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HomeMy WebLinkAbout50A - ORD - UPDATE MMD PROGRAMREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: APRIL 5, 2016 TITLE; UPDATE ON THE MEDICAL MARIJUANA REGULATORY PROGRAM AND AMENDMENTS TO ORDINANCE NO. NS -2864 (MEASURE BB) (STRATEGIC PLAN NO. 1; 4; 5) CITY MANAGEA 12* i7M&ML11047_[�3�C�7�1 CLERK OF COUNCIL USE ONLY: r'J.T7"d*M� W* ❑ As Recommended ❑ As Amended Cl Ordinance on 1 ®' Reading ❑ Ordinance on 20d Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Receive and file an update on the Medical Marijuana Regulatory Program. 2. Adopt ordinance amending Chapter 18 of the Santa Ana Municipal Code to remove requirement that security guards be unarmed. 3. Adopt ordinance amending Chapter 18 of the Santa Ana Municipal Code to establish deadlines for submitting a regulatory safety permit application and obtaining a Certificate of Occupancy. 4. Adopt ordinance amending Chapter 18 of the Santa Ana Municipal Code to prohibit narcotics registrants from obtaining a regulatory safety permit. This will be applicable to all new registration applications received after April 5, 2016. DISCUSSION On November 4, 2014, the voters of the City of Santa Ana approved Measure BB (Ordinance No. NS -2864) to regulate the establishment, operation, and taxation of Medical Marijuana Collectives /Cooperatives. The Measure regulates medical marijuana collectives /cooperatives to provide compassionate access to medical marijuana, and seeks to protect the public's health, safety, and welfare. On February 5, 2015, twenty (20) registered applicants were selected through an independent lottery process to proceed and apply for a Regulatory Safety Permit to operate a medical marijuana collective in specific industrial zones within the City. As of March 2016, ten (10) applicants have completed the Regulatory Safety Permit (RSP) process and are currently operating in the City. Six (6) applicants are in various stages of the RSP process, two (2) applicants have contacted the City and expressed an interest in applying in the future, and two (2) applicants have not contacted the City. Approximately $1.7 million in application and permit fees, and tax receipts have funded program costs and enforcement efforts since approval of the Measure. The City expects to collect approximately $710,000 in sales and gross receipt taxes from the ten (10) permitted collectives 50A -1 Update On The Medical Marijuana Regulatory Program And Amendments To Ordinance No. NS- 2864 (Measure BB) April 5, 2016 Page 2 by the end of the 2015 -2016 fiscal year. Once all 20 permitted collectives are fully operational, the City anticipates generating over $1.5 million annually to fund program costs and enforcement efforts. On November 18, 2014, the City Council approved the Medical Marijuana Dispensaries (MMD) Enforcement Plan to close illegal marijuana dispensaries and ensure the monitoring of permitted collectives /cooperatives operating legally under Measure BB. As approved, the MMD Enforcement Plan provided additional staffing in various departments to work collaboratively to implement the plan. City staff from the Planning and Building Agency Code Enforcement Division, Police Department, and City Attorney's Office comprise the Medical Marijuana Dispensary Task Force. The Task Force works collectively in determining the appropriate actions needed to enforce the Measure. These actions are progressive in nature and include notifications to property owners and dispensary operators, administrative citations, criminal prosecution, disconnection of utilities, and the filing of possible civil actions. Given the strategic and collective efforts by the Task Force, the MMD Enforcement Plan has resulted in the closure of approximately 79% (92 out of 116) of identified illegal marijuana dispensaries operating in the City. Additionally, the Task Force has successfully shut down 14 illegal marijuana grow operations in the City with an estimated street market value of $20.5 million. At the January 26, 2016 Public Safety and Neighborhood Improvement Council Committee meeting, City staff was directed to review and analyze the operational standard in Ordinance No. NS -2864 that required unarmed security guards at permitted medical marijuana collectives. The Committee's request was a result of constituents, including operators of permitted medical marijuana collectives /cooperatives, expressing an interest in armed security guards to provide greater safety and security at permitted medical marijuana collectives. City Staff has reviewed and analyzed the above - referenced operational standard and recommends that Ordinance