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HomeMy WebLinkAbout17 - NB-2 - Submission to the Voters at the Nov 8, - 6/7/2016CITY COUNCIL AGENDA REPORT MEETING DATE: June 7, 2016 ITEM NUMBER: NB -2 SUBJECT: SUBMISSION TO THE VOTERS AT THE NOVEMBER 8, 2016 GENERAL MUNICIPAL ELECTION TWO PROPOSED ORDINANCES QUALIFIED BY VOTER INITIATIVE ALLOWING OPERATION OF LICENSED MEDICAL MARIJUANA BUSINESSES IN THE CITY OF COSTA MESA DATE: May 27, 2016 FROM: Brenda Green, City Clerk Tarquin Preziosi, Deputy City Attorney PRESENTATION BY: Tarquin Preziosi, Deputy City Attorney FOR FURTHER INFORMATION CONTACT: Brenda Green, City Clerk, 714-754-5221 RECOMMENDATION: Staff recommends that the City Council: 1. Adopt Resolution 2016-29: Calling and giving notice for the holding of a General Municipal election to be held on November 8, 2016 for the submission to the voters of a proposed ordinance entitled, "Allow Operation of up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa"; and 2. Adopt Resolution 2016-30: Calling and giving notice for the holding of a General Municipal election to be held on November 8, 2016 for the submission to the voters of a proposed ordinance entitled, "Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa"; and 3. Adopt Resolution 2016-31: Requesting the Orange County Board of Supervisors to Consolidate a General Municipal election to be held on November 8, 2016, for the purpose of submitting to the voters of the City of Costa Mesa two questions relating to the adoption of proposed ordinances; and 4. Adopt Resolution 2016-32: Authorizing written arguments for or against the proposed ordinance to Allow Operation of up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa; setting priorities for filing written arguments, determining the authors of the written arguments, and directing the City Attorney to prepare an impartial analysis; and 5. Adopt Resolution 2016-33: Authorizing written arguments for or against the proposed ordinance to Allow Operation of up to Four Medical Marijuana Businesses in the City of Costa Mesa; setting priorities for filing written arguments, determining the authors of the written arguments, and directing the City Attorney to prepare an impartial analysis; and 1 6. Adopt Resolution 2016-34: Authorizing the filing of rebuttal arguments for City measures submitted at municipal elections. BACKGROUND Two initiative petitions each with the intent of authorizing the operation of medical marijuana businesses within the City of Costa Mesa, have qualified for placement on the November 8, 2016 ballot. At the November 18, 2014 City Council meeting, City Council ordered a report pursuant to Election Code Section 9212 for two qualifying medical marijuana ballot initiatives, a report for a proposed City's Medical Marijuana Ordinance, and a report on the City of Santa Ana's Ordinance. The City Council met on December 16, 2014 to discuss the report and approved June 7, 2016, as the date to agendize the resolutions to order the two initiatives to be placed on the November 8, 2016 ballot. FISCAL IMPACT OF PLACING MEASURE ON BALLOT The cost to place both initiatives on the November 2016 ballot is estimated at $20,000.00, and is included in the Fiscal Year 2016-17 preliminary budget, Elections Consulting. LEGAL REVIEW The City Attorney's office has reviewed the report and approved as to form. CONCLUSION Adoption of the proposed Resolutions ensures compliance with the California Elections Code which mandates the process for placement of the initiative on the November 8, 2016 ballot. BRENDA GREEN City Clerk RICHARD L. FRANCIS Assistant Chief Executive Officer Attachments: 1. Resolution 2016-29 2. Resolution 2016-30 3. Resolution 2016-31 4. Resolution 2016-32 5. Resolution 2016-33 6. Resolution 2016-34 TARQUIN PREZIOSI Deputy City Attorney 2 RESOLUTION NO. 16-29 ATTACHMENT 1 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, CALLING AND GIVING NOTICE FOR THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2016 FOR THE SUBMISSION TO THE VOTERS OF A PROPOSED MEASURE THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, pursuant to authority provided by statute a petition has been filed with the legislative body of the City of Costa Mesa, California, signed by more than fifteen percent (15%) of the number of registered voters of the city to submit a proposed ordinance entitled: Allow Operation of up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa; and WHEREAS, the City Clerk has caused to be examined, through the office of the Orange County Registrar, the records of registration and is in receipt of that certain "Certificate as to Verification of Signatures on Petition," from the Orange County Registrar, has examined such certificate and has accepted as true and correct the findings contained therein and, thereby, ascertained that the petition is signed by the requisite number of voters; and WHEREAS, the City Council has not voted in favor of the adoption of the ordinance; and WHEREAS, the City Council is authorized and directed by statute to submit the proposed ordinance to the voters; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on November 8, 2016 a General Municipal Election for the purpose of submitting the following proposed ordinance: Resolution No. 16-29 Page 1 Measure : Allow Operation of up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana (cannabis) businesses with: six percent tax on Yes medical marijuana (estimated annual tax revenues $48,000 to $912,000); one percent tax on other products; exemption No from permits; regulations not subject to change by City Council except for increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached as Exhibit A. SECTION 4. That the vote requirement for the measure to pass is a majority (50% +1) of the votes cast. SECTION 5. That the ballots to be used at the election shall be in the form and content as required by law. SECTION 6. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 7. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same day when said polls shall be closed, pursuant to Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That the Orange County Registrar of Voters is authorized to canvass the returns of the General Municipal Election. SECTION 8. That in all particulars not recited in this resolution, said election shall be held and conducted in accordance with the provisions of law regulating the statewide election. SECTION 9. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give such further or additional notice of the election, in the time, form, and manner required by law. Resolution No. 16-29 Page 2 SECTION 10. The Costa Mesa City Council hereby requests that the Orange County Registrar of Voters conduct all necessary services related to the Costa Mesa General Municipal Election. Pursuant to Elections Code Section 10002, the Finance Director, or his/her designee, is hereby authorized to reimburse the County for the actual cost incurred in conducting the election upon receipt of a bill stating the amount due as determined by the elections official. SECTION 11. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 7t" day of June, 2016. Stephen M. Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 16-29 was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 7t" day of June, 2016, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 8t" day of June, 2016. BRENDA GREEN, CITY CLERK Attachment: Exhibit A — Proposed Ordinance Resolution No. 16-29 Page 3 Exhibit A INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS Committee of proponents, who are residents of the City of Costa Mesa, sponsoring the petition: Robert Taft, Jr. Kevin Gardner TEXT OF THE PROPOSED MEASURE: MEDICAL CANNABIS CONTROL ACT. Section 1 — Title This initiative shall be known and may be cited as the Medical Cannabis Control Act. Section 2 — Findings and Declarations Pursuant to, and consistent with the current California law concerning medical cannabis, the City of Costa Mesa shall enact an ordinance creating Title 9, Chapter VI of the Costa Mesa Municipal Code, and amend in its entirety Title 13, Chapter 1, Article 2, Section 13-6, and amending Row 31(a) of Title 13, Chapter 4, section 13-30, and amending Title 9, Chapter 1, Article 5, Section 9-32 of the Costa Mesa Municipal Code, in order to authorize the establishment of medical cannabis businesses, to restrict and limit such medical cannabis businesses by imposing strict regulations on such businesses to protect the health, safety, and welfare of the community; WHEREAS, the Compassionate Use Act ("CUA"), adopted by California voters in 1996, and the Medical Marijuana Program Act ("MMPA"), enacted by the State Legislature in 2003, decriminalized the cultivation and use of marijuana by seriously ill individuals upon a physician's recommendation and provided California's qualified patients and their primary caregivers with specified immunities under state law, thereby helping