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Home My WebLink AboutAGENDA REPORT 2024 0515 CCSA REG ITEM 09A POWERPOINT-HdL CompaniesCity of Moorpark Cannabis Policy Study Session Mark Lovelace Senior Policy Advisor HdL Companies 3 ITEM: 09.A. About HdL •Municipal finance consulting firm providing revenue and economic insights to local governments •HdL Serves:•303 cities•48 counties•108 transaction districts •We provide sales tax, property tax, business licensing, economic development, and cannabis management •HdL has provided consulting services to over 175 local agencies to help develop cannabis policies •Team includes former policymakers, law enforcement and cannabis regulators with State, county and local level experience 2 4 OBJECTIVES OF DISCUSSION •Provide brief overview of cannabis policy in California, the City of Moorpark and the surrounding region •Take comments and input from the public •Discuss and ask questions •Consider key policy questions before providing direction to staff 3 5 Business Types 4 6 CULTIVATOR MANUFACTURER TESTING LAB DISTRIBUTOR RETAIL TESTING LAB CONSUMER CANNABIS BUSINESS CATEGORIES 5 7 State/Regional Environment 6 8 CA CANNABIS LICENSES AS OF JANUARY 1, 2024 5,490 Cultivation 755 Manufacturer 1,243 Retailers 465 Retailers Non-Storefront 1,139 Distributors 154 Distributor Transport Only 402 Microbusinesses 38 Testing Labs 46 Cannabis Event Organizers 9,732 Total 79 CANNABIS BUSINESSES IN THE NEARBY REGION 8 10 STATUS OF OTHER AGENCIES IN THE REGION: •Ventura County –Cultivation, Distribution •Ventura (City) –Retail, Manufacturing, Distribution, Testing •Port Hueneme – Retail, Manufacturing, Distribution, Cultivation, Testing •Los Angeles – Retail, Manufacturing, Distribution, Cultivation, Testing •Oxnard – Retail, Manufacturing, Distribution, Testing •Thousand Oaks–Retail (medicinal only), Testing 9 11 10 Cannabis Taxes in the Moorpark Region City or County Cultivation Nursery Distributor Manufacturer Retailer Microbusiness Testing Lompoc 1.0% 1.0%$15K - $30K $15K - $30K 6.0%up to 6%0.0% Los Angeles (City)2.0% 2.0% 1.0% 2.0%5.0% - 10.0%2.0% 1.0% Los Angeles County $4/sf - $7/sf $2/sf 3.0% 3.0% 4.0%By Activity 1.0% Malibu N/A N/A N/A N/A 2.5%N/A N/A Ojai N/A N/A 3.0% 3.0% 3.0%N/A 3.0% Oxnard*$7/sf 1.0% 2.0% 2.5% 4.0%2.0% to 4.0%1.0% Pasadena $2/sf - $7/sf $1/sf 2.0% 2.5% 4.0% 4.0% 1.0% Port Hueneme $7/sf N/A 2.0% 2.0% 5.0%2.0% to 5.0%N/A Santa Barbara (City)2.0% 2.0% 4.0% 3.0% 5.0%N/A 4.0% Santa Barbara County 4.0% 1.0% 1.0% 3.0% 6.0% 6.0% 0.0% Santa Monica N/A N/A N/A N/A N/A N/A N/A Thousand Oaks $2/sf - $7/sf $1/sf 2.0% 2.5% 4.0% 4.0% 1.0% Ventura (City)$2/sf - $7/sf $1/sf 2.0% 2.5% 4.0% 4.0% 1.0% Ventura County 4.0% 4.0%N/A N/A N/A N/A N/A West Hollywood 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 12 11 CANNABIS REGULATIONS 13 A REGULATORY SYSTEM CAN: Establish facility design and location requirements Give the local agency authority and control over licensing decisions Impose operating restrictions that are more stringent than the State Enhance accountability for security and product safety 12 14 13 ZONING AND LOCATION REQUIREMENTS City can determine allowable zones for each business type City can apply other restrictions such as setbacks from schools, parks or other sensitive uses 15 •Cannabis businesses cannot be located within 600 feet of a “sensitive use,” defined as a school, day care center, or youth center. •Local jurisdictions have the authority to increase/decrease buffer distances, and/or expand the definition of “sensitive use.” STATE-MANDATED BUFFER ZONES 14 16 COMMUNITY PRIORITIES 1 2 3 4 Public Safety Public Health Neighborhood and Land Use Protection Preventing Youth Access 15 17 •Existing State Law: •Security personnel on-site during all hours of operation •24-hour video surveillance •Alarm systems monitored by third-party •Limited access areas •Sign-in/sign-out procedures •Employee badge requirement •Criminal background checks of owners PUBLIC SAFETY •City Regulatory Authority: •Motion sensor lighting •On-site safe/vault •Security patrol or presence when closed •Annual compliance inspections/ financial audits •Criminal background checks of employees •Limitations on amount of cannabis goods in retail space 16 18 PUBLIC HEALTH •Existing State Law: •Third -party testing for mold, pesticides, and other contaminants •Product labeling / dosing •THC concentration limits •Daily purchase limits for customers •No public consumption •Dedicated public health program funding through cannabis tax revenue •City Regulatory Authority: •Warning signage inside facility •Display of CDPH health pamphlets •Visibility restrictions •Budtender training program •Annual public health fee •Allocation of tax revenues to fund local public health programs 17 19 LAND USE PROTECTION •Existing State Law: •Sensitive use buffer requirements •Cannabis waste disposal requirements •Cannabis goods display only in