No. NS -2864 be amended. The proposed amendment would neither require nor prohibit that security guards be armed. Rather, the amendment removes the requirement that security guards be unarmed. In addition, given that four (4) out of the twenty (20) selected applicants have not submitted their Regulatory Safety Permit (RSP) applications in over 14 months, City Staff recommends adding a deadline by which completed RSP applications must be submitted. That deadline would provide up to eighteen (18) months from the date of the independent selection process (lottery) for selected applicants to submit a completed RSP application. This will provide an opportunity to select the next available registered applicant(s) from the waitlist. Waitlisted applicants that move onto the selected list will have no more than six (6) months to submit a completed RSP application following issuance of a written notice advising them of the opportunity. Furthermore, a RSP applicant will have six (6) months to obtain a Certificate of Occupancy after submitting its RSP application. Failure to meet any of the foregoing deadlines will disqualify an applicant from the selected applicant list and waitlist. Other administrative amendments are also recommended, e.g., definitions and changing code section numbering. 50A -2 Update On The Medical Marijuana Regulatory Program And Amendments To Ordinance No, NS- 2664 (Measure BB) April 5, 201e Page 3 Furthermore, City Staff recommends amending Measure BB to prohibit Issuing a RSP to anyone who must comply with Health & Safety Code Section 11590, l.e., a narcotics registrant. Section 11590 requires individuals who have been convicted of certain drug related offenses to register with the local police. The City has an interest in prohibiting individuals with drug convictions from obtaining a RSP for a medical marijuana collective /cooperative, This change will be applicable to all new registration applications received after April 5, 2016. City Staff will be organizing a meeting with permitted medical marijuana collectives to learn about their experiences with the implementation of the Measure, potential process improvements, and their desires to modify the Ordinance, A report on proposed changes will be provided to the Public Safety and Neighborhood Improvement Council Committee and City Council. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal # 1 Community Safety, Goan # 4 City Financial Stability, and Goal # 5 Health, Livability, Engagement& Sustainabllity. FISCAL IMPACT There Is no fiscal Impact associated with this item. Hassan Hagh ni, Al Executive Di ector of the Planning & Building Agency +i Exhibit: 1, Ordinance Amending Chapter 18 of the Santa Ana Municipal Code y 1 W J y' 1 I SMS 4/5/16 ORDINANCE NO. NS - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE SANTA ANA MUNICIPAL CODE REGARDING UNARMED GUARDS; ESTABLISHING REGULATORY SAFETY PERMIT APPLICATION DEADLINES; AND PROHIBITING ISSUANCE OF REGULATORY SAFETY PERMIT APPLICATIONS TO NARCOTIC REGISTRANTS Section 1. The City Council of Santa Ana hereby finds, determines and declares as set forth below. A. This ordinance came before the City Council of the City of Santa Ana on April 5, 2016. B. The Request for Council Action for this ordinance dated April 5, 2016, and duly signed by the City Manager, shall, by this reference, be incorporated herein, and together with this ordinance, any amendments or supplements. C. All provisions of the Santa Ana Municipal Code which are restated herein are repeated solely to comply with the provisions of Section 418 of the Charter of the City of Santa Ana. Any such restatement of existing provisions of the Code is not intended, nor shall it be interpreted, as constituting a new action or decision of the City Council, "but rather such provisions are repeated for tracking purposes only in conformance with the Charter. Section 2. Section 18 -613 of Chapter 18 of the Santa Ana Municipal Code is hereby amended by deleting the last sentence of subsection (a) as follows: 18 -613. Operating Standards. (a) At all times the collective is open, a collective shall provide at least one security guard who is licensed, possesses a valid Department of Consumer Affairs "security guard card", and has a valid Santa Ana Business License. Secids sha l I- not - possess -f i re a rrgs: Section 3. Section 18- 617.01 entitled "Cooperative /Collective registration required." of Chapter 18 of the Santa Ana Municipal Code is hereby amended to change the numbering of this code section and the substance of this section is deleted Ordinance No. NS -XXX Page 1 of 8 y 1 SMS 4/5/16 in its entirety and replaced as