to ensure that qualified patients and their primary caregivers, who possess and use marijuana for medical purposes, are not subject to criminal prosecution and/or sanction; WHEREAS, the Costa Mesa Police Department ("CMPD") has reported that the number of marijuana dispensaries and commercial growing operations proliferated though out the City in the past without sufficient legal oversight, the City and its neighborhoods have experienced negative secondary effects, including an increase in crime at certain locations associated with unregulated medical cannabis businesses; WHEREAS, there presently are no ordinances in the City of Costa Mesa specifically regulating or monitoring the location, zoning standards, or other aspects of the locations and facilities where medical cannabis will be dispensed to eligible persons under state law; -5- MEDICAL CANNABIS CONTOL ACT WHEREAS, medical cannabis businesses must operate with reasonable regulation, to ensure that those seriously ill residents of the City benefit from the palliative effects of medical cannabis have access they are provided under state law; WHEREAS, by implementing a fair and reasonable registration process for medical cannabis businesses, the City will be able to maintain order while avoiding undue burdens on its already strained financial resources; WHEREAS, the City has a substantial and clear interest in ensuring that medical cannabis is distributed in an orderly manner, and in protecting the public health, safety and welfare of its residents, its businesses, the neighborhoods in which medical cannabis businesses operate, while ensuring compassionate access to seriously ill residents to medical cannabis in accordance with the CUA and the MMPA; WHEREAS, the regulations in this initiative do not interfere with a qualified patient's right to use medical cannabis as authorized under California law, nor do they criminalize the possession or cultivation of medical cannabis by specifically defined classifications of persons, as authorized under California law; WHEREAS, medical cannabis businesses shall comply with all provisions of the Costa Mesa Municipal Code ("Code"), California law, and all other applicable local laws; nothing in this initiative purports to permit activities that are otherwise illegal under state or local law; WHEREAS, this initiative is not intended to conflict with federal or state law, nor is it intended to respond to or invite litigation over any unresolved legal questions posed by the California Attorney General or by case law regarding the scope and application of state law; it is intended that this initiative be interpreted to be compatible with federal and state enactments and in furtherance of the public purposes that those enactments encompass; WHEREAS, the People of the City of Costa Mesa find that nonprofit medical cannabis businesses which operate in full compliance with the State Compassionate Use Act, the Medical marijuana program act, and the Attorney General Guidelines demonstrate a willingness to engage in lawful activity which benefits economic costs associated with the City of Costa Mesa's local regulation and enforcement efforts; WHEREAS, to that end, the People of Costa Mesa further find that those nonprofit medial marijuana businesses, as set forth in the above paragraph, have been precluded from operation in the City of Costa Mesa due to the inability to obtain a business license under the City of Costa Mesa's Municipal Code. Those medical cannabis businesses who never operated in in Costa Mesa without a business license yet have or have attempted to comply with the Compassionate Use Act, the Medical marijuana program act, the Attorney General's Guidelines, and the Costa Mesa Municipal Code by applying for a business license and when denied did not violate the law and commence operation of a medical cannabis business illegally should be given a preference for obtaining "Priority Registration" status as that term is herein defined, to operate under Title 9, Chapter VI. WHEREAS, the People of the City of Costa Mesa recognize that an ordinance proposed by a voter initiative and adopted by a vote of the People cannot be repealed or amended, except by a vote of the People pursuant to the California Constitution, Article 2, Section 10; -6- MEDICAL CANNABIS CONTOL ACT WHEREAS, the People of the City of Costa Mesa further find and declare that this initiative is enacted pursuant to the powers reserved to the State of California, the City of Costa Mesa, and its People under the Tenth Amendment of the United States Constitution, Article 2 of the California Constitution, and the California Health and Safety Code Sections 11362.5 and 11362.7 et seq. NOW, THEREFORE, the People of the City of Costa Mesa ordain as follows: SECTION 3 - Amendment to the Costa Mesa Municipal Code to Add Title 9, Chapter VI. The People of the City of Costa Mesa do hereby enact and ordain that Title 9 of the Costa Mesa Municipal Code, entitled Licenses and Business Regulations, is hereby amended to add Chapter VI to read as follows: (Any underlined language is new and shall be inserted into the Chapter) CHAPTER VI. - MEDICAL CANNABIS BUSINESSES 9-481 Authority and title 9-482 Release of liability and hold harmless 9-483 Purpose and intent 9-484 Physicians/patient confidentiality 9-485 Definitions 9-486 Medical cannabis businesses prohibited 9-487 Limited immunity 9-487.1 Operational requirements 9-488 Cultivation of medical cannabis 9-489 Transportation of medical cannabis 9-490 Violation and enforcement 9-491 Majority approval; effective date 9-492 Competing measures. 9-493 Amendment and repeal. 9-494 Severability. 9-495 Statewide regulation. 9-496 Special or general election. SEC. 9-481 Authority and title. Pursuant to the authority granted by the California Constitution Article 2 and California Health mid Safety Code Sections 11362 and 11362 7 et sen the People of the City of Costa Mesa do enact this Chapter, which shall be known and may be cited as the "Medical Cannabis Control Act." -7- MEDICAL CANNABIS CONTOL ACT SEC. 9-482 — Release of liability and hold harmless. To the fullest extent permitted by law, the City of Costa Mesa shall assume no liability whatsoever, and expressly does not waive sovereign immunity, with respect to the medical cannabis business program established herein, or for the activities of any medical cannabis business. Each medical cannabis business recognized by the city shall a. Release the cites agents, officers, elected officials, and employees from any injuries, damages, or liabilities of any kind that result from any arrest or prosecution of the medical cannabis provider association or its participants for a violation of state or federal law. b. Indermiify and hold harmless the City, its agents, officers, elected officers and employees for any claims, damages, or injuries brought by adjacent or nearby property owners or other third parties due to the operations at the medical cannabis business and or premises; and c. Indemnify and hold harmless the City, its is agents, officers, elected officials and employees for any claims, damages, or injuries brought by any of its participants for problems, injuries, damages, or liabilities of any kind that may arise out of the distribution, cultivation and/or use of medical cannabis provided at the medical cannabis business and/or premises. SEC. 9-483 - Purpose and intent. It is the purpose and intent of this Article to limit the maximum number and concentration of medical cannabis businesses in the City, to provide needed tax revenue to the City, and to regulate the operation of medical cannabis businesses in order to ensure the health, safety and welfare of the residents of the City of Costa Mesa The regulations in this Chapter, in compliance with the Compassionate Use Act, the Medical marijuana program act, and the California Health and Safety Code do not interfere with a qualified patient's right to use medical cannabis as authorized under California law, nor do they criminalize the possession or cultivation of medical cannabis by specifically defined classifications of persons, as authorized under California law. Medical cannabis businesses shall comply with all provisions of the Costa Mesa Municipal Code ("Code") and California laws. Nothing in this Article purports toep rmit activities that are otherwise illegal under federal, state or local law. This Article is not intended to conflict with federal or state law, nor is this Article intended to respond to or invite litigation over any unresolved legal questions posed by the California Attorney General or by case law regarding the scope and application of state law. It is intended that this Article be interpreted to be compatible with federal and state enactments and in furtherance of the public purposes that those enactments encompass. _8— MEDICAL CANNABIS CONTOL ACT SEC. 9-484 — Phvsician/Patient confidentiali Requirements set forth