PREPARED BY: GRIFFEN DEMPSEY DATE OF MEETING: January 28, 2025
SUBJECT:
TITLE
AMENDMENTS TO THE SAN PABLO ZONING CODE 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 ESTABLISHING 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
Location: Citywide
APN: Citywide
Zoning: Citywide
CEQA: Exempt from CEQA in accordance with Guidelines Section 15061(b)(3)
PLAN #: PLAN2411-0003
Applicant: City of San Pablo
Staff Contact: Griffen Dempsey, Assistant Planner
Recommendation
Conduct public hearing; adopt Resolution
Body
STAFF RECOMMENDATION
Approve Resolution recommending approval of PLAN2411-0003, subject to findings. This is a recommendation by the Planning Commission to the City Council for approval of an amendment to the Zoning Ordinance provisions in the Municipal Code related to certain permitted commercial cannabis businesses.
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 8, 2025.
ENVIRONMENTAL DOCUMENTATION
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 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.
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.
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. The ordinance sets forth a thorough administrative review that operators must undergo in order to first obtain an Operator Permit. Following the initial selection of operators, the Operator Permit will be administered by the Zoning Administrator, 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.
STAFF RECOMMENDATION
Adopt Resolution recommending that the City Council approve zoning text amendments to Chapters 17.32, 17.34, 17.36, 17.62, and 17.70 of the Zoning Ordinance.
CONCLUSION
The purpose of this public hearing is for the Planning Commission to review the proposed zoning ordinance amendment, take public testimony, and make a recommendation to the City Council.
The Draft Text Amendment (Exhibit 1 to Attachment A) incorporates the recommended amendments to the Zoning Ordinance in strike-out and underline format.
ATTACHMENTS
A. Resolution PC25-01 recommending approval of the Zoning Ordinance amendment to the City Council.
B. Proposed Text Amendment
C. Map of eligible retail cannabis locations under proposed land use framework
D. Proof of Publication