Consideration of Possible Action Re: Marijuana/ Cannabis Regulations City Council January 22, 2018

Overview In November of last year, the City Council approved three ordinances clarifying and strengthening the City’s existing bans on commercial cannabis activity With the exception of allowing medical cannabis deliveries into the City, all commercial cannabis uses were prohibited under these ordinances City informed the Bureau of Cannabis Control of its ban No State licenses can be issued for operators in Pasadena

Overview The City Council determined that Pasadena would take a measured approach to the legalization of cannabis Preserve local control to make future decisions about the cultivation, manufacturing, and sale of cannabis products in Pasadena Allow the City to observe the rollout of the State’s licensing and regulatory mechanism, learn best practices from other cities No time within which to act was proposed

Overview Proponents submitted a referendum petition against the ordinance that banned cannabis land uses Last week the City Clerk’s Office certified that the proponents’ referendum failed for lack of enough valid signatures Proponents are circulating an initiative measure that would allow commercial cannabis businesses, and a tax Would legalize all dispensaries currently operating illegally and would designate such illegal dispensaries as non-conforming land uses so that the City could not apply conditions to operations

Threshold Question for Council Given initiative effort, consider whether the City wants to: Prior to the time that the proponents’ measure would go forward, City puts its own measure on the ballot, proposing regulations and a tax or At the same time as the proponents’ measure would go forward, City puts its own measure on the ballot, proposing regulations and a tax Take no action at this time (wait to see if proponents’ measure passes and is valid)

Options LAND USE REGULATIONS Exercise local regulatory control over an important land use; protect residents from secondary effects TAXATION Help to fund general municipal services (police and code enforcement services necessary for the proper administration of regulations), as well as promote health education regarding the dangers of smoking cannabis, particularly to young people

Land Use: Option 1 Put forth a ballot measure with the City’s own proposed land use regulations regarding the sale, cultivation, and delivery of recreational and medical cannabis, based on input received during the public outreach process and from the numerous public meetings on the subject This could be done as early as a June 2018 special election STAFF RECOMMENDS THIS OPTION

Land Use: Option 2 Put forth a ballot measure with the City’s own proposed land use regulations regarding the sale, cultivation, and delivery of recreational and medical cannabis at the same time as that of the initiative proponents – possibly November 2018 This would potentially allow Pasadena voters a choice between the two proposals; however, it may also create confusion on the part of the voting public as to which measure to choose

Land Use: Option 3 Take no additional action Assuming it were to qualify, the initiative proponents would have their ballot initiative considered possibly in November 2018 without a competing measure from the City This approach would prevent the City Council from exercising its control over an important land use; allow those who have been operating illegally within the City to continue to do so; and prevent the City from applying conditions to the operations of formally illegal dispensaries

Taxation: Option 1 June 2018 special election, separate taxation measure (allow for audits) If intent is to use tax revenues for any purpose, the measure would require simple majority voter approval Council must first make a unanimous finding of “emergency” pursuant to Proposition 218 STAFF RECOMMENDS THIS OPTION even if the Council decides not to put forward the land use regulations, so as to have something in place in the event marijuana ultimately becomes legal within the City

Taxation: Option 2 November 2018 election, separate taxation measure (allowing for audits) to compete against proponents’ measure As with Option 1, measure would require simple majority voter approval if a general tax for any purpose No unanimous “emergency” finding would be required if the charter amendment in June is passed changing the City’s regular election cycle to even-numbered years

Taxation: Option 3 Take no action with regard to taxation If the initiative proponents’ measure passes, the taxation component of their measure would take effect, without ability by the City to audit

Next Steps If Council approves of staff’s recommendation, staff will return to City Council with a framework of regulations that will address such issues as: Types of commercial cannabis activity to be permitted (such as dispensaries, cultivation, manufacturing, etc.) Limitations on the number and location Operational standards for each type of use Administrative guidelines Taxation options

Recommendation It is recommended that the City Council: Find that the proposed action is not a project subject to the California Environmental Quality Act (CEQA) pursuant to Section 21065 of CEQA and Sections 15060 (c)(2), 15060 (c)(3), and 15378 of the State CEQA Guidelines and, as such, no environmental clearance is required for the action; and Direct Staff to prepare and return to the City Council for its consideration, all documents necessary to place one or more possible ballot initiatives on the June 5, 2018 ballot related to cannabis regulations and taxation.

End of Presentation City Council January 22, 2018

Potential Cannabis Regulations

Potential Cannabis Regulations

Potential Cannabis Regulations