O2556City Council Meeting: October 24, 2017 Santa Monica, California
ORDINANCE NUMBER 7-6S7d (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
SETTING FORTH REGULATIONS FOR COMMERCIAL MEDICINAL AND
NONMEDICINAL CANNABIS USES
WHEREAS, the State of California has hada long history of regulating medicinal
cannabis uses within the State; and
WHEREAS, in 1996, California voters approved Proposition 215 (codified at Health
and Safety Code section 11362.5 and titled the "Compassionate Use Act of 1996"), which
provides criminal immunity for patients and primary caregivers for the cultivation and
possession of cannabis if a doctor has recommended the cannabis for medical purposes;
and
WHEREAS, in 2004, Senate Bill 420 was enacted (codified at Health and Safety
Code section 11362.7 et seq. and titled the "Medical Marijuana Program Act") to clarify
the scope of the Compassionate Use Act of 1996; and
WHEREAS, the Medical Marijuana Program Act allows cities and other governing
bodies to adopt and enforce laws consistent with its provisions; and
WHEREAS, neither the Compassionate Use Act of 1996 nor the Medical Marijuana
Program Act provided an effective statewide regulatory system for the medicinal cannabis
industry, and this lack of uniform regulation created uncertainty about the legality of
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medicinal cannabis activities and endangered the safety of end users, who have not had
the benefit of a monitored supply chain for medicinal cannabis, quality control, testing or
labeling requirements; and
WHEREAS, in 2015, Assembly Bills 243 and 266 and Senate Bill 643 were
enacted (codified at Business and Professions Code section 19300 et seq. and titled the
"Medical Marijuana Regulation and Safety Act") and provided for enhanced statewide
marijuana regulations; and
WHEREAS, Assembly Bills 243 and 266 and Senate Bill 643 also amended
provisions of the Medical Marijuana Program Act related to the cultivation of medical
marijuana; and
WHEREAS, In November 2016, voters approved Proposition 64, the Adult Use of
Marijuana Act (AUMA). Under Proposition 64, adults 21 years of age or older may legally
grow, possess, and use cannabis for nonmedicinal purposes, with certain restrictions;
and
WHEREAS, beginning on January 1, 2018, AUMA authorizes the sale and
distribution of cannabis for nonmedicinal purposes through a licensed business; and
WHEREAS, in 2017, the State legislature enacted Senate Bill 94 which created
the Medicinal and Adult -Use Cannabis Regulation and Safety Act (MAUCRSA) which
establishes a robust set of regulations for the medicinal and adult nonmedicinal use
cannabis markets, aligns all permit types, and authorizes certain state agencies to
establish rules governing cannabis operations and to implement the law; and
WHEREAS, MAUCRSA continues to preserve local control over cannabis -related
uses by (1) requiring medicinal cannabis businesses to obtain both a state license and a
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local license or permit, if required, to operate legally in California, (2) terminating the ability
of a medicinal cannabis business to operate if its local license or permit is terminated, (3)
continuing to authorize local governments to enforce local cannabis -related laws, (4)
providing for penalties for unlicensed activities, and (5) expressly protecting local
licensing practices, zoning and business regulation laws, and local actions taken under
the constitutional police power; and
WHEREAS, consistent with State actions, the City Council, when adopting its
comprehensive update to its Zoning Ordinance, contemplated authorizing two medicinal
cannabis retailers within the City to serve local needs; and
WHEREAS, the Council, after reviewing public input, further directed staff to
consider authorizing light medicinal cannabis manufacturing facilities within the City; and
WHEREAS, providing for light manufacturing of medicinal cannabis products
provides greater access to patients in need while protecting public health, safety and
general welfare by prohibiting manufacturing that uses volatile solvents; and
WHEREAS, the City has a compelling interest in protecting the public health,
safety, and welfare of its citizens, residents, visitors, and businesses by developing and
implementing strict regulations governing the performance and operating standards for
cannabis -related commercial activities; and
WHEREAS, the City has a compelling interest in protecting the public health,
safety, and welfare of its citizens, residents, visitors, and businesses by selecting the most
qualified permitees and licensees for commercial uses related to medicinal cannabis; and
WHEREAS, local regulation of medicinal cannabis activities within the City is
necessary to protect the public health, safety, and general welfare of the community, and
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is in the interest of qualified patients who obtain, possess, and use marijuana for medicinal
purposes; and
WHEREAS, commercial nonmedicinal cannabis uses remain untested within the
State of California, have the potential to create serious public health and safety concerns,
and have comparably fewer and less significant benefits than medicinal cannabis uses;
and
WHEREAS, it is prudent to continue to prohibit commercial nonmedicinal adult
cannabis uses while continuing to study the impacts of such uses on local communities.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES ORDAIN AS FOLLOWS:
SECTION 1. TITLE, WORDS AND PHRASES
This Ordinance shall be known as the City of Santa Monica Cannabis Ordinance.
