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HomeMy WebLinkAboutPresentation- #1 IiALL C T - I I 1 5-1 Commercial Cannabis Ordinance Updates July 29 , 2022 Work Study Session Cannabis Ordinance Updates Study Session Slide 1 Planning and Building July 29, 2022 Recommendations • Review background and context • Discuss May 3, 2022 draft ordinance changes • Provide feedback on additional ordinance changes based on Council , industry, and stakeholder feedback Cannabis Ordinance Updates Study Session Slide 2 Planning and Building SANW ANAJuly 29, 2022 Background and Context Cannabis Ordinance Updates Study Session Slide 3 Planning and Building July 29, 2022 Background ................................................................................................................................................................................................. • Santa Ana's regulatory program in cannabis began in 2014 with voter approval of Measure 66 • In 2016, California voters approved Proposition 64 , allowing expanded commercial cannabis business opportunities • City Council approved regulations for adult-use retail in November 2017, followed by regulations for testing , manufacturing , distribution , and cultivation in early 2018 • Up to 30 retail storefronts allowed , and no cap on non-retail business types Cannabis Ordinance Updates Study Session Slide 4 Planning and Building July 29, 2022 Context ................................................................................................................................................................................................. • The cannabis industry commenced legalized operations in Santa Ana in 2014 and continues to evolve • Since then, City staff have routinely brought forward ordinance updates for consideration by the City Council • Updates are required to maintain: — Consistency with State law, and — Santa Ana's competitive environment and leadership in the cannabis industry • Staff continues to stay current in the industry trends and have established a streamlined process with State licensing staff to ensure a safe and efficient program Cannabis Ordinance Updates Study Session Slide 5 Planning and Building July 29, 2022 Amendments Previous changes proposed in May 3, 2022 staff report and ordinance, and new feedback received Cannabis Ordinance Updates Study Session Slide 6 Planning and Building SANTA ANAJuly 29, 2022 Amendments ................................................................................................................................................................................................. • The May 3, 2022 draft identified regulatory and financial topics • Regulatory amendments include: — Standardizing community benefits — Updating cannabis zones map to expand eligible areas — Sunsetting the Measure BB waitlist and increasing retail storefronts to 35 — Allowing consumption lounges and temporary events — Administrative/procedural updates and consolidation of all cannabis regulations into Chapter 40, including live scan requirements • Financial amendments include: — Definition and category updates, and administrative amendments to address shared manufacturing facilities and vertically & horizontally-integrated businesses — Supply-side (non-retail) tax rates Cannabis Ordinance Updates Study Session Slide 7 Planning and Building July 29, 2022 RegulatoryAmendments No further direction needed ................................................................................................................................................................................................. . . Administrative/procedural updates and No further direction needed. 41 consolidation of all cannabis regulations into Chapter 40 Live scan requirements for employees No further direction needed. Feedback was provided on how this requirement affects business operations, and draft ordinance will be modified to remove live scan requirements for employees. Relocation of cannabis retail stores No further direction needed. Feedback has been received on SR-55 freeway widening impacts and competitiveness. Sunset the Measure BB waitlist No further direction needed. Ordinance to require City to provide waitlisted entities ample notice and information on how to submit an application for a new storefront. t:annapis urainance upaaies cauay Session Slide 8 Planning and Building July 29, 2022 RegulatoryAmendments No further direction needed ................................................................................................................................................................................................. . . nirection Consumption lounges and temporary No further direction needed. Council, events industry, and staff are supportive of allowing such activities, subject to responsible regulation and practices. Outdoor smoking and number and types of No further direction needed. Feedback was temporary events, including festivals provided to allow outdoor smoking subject to odor control and to increase the number and category of onsite events and to include festivals. The draft ordinance will be modified to address these items. Requiring pending/relocated retail No further direction needed; draft ordinance businesses to open within specified will be modified to establish required timeframe timeframe for all pending/relocated retail storefronts to open within 180 days of permit issuance. t annabis Ordinance Updates Study Session Slide 9 Planning and Building July 29, 2022 RegulatoryAmendments Additional direction needed ................................................................................................................................................................................................. . .