pursuant to this Chapter shall preserve to the maximum extent possible all legal protections and privileges, consistent with reasonably verifying the qualifications and status of qualified patients and primary caregivers. Disclosure of any patient information to assert facts in support of qualified status shall not be deemed a waiver of confidentiality of that information. SEC. 9-485. Definitions. A. The following phrases and words, when used in this section, shall be constnied as defined below. Words and phrases not defined here shall be construed as defined in Costa Mesa municipal code or state law. "Building" means any structure having a roof supported by columns or walls for the housing shelter or enclosure of persons, animals, chattels, or property of any kind. "Caimabis" or "marijuana" shall be construed as defined in California Health and Safety Code Section 11018 and further shall specifically include any product that contains marijuana or a derivative of marijuana and all parts of the plant Ll cannabis whether growing or not the seeds thereof; the resin extracted from any Llpart of the plant; and every compound manufacture salt derivative, mixture, or[lpreparation of the plant, its seeds or resin. It includes marijuana infiised in[Ifoodstuff. It does not include the mature stalks of the plant fiber produced from 11the stalks oil or cake made from the seeds of the plant any other compound,[] manufacturesalt derivative mixture, or preparation of the mature stalks (except 0the resin extracted therefrom) fiber oil or cake, or the sterilized seeds of the plant❑ are incapable of germination. ❑ "Collectives" and "cooperatives" when referring to medical cannabis Oorganizations, both mean associations of five or more qualified patients persons El with identification cards or primarv caregivers of qualified patients and persons El With identification cards who associate as an incorporated or unincorporatedL7association, to collectively or cooperatively cultivate and distribute medical 11 cannabis for use exclusively by their registered members in strict accordance withOCalifornia Health and Safety Code sections 11362.5 and 11362.7 et sen "Cultivation" means the planting, growing, harvesting, drying, processing or storage of one or more marijuana plants or any part thereof in any location, indoor or outdoor, including from within a filly enclosed an secure building. "Edible products" means marijuana cultivated by medical cannabis businesses and participants thereof, that is made available in an edible form and prepared in a certified kitchen meeting all the applicable health requirements to be used and ingested solely by qualified patient participants as part of their medical regime, in strict accordance with state law. "Felony Conviction" means any conviction whether by guilty plea judicial ruling or jury_ verdict, of any felony offense. A conviction of a felony offense that has been dismissed withdrawn, expunged, or set aside, whether pursuant to California Penal Code section 1203 .4, _9_ MEDICAL CANNABIS CONTOL ACT California Penal Code section 1000 California Penal Code section 1385 the interest of justice or any other judicial ruling or agreement of the prosecution shall not be deemed a felony conviction. "Live Scan" means a system for inkless electronic fingerprinting and the automated background check developed by the California Department of Justice ("DOJ") which involves di itizing fingerprints and electronically transmitting the fingerprint image data along with personal descriptor information to computers at the DOJ for completion of a criminal record check or such other comparable inkless electronic fingerprinting_ "Location" means any parcel of land, whether vacant or occu ip ed by a building group of buildings, or accessory buildings and includes the buildings structures yards open spaces lot width, and lot area. "Manager" means any person with responsibility for the establishment organization registration, supervision, or oversight of a medical cannabis business including but not limited to any person who performs the functions of president vice president board member, director, owner, operating officer, financial officer, secretary, or treasurer of the medical cannabis business. "Medical cannabis" and "medical marijuana" means cannabis that isl1grown used and distributed pursuant to the provisions of California Health andDSafety Code sections 11362.5 and 11362.7-11362.83, including all cannabis Oproducts. infusions and concentrates containing the active ingredients of the 0cannabis plant. "Medical cannabis businesses" means the following: an unincorporated or incorporated entity or association of qualified patients and/or primary caregivers and/or persons with identification cards who provide money and in-kind contributions reimbursements and reasonable compensation towards the aforementioned entity's actual expenses for activities including but not limited to; planting cultivation harvesting transporting manufacturing compounding_ converting_ processing preparing storing packaging_ providing and/or retail sales of medical cannabis. A medical cannabis business may provide medical cannabis products services and assistance to qualified patients, persons with a medical cannabis identification card (as set forth in the MMPA), or the primary caregiver of such persons. Medical cannabis businesses may assist with the acquisition of skills necessary to cultivate or provide marijuana for medical purposes in compliance with State Law. A medical cannabis business includes any facility, building structure or location whether permanent or temporary, where marijuana is made available, sold, given away, distributed, or otherwise provided in accordance with Health and Safety Code section 11362.5 et sea. A medical cannabis business includes medical cannabis collectives, cooperatives, dispensaries, cultivations, and marijuana delivery services Medical Cannabis businesses include "medical marijuana businesses." (1) "Medical cannabis business" shall not include nor be interpreted to include any of the following: a. Any location which is a legal dwelling zoned exclusively for residential use and not permitted for any conunereial activity where three (3) or less people who reside at a property cultivate marijuana. _Ip - MEDICAL CANNABIS CONTOL ACT b. The location of any clinic licensed pursuant to Chapter 1 (commencing with Section 1200) a health care facility licensed pursuant to Chapter 2 (commencing with Section 1250), a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01), a residential care facility for the elderly licensed pursuant to Chapter 3.2 (commencing with Section 1569) a hospice or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725), any facility specified in Division 2 of the California Health and Safety Code where: (i) a qualified patient or person with an identification card receives medical care or supportive services, or both, from the clinic, facility, hospice, or home health agency: and (ii) the owner or operator, or one of not more than three employees designated by the owner or operator, of the clinic facility, hospice, or home health agency has been designated as arp imary caregiver pursuant to California Health and Safety Code Section 11362.7(d) by that qualified patient or person with an identification card. "Medical cannabis identification card," "Medical marijuana identification card," and "identification card" mean a❑document issued by the State Department of Health Services pursuant to❑California Health and Safety Code sections 11362.7 et seq that identifies a person[] authorized to engage in the medical use of cannabis and the person's designated[] primary caregiver, if any, or identifies a person as a primary caregiver for a❑medical cannabis patient. "Premises" means the space in any buildings of a medical cannabis business together with the spaces within any structures, yards, open spaces, lot width, and lot area at a location that is occupied or used in the operation of the medical cannabis business. "Reasonable compensation" means compensation commensurate with reasonable wages and benefits paid to employees of IRS -qualified non-profit organizations who have similar job descriptions and duties, required level of education and experience, prior individual earnings history, and number of hours worked. "Structure" means anything constructed or erected which is supported directly or indirectly on the ground, but not including any vehicle. "Vehicle" means a conveyance or device by which any person or property may be propelled, moved, or drawn upon a street, sidewalk or waterway, including but not limited to a device moved exclusively by human power. B. The following words or phrases when used in this section shall be construed as defined in California Health and Safety Code Sections 1746, 11362.5, and 11362.7. "Hospice"; "Identification card"; "Person with an identification card:" "Primary caregiver"; and "Qualified patient." —I1— MEDICAL CANNABIS CONTOL ACT SEC. 9-486. Medical cannabis businesses prohibited. A. It shall be unlawful to own, establish, operate, use or permit the establishment or operation of a medical cannabis business or to participate as an employee contractor, agent volunteer, or in any manner or capacity other than as provided in this Chapter. B. The general prohibition contained in this section shall include renting leasing or otherwise permitting a medical cannabis business to occupy or use a location vehicle or other mode of transportation. SEC. 9-487. Limited immunity. A medical cannabis business shall be immune to the prohibition set out in Section 9-486 and the remedies set forth in Costa Mesa Municipal Code including criminal prosecution, so long as that medical cannabis business obtains a Business License for the operation of a medical cannabis business from the City, through the Treasury Division Management Department and/or City Tax Collector, as well as complies with all operational requirements provided in this section A. Business license. 