The terms, phrases, and words used in this Ordinance shall be construed in compliance
with the definitions set forth in Section 26001 of the Business and Professions Code.
SECTION 2. Section 6.200 of the City of Santa Monica Municipal Code is hereby
added to read as follows:
Chapter 6.200 Commercial Cannabis
6.200.010 Purpose.
Chapters 6.200, 6.201, 6.202, and 6.203 of this Code shall be known as the City
of Santa Monica Cannabis Ordinance (hereinafter this "Ordinance"). The City has a
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compelling interest in protecting the public health, safety, and welfare of its citizens,
residents, visitors, and businesses by developing and implementing strict performance
and operating standards for cannabis -related commercial activities so that only the most
qualified operators of such businesses will operate within the City. The purpose of this
Ordinance is to effectuate these compelling interests by establishing regulatory
requirements for commercial cannabis activities within the City.
6.200.020 Definitions.
For purposes of this Chapter, the following words shall have the following
meanings:
(a) "Cannabis" shall have the same meaning as set forth in Business &
Professions Code § 26001 as the same may be amended from time to time.
(b) "Cannabis Product' shall have the same meaning as set forth in Section
11018.1 of the Health and Safety Code as may be amended from time to time.
(c) "Commercial Cannabis Activity" shall have the same meaning as that set
forth in Business & Professions Code § 26001 as the same may be amended from time
to time.
(d) "Cultivation" shall have the same meaning as set forth in Business &
Professions Code § 26001 as the same may be amended from time to time.
(e) "Delivery" shall have the same meaning as set forth in Business &
Professions Code § 26001 as the same may be amended from time to time.
(f) "Director" shall mean the Director of Planning and Community Development
or his or her designee.
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(g) "Manufacture" shall have the same meaning as set forth in Business &
Professions Code § 26001 as the same may be amended from time to time.
(h) "Manufacturer" shall have the same meaning as set forth in Business &
Professions Code § 26001 as the same may be amended from time to time.
(i) "Medicinal Cannabis," "Medicinal Cannabis Product," and "Cannabis
Product" shall have the same meanings as set forth in Business & Professions Code §
26001 as the same may be amended from time to time.
(j) "Permitee" means a person who has been issued a permit under this
Chapter.
(k) "Retailer" shall have the same meaning as set forth in Business &
Professions Code § 26070 as the same may be amended from time to time.
6.200.030 Administrative Regulations.
(a) The Director may adopt administrative regulations that are consistent with
the purposes of this Chapter, to implement the provisions of this Ordinance, including, but
not limited to, the timely exercise of rights granted by this Ordinance, the safe and lawful
conduct of all commercial cannabis activities, permit application procedures, and permit
standards.
(b) No person shall fail to comply with the City's administrative regulations. Any
violation of any administrative regulation issued pursuant to this Section shall constitute
a violation of this Code and shall subject the violator to the penalties set forth in this
Chapter.
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6.200.040 Conditions imposed on permit.
(a) The City may impose conditions, as part of any permit issued pursuant to
this Ordinance, if the conditions are reasonably necessary to effectuate the purposes of
this Ordinance, protect the peace and tranquility of any residential area, mitigate traffic
impacts, protect other uses in the area, or protect the health, welfare, and safety of the
public.
(b) A permittee shall comply with all conditions that are imposed as part of the
permit pursuant to subsection (a) of this Section.
(c) Any violation of any permit condition shall constitute a violation of this Code
and shall subject the violator to the penalties set forth in this Chapter.
6.200.060 Insurance requirements.
(a) Before a permit is issued pursuant to this Ordinance, the applicant shall furnish,
and maintain at all times while the permit is in effect, public liability insurance in amounts
as determined by the City's Risk Manager and name the City of Santa Monica as
additional insured.
(b) The insurance policy shall be endorsed to state that coverage shall not be
cancelled except after thirty days prior written notice by certified mail has been given to
the City.
(c) If any insurance policy issued to a permittee is cancelled for any reason, the
permit issued under this Ordinance is automatically suspended. In order to reinstate the
permit, the permittee shall provide a new certificate and policy of insurance to the City.
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(d) A permittee shall maintain in force and effect at all times while the permit is in
effect Workers' Compensation insurance as required by law.