&a.- Direction Community benefits obligations Direction needed— staff and industry support streamlining community benefit requirements. Feedback on obligations, measurable performance metrics, and in lieu fee option is mixed. Social Equity and Tax Credits/Rebates Direction needed— Original draft proposed staff returning with social equity proposals within 2 years of ordinance adoption. Feedback from labor stakeholders and various councilmembers is to provide for a tax credit program for qualified employers, qualified employees, equity employees, job/skills creation, incentives, and similar features. Cannabis Ordinance Updates Study Session Slide 10 Planning and Building July 29, 2022 RegulatoryAmendments Additional direction needed ................................................................................................................................................................................................. F qv����g nmr Ctinn Additional retail storefronts Direction needed— staff recommend allowing up to 5 additional storefronts, but Council and industry feedback is mixed on whether the additional licenses are necessary. Updating cannabis zone map Direction needed — staff and industry are supportive of a reduction of the residential/schools/parks buffer from 1,000 feet to 600 feet, but Council feedback is mixed on sensitive land uses and how much to reduce the buffer. Cannabis Ordinance Updates Study Session Slide 11 Planning and Building July 29, 2022 HjRlS hx! Hg, [ImWamer' r r' WARNER AV r 1 7 SEGERSTRONI AV m w a _ IRA hop - !LMalert3! M rs H•x[VT MACARTHUR BL GI Ce15Vi Chap¢I H.H.p, �VIa1l JrrxL a 'AD 1,aQO filar-u,anz �I�rn�nl sz�t .wcemr r+c ueece mn::F c•,vv cry d'�I.w�e-nnsncn � 4 IA SUNFLOWER AV — --- — — — Buffer Maps Comparison: Yellow (Existing) and Gray (Proposed) Harbor Boulevard Industrial Area Cannabis Ordinance Updates Study Session Slide 12 Planning and Building July 29, 2022 rDYER,RD! WARNER AV LL Delhl Park Sac le6ack King Y�r t�. Legend Schools Parks o saa L'wo 600 ft Buffer from Parks&Residential Feel 1000 it Buffer from Schools ` ,�,, rw.w eRMw�ase=xrama ua Current 1000 ft Buffer(Parks, yy4 i ��' �+n'•�r�� Ga Residential,and Schools) r Buffer Maps Comparison: 1 ,000 Ft. (Left) and 600 Ft. (Right) Dyer Road Industrial Area Cannabis Ordinance Updates Study Session Slide 13 Planning and Building I,"OLIN V.-W-AM July 29, 2022 em � w9 er j EtM I 1 I MG FADDEN AV 1 Zrll EDINGER A�V I1 L1 WARNER AV Buffer Maps Comparison: 1 ,000 Ft. (Left) and 600 Ft. (Right) Grand Avenue Industrial Area Cannabis Ordinance Updates Study Session Slide 14 Planning and Building July 29, 2022 Financial Amendments No further direction needed ................................................................................................................................................................................................. . . 4 nmilrectinn Administrative amendments to address No further direction needed. The shared manufacturing facilities and changes would directly address and'q vertically & horizontally-integrated streamline regulations for businesses businesses engaged in multiple cannabis business activity types, as well as shared manufacturing facilities such as My Green Network. Definitions and categories to No further direction needed. addresses new uses Cannabis Ordinance Updates Study Session Slide 15 Planning and Building July 29, 2022 Financial Amendments Additional direction needed ................................................................................................................................................................................................. . . Direction Supply-side (non-retail) tax rates Direction needed— staff recommend a reduction to 4%, while industry recommends a reduction to 1%. UFCW recommends tax credit option for providing community and social equity benefits. Retail tax rates Direction needed— staff recommend leaving the retail taxes for medicinal (651o) and adult- use (851o) intact, while industry recommends a reduction ranging between 5% and 7%. UFCW recommends tax credit option for providing community and social equity benefits. Community benefit & social equity tax credits Direction needed—proposals have been or rebates received to provide for a tax credit program for qualified employers, qualified employees, equity employees,job/skills creation, and similar features and an in-lieu fee program as a separate option. t annabis Ordinance Updates Study Session Slide 16 Planning and Building July 29, 2022 �R69-2019 '� t Celebrating ©RA..NGE CpUNTy �. years Questions , Discussion , and Direction Cannabis Ordinance Updates Study Session Slide 17 Planning and Building July 29, 2022 Topic Direction Topical areas where no further direction is needed. Administrative/procedural updates and consolidation of all cannabis regulations into Chapter 40 Ordinance will be amended. No direction needed. Proceed. Live scan requirements for employees Ordinance will be amended to require live scans for only owners and managers, no longer for employees. No direction needed. Proceed. Relocation of cannabis retail stores Ordinance will be amended to allow relocation of pending and existing cannabis retailers, subject to full compliance with SAMC requirements. No direction needed. Proceed. Requiring pending/relocated retail businesses to open within specified timeframe Ordinance will be amended to require all relocated and pending retailers to submit plans for plan check by 12/31/2022 and then open within 180 days of permit issuance. No direction needed. Proceed. Sunset the Measure BB waitlist Ordinance will be amended to sunset the Measure BB Waitlist, subject to the City providing ample notice (180 days) to the waitlisted entities, and information on how to apply for the new retail license. Proceed. Temporary events/festivals Ordinance will be amended to allow temporary events and distinguish between smaller events and larger festivals. No direction needed. Proceed. Outdoor smoking Ordinance will be amended to allow outdoor smoking with odor and smoke control mechanisms. No direction needed. Proceed. Allow retailers to donate medicinal cannabis consistent with State law. Modify ordinance to be consistent with State law and allow retailers to donate medicinal cannabis in certain cases, i.e. to veterans. No direction needed. Proceed. Bona Fide Labor Unions and Labor Peace Agreements Update bona fide labor union definition. Proceed. Administrative financial amendments to address shared manufacturing facilities and vertically& horizontally-integrated Ordinance will be amended to add new definitions for new uses, and to address horizontally and vertically integrated businesses, as well as shared manufacturing facilities. No direction needed. Proceed. Topic Direction Topical areas where direction is needed. Consumption lounges Yes or No-Should consumption lounges be allowed subject to regulation? Response Option 1 -Allow for all retailers, at same location. Option 2 -Allow for all retailers, with option for offsite location. Option 3 -Allow for all retailers and extend hours to midnight, with stop for consumption sales at 11:00 p.m. Topic Direction Topical areas where direction is needed. Updating cannabis zone map Yes or No-Should the cannabis map be updated with new buffers? Response Option 1 - Establish new map based on 600-ft buffer from parks and residential, but 1,000-ft from schools Option 2 -Allow businesses to locate in areas less than 1,000 ft with a CUP. Topic Direction Topical areas where direction is needed. Supply-side(non-retail)tax rates Yes or No-Should taxes be lowered on supply-side (non-retail) cannabis businesses? Response Option 1 - Lower taxes on cultivation, distribution, and manufacturing (supply-side) from 6%to 4%or 1% Option 2 - Lower taxes on cultivation, distribution, and manufacturing (supply-side) from 6%to 4%or 1%, with additional defined community benefit and social equity obligations. Option 3 - Provide tax credits for businesses engaging in social equity programs, such as higher wages, minority hiring, etc. Topic Direction Topical areas where direction is needed. Retail tax rates Yes or No-Should taxes be lowered on retail cannabis businesses? Response Option 1 - Lower retail tax to 7%, 5%, or 4% Option 2 - Lower retail tax from 8%to 7%, 6%„ or 5%, with additional defined community benefit and social equity obligations Option 3 - Provide tax credits for businesses engaging in social equity programs, such as higher wages, minority hiring, etc. Topic Direction Topical areas where direction is needed. Community benefits obligations and social equity Yes or No-Should community benefit and social equity obligations be strengthened? Response Option 1 - Require defined community benefit obligations with option for in-lieu fee to satisfy. Option 2 - Require defined community benefit obligations (no in-lieu fee options). Option 3 - Establish community benefit fee to create annual fund (no community benefit plan required). Option 4- Establish pathways to ownership requirement in community benefits plan, such as managerial and owner training, stock options, etc. Option 5 - Local hire 40% low income census tracts; 40% stock options; minimum wage; training OSHA. Option 6- Provide mechanism to ensure highly trained and skilled workforce, such as participating in high road training partnerships funded by the operator. Option 7 -Work with certified NPOs. Option 8- Require each cannabis business to provide a written social equity policy for recruiting and hiring from lower- income census tracts, training in High Road Training Partnerships, paying living wages and reimbursement for mileage, and partnering with community benefit organizations.