1. The City Tax Collector and/or The City Treasury Division Management Department shall issue a business license for a medical cannabis business that meets priority registration or non-priority registration requirements detailed below in this section. a. Priority Registration. i. Beginning on the date that is thirty (30) days after the effective date of this ordinance, and lasting for ten (10) business days a medical cannabis business may submit a priority registration application and obtain a business license for the purpose of operating a medical cannabis business from the City of Costa Mesa if, on or before May 30, 2014, such applicant: (a) Has never operated a medical cannabis or medical marijuana business in the city of Costa Mesa has never been convicted of operating a medical cannabis business, or never been civilladjudicated of operating a medical cannabis business or medical marijuana business without a business license in the City of Costa Mesa: a. The lack of any court record of a citation conviction or civil adjudication by the city shall be sufficient proof to satisfy that applicant has not operated a medical cannabis business in the City of Costa Mesa. (b) Has been issued a business license or has applied for a business license from the City of Costa Mesa for a -12- MEDICAL CANNABIS CONTOL ACT medical cannabis business or medical mariivana business; a. Proof of application or attempt to apply for as Costa Mesa business license for the purpose of a medical cannabis business or medical marijuana business shall be satisfied by any competent verifiable documentation, including but not limited to, a date stamped business license application from the City, a filed application a copy of a denial letter for a medical cannabis business from Citv of Costa Mesa or a dated copy of an application for a medical cannabis business license along with some proof that a mailing was sent to the City of Costa Mesa Treasuresgement Division P.O. Box 1200 Costa Mesa, CA 92628-1200 within seven (7) days of the signing of the application, or any documentation stamped "Received" by the city including, but not limited to, a printout of City, of Costa Mesa Land Use Matrix Table 13-30 or a copy of a received stamped copy of a business card of a senior planner for the City of Costa Mesa. (c) Has filed for Incorporation, filed Chapters of Association for a limited liability company, or articles of organization with the Secretary of State of California for the purpose of operating a non-profit medical cannabis business or medical marijuana business; a. Proof of incorporation, articles of association or limited company status shall be satisfied by a true and correct copy of the articles of incorporation filed with the Secretary of State Chapters of Association or any other competent verifiable documentation; (d) Possesses or has applied for a Seller's Permit from the State Board of Equalization in the name of the business. (e) Possesses or has applied for a License to Sell Nursery Stock for the City of Costa Mesa which was applied for or issued by the Department of Food and Agriculture• (f) Has applied for a Live Scan background check; (g) Possesses a physician's medical cannabis or medical mariivapa recommendation pursuant to California Health and Safety Code section 11362 et. see.: (h) Possess or has applied for a medical marijuana identification card pursuant to Health and Safety de Section 11362.7 et sec.; (i) Possesses or has applied for a general liability insurance policy (bodily injury, property damage and medical -13_ MEDICAL CANNABIS CONTOL ACT camlabis liability), which specifically includes liability for medical cannabis and/or medical marijuana a. Proof of application for a general liability insurance policy, which specifically includes liability for medical cannabis and/or medical marijuana may be shown by a quote from an insurance company or any other verifiable documentation. (j) The applicant possesses a notarized, signed and dated authorization to submit to fingerprinting and photographing and authorizing the City in writing to obtain information from criminal justice agencies, financial institutions, Federal, State and local government agencies, and other persons and entities. The written authorization shall include consent to release the information to the City for use in connection with the business license. (k) The applicant possesses a notarized, signed and dated statement indicating to the City that the applicant will hold harmless, indemnify, and defend the City against all claims and litigation arising from the issuance of a licenses, including any claims and litigation arising from the establishment operation or ownership of the medical cannabis establishment. b. Non -Priority Registration: i. Beginning on the date that is thirty (30) days after the effective date of this ordinance plus ten (10) business days any medical cannabis business may submit a non-priority registration application to the Treasury Division Management Department and/or City Tax Collector for a business license provided the medical cannabis business meets the following criteria: (a) Has never operated a medical cannabis or medical marijuana business in the city of Costa Mesa, has never been convicted of operating a medical cannabis business or never been civilly adjudicated of o ep rating a medical cannabis business or medical marijuana business without a business license in the City of Costa Mesa,• a. The lack of any court record of a citation conviction or civil adjudication by the city shall be sufficient proof to satisfy that applicant has not operated a medical cannabis business in the City of Costa Mesa. (b) Has been issued a business license or has applied for a business license from the City of Costa Mesa for a -14- MEDICAL CANNABIS CONTOL ACT medical cannabis business or medical marijuana business; a. Proof of application or attempt to apply for a Costa Mesa business license for the purpose of a medical cannabis business or medical marijuana business shall be satisfied by con ep tent verifiable documentation, including, but not limited to, a date stamped business license application from the City, a filed application a copy of a denial letter for a medical cannabis business from City of Costa Mesa or a dated copy of an application for a medical cannabis business license along with some proof that a mailing was sent to the City of Costa Mesa, TreasuryManagement Division, P.O. Box 1200, Costa Mesa, CA 92628-1200 within seven (7) days of the signing of the application, or any documentation stamped "Received" by the city including, but not limited to, a printout of City, of Costa Mesa Land Use Matrix Table 13-30 or a copy of a received stamped copy of a business card of a senior planner for the City of Costa Mesa. (c) Has filed for Incorporation, filed Chapters of Association for a limited liability company, or articles of organization with the Secretary of State of California for the purpose of operating a non-profit medical cannabis business or medical marijuana business; a. Proof of incorporation, articles of association, or limited company status shall be satisfied by a true and correct copy of the articles of incorporation filed with the Secretary of State, Chapters of Association or any other competent verifiable documentation; (d) Possesses or has applied for a Seller's Permit from the State Board of Equalization in the name of the business. (e) Possesses or has applied for a License to Sell Nursery Stock for the City of Costa Mesa which was applied for or issued by the Department of Food and Agriculture; (f) Has applied for a Live Scan background check; (g) Possesses a physician's medical cannabis or medical marijuana recommendation pursuant to California Health and Safetv Code section 11362 et. sec.; (h) Possess or has applied for a medical marijuana