6.200.070 Conformance with applicable laws.
All permittees shall operate in full compliance with all applicable State laws.
Nothing in this Ordinance is intended to authorize the operation of any commercial
cannabis activity in a manner contrary to applicable State laws.
6.200.080 Enforcement.
(a) Any person who violates any provision of this Ordinance shall be guilty of
an infraction, which shall be punishable by a fine not exceeding $250.00, of a
misdemeanor, which shall be punishable by a fine not exceeding $500.00 per violation or
by imprisonment in the County Jail for a period not exceeding six months or by both such
fine and imprisonment. Violation of any provision of this Ordinance shall be considered
strict liability; accordingly, the prosecution shall not be required to prove criminal intent or
that the violator meant to violate any provision of this Ordinance.
(b) Any person who violates any provision of this Ordinance shall be subject to
administrative fines and administrative penalties pursuant to Chapter 1.09 and Chapter
1.10 of this Code.
(c) Any person convicted of violating this Ordinance in a criminal case, or found
to be in violation of this Ordinance in a civil or administrative case brought by a law
enforcement agency, shall be ordered to reimburse the City and other participating law
enforcement agencies their full investigative costs.
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(d) Any commercial cannabis activity conducted or maintained contrary to this
Ordinance may be, and the same is hereby declared to be, unlawful as defined in Section
1.08.010 of this Code and a public nuisance as defined in this Code and in Penal Code
Section 373a. The City may, in addition to, or in lieu of, prosecuting a criminal action
hereunder, pursue any available civil remedy, including, but not limited to an action or
preceding for the abatement, removal, and enjoinment of the operation of the commercial
cannabis activity and for reimbursement of the costs of such abatement, removal and
enjoinment.
6.200.090 Grounds for revocation, suspension or denial.
(a) Any permit authorized pursuant to this Ordinance may be revoked, suspended,
or denied by the Director based upon any of the following grounds:
(1) Making one or more false or misleading statements, or material
omissions on the permit application or during the application process;
(2) Failing to provide information requested or required by the City;
(3) Any condition set forth in California Business and Professions Code
Section 26057;
(4) Multiple violations of any conditions of a permit issued pursuant to
this Ordinance;
(5) Repeated failure to comply with applicable laws or regulations;
(6) Operating or proposing to operate in a manner that endangers the
health, safety or welfare of the community.
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SECTION 3. Chapter 6.201 of the City of Santa Monica Municipal Code is hereby
added to read as follows:
Chapter 6.201 Medicinal Cannabis Retailer
6.201.010 Permit required.
(a) The City Council finds that Medicinal Cannabis Retailing requires specific
regulation, in order to maintain the public health, safety and welfare. No person shall
operate, or cause to be operated, a commercial Medicinal Cannabis Retail use without
having first obtained a Medicinal Cannabis Retailer permit and a business license from
the City.
(b) In accordance with the City's Zoning Ordinance, the City may, in its
discretion, award no more than two active permits for the operation of Medicinal Cannabis
Retail uses within the City.
(b) The permit(s) shall be awarded through a competitive process initiated
through a request for applications issued by the City. Permit applications shall be
evaluated based upon objective criteria including: experience; financial wherewithal and
stability; insurance; familiarity and capability of operating in the City of Santa Monica;
proposed community benefits; relevant record of the applicant or owner's violations of
Federal, State or local law, or rules and regulations of local jurisdictions; and any other
objective criteria established by administrative regulation.
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6.201.020 Permit application requirements.
(a) All permit applications shall be completed on a form designated by the City,
and signed by the applicant under penalty of perjury.
(b) Renewal applications shall be filed a minimum of thirty days prior to the
expiration of any existing permit.
(c) All applicants shall provide the following information with their applications:
(1) The names, residence and business addresses of all officers,
persons and entities having any share of ownership of the applicant or the
proposed operation, including but not limited to ownership interest in the overall
operation, inventory, equipment or real estate.
(2) The names and addresses of any parent or subsidiary of the
applicant, namely, any other business entity owning or controlling the applicant in
whole or in part, or owned or controlled in whole or in part by the applicant, and a
statement describing the nature of any such parent or subsidiary business entity.
(3) Names and address of any or all persons responsible for the
activities of the retailer, including principals, officers, directors, managers and
employees.
(4) Copies of articles of organization or incorporation.
(5) Detailed financial information, including information on existing and
proposed loans to the applicant for the proposed operation and the names and
contact information for the lenders.
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(6) A description of the proposed plan of operation, including the
proposed business plan, a detailed description of the business's regulatory
compliance program, and intent to operate as non-profit or for-profit business.
