1. DRAFT MEDICAL MARIJUANA CULTIVATION & COMMERCE ORDINANCE 2 ND STUDY SESSION : REQUEST FOR BOARD DIRECTION ON SPECIFIC POLICY ISSUES 2/16/16 1

2. It’s Ba-aaack! O At the last study session on MMJ, the Board chose to not adopt cultivation regulations until the State adopted its own regulatory scheme. O The State has now adopted a comprehensive regulatory scheme for all commercial MMJ activities—including cultivation. 2

3. Comprehensive State Program to Regulate MMJ Cultivation & Commerce O The 3 bills : O AB 243 O AB 266 O SB 643 O Effective 1/1/16 O Cultivation, distribution, product testing, packaging, transport, and medical retail sales O Counties retain the right to ban cultivation & commercial marijuana activity 3

4. State & Local Licenses & Permits O All persons or entities involved in any stage of commercial MMJ activities will need one or more state licenses to legally operate O Before commercial operators can get a state license, they will need to first obtain a local permit (or other document giving local authorization) O The local permit can be conditionally issued and then “finaled” after applicant is successful getting a state license O State provides background checks 4

5. Categories of State Licenses: If Allowed, Each Will Need A Local Permit O Commercial Cultivation O Manufacturing O Laboratory Testing O Distribution (between commercial licensees) O Transportation (between commercial licensees) O Dispensary (default = mobile deliveries OK) O Nursery (default = transport OK) 5

6. 2 Exceptions to State License Requirement O Small personal grows by a patient for him/herself only (up to 100 sq ft) O Primary caregiver grows for qualified patients O No more than 5 qualified patients O No more than 500 sq ft Counties CAN regulate or ban any of these activities at the local level 6

7. Local Regulatory Control O County may adopt ordinances that establish additional standards, requirements, and regulations for local licenses and permits for commercial cannabis activity. O State standards are the minimum standards O The new state laws do not prevent counties or other local or regional government entities from enforcing their own local ordinances and regulations O E.g. Some regional water quality control boards have developed standards and requirements for MMJ wastewater discharge permits 7

8. Important Deadline Approaching! O If county does not have regulations or ban in place by March 1, 2016, the state becomes “the sole licensing authority” O Not clear what it means to the county if state becoming “the sole licensing authority” O Urgency ordinance recommended as “placeholder” 8

9. BANS 9

10. DOES THE COUNTY WISH TO BAN ANY OF THE FOLLOWING: O Commercial Cultivation O Indoor (artificial light) O Outdoor (greenhouse or open) O Nursery (immature plants & clones) O Personal Cultivation (up to 100 sq feet) O Caregiver Cultivation (up to 5 patients & 500 sq ft) O Dispensaries O Manufacturing (with/without volatile compounds) O Mobile Deliveries (dispensaries to patients) O Transporters (between commercial licensees) O Distributors (between cultivators/manufacturers, labs, & dispensaries) O Laboratories 10

11. LOCAL REGULATION 11

12. Conditional Permit or Other Local Approval O If County chooses to regulate cultivation, the County will need some sort of permit or other source of written permission for the applicant to take to the State to get a license O State law anticipates (but does not require) a conditional permit process O Preliminary approval by County O Get license from State O Final County approval after licensure O Ministerial authorizations are also allowed so long as there is some document for state 12

13. Which Types of Permits? O For each type of activity the County wishes to allow, it will also need to decide what type of permit or other authorization it wants to require for that activity 13

14. Those Exempt from State Licensure Requirements O Does the Board want to locally regulate outdoor and/or indoor cultivation activities that are otherwise exempt from State licensure requirements? O Qualified Patient personal grows up to 100 sq ft O Primary Caregiver grows for Qualified Patients up to 5 Individuals & 500 sq ft O Types of potential regulation: O Permit/license required O Inspection requirements O Background checks O Fees O Other regulatory requirements—perhaps similar to what the state requires of non-exempt applicants O NOTE: These reqs would have to be administered locally 14

