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Home My WebLink AboutD-1 Recreational Marijuana - Proposition 64Discussion of Potential Recreational Marijuana Regulations October 3, 2016 Page 1 SCHEDULED ITEM D-1 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: TROY BUTZLAFF, ICMA-CM, CITY MANAGER FROM: MARCO MARTINEZ, CITY ATTORNEY JORDAN FERGUSON, DEPUTY CITY ATTORNEY DATE: OCTOBER 3, 2016 SUBJECT: DISCUSSION OF POTENTIAL RECREATIONAL MARIJUANA REGULATIONS IN RESPONSE TO PROPOSITION 64 ON NOVEMBER 8, 2016 ELECTION BALLOT SUMMARY: On June 28, 2016, the Secretary of State Certified Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (“AUMA”) for the November 8, 2016 ballot. If AUMA passes it would immediately legalize the possession, transport, purchase, use, and transfer of recreational marijuana for individuals 21 years of age or older. It would also legalize the cultivation of marijuana, marijuana delivery services, and recreational marijuana retail services. Currently, the City’s Municipal Code (Section 88.42.035) bans medical marijuana dispensaries, delivery services, and cultivation. Although AUMA allows local governments to regulate the cultivation, sales and delivery of recreational marijuana, these restrictions or outright bans need to be established prior to the passage of Proposition 64. Staff recommends that the City Council discuss and provide direction on potential recreational marijuana regulations to ensure the City of Azusa properly regulates these uses prior to the potential passage of AUMA. RECOMMENDATION: Staff recommends that the City Council take the following action: 1) Discuss and provide direction on potential recreational marijuana regulations. DISCUSSION: If AUMA passes, it would allow for the development of many new marijuana-related businesses, including recreational dispensaries, recreational retail services, and recreational delivery. However, AUMA also gives local governments the authority to regulate these uses. While AUMA indicates a local government cannot prevent transportation of marijuana or marijuana products on public roads, AUMA authorizes cities to Approved Council Meeting 10/3/2016 with option No. 1 Discussion of Potential Recreational Marijuana Regulations October 3, 2016 Page 2 “reasonably regulate” indoor cultivation of marijuana in private residences, ban outdoor cultivation of marijuana entirely unless it is federally legalized, and prohibit any marijuana-related business entirely. If AUMA becomes law, recreational use of marijuana will be legalized, as will recreational possession of marijuana and some level of indoor cultivation. However, even these limited uses require the City to monitor their operation. For example, allowing large-scale indoor cultivation will require the City to review its efforts to provide energy (electric and water) to these uses. Further, the City will need to review its ventilation requirements to assure that the use of pesticides and fertilizers in an enclosed space do not create chemical contamination and outdoor impacts. In addition, allowing mobile delivery services require the City to expend resources to monitor and enforce state laws, questions of patient qualification, and risks relating to the high use of large sums of cash for mobile transactions. Other unknown impacts may have to be addressed as the AUMA is implemented. Staff recommends the following: (a) the City Council discuss and provide direction on the preparation of an ordinance banning or regulating some or all of these uses; and (b) that any Ordinance regulate or ban to the extent allowable (1) personal marijuana use and cultivation, (2) medical marijuana uses, and (3) commercial marijuana uses. 1) Regulation of Personal Marijuana Uses As indicated above, passage of AUMA would legalize recreational use of marijuana. Any Ordinance passed prior to Election Day should include a provision banning personal recreational use of marijuana to the extent such use is illegal under California law. If AUMA fails, this would continue to ban all personal recreational use of marijuana in the City. The City is also allowed to ban outdoor cultivation of marijuana entirely. Alternatively, some cities are allowing outdoor cultivation with regulations such as:  Outdoor, residential cultivation so long as plants are enclosed  Property owner must approve of cultivation on the property; and  Limiting the number of plants If AUMA passes, the City cannot ban indoor cultivation of marijuana in private residences outright, but it may “reasonably regulate” such cultivation. One option would ban all indoor cultivation entirely to the extent allowed by California law, and ban indoor cultivation in all structures that are not private residences entirely. This option would also allow for indoor cultivation in private residences only after the individual has obtained an Indoor Cultivation Permit, which would allow the City to place building code, fire code, and public safety restrictions on cultivation occurring in private residences. Alternatively, the City could decline to regulate indoor cultivation entirely, or propose other regulations, such as:  Indoor cultivation for personal use only  Indoor cultivation for commercial use with a business license  Indoor cultivation with an alternative set of public welfare regulations imposed, but no permit required Discussion of Potential Recreational Marijuana Regulations October 3, 2016 Page 3 2) Regulation of Medical Marijuana Uses The Medical Marijuana Regulation and Safety Act (“MMRSA”) is left largely intact by AUMA, and so the potential for medical marijuana uses, including qualified patient or primary caregiver cultivation, still exists. One regulatory option would impose the same regulations on medical marijuana cultivation as on recreational cultivation and would ban all collectives, cooperatives, dispensaries, delivery services, operators, establishments, and providers. Alternatively, the City could:  Create looser regulations for those who have a verified medical need to cultivate marijuana indoors or outdoors  Allow dispensaries but limit the number allowed in the jurisdiction  Allow dispensaries but impose separation requirements from parks, schools, churches, and other dispensaries  Limit dispensaries to a specified zoning designation  Impose security requirements including limiting the hours of operation of any dispensaries and prohibiting loitering. 3) Regulation of Commercial Marijuana Uses If AUMA becomes law, it will likely lead to the creation of a variety of new commercial marijuana ventures, including recreational retail services. One regulatory option would ban all commercial marijuana activity, including commercial delivery, commercial cultivation, commercial manufacturing, commercial testing, and any commercial dispensaries or recreational retailers. Alternatively, the City could allow some or all of these uses, with whatever regulations the City sees fit. Some other options include the following:  Allowing commercial cultivation with a local tax imposed on growth  Allowing some retailers with zoning limitations on location or number  Allowing delivery to originate or terminate in the City Staff recommends that the City Council discuss and provide direction to staff concerning the appropriate amount of regulation of these uses. OPTIONS FOR REGULATION: 1. Maintain the existing marijuana regulations in Section 88.42.035, but risk the establ ishment of uses that may later become non-conforming. 2. Draft an ordinance banning all marijuana dispensaries, delivery services, and outdoor cultivation, and requiring a permit for indoor cultivation. 3. Draft an ordinance allowing some marijuana businesses, like medical delivery or recreational delivery, and prohibiting dispensaries, while regulating or banning outdoor cultivation and banning indoor cultivation. 4. Draft an ordinance banning all marijuana businesses, but declining to regulate either outdoor and indoor cultivation or just indoor cultivation. Discussion of Potential Recreational Marijuana Regulations October 3, 2016 Page 4 FISCAL IMPACT: There is no known fiscal impact at this time. Prepared by: Reviewed and Approved: Jordan Ferguson Marco Martinez Deputy City Attorney City Attorney Reviewed and Approved: Reviewed and Approved: Louie F. Lacasella Troy L. Butzlaff, ICMA-CM Management Analyst City Manager