PREPARED BY: GRIFFEN DEMPSEY DATE OF MEETING: 02/18/2025
SUBJECT:
TITLE
CONSIDER AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN PABLO AMENDING THE SAN PABLO MUNICIPAL CODE (TITLE 17 - ZONING ORDINANCE) TO REVISE EXISTING REGULATIONS PERTAINING TO THE PERSONAL CULTIVATION OF CANNABIS AND TO ESTABLISH LAND USE STANDARDS APPLICABLE TO CERTAIN PERMITTED COMMERCIAL CANNABIS BUSINESSES IN THE CITY OF SAN PABLO.
CEQA: The proposed amendment is exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no potential for causing a significant effect on the environment.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Conduct public hearing; waive first reading; introduce Ordinance
Body
Compliance statements
FY 2023-2025 Council Priority Workplan Compliance Statement
Updating the Zoning Ordinance to revise regulations pertaining to the personal cultivation of cannabis and to establish land use standards applicable to certain permitted commercial cannabis uses would help to promote the City Council Major Policy Goal of Focus on Economic Development and Fiscal Diversification, Priority 405 Explore and Sustain New Revenue Enhancements to the City’s General Fund, and Priority 410 Explore and Research Cannabis Commercial Uses and Impacts.
CEQA Compliance Statement: The proposed amendment is exempt from the California Environmental Quality Act in accordance with CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no potential for causing a significant effect on the environment because the Project solely involves text changes to the municipal code, does not authorize any construction activities, and specifically requires a discretionary conditional use permit process and accompanying environmental review in the event that any retail business is actually proposed.
PUBLIC HEARING NOTICE
A Public Hearing Notice was published in the West County Times (West Contra Costa edition of the East Bay Times) newspaper on Wednesday, January 29, 2025.
BACKGROUND
In 1996, California voters approved Proposition 215, the Compassionate Use Act. The purpose of the Compassionate Use Act is to enable persons who are in need of cannabis for specified medical purposes to obtain and use cannabis under limited circumstances. The Compassionate Use Act (Health and Safety Code (HSC) § 11362.5) established a limited defense for qualified patients and their primary caregivers to the crimes of possessing or cultivating cannabis.
In 2003, the Legislature enacted the Medical Marijuana Program. (Note that marijuana is now more commonly and less pejoratively referred to as “cannabis”). The Medical Marijuana Program (HSC §§ 11362.7-11362.83) established regulations and procedures regarding the issuance of identification cards to patients qualified to use medical cannabis, and clarifies what is a “reasonable” amount of cannabis for personal medical use. The Medical Marijuana Program also established a defense to criminal liability for the collective or cooperative cultivation of cannabis.
On November 8, 2016, California voters approved Proposition 64, The Adult Use of Marijuana Act, legalizing the use, sale and cultivation of recreational cannabis for adults 21 and over. This act decriminalized the adult use of cannabis and the personal cultivation of up to six marijuana plants, as well as creating a state regulatory licensing system governing the commercial cultivation, testing, and distribution of nonmedical cannabis, and the manufacturing of cannabis products. Local jurisdictions were left with the authority to adopt and enforce local ordinances regulating or completely prohibiting state-licensed cannabis businesses. Local jurisdictions may establish standards, requirements, and regulations regarding health and safety, environmental protection, testing, security, food safety, and worker protections that exceed state standards.
Many cities across the state have since adopted ordinances allowing for various forms of commercial cannabis establishments, including retail cannabis. Cannabis retail businesses are now common throughout Contra Costa County, the Bay Area and statewide, although many jurisdictions still prohibit commercial cannabis uses.
Governor Jerry Brown signed Senate Bill 94 on June 27, 2017, merging California's cannabis laws into a single regulatory system for medical and nonmedical commercial cannabis businesses. The budget trailer bill ("SB 94") took effect immediately. The extensive legislation repeals the Medical Cannabis Regulation and Safety Act ("MCRSA"), passed in 2015, and incorporates many of MCRSA's provisions into the Adult Use of Marijuana Act ("AUMA"). The new comprehensive regulatory system, intended to regulate all commercial cannabis uses, is called the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA"). SB 94 preserves local control over cannabis businesses, which includes enforcing Fire and Building Codes at cannabis businesses.
In response to the adoption of MAUCRSA, the City of San Pablo adopted Ordinance 2017-005 on September 18, 2017 prohibiting the establishment of all commercial cannabis activities and businesses within the City. Pursuant to Ordinance 2017-005, the existing Zoning Ordinance prohibits recreational and medical marijuana facilities, delivery and cultivation (existing Section 17.62.130). The only exception is for personal cultivation of up to 6 marijuana plants, as required by state law.