identification card pursuant to Health and Safety Code Section 11362.7 et sec.; (i) Possesses or has applied for a general liability insurance policy (bodily injury, property damage, and medical _Ig - MEDICAL CANNABIS CONTOL ACT cannabis liability), which specifically includes liability for medical cannabis and/or medical marijuana. a. Proof of application for a general liability insurance policy, which specifically includes liability for medical cannabis and/or medical marijuana may be shown byguote from an insurance company or any other verifiable documentation. (j) The applicant possesses a notarized, signed, and dated authorization to submit to fingerprinting and photographing and authorizing the City in writing to obtain information from criminal justice agencies, financial institutions, Federal, State and local government agencies, and other persons and entities. The written authorization shall include consent to release the information to the City for use in connection with the business license. (k) The applicant possesses a notarized, signed, and dated statement indicating to the City that the applicant will hold harmless, indemnify, and defend the City against all claims and litigation arising from the issuance of a licenses, including any claims and litigation arising from the establishment, operation, or ownership of the medical cannabis establishment. c. The Tax Collector or Citv shall issue a business license or a reiection with a written explanation, to an applicant within 45 days of the applicant's written request for a business license. The failure of the Tax Collector to issue a business license within the 45 day period shall be deemed an acceptance of the application for the business license and the medical cannabis business shall be permitted tooperate. d. The business license shall be valid for two (2) vears, irrespective of whether or not the business is active operating during that period. An application for renewal of a medical cannabis business license must be filed no later than thirty (30) calendar days prior to the expiration of the registration, but no earlier than sixty (60) calendar days prior to the expiration of the registration. A registration shall be renewed for an additional period of two (2)years by submitting an application to the Tax Collector or City. e. The fee required for application and registration for a medical cannabis business license shall not exceed five hundred dollars ($500.00). 2. No permit required: The People of the City of Costa Mesa herebv declare that the operation of a medical cannabis dispensary in compliance with this Chapter is not detrimental to the public health, safety, welfare, or moral standards of the City. As such, the City shall not require the medical cannabis 16 - MEDICAL CANNABIS CONTOL ACT business to obtain any pecial use permit, conditional use permit, or any other permit pursuant to any section of this code specifically, but not limited to Sections 9-33 and 9-114, as a condition president or condition subsequent to obtaining a business license and/or business tax registration certificate. Additionally, no special site plan, variance, or any other permit or certificate shall be required for a medical cannabis business, other than those specified in this Chapter. 3. Business tax registration certificate — Transfer: Notwithstanding Section 9-44, Medical cannabis Business licenses shall be transferable only so long as the medical cannabis business taxed is transferred, whether by sale or otherwise, to another person or entity under such circumstances that the real or ultimate ownership of the business after the transfer is substantially similar to the real or ultimate ownership existing before the transfer and the transferee meets all the non-priority registration requirements listed in Subsections (a) through (f) of Section 9-487(A.)(1.)(b.)_(i.). 4. Maximum number of businesses: City shall issue no more than eight (8) business licenses for the operation of medical cannabis businesses, subject to Subsections 4(a) below. If the number of certified medical cannabis businesses falls below nine (9), then the City shall issue additional business licenses pursuant to the terms of this Chapter. a. City council shall have the discretion to increase but not decrease the number of business licenses issued by the Tax Collector, City Treasury Division Management Department, or City to medical cannabis businesses pursuant to the terms of this Chapter. 5. Any such exercise of discretion under Section 4(a) above increasing the number of new business licenses above the current maximum number of nine (9) shall comply with the minimum non-priority registration standards enumerated in in Subsections (a) through (fl of Section 9-487(A.)(1.)(b.)(i.). SEC. 9-487.1. Operational requirements. A medical cannabis business shall be immune to the prohibition set out in Section 9-486 and the remedies set forth in Costa Mesa MLulicipal Code, so long as that medical camiabis business obtains a business license and complies with the following operational requirements: Safe radius restrictions: The medical cannabis business is not located within: —17— MEDICAL CANNABIS CONTOL ACT A 600 -foot radius of a public school as defined under Health and Safety Code §11362.768 (4 ii. The distances specified in this paragraph shall be the horizontal distance measured in a straight line from the property line of the school to the property line of the medical cannabis business without regard to intervening structures: iii. Medical cannabis businesses shall be permitted in the following use districts or zones in the City: AP, CL, C2, C1 -S, MG, MP, PDC, PDh C1 & TC Medical cannabis businesses are prohibited in all other use districts or zones. 2. Non -concentration of businesses requirement: The medical cannabis businesses shall be disbursed in accordance with the following: i. A marijuana business shall not be located within a 1000 -foot radius of an,, oy ther licensed medical cannabis business. ii. The distances specified in this paragraph shall be the horizontal distance measured in a straight line from the property line of the first licensed medical cannabis business to the closest property line of the second medical cannabis business without regard to intervening structures: Delivery restrictions: The medical cannabis business shall not deliver marijuana to its members within the City of Costa Mesa unless the medical cannabis business maintains insurance for its managers, volunteers or employees who deliver the marijuana and the medical cannabis business maintains a location within the City of Costa Mesa which possesses a business license under this Chapter. 4. License requirements: The medical cannabis business shall maintain a valid state Board of Equalization state Seller's permit in the name of the business Insurance Requirement: The medical cannabis business shall possesses a commercial general liability insurance policy (bodily injury,property, damage and medical cannabis liability), which specifically includes liability for medical cannabis. 6. Restriction of minors on premises: The medical cannabis business shall not allow minors under the age of 18 years to enter its premises during any hours of operation 7. Restriction of minors as employees: It shall be unlawful for any medical cannabis business to employ any person who is not at least 18 years of age. 8. Restriction on hours of operation: Hours of operation are limited to the hours between 9 a.m. and 10 p.m., seven days a week. 9. Visible marijuana restrictions: Any marijuana within a medical cannabis business shall not be visible with the naked eye from the exterior of the business's premises —Is— MEDICAL CANNABIS CONTOL ACT 10. Alcohol restrictions: The medical cannabis business shall prohibit the sale, dispensing, or consumption of alcoholic beverages at its location, in the parking area of the location, or within fifty (50) feet of the business. 11. Premises use restrictions: The medical cannabis business shall not allow any persons to inhale, smoke, eat, ingest, or otherwise consume marijuana at the location, in the parking areas of the location, within fifty (50) feet of the premises, or in those areas restricted under the provisions of California Health and Safety Code section 11362.79. This prohibition shall not apply to a qualified patient's use of marijuana for his or her own medical needs if the qualified patient's permanent legal residence is at the medical cannabis business's location, nor shall this prohibition limit or conflict with the exceptions provided in local and state law that permit smoking in designated areas within licensed residential medical and elder care facilities. 