follows: Section 18-617,194 Cooperative /Collective registration required. (a) Within 30 days after the adoption of this Chapter, the Director of Planning and Building shall prepare Cooperative /Collective registration application forms and a related administrative policy. Each collective interested in operating pursuant to this article may submit an application together with a non - refundable processing fee in an amount established by the City Council. Within 60 days after the adoption of this article, the Director shall stop accepting applications and process all applications received, (b) The Director or his or her designee shall determine whether each application demonstrates compliance with this article. Each application that is in compliance with this article shall be placed on the "Qualified Registration Applicant List" and the Director shall notify the applicant in writing that it is a "Qualified Registration Applicant." (c) Once all applications are processed, the Director shall hold an independent selection process ('lottery") in an open and public location and select 20 applications. The 20 applications chosen through the independent selection process (lottery) will be placed on the "Regulatory Safety Permit ( "RSP ") Eligibility List." Each applicant on the RSP Eligibility List may then choose to file an application for a RSP pursuant to Section 18- 617.2. Applicants identified on the RSP Eligibility List following the February 5, 2015 independent selection process (lottery) must submit a completed RSP application within eighteen (18) months of that date. Failure to submit a completed RSP application by that deadline will disqualify the applicant from the RSP Eligibility List and the Waitlist described in subsection (d). (d) Qualified Registration Applicants will appear on the "Qualified Registration Applicant List" in the order that they are selected during the independent selection process (lottery), This list is the Waitlist. The Waitlist will become active if (1) an applicant on the RSP Eligibility List is disqualified from that List; (2) a location appearing on the RSP Eligibility List becomes available; or (3) a location not appearing on the RSP Eligibility List becomes available. A Qualified Registration Applicant's ability to move from the Waitlist to the RSP Eligibility List is determined by the applicant's proposed medical marijuana collective location and the applicant's position on the Waitlist. (e) A Qualified Registration Applicant that moves from the Waitlist to the RSP Eligibility List must submit a completed RSP application within six (6) months following issuance of a written notice advising the applicant of that opportunity. Failure to submit Ordinance No. NS -XXX Page 2 of 8 y (f M SMS 4/5/16 a completed RSP application by that deadline will disqualify the applicant from the RSP Eligibility List and the Waitlist. (f) The Director shall maintain the Waitlist and update it on an annual basis. A Qualified Registration Applicant on that Waitlist must submit a written request each year to maintain its status on the Waitlist. The Director may place new applicants on the Waitlist in the order in which the new registration applications are received. Section 4. Section 18- 617.01 entitled "Cooperative /Collective regulatory safety permit" of Chapter 18 of the Santa Ana Municipal Code is hereby amended to change the numbering of this code section and to add subsection (d) as follows: 18- Q17.1104- Cooperative /Collective regulatory safety permit. (d) A Regulatory Safety Permit shall not be issued to an individual or a business received after April 5, 2016. Section 5. Section 18 -617.2 entitled "Medical Marijuana collective - regulatory permit application process." of Chapter 18 of the Santa Ana Municipal Code is hereby amended to add the following language: (a) Any Medical Marijuana Collective desiring a regulatory safety permit required by this article shall, prior to initiating operations and after receiving notice of its successful registration under section 18- 617.194 as being on the RSP Eligibility List must complete and file are a Regulatory Safety Permit application to the Chief of Police on a form supplied by the Police Department. The application shall be filed together with a nonrefundable fee as established by resolution of the City Council, to defray, the cost of investigation required by this article. The application shall contain all of the following: (1) The address of the property where the proposed Medical Marijuana Collective(s) will operate; (2) A site plan describing the property with fully dimensioned interior and exterior floor plans including