the possession of an approved use permit.
Staff has confirmed that there are none of the above listed cannabis businesses types within 1,000 feet of the Project property lines. The closest cannabis related business is at 1621 Navy Drive, which is a non-storefront, delivery only, location and is approximately 2,640-feet as the crow flies. (Attachment F - Approved Cannabis Business Locations)
Commission Use Permit
A Commission Use Permit is required for a cannabis retail storefront business. The operations of the proposed use would be carried out within the project site. The following analysis addresses the proposed land use.
SMC Section 16.168.050.A requires seven findings of fact to grant CUP approval. Each finding and staff’s analysis 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 andwill 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 be situated in an existing building situated near several other industrial uses, primarily larger truck trailer storage uses. It would fill an existing unoccupied/vacant site 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 microbusinesses 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 vacant building in an industrial area adjacent to other warehouse 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 private driveway off S Stockton 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.
PUBLIC COMMENT
The applicant intends to hold a community meeting on April 3, 2024. Staff will be prepared to address the outcome of the community meeting at the public hearing.
Notice for this item was published in the Record on April 1, 2024, and a mailed meeting notice has been sent to all property owners within a 300-foot radius of 1137 South Stockton Street on April 1, 2024.
Attachment A - Location Map
Attachment B - General Plan Land Use Map
Attachment C - Zoning Map
Attachment D - Cannabis Lottery Win Letter
Attachment E - Project Description and Plans
Attachment F - Approved Cannabis Business Locations
This report was prepared by Nicole D. Moore, Contract Planner, (209) 227-3138; nicole.moore.CTR@stocktonca.gov.