(7) A detailed description of any plans for on-site cultivation, including a
detailed description of chemical and water use.
(8) A detailed description of any community benefits created by the
proposed operation.
(9) If known, the name and address of the owner and owner's
representative of the real property upon which the retail establishment will be
located. If no lease has been signed, a list of the names and addresses of any
owner and owner representatives for properties related to which bona fide leasing
discussions have begun.
(10) Authorization to conduct background checks on all individuals
associated with the operation of the retailer, including but not limited to all
principals, officers, directors, managers and employees.
(11) Names, addresses, and complete licensing information for all current
and anticipated suppliers of cannabis products proposed to be sold.
(12) Names, addresses, and complete licensing information for all current
and anticipated cannabis testing facilities to be used.
(13) A listing of all other cannabis -related business locations owned or
operated by the applicant, including any person with any financial interest in any
such cannabis -related operation, along with copies of any operating permits for all
locations.
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(14) Any other requirements set forth by administrative regulation.
6.201.030 Permit application selection
(a) Each Medicinal Cannabis Retailer permit application shall first be examined
by the Director to determine if the applicant is qualified. An applicant is qualified if the
application meets all standards set forth in this Ordinance and administrative regulations,
and is not subject to denial pursuant to Section 6.200.090 of this Code.
(b) The Director shall establish a committee to evaluate and provide to the
Director recommendations and a ranking of all qualified applicants based on established
objective criteria set forth by this Ordinance and administrative regulation, including
background checks completed by the Police Department.
(c) The Director shall review de novo the committee's recommendations, along
with any other information the Director deems relevant, and establish the final rankings
of the qualified applicants. The Director may request additional information from either
the committee, the Police Department, any applicant, or any other source that would
assist in determining the final rankings.
(d) The highest -ranked applicant(s), corresponding to the number of positions
available, shall be awarded with a Preliminary Selection Letter, stating the City's intent to
issue a Medicinal Cannabis Retail permit, subject to the applicant complying with all other
permit conditions and requirements. The Preliminary Selection Letter shall not guarantee
final issuance of a permit, and the Letter shall expire if not timely exercised. If there is a
tie in the rankings, a lottery shall be used to establish the final rankings for any applicants
that achieved the same score. If an applicant who is issued a Preliminary Selection Letter
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is disqualified or withdraws prior to the expiration of the ranking, the next applicant on the
ranking may be issued a Preliminary Selection Letter.
(e) Any applicant in receipt of a Preliminary Selection Letter may proceed to
seek all other permits and approvals, including the City's land -use approvals, the City's
Medicinal Cannabis Regulatory Permit pursuant to this Ordinance, and a City Business
License.
(f) Any applicant may appeal the Director's qualification or ranking
determination, with respect to that applicant, to a Hearing Examiner for consideration
pursuant to the procedures set forth in Chapter 6.16 of this Code.
(1) The Hearing Examiner shall review the Director's qualification
determination de novo and shall render a final decision regarding qualification.
(2) The Hearing Examiner shall review the Director's ranking decisions
based on an abuse of discretion standard. The Hearing Examiner shall affirm the
Director's ranking decisions if he or she finds, based on a preponderance of the
evidence, that the City conducted the ranking process in compliance with all
applicable laws and that the Director did not act in an arbitrary or capricious
manner. If otherwise, the Hearing Officers shall remand the matter back to the
Director so that a new ranking process can be completed.
(g) Any final ranking results shall expire after 12 months. The Director may
extend any final ranking result by up to 12 months, if the Director finds that the extension
is appropriate given the City's progress in permit processing. Upon expiration of the
ranking results or the lack of qualified applicants, the City may re-initiate the ranking
process set forth in this Chapter.
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6.201.040 Regulatory Permit
(a) The City shall issue a Medicinal Cannabis Retailer Regulatory Permit to any
applicant who:
1) is in possession of a valid Preliminary Selection Letter and remains
in substantial compliance with the original proposal;
2) has obtained all applicable City land -use approvals;
3) has a valid medicinal marijuana retailer license from the State of
California;
4) has paid all required fees;
5) meets all applicable standards set forth in this Code, administrative
regulations and any other applicable laws; and
6) whose application is not subject to denial pursuant to Section
6.200.090 of this Code or any other applicable laws or regulations.
(b) The Medicinal Cannabis Retailer Regulatory Permit shall expire if it is not
timely exercised.