The City Council’s 2023-2025 Council Priority Workplan included Policy #405, Explore and Sustain new Revenue Enhancements to the City’s General Fund, and Policy #410, Explore and Research Cannabis Commercial Uses and Impacts. On July 15, 2024, the City Council adopted Resolution 2024-105, placing a measure on the November 5th ballot to impose a commercial cannabis business license tax, providing potential additional general fund revenue to the City. This measure, known as Measure M, passed with 72.69% support from voters, allowing the City to begin taxing legal cannabis businesses.
This proposed Ordinance introduces a regulatory framework to allow for retail cannabis businesses to operate within the City of San Pablo, establishing definitions, use regulations, and permitting processes for this use type.
The San Pablo Planning Commission held a duly noticed public hearing on the proposed amendments at its regular meeting on January 28, 2025 and approved PC25-01, by a vote of 4 ayes and 1 absent, recommending that adoption by the city council. Further discussion of the Planning Commission’s recommendation is provided in a section below.
RETAIL CANNABIS REGULATORY FRAMEWORK
In response to City Council priority workplan policies to explore commercial cannabis uses to enhance general fund revenues for San Pablo and the passage of Measure M, staff have created a framework for allowing up to three retail cannabis businesses to operate within the City of San Pablo. The proposed Ordinance introduces two layers of review for prospective retail cannabis businesses (Operator Permit and Conditional Use Permit). In addition, a Request for Proposals (RFP) will be issued by the City to recruit and evaluate potential operators. The RFP is not included within the ordinance and will be a separate, one-time process to be administered by the City Manager’s office and will aim to solicit operators that can demonstrate that they will be able to meet the requirements of the Ordinance.
Following the initial selection of operators, each will be required to obtain an Operator Permit. The Zoning Administrator issues these Operator Permits, with decisions appealable to the City Manager. Once applicants have secured an Operator Permit, they must then also obtain a Conditional Use Permit, which requires approval from the Planning Commission at a public hearing and will be appealable to City Council. Once an operator has been selected through the RFP process and has acquired both the Operator and Conditional Use permits, as well as all other necessary state or local permits and licenses, they would be able to begin operations in the City. An overview of the proposed changes to the Municipal Code that will facilitate this process can be found below; the proposed text changes and additions to the Municipal Code can be found in Attachment B.
OVERVIEW OF PROPOSED ORDINANCE
Below is a summary of the primary amendments that are proposed with the ordinance:
1. Retail cannabis businesses. The draft ordinance defines “Retail cannabis businesses” in existing section 17.70 and includes the use in all the Use Tables. The use is prohibited in all residential and public/semi-public zoning districts, while it is permitted subject to a conditional use permit in all commercial and industrial zoning districts.
2. Medical cannabis and cannabis delivery. The draft ordinance removes outdated references to “Medical cannabis facilities” and “Cannabis, delivery” from all use tables and from the definitions in section 17.70.
3. Regulation of cannabis activity. The ordinance replaces Chapter 17.62 - Special Nonresidential Uses, Section 17.62.130 - Cannabis facilities, delivery, and cultivation with a new section titled “Regulation of Cannabis Activity.” This section includes the following:
a. Definitions. New definitions are included for a number of relevant terms and phrases.
b. Legal framework. The section describes the applicability of the code and prescribes limitations on use and operations.
c. Cannabis cultivation. Rules and regulations governing cannabis cultivation remain consistent with those currently listed in Section 17.62.130, including the prohibition of commercial cannabis cultivation within the City.
d. Commercial Cannabis. Rules and regulations are set forth for retail cannabis businesses. This includes the zoning districts where retail businesses may locate, the land use buffers around schools and other cannabis uses, the types of permits required, performance standards, and fees. Retail cannabis uses are to be permitted in the Neighborhood Commercial (NC), Commercial Mixed Use (CMU), Regional Commercial (CR), and Industrial Mixed Use (IMU) zones, as well as the Commercial Mixed-Use zone of the 23rd Street Specific Plan and the Commercial Mixed-Use, Regional Commercial, and Entertainment Overlay districts of the San Pablo Avenue Specific Plan. Cannabis uses must be at least 750 feet from any elementary or middle school, 1,250 feet from any high school, and 1,000 feet from any other permitted cannabis use.