electrical, mechanical, plumbing, and disabled access compliance pursuant to Title 24 of the State of California Code of Regulations and the federally mandated Americans with Disabilities Act; (3) Exterior photographs of the entrance(s), exits(s), street frontage(s), Ordinance No. NS -XXX Page 3 of 8 50A -7 SMS 4/5116 parking, front, rear and side(s) of the proposed property; (4) Photographs depicting the entire interior of the proposed property; (5) If the property is being rented or leased or is being purchased under contract, a copy of such lease or contract; (6) If the property is being rented or leased, written proof that the property owner, and landlord if applicable, were given notice that the property will be used as a Medical Marijuana Collective, and that the property owner, and landlord if applicable, agree(s) to said operations; (7) The name, address, ; telephone number, title and function(s) of each manager, employee, volunteer, etc.; (8) For each manager, employee, volunteer, a fully legible copy of one valid government issued form of photo identification, such as State Driver's License or Identification Card; (9) If the Medical Marijuana Collective is a corporation, a certified copy of the Collective's Secretary of State Articles of Incorporation, Certificate(s) of Amendment, Statement(s) of Information and a copy of the Collective's Bylaws; (10) If the Medical Marijuana Collective is an unincorporated association, a copy of the Articles of Association; (11) The name and address of the applicant's current agent for Service of Process; (12) A copy of the applicant's Board of Equalization Seller's Permit; (13) A copy of the Medical Marijuana Collective Operating Standards, listed in Section 18 -613, containing a statement dated and signed by the responsible party on- site stating under penalty of perjury, that they read, understand and shall ensure compliance with the aforementioned operating standards. The Chief of Police shall have sixty (60) calendar days in which to investigate the application and background of the applicant. The department of building safety and housing, the fire department and the Orange County Health Department shall inspect the premises proposed to be devoted to the collective establishment and shall make separate recommendations to the Chief of Police or designee concerning compliance with the foregoing provisions. Ordinance No. NS -XXX Page 4 of 8 y 1 m • SMS 4/5/16 ,(c) The Chief of Police or designee, after receiving the application and aforementioned recommendations, shall grant the permit if he finds: (1) The required fee has been paid. (2) The application conforms in all respects to the provisions of this article. (3) The applicant has not knowingly made a material misrepresentation in the application. (4) The applicant has fully cooperated in the investigation of the application. (5) The applicant has not. had: a regulatory safety permit or other similar license or permit denied or revoked for cause by this City or any other city located in or out of this state within the five (5) years prior to the date of application. (6) The collective as proposed by the applicant would comply with all applicable laws including, but not limited to, health, zoning, fire and safety requirements, (7) The applicant has demonstrated compliance with the California Department of Justice, Office of the Attorney General, "Guidelines for the Security and Non - Diversion of Marijuana Grown for Medical Use" standards. (d) Failure of an applicant listed on the RSP Eligibility List to obtain a Certificate of Occupancy within six (6) months of submitting a completed RSP application will result in disqualification from the RSP Eligibility List and Waitlist Section 6. If any section, subsection, sentence, phrase or clause of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. Ordinance No. NS -XXX Page 5 of 8 m • y SMS 4/5/16 Section 7. The City Clerk shall certify the adoption of this Ordinance and shall cause the same to be posted as required by law. ADOPTED this day of J2016. Miguel A. Pulido Mayor Ordinance No. NS -XXX Page 6 of 8 50A -10 APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney Safiidra M. Schwarzmann Senior Assistant City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: NOT PRESENT: Councilmembers Councilmembers 5OA -11 SMS 4/5/16 Ordinance No. NS -XXX Page 7 of 8 SMS 4/5/16 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS -XXX to be the original ordinance adopted by the City Council of the City of Santa Ana on , and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date: Clerk of the Council City of Santa Ana 50A -12 Ordinance No. NS -XXX Page 8 of 8