12. Legal notice reauirements: A sign shall be posted inside the medical cannabis businesses stating substantially as follows: "The diversion of cannabis for non-medical purposes is a violation of State Law. Loitering at the location of a medical cannabis dispensing or business for an illegal purpose is prohibited by California Penal Code section 647(h). No medical cannabis shall be smoked, ingested or otherwise consumed on the premises of the business or within fifty (50) feet of a medical cannabis business" Such sign shall be printed in 14 -point font or larger upon 8 % by 11 paper and posted at some conspicuous part of such site. 13. Restrictions relatine to cultivation, manufacturing, and processine: Medical cannabis businesses shall exchange, sell, transfer, and distribute only marijuana or cannabis cultivated, manufactured, or processed in the State of California and that has not left the State before arriving at the business and that has been cultivated only by, and provided only to, its verified members in a closed-circuit of production and consumption, 14. Medicine inventory restrictions: The medical cannabis business may possess and cultivate a reasonable quantity of dried marijuana and marijuana plants to meet the personal medical needs of their members. 15. Employee background requirements: The medical cannabis business shall utilize the Live Scan background check system as set forth in this Article prior to employing any manager, volunteer or employee. The medical cannabis businesses' managers must be registered members of the medical cannabis business. Verification of all Live Scan applications received by a medical cannabis business shall be processed and received by the Costa Mesa Police Department in accordance with California Department of Justice guidelines. 16. Employee background restrictions: Prior to being offered a position of management or employment at a medical cannabis business, an applicant for a position of manager, volunteer, or employee of the medical cannabis business who dispenses medical cannabis 19 MEDICAL CANNABIS CONTOL ACT must submit and successfully pass an annual Live Scan background check by December 31 of each year in order to be employed at the medical cannabis business. A failed Live Scan is any Live Scan that shows a felony conviction having occurred within theap st 7 years and/or shows that the manager, volunteer or employee is currently on parole or probation for the sale or distribution of a controlled substance. i. For the purposes of this section, a conviction of a felony that has been dismissed withdrawn, expunged, or set aside, whether pursuant to California Penal Code section 1203.4, California Penal Code section 1000, California Penal Code section 1385 or any other judicial ruling or prosecution agreement, shall not be deemed a felony conviction and, conse uently, shall not result in a failed Live Scan. 17. Patient confidentiality: In order to protect confidentiality, the medical cannabis business may maintain records of all qualified patients with a valid identification card and primary caregivers with a valid identification card using only the identification card number issued by the State or County pursuant to California Health and Safety Code section 113 62.7, et seq. 18. Manufacture of concentrated cannabis restrictions: The medical cannabis business shall not participate in or otherwise engage in the manufacture of concentrated cannabis in violation of California Health and Safety Code section 11379.6. 19. Security requirements: The medical cannabis business shall provide the following security measures: the medical cannabis business shall maintain an alarm system reasonably designed to ensure the safety of persons and to protect the premises from theft; ii. the business shall provide a security guard patrol for the premises during all hours of operation; iii. the security guard patrol shall be a duly -licensed and uniformed security guard ap trol. 20. Packaging requirements: All medical cannabis businesses shall distribute all non -live marijuana in sealed packaging or in "Child Proof' containers equipped with either a "Push or Turn", "Reversible" top vial, or "Pop Top" or "Squeeze Top" locking mechanism. 21. Warning labels requirements: All medical cannabis packaging shall contain a warning that the product contains marijuana, and it is to be consumed only with a physician's recommendation. -20- MEDICAL CANNAWS CONTOL ACT 22. Signage restrictions: Outdoor signage on medical cannabis business premises shall comply with all City signage restrictions and shall not contain pictorial representations of the marijuana plant or pictorial representations of marijuana use. 23. Edible restrictions: Medical cannabis businesses that prepare, dispense or sell edible medical cannabis products, or food containing any form of medical cannabis, must comply with and are subject to the provisions of all relevant state and local laws regarding the preparation, distribution, and sale of food. Failure to obtain and comply with all necessary permits related to the preparation, distribution, and sale of food will be an express violation of this Chapter 24. Odor restrictions: A business shall have an air treatment filtration or ventilation system that reasonably prevents odors generated from the storage of marijuana on the business property. 25. Taxation of medical cannabis businesses: The rate of sales tax and use tax imposed by this Chapter shall be: i. Every person engaged in operating or otherwise conducting a medical cannabis busines not otherwise specifically taxed by other business tax provisions of this Chapter, shall pay a business tax of six (6) percent or $60.00 for each $1000.00 of gross receipt or fractional parts thereof on all proceeds from the distribution, sale transfer of medical cannabis by the operation of a medical cannabis business ii. One (1) percent or $10.00 for each $1,000 on the sale of all other tangible personal property at retail. iii. For the pun poses of this Section, the above taxes apply only prospectively. The city shall make no claim, current, retroactive, or prospective for payment by any medial marijuana business or any other City tax except for the City portion of any Sales Tax collected by the California State Board of Equalization. iv. For the purpose of this section, a "medical cannabis business" means any activity regulated or permitted by Chapter VI of this Code and California Health and Safety Code sections 113 62.5, et seq., that involves transporting, dis ensin delivering, providing or manufacturing compounding, converting, processing, preparing, storing_ packaging, or testing harvesting of any part of the marijuana plant for medical purposes. Sec. 9-488. Cultivation of medical cannabis: Medical cannabis businesses may cultivate a reasonable amount of mariivana consistent with their member patient's needs. All medical cannabis cultivation subject to this Chapter shall be concealed from public view at all stages of growth, and there shall be no exterior evidence of cultivation occurring at the premises from a public right of way or from an adjacent parcel. Medical cannabis cultivation subject to this Chapter shall not create unreasonably offensive odors, create excessive dust, noise, heat, smoke, or other impacts that are unreasonably disturbing to persons of normal sensitivity present on adiacent propert Sec. 9-489. Transportation of medical cannabis: Activities entailing the transportation of medical cannabis in accordance with the Compassionate Use Act, the Medical marijuana program act, The Attorney General Guidelines, and this Chapter, shall be lawful only when -21- MEDICAL CANNABIS CONTOL ACT conducted by a participant of a recognized medical cannabis business, or collective, or cultivation site for delivery to a participant member of the same medical cannabis collective or medial marijuana business of the same medical cannabis collective or association when the quantitytransported and the method, timing, and distance of the transportation are reasonably related to the medical needs of the qualified patient or medical cannabis businesses receiving the medication. Sec. 9-490. Violation and enforcement: Each violation of this Chapter shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by Costa Mesa Municipal Code. Additionally, as a nuisance per se, any violation of this Chapter shall be subject to legally authorized remedies, including procedures for injunctive relief, disgorgement and payment to the City of any and all monies unlawfully obtained, costs of abatement, costs of investigation, attorney's fees, and any other relief or remedy available at law or equity. The City may also pursue any and all remedies and actions available and applicable under local and state laws for any violations committed by the medical camiabis business and persons related or associated with such medical cannabis business. Sec. 9-491. Majority approval; Effective date: This Measure shall be effective only if approved by a majority of voters and shall go into effect immediately Uon passage. Sec. 9-492. Competing measures: In the event that this Measure and another Measure or Measures relating to