e. Operator permits. There are requirements and procedures for applying for and approving cannabis operator permits. This section details the submittal requirements for applicants, the application and selection process, performance standards, and procedures for renewal, transfer, suspension, modification, and revocation, as well as appeals of these actions. This section includes requirements for background information about the operator, proof of insurance, conceptual plans, and a security plan, among other requirements. Performance standards include requirements for alarms, video surveillance, and on-site security, as well as odor control, limits on hours of operation, and prohibition of on-site consumption of cannabis products.
f. Conditional use permits. Retail cannabis uses must acquire a conditional use permit to operate in all commercial zones. Submittal requirements, findings, and conditions for the use permit process are specified.
g. Enforcement. Specific terms for addressing and remedying violations are provided within the section.
SUMMARY OF CHANGES
This is a City-initiated text amendment to Sections 17.32.030, 17.34.030, 17.36.030, 17.62.130, and 17.70.040 of the Municipal Code. Below is a summary of the specific language changes that are proposed.
1. Section 17.70.040, Use Classification Descriptions, is updated to remove the “Medical cannabis facility” use classification and introduce the “Cannabis retail business” use classification.
2. Section 17.32.030, Residential Districts, Allowed Uses, and Development Standards, Table 17.32-A-Residential Districts: Use Regulations is amended to remove the Cannabis, Delivery and Medical Cannabis Facility uses and to introduce the Cannabis, Retail Business use, which is designated as Prohibited in the R-1, R-2, R-3, R-4, and RMU zones.
3. Section 17.34.030, Commercial and Industrial Districts, Allowed Uses, and Development Standards, Table 17.34-A-Commercial and Industrial Districts: Use Regulations is amended to remove the Cannabis, Delivery and Medical Cannabis Facility uses and to introduce the Cannabis, Retail Business use. This use is designated in the table as permitted subject to a Conditional Use Permit in the NC, CR, CMU, and IMU zones.
4. Section 17.36.030, Public and Semi-Public Districts, Allowed Uses, and Development Standards, Table 17.36-A-Public and Semi-Public Districts: Use Regulations is amended to remove the Cannabis, Delivery and Medical Cannabis Facility uses and to introduce the Cannabis, Retail Business use, which is designated as Prohibited in the I and OS zones.
5. The contents of Chapter 17.62, Special Nonresidential Uses, Section 17.62.130, Cannabis facilities, delivery, and cultivation are struck in their entirety and replaced with a new regulatory framework for retail cannabis and cannabis cultivation. New definitions are introduced. Provisions regarding personal cultivation of cannabis remain largely similar. A new subsection details the regulations and standards for retail cannabis businesses and sets forth the process for such uses to obtain an Operator Permit and Conditional Use Permit.
GENERAL PLAN COMPLIANCE
State law requires the City’s Zoning Ordinance to be consistent with the General Plan. (Gov. Code Section 65860.) The proposed ordinance is consistent with the following General Plan policies:
ED-G-1 Review, assess, and respond to the changing economic conditions.
ED-G-5 Preserve and enhance the qualities that make San Pablo an ideal place to do business.
ED-I-3 Attract new businesses, focusing on business that:
• Possess a high growth potential…;
• Generate net fiscal benefits to the City through high tax revenues;
…
• Complement or augment existing goods and services in San Pablo
…;
• Require minimal public investment
ED-I-26 Undertake strategic initiatives to attract new retail and commercial development.
LU-G-2 Ensure planned land uses are compatible with existing uses and provide for appropriate transitions or buffers for new uses, as needed.
LU-G-7 Retain and enhance existing commercial, industrial, educational, and entertainment land use areas to strengthen San Pablo’s economic base.
LU-I-10 Continue to involve the Police Department in the development review process to ensure new buildings are designed with security and safety in mind.
The proposed ordinance would enable a potentially profitable new type of business to begin operating in San Pablo while ensuring appropriate safeguards are in place to protect public safety and prevent negative community impacts. Cannabis operators would bring in significant commercial activity and tax revenue, helping ensure the fiscal stability of the City and providing revenue that can help fund improved community services and City functions.
ZONING ORDINANCE COMPLIANCE:
By updating the Zoning Ordinance to facilitate the orderly administration and permitting of retail cannabis businesses in the City, the proposed amendments are consistent with the purposes of the Zoning Ordinance:
Pursuant to Zoning Ordinance Section 17.01.020, “Purpose,” the purpose of the ordinance is to promote growth of the city in an orderly manner and to promote and protect the public health, safety, peace, comfort, and general welfare in conformance with the general plan. In addition, pursuant to Zoning Ordinance Section 17.32.010, “Purpose,” the ordinance helps to produce healthy, safe, and attractive neighborhoods in San Pablo, consistent with the policy direction in the San Pablo general plan.