retail area •Opaque exit packaging requirement •Shipment of cannabis goods may only be accepted during business hours •Mandatory 10PM closure •City Regulatory Authority: •Exterior lighting + landscaping •Stringent facility design standards •Strict enforcement of odor control •Exterior waste receptacles and scheduled cleaning •Designated community liaison •Prohibition on queue outside facility •Further restrictions on hours of operation (e.g. 9PM closure) 18 20 PREVENTING YOUTH ACCESS •Existing State Law: •Retailers cannot sell cannabis to persons under 21 (or 18 with medical ID card) •ID verification prior to entry •Employee presence at all times •Track and trace of cannabis goods •Tamper-evident child-resistant packages •Product warning labels •Universal cannabis symbol: •City Regulatory Authority: •Underage decoy program •Routine inspections •Funding of youth prevention services using cannabis tax revenues •Annual license renewals with automatic revocation for underage sales •Prohibition on temporary signage 19 21 REVENUE GENERATING STRATEGIES 20 FEES •Application fees •Regulatory fees •Limited to cost recovery only TAXES •% gross receipts •$ per square foot •Requires voter approval AGREEMENTS •Provide agreed- upon benefits to the City or community 22 CANNABIS RETAIL TAX REVENUE Annual Retail Cannabis Tax Revenue Potential cannabis retail sales: $12 million Potential cannabis tax revenue: $500,000 to $700,000 Depending upon tax rate Plus $230,000 in sales tax and Measure BB 21 23 PROCESS FOR REGULATORY DEVELOPMENT(IF APPLICABLE) 01 Step I Step II Step III Inform the City Council and the community Conduct community survey/stakeholder meeting Analyze sensitive buffers and make recommendations Evaluate impacts of surrounding jurisdictions/neighborhoods 22 24 02 PROCESS FOR REGULATORY DEVELOPMENT (IF APPLICABLE) Step I Step II Step III Draft a regulatory ordinance which includes best practices Draft zoning ordinance and present to Planning Commission Conduct study sessions & public hearing to City Council on regulatory and zoning ordinances 23 25 PROCESS FOR REGULATORY DEVELOPMENT (IF APPLICABLE) Ma 03 Step I Step II Step III Develop application process Establish application fees to recover all associated cost with the application process Present a Cannabis Tax Measure to the voters for approval 24 26 Key Policy Decisions •Ban vs. Regulate •Retail vs. Non-Retail •Cap vs. No Cap •Merit vs. Lottery vs. Other •Industrial vs. Commercial •State Buffers vs. Local Buffers •Tax vs. Development Agreement 2527 Questions? 26 28 POLICY DISCUSSION 27 29 POLICY QUESTION #1 Ban or regulate commercial cannabis? BAN REGULATE •Maintain ban on commercial cannabis activity in the City of Winters •Direct staff to draft a regulatory and land use ordinance to bring back to City Council for consideration 28 30 POLICY QUESTION #2 Cannabis license types? RETAIL NON-RETAIL •Storefront retail •Non-Storefront retail-delivery •Cultivation •Manufacturing •Distribution •Laboratory Testing •Microbusiness 29 31 POLICY QUESTION #3 Cap on available licenses? CAP NO CAP •Limit number of businesses through licensing process •Most appropriate for retail license types (e.g. storefront retail) •Requires competitive application process •Total number of licenses determined by other factors (e.g. consumer demand, zoning, buffers, etc.) •Most appropriate for non-retail license types (e.g. distribution, manufacturers, cultivation, and testing labs) 30 32 POLICY QUESTION #4 Application Selection: MERIT FIRST IN LINE LOTTERY HYBRID •Application/ interview ranking •Discretionary approval •First-come, first serve •Online or in- person •Lottery machine •Software •Combination of merit + lottery process 31 33 POLICY QUESTION #5 Location Restrictions: INDUSTRIAL COMMERCIAL MIXED USE •Industrial Park •Manufacturing •Neighborhood Commercial •Community Commercial •Regional Commercial •Downtown Commercial •Planned Developments 32 34 POLICY QUESTION #6 Buffer Distances: STATE DEFAULT LOCALLY DEFINED •600-foot distance from all sensitive uses •Sensitive uses include schools, daycare centers, and youth centers •Distance requirements greater or less than 600 feet •Sensitive uses include other facility types (e.g. parks, libraries, etc.) 33 35 POLICY QUESTION #7 Revenue Options: TAXES FEES OTHER BENEFITS •Percentage of gross receipts •Price per square foot •Requires voter approval •Application fees •Regulatory fees •Limited to cost recovery •Development or operation agreements may be used to negotiate other community benefits 34 36 POLICY QUESTION #8 Community Input: SURVEY COMMUNITY OUTREACH •Online survey •City Council •Planning Commission •Community workshops 35 37 KEY POLICY QUESTIONS – SUMMARY Initial Key Questions: •Ban vs. Regulate •Retail vs. Non-Retail •Cap vs. No Cap •Merit vs. Lottery vs. Other •Industrial vs. Commercial •State Buffers vs. Local Buffers •Tax vs. Development Agreement 38 Questions? 37 39