SECTION 4. Section 6.202 of the City of Santa Monica Municipal Code is hereby
added to read as follows:
Chapter 6.202 Medicinal Cannabis Light Manufacturer
6.202.010 Permit required.
The City Council finds that Medicinal Cannabis Manufacturing requires specific
regulation, in order to maintain the public health, safety and welfare. No person shall
operate, or cause to be operated, a commercial medicinal cannabis manufacturing use
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without having first obtained a Medicinal Cannabis Light Manufacturer permit and
business license from the City.
6.202.020 Permit application requirements.
(a) All permit applications shall be completed on a form designated by the City,
and signed by the applicant under penalty of perjury.
(b) Renewal applications shall be filed a minimum of thirty days prior to the
expiration of any existing permit.
(c) All applicants shall provide the following information with their applications:
(1) The names, residence and business addresses of all officers,
persons and entities having any share of ownership of the applicant or the
proposed operation, including but not limited to ownership interest in the overall
operation, inventory, equipment or real estate.
(2) The names and addresses of any parent or subsidiary of the
applicant, namely, any other business entity owning or controlling the applicant in
whole or in part, or owned or controlled in whole or in part by the applicant, and a
statement describing the nature of any such parent or subsidiary business entity.
(3) Names and address of any or all persons responsible for the
activities of the manufacturer, including principals, officers, directors, managers
and employees.
(4) Copies of articles of organization or incorporation.
(5) A copy of the applicant's application to the State for the proposed
manufacturing operation.
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(6) Authorization to conduct background checks on all individuals
associated with the business, including but not limited to including principals,
officers, directors, managers and employees.
(7) Any other information required by administrative regulation.
6.202.030 Regulatory Permit
The City shall issue a Medicinal Cannabis Light Manufacturer Regulatory Permit
to any applicant who
1) has a valid medicinal marijuana manufacturing license from the State
of California;
2) has obtained all City land -use approvals authorizing the commercial
Medicinal Cannabis Light Manufacturing use;
3) has paid all required fees;
4) meets all applicable standards set forth in this Code, administrative
regulations and any other applicable laws; and
5) whose application is not subject to denial pursuant to Section
6.200.090 of this Code or any other applicable laws or regulations.
SECTION 5. Chapter 6.203 of the City of Santa Monica Municipal Code is hereby
added to read as follows:
Chapter 6.203 Commercial Nonmedicinal Cannabis Uses
6.203.010 Commercial Nonmedicinal Uses Prohibited.
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It shall be unlawful to undertake, establish, operate, maintain, or permit any
Commercial Nonmedicinal Cannabis use in the City. No use permit, business license,
variance, building permit, or any other entitlement, license, or permit, whether
administrative or discretionary, shall be approved or issued. The possession of a state
license for Commercial Nonmedicinal Cannabis use shall not be sufficient to authorize
the operation of such a use within the City.
SECTION 6. Any provision of the City of Santa Monica Municipal Code or
appendices thereto, inconsistent with the provisions of this Ordinance, to the extent of
such inconsistencies and no further, are hereby repealed or modified to that extent
necessary to effect the provisions of this Ordinance.
SECTION 7. If any section, subsection, sentence, clause, or phrase of this
Ordinance is for any reason held to be invalid or unconstitutional by a decision of any
court of any competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby declares that it would have
passed this Ordinance, and each and every section, subsection, sentence, clause, or
phrase not declared invalid or unconstitutional without regard to whether any portion of
the Ordinance would be subsequently declared invalid or unconstitutional.
SECTION 8. The Mayor shall sign and the City Clerk shall attest to the passage of
this Ordinance. The City Clerk shall cause this Ordinance, or a summary thereof to be
published once in the official newspaper within 15 days after its adoption. This Ordinance
shall become effective thirty (30) days from the second reading of the ordinance.
APPROVED AS TO FORM:
LANE DILG
City Attorney
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Approved and adopted this 24th day of October, -20117..
Ted Winterer, Mayor
State of California )
County of Los Angeles ) ss.
City of Santa Monica )
I, Denise Anderson -Warren, City Clerk of the City of Santa Monica, do
hereby certify that the foregoing Ordinance No. 2556 (CCS) had its introduction
on October 10, 2017, and was adopted at the Santa Monica City Council meeting
held on October 24, 2017, by the following vote:
AYES: Councilmembers Himmelrich, McKeown, O'Connor, O'Day, Vazquez,
Mayor Pro Tem Davis, Mayor Winterer
NOES: None
ABSENT: None
ATTEST:
Denise Anderson -Warren, City Clerk Date
A summary of Ordinance No. 2556 (CCS) was duly published pursuant to
California Government Code Section 40806.