The proposed amendment sets forth a clear and transparent process for attracting and regulating retail cannabis businesses, allowing this type of use to operate in San Pablo while mitigating potential negative impacts on the community through a rigorous review process, including an Operator Permit and Conditional Use Permit.
PLANNING COMMISSION RECOMMENDATION
The San Pablo Planning Commission held a duly noticed public hearing on the proposed amendments at its regular meeting on January 28, 2025 and approved PC25-01, by a vote of 4 ayes and 1 absent, recommending adoption of the proposed Ordinance by the City Council. The Planning Commission further recommended two changes to the proposed amendments. The first change recommended was to allow for on-site consumption of cannabis at cannabis retail facilities. The Planning Commission’s rationale was that disallowing this type of use could discourage prospective cannabis operators from locating in the City. Staff does not recommend making this change due to the different nature and intensity of on-site consumption uses relative to cannabis storefront sales. On-site consumption would also present significant additional challenges for police response, such as greater issues with people congregating and consuming cannabis in one location and potentially leaving the establishment under the influence, as well as increased impacts on neighbors, with higher potential for odors to affect surrounding properties. The Planning Commission also recommended exploring increased buffer zones around sensitive land uses, particularly around elementary and middle schools. Staff does not recommend increasing these buffer zones as the current buffers are similar in distance or greater than peer jurisdictions as well as state guidelines. Additionally, increasing these buffers would make a larger number of commercial parcels ineligible for retail cannabis operations, reducing the likelihood of the City attracting the desired number of operators and being able to collect the tax revenue from these uses.
PUBLIC COMMENT RECEIVED
The City received three comment letters for the Planning Commission hearing. The first undated comment was received on January 27th from the Alcohol, Marijuana, and Prescription Drug Coalition, a program of Bay Area Community Resources, a nonprofit organization. The letter described the negative impacts of cannabis on the health of youth, and urged the City to implement buffers of 1,000 feet from schools, residential neighborhoods, places of worship, and any locations where youth gather, such as parks, libraries and recreational facilities. Staff does not recommend implementing the buffers suggested in the comment letter as they would preclude almost all commercial parcels in the city from hosting a cannabis retail business. Additionally, the buffers proposed in the Ordinance are greater than the State standard of 600 feet and are in line with or in excess of the buffers required by peer jurisdictions.
A second comment letter dated January 28, 2025 and received on January 28th was from a representative of the Contra Costa Health Cannabis Prevention program. The letter discussed the importance of safeguarding youth from cannabis, and recommended that the City restrict advertising of cannabis, enforce strict buffer zones between retail dispensaries and youth-sensitive areas such as schools, parks, daycare centers, and recreational facilities, and limit the number of dispensaries in close proximity to one another. The Ordinance as written does included appropriate buffers between retail dispensaries and youth-sensitive uses.
A third letter dated January 28th, 2025 was from a representative of Contra Costa Health’s Tobacco and Cannabis Prevention Program. This letter also spoke of the risks of exposing youth to cannabis and recommended that the City limit high-potency THC products, restrict advertising and billboards for cannabis products, and prohibit flavored cannabis products. Cannabis facilities in San Pablo would be required to comply with State-mandated limits on potency and type of cannabis products. Advertising of cannabis facilities and products is currently subject to both federal and state regulation. Additional regulation implicates potential First Amendment limitations and applicable Case law pertaining to commercial speech.
CONCLUSION
Staff recommends that the City Council review the proposed amendments, take public testimony, and introduce the attached ordinance amending the Zoning Ordinance (Title 17) Chapter 17.32, Section 17.32.030; Chapter 17.34, Section 17.34.030; Chapter 17.36, Section 17.36.030; Chapter 17.62, Section 17.62.130, and Chapter 17.70, Section 17.70.040, revising existing regulations pertaining to the personal cultivation of cannabis and to establish land use standards applicable to certain permitted commercial cannabis businesses in the City of San Pablo.
ATTACHMENTS
Att A - Proposed City Council Ordinance
Att B - Resolution PC25-01 recommending approval of the Zoning Ordinance amendment to the City Council with proposed Text Amendment with strike-outs attached
Att C - Map of eligible retail cannabis locations under proposed land use framework
Att D - Public comment letters
Att E - Proof of Publication