15. CULTIVATION 15

16. State Cultivation Categories Indoor (artificial light only) O 1A—Up to 5K sq ft total canopy size O 2A—5,001 to 10K sq ft total canopy size O 3A—10,001 to 22K sq ft total canopy size Mixed-light (natural light + some artificial) O 1B—Up to 5K sq ft total canopy size O 2B—5,001 to 10K sq ft total canopy size O 3B—10,001 to 22K sq ft total canopy size Outdoor (natural light, including greenhouses) O 1—Up to 5K sq ft total canopy size or up to 50 mature plants on noncontiguous plots) O 2—5,001 to 10K sq ft total canopy size O 3—10,001 sq ft to 1 acre total canopy size 16

17. COMMERCIAL INDOOR CULTIVATION Policy questions related to the regulation of indoor medical marijuana cultivation 17

18. INDOOR CULTIVATION— Locational Restrictions O Restricted to parcels zoned for residential uses? Other zone restrictions? O Restricted to parcels actually containing a legal permanent dwelling? O Restricted to parcels where legal permanent dwelling is actually occupied? O Cultivation allowed in dwelling place? O Cultivation allowed in permitted accessory structure? 18

19. 19 Medical Cannabis Cultivation Zoning and Permitting Recommendations Type of Permit (1) IndoorOutdoor/Mixed LightNursury Zone Pers. Use/ caregiver1A2A3A Pers. Use/ caregiver1/1B2/2B3/3B4 UP(2)---PPCUP - HSP---P---- RAP---PPCUP - RRP---PPCUP - R1P-------- GFP---PPCUP - A1P---PPCUP APP---P---- M1-CUP ---- M2-CUP ---- M4-CUP ---- 1. As defined by Business & Professions Code Sec. 19332(g) 2. P = Permitted subject issuance of medical cannabis cultivation license and meeting all development standards: Cultivation only permitted on parcels with occupied, permanent dwelling or on adjacent parcel under common ownership Written permission of land owner required if cultivation carried on by tenant Options:Minimum parcel size X% of lot maximum cultivation area

20. INDOOR CULTIVATION— Structure/Size/Environmental Restrictions O Recommended: Use state’s method of measurement—max square feet of canopy size O Design requirements for structure where plants are grown/kept? O Just one structure allowed? Or multiple? O Screening requirements? O Odor control/filtration/ventilation? O Electricity and water? O Fencing requirements? O Indoor cultivation plant or area limits? 20

21. INDOOR CULTIVATION— What Type of Permit/Auth? O What type of permit or other authorization does the County want to issue for commercial indoor cultivation? 21

22. OUTDOOR CULTIVATION Policy questions related to the regulation of outdoor medical marijuana cultivation 22

23. OUTDOOR CULTIVATION— Locational Restrictions O Restricted to parcels zoned for residential uses? Other zone restrictions? O Restricted to parcels actually containing a legal permanent dwelling? O Restricted to parcels where legal permanent dwelling is actually occupied? O Sensitive use distance restrictions? 23

24. 24 Medical Cannabis Cultivation Zoning and Permitting Recommendations Type of Permit (1) IndoorOutdoor/Mixed LightNursury Zone Pers. Use/ caregiver1A2A3A Pers. Use/ caregiver1/1B2/2B3/3B4 UP(2)---PPCUP - HSP---P---- RAP---PPCUP - RRP---PPCUP - R1P-------- GFP---PPCUP - A1P---PPCUP APP---P---- M1-CUP ---- M2-CUP ---- M4-CUP ---- 1. As defined by Business & Professions Code Sec. 19332(g) 2. P = Permitted subject issuance of medical cannabis cultivation license and meeting all development standards: Cultivation only permitted on parcels with occupied, permanent dwelling or on adjacent parcel under common ownership Written permission of land owner required if cultivation carried on by tenant Options:Minimum parcel size X% of lot maximum cultivation area

25. OUTDOOR CULTIVATION— Structure/Size/Environmental Restrictions O Recommended: Use state’s method of measurement—max square feet of canopy size O Size/area/contiguity restrictions? O Screening/fencing/security requirements? O Odor control? O Water requirements? O Outdoor cultivation plant limits? 25

26. OUTDOOR CULTIVATION— What Type of Permit/Auth? O What type of permit or other authorization does the County want to issue for commercial outdoor cultivation? 26

27. CULTIVATION— Cannabis Nurseries O The State has a separate license for cultivation of cannabis solely as a nursery. O The state license allows for transportation of live plants, although the County could restrict this. O A local permit will be required O Does the County want to allow cannabis nurseries? O If so, does the County want to impose locational or other regulations beyond those required by State? Permit/authorization? 27

28. Mobile Deliveries O The State default is that these will be allowed unless a County expressly bans them O Mobile deliveries from dispensaries to patients and caregivers do NOT require a separate transport license or other special license from the state O If a County allows MMJ deliveries, it can tax these deliveries under B&P 19340(c) O County cannot prohibit mobile deliveries from simply passing through the County on public roads O Does the County want to allow in-county mobile deliveries? If so, how does it want to regulate them? Permit or other authorization? 28

29. OTHER COMMERCIAL CANNABIS USES 29

30. Cannabis Manufacturing O The State is developing a comprehensive scheme for standardizing the production, labeling, packaging and sales of edible and topical MMJ products and concentrated cannabis products O They are “not a food” and “not a drug”. Not sure yet whether they will be regulated by the Retail Food Code or a new regulatory scheme. O 2 levels of manufacturing license—one for those who use volatile compounds and one for those who don’t O Local permit required O Does the County want to allow any level of cannabis product manufacturing in-county? If so, where, and under what conditions? Permit/other authorization? 30

31. Cannabis Testing Labs O The State has a separate license for laboratories to test cannabis for compliance with the new State requirements O A local permit is required O Does the County want to allow cannabis testing laboratories? O If so, does the County want to impose locational or other regulations beyond those required by State? O Permit/authorization? 31

32. Cannabis Distribution Centers & Related Storage O The State requires dispensaries to receive its cannabis through a licensed, bonded & insured distributor, which conducts quality assurance measures through a laboratory and is in charge of tracking sales for tax purposes. O A local permit will be required O Does the County want to allow cannabis distribution centers and storage in the County? O If so, does the County want to impose locational or other regulations beyond those required by State? Permit/authorization? 32

33. Cannabis Transportation Centers & Related Storage O The State requires transporters of cannabis between commercial licensees (growers, manufacturers, labs, distributors, and dispensaries) O This does NOT include deliveries by dispensaries to retail customers such as patients or caregivers O Transportation through County on public roads by licensed transporters cannot be banned O Local permit is required if the transport business or vehicle storage is located in the County O Does the County want to allow cannabis transportation operations (and concomitant storage) in the County? O If so, does the County want to impose additional locational or other regulations beyond those of State? O Which type of permit/authorization? 33

34. Cannabis Dispensaries O Currently require AUP O Recommended: CUP O Recommended: Amend ordinance to expressly require compliance with state licensure program as pre-condition. O Any additional changes? 34

35. 35 Medical Cannabis Zoning and Permitting Recommendations Zone (1)Mfg.TestingDistrib.Transp. Ctr.Dispens. CP----CUP C1-CUP-- C2-CUP M1CUPPAUPP- M2CUPPAUPP- M4CUPPAUPPCUP Notes: 1. Only those zones listed are permitted to have cannabis related activites as listed above. Such uses are prohibited in all other zones. P = Permitted subject to issuance of Medical Cannabis Testing or Transportation License AUP = Admin. Use Permit required CUP = Conditional Use Permit required

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