the regulation of medical cannabis in the City of Costa Mesa shall appear on the same ballot, the provisions of the other Measures shall be deemed to be in conflict with this Measure. In the event that this Measure shall receive a greater number of affirmative votes, the provisions of this Measure shall prevail in their entirety, and the provisions of the other relating to the regulation of medical cannabis in the City of Costa Mesa shall be null and void. Sec. 9-493. Amendment and repeal: The provisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative Measure may be amended only as provided in each section. The provisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative measure shall not be repealed, except by an ordinance adopted either by petition or by the Council at its own instance and adopted by a majority vote of the electors. Sec 9-494. Severability: If any portion of this initiative Measure is for any reason held to be unconstitutional, invalid or unenforceable by a court of competent jurisdiction, that invalidity shall not affect the remaining portions of this initiative Measure that can be implemented without the invalid provision, and, to this end, the provisions of this initiative Measure are severable. Sec. 9-495. Statewide regulation: This initiative Measure, and the provisions herein, shall be read consistent with any statewide regulation of medical camiabis or recreational marijuana that is promulgated by the legislature or by voter approval in the future. Sec. 9-496. Special or General election: This initiative Measure shall be set for a special or regular election at the earliest time allowed by law. -22-- MEDICAL CANNABIS CONTOL ACT SECTION 4 — AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 9, CHAPTER 1, ARTICLE 5, SECTION 9-32. The People of the City of Costa Mesa do hereby enact and ordain that Title 9, Chapter 1, Article 5, Section 9-32, entitled Unlawful Business Not Authorized, is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted.) Sec. 9-32 Unlawful business not authorized. No business license or permit issued under the provisions of this title, nor the payment of any tax required under the provisions of this title shall be construed as authorizing the conduct or continuance of any illegal orismcss businesses deemed illegal by state law or a legal business in an illegal manner. SECTION 5 - AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 13, CHAPTER 1, ARTICLE 2, SECTION 13-6. The People of the City of Costa Mesa do hereby enact and ordain that Title 13, Chapter 1, Article 2, Section 13-6, entitled, is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted) Section 13-6. Definitions following:by any other means made aN,ailabla to and/or Elistr-ibtAed by or to t1ff ee (3) or fnere of the a primat., ',ualified patient, of a person with an identification eard4ifl strie! aeoer-clanee with State Health and Safety Gode Seefiens 11362.5 e! seq. and 1136-2.7 L4 seqwhich shall btit not be lifnited any &eility or loeation in the f ro engaging sale, dispensation, of distribution of marijuana for medical purposes that Elees not have , � aetive rele in the eultivation- -of the marijuana product that it sells, dispenses, or distributes,,-er sale, ElispensatioH, or distribution. Medical Cannabis Business. An unincorporated or incorporated entity or association of qualified patients and/or primary caregivers and/or persons with identification cards, who provide money and in-kind contributions, reimbursements, and reasonable compensation towards the aforementioned entity's actual expenses for activities including, but not limited to; planting, cultivation, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging_ providing and/or retail sales of medical cannabis. A medical cannabis business may provide medical cannabis, products, services and assistance to qualified patients, persons with a medical marijuana identification card (as set forth in the MMPA), or the primary caregiver of such persons. Medical cannabis businesses may assist with the acquisition of skills necessary to cultivate or provide marijuana for medical pruposes in compliance with State Law. A medical cannabis business includes any facility, building, structure or location, whether permanent, or temporary, where marijuana is made available, sold, given away, -23- MEDICAL 23MEDICAL CANNABIS CONTOL ACT distributed, or otherwise provided in accordance with Health and Safety Code section 11362.5 et seg. A medical cannabis business includes medical cannabis "cooperatives" and marijuana delivery services. (1) "Medical cannabis business" shall not include, nor be interpreted to include, any of the following: a. Any location which is a legal dwelling zoned exclusively for residential use and not permitted for any commercial activity where three (3) or less people who reside at a property cultivate marijuana. b. The location of any clinic licensed pursuant to Chapter 1 (commencing with Section 1200), a health care facility licensed pursuant to Chapter 2 (commencing with Section 1250), a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01), a residential care facility for the elderly licensed pursuant to Chapter 3.2 (commencing with Section 1569), a hospice, or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725), any facility pecified in Division 2 of the California Health and Safety Code where: (i) a qualified patient or person with an identification card receives medical care or supportive services, or both, from the clinic, facility, hospice, or home health agency; and(ii) the owner or operator, or one of not more than three employees designated by the owner or operator, of the clinic, facility, hospice, or home health agency has been designated as a primary caregiver pursuant to California Health and Safety Code Section 11362.7(d) by that qualified patient or person with an identification card. SECTION 6 - AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 13, CHAPTER 4, SECTION 13-30, ROW 31a OF TABLE 13-30 THE COSTA MESA LAND USE MATRIX. The People of the City of Costa Mesa do hereby enact and ordain that Title 13, Chapter 4, Section 13-30, Table 13-30, Row 3la, entitled City of Costa Mesa Land Use Matrix, is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted.) _24_ MEDICAL CANNABIS CONTOL ACT Section 13-30, Table 13-30 Section 13-30, Table 13-30, Row 31a —25— MEDICAL CANNABIS CONTOL ACT Zones LAND USES R R R R A C C C C T M M P P P P P P I I P 1 2 2 3 P L 1 2 1 C G P D D D D D D&& M H S R R R R C I R R D D L M H N S D D D C M 31a. Medical P P P P P P P P P P ma dispensafy Cannabis Businesses (subject to the requirements of TITLE 9, CHAPTER VI. MEDICAL CANNABIS BUSINESSES) —25— MEDICAL CANNABIS CONTOL ACT RESOLUTION NO. 16-30 ATTACHMENT 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, CALLING AND GIVING NOTICE FOR THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2016, FOR THE SUBMISSION TO THE VOTERS OF A PROPOSED ORDINANCE THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, pursuant to authority provided by statute a petition has been filed with the legislative body of the City of Costa Mesa, California, signed by more than fifteen percent (15%) of the number of registered voters of the city to submit a proposed ordinance entitled: Allow Operation Of Up To Four Licensed Medical Marijuana Businesses In City of Costa Mesa; and WHEREAS, the City Clerk has caused to be examined, through the office of the Orange County Registrar, the records of registration and is in receipt of that certain "Certificate as to Verification of Signatures on Petition," from the Orange County Registrar, has examined such certificate and has accepted as true and correct the findings contained therein and, thereby, ascertained that the petition is signed by the requisite number of voters; and WHEREAS, the City Council has not voted in favor of the adoption of the ordinance; and WHEREAS, the City Council is authorized and directed by statute to submit the proposed ordinance to the voters; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on November 8, 2016 a General Municipal Election for the purpose of submitting the following proposed ordinance: Resolution No. 16-30 Page 1 Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana (estimated annual tax revenues $24,000 to $456,000); required industry specific licenses; required No operator permits; regulations subject to change by City Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached as Exhibit A. SECTION 4. That the vote requirement for the measure to pass is a majority (50% +1) of the votes cast. SECTION 5. That the ballots to be used at the election shall be in the form and content as required by law. SECTION 6. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 7. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same day when said polls shall be closed, pursuant to Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. SECTION 8. That the Orange County Registrar of Voters is authorized to canvass the returns of the General Municipal Election. SECTION 9. That in all particulars not recited in this resolution, said election shall be held and conducted in accordance with the provisions of law regulating the statewide election. SECTION 10. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give such further or additional notice of the election, in the time, form, and manner required by law. Resolution No. 16-30 Page 2 SECTION 11. The Costa Mesa City Council hereby requests that the Orange County Registrar of Voters conduct all necessary services related to the Costa Mesa General Municipal Election. Pursuant to Elections Code Section 10002, the Finance Director, or his/her designee, is hereby authorized to reimburse the County for the actual cost incurred in conducting the election upon receipt of a bill stating the amount due as determined by the elections official. SECTION 12. That the City Clerk shall certify to the passage and adoption of this resolution. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 7th day of June, 2016. Stephen M. Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 16-30 was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 7th day of June, 2016, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 8th day of June, 2016. BRENDA GREEN, CITY CLERK Attachment: Exhibit A — Proposed Ordinance Resolution No. 16-30 Page 3 Exhibit A INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS AN ORDINANCE OF THE PEOPLE OF THE CITY OF COSTA MESA AMENDING THE THE COSTA MESA ZONING CODE AND MUNICIPAL CODE Corrunittee of proponents, who are registered voters of the City of Costa Mesa, sponsoring the petition: Taylor Webster Michael Levesque TEXT OF PROPOSED MEASURE: "AN INITIATIVE TO PROVIDE REVENUE TO COSTA MESA CITIZENS" WHEREAS, the Costa Mesa Police Department C CMPD") has reported that, as the number of marguana dispensaries and corrunercial growing operations proliferated without sufficient legal oversight, the City and its neighborhoods have experienced negative secondary effects, including an increase in crone at certain locations associated with unregulated marguana dispensaries; WHEREAS, The League of California Cities and California Chief of Polices Association have authored statewide legislation, presented by veteran State Senator Lou Correa to provide a clear road nip for reasonable statewide implementation of Proposition 215 and the Medical Marguana Program Act of 2004 in California; WHEREAS, legislation regulating the medical marijuana industry is supported by the Association for Los Angeles Deputy Sheriffs; Association of Orange County Deputy Sheriffs; California Fraternal Order of Police; International Faith Based Coalition; Long Beach Police Officers Association; Los Angeles County Professional Peace Officers Association; Los Angeles Police Protective League; Riverside Sheriffs Association and Santa Ana Police Officers Association; WHEREAS, it is in the interest of the citizens of Costa Mesa to have medical cooperatives operate with reasonable regulation that mirror those put forward by The League of California Cities and California Chief of Polices Association in order to regulate the distribution of medical marijuana, which if unregulated threatens the interests of local neighborhoods and dispensaries, as well as negatively impacting those seriously ill residents of the City; WHEREAS, the City has a substantial and clear interest in ensuring that medical marijuana is distributed in an orderly manner, in protecting the public health, safety and welfare of its residents, its dispensaries, the neighborhoods in which Medical Cooperative operate, while ensuring compassionate access by seriously ill residents to medical marijuana in accordance with the CUA and the MMPA; WHEREAS, the City seeks to create a gross receipts tax on medical cooperative at a rate of $60 per $1,000 of gross receipts, which will help to fund necessary general municipal services, which may include but is not limited to, code enforcement, building inspections, police protection and crone suppression services, fire prevention and suppression services, which will facilitate the purposes of this law and which will fiend necessary services as determined by the City Council; NOW, THEREFORE, THE PEOPLE OF THE CITY OF COSTA MESA HEREBY ORDAIN AS FOLLOWS: Section 1. Code Amendment. Section 16-14, of Chapter II in Title 16 of the Costa Mesa Municipal code is hereby amended in its entirety to read as follows: (a) The rate of sales tax and use tax imposed by this chapter shall be one per cent on all businesses except for medical cooperative. (b) Every person engaged in operating or otherwise conducting a busyness where marijuana is cultivated, distributed or transferred pursuant to Title 9, Chapter VI shall pay a tax proportionate to gross receipts earned within the taxing jurisdiction at a rate of six (6) per cent. (c) The City Council may impose the tax authorized by this section at a lower rate and may establish exemptions, incentives, or other reductions as otherwise allowed by California law. No action by the Council under this paragraph shall prevent it fi-om later increasing the tax, up to six per cent, or removing any exemption, incentive, or reduction and restoring the maximum tax specified in this section. Section 2. Code Amendment. Row 31 a of the Costa Mesa Land Use Matrix Table in section 13- 30 of Chapter IV, Title 13, is hereby amended to read as follows: Section 13-30, Table 13-30, Row 31a Zones LAND USES R R R R A C C C C T M M P P P P P P I I P 1 2 2 3 P L 1 2 1 C G P D D D D D D&& M H S R R R R C I R R D D L M H N S D D D C M 3Ia. Medical P P P P P_ P P P P P cooperative (Subject to the requirements to TITLE 9, CHAPTER V1, Medical cooperative) Section 3. Code Amendment. TITLE 9 is hereby amended to include TITLE 9, Chapter VI, henceforth entitled "Medical Cooperative Regulations" and is hereby amended in its entirety to read as follows: Sec. 9-49 L Purpose. The people of the city of Costa Mesa hereby declares that the purpose of the regulations in this chapter is to provide a uniform and enforceable set of rules for the operation of medical cooperative, in compliance with state law and firture state-wide regulation, to prevent the proliferation of medical cooperatives, to tax the distribution of medical marijuana as well as to protect the public health, safety and welfare of residents. Sec. 9-482. Definitions. The fallowing terms and phrases, whenever used in this section, shall be construed as defined in this section: (a) "Medical cooperative" or "Cooperative" shall be defined in section 13-6 if Title 13 of the Costa Mesa Municipal Code. (b) "Building" means any structure having a roof supported by columns or walls, for the housing, shelter or enclosure of persons, animals, chattels, or property of any kind. (c) "Live Scan" means a system for inkless electronic fingerprinting and the automated background check developed by the California Department of Justice (DOJ) which involves digitizing fingerprints and electronically transmitting the fingerprint image data along with personal descriptor information to computers at the DOJ for completion of a criminal record check, or such other comparable inkless electronic fingerprinting and automated background check process as determined by the City Council\ (d) "Live Scan application" means a form developed by the City Clerk to request Live Scan services and to contain information relevant to the Live Scan process. (e) "Location" means any parcel of land, whether vacant or occupied by a building, group of buildings, or accessory buildings, and includes the buildings, structures, yards, open spaces, lot width, and lot area. (t) "Establishment." Includes any of the following: a. The opening or commencement of any such business as a new business; b. The conversion of an existing business, whether or not a medical cooperative, to any of the medical cooperative defined herein; c. The addition of any of the medical cooperative defined herein to any other existing medical rnarjuana business; or d. The relocation of any such medical cooperative. (g) "Marijuana" shall be construed as defined in California Health and Safety Code Section 11018 and father shall specifically include any product that contains marijuanna or a derivative of marijuana. (h) "Operator" means any person with responsibility for the establishment, organization, registration, supervision, or oversight of a medical cooperative, including but not limited to any person who performs the functions of president, vice president, board member, director, owner, operating officer, financial officer, secretary, or treasurer of the medical cooperative. O "Applicant." A person who is required to file an application for a license wider this chapter, including an individual owner, managing partner, officer of a corporation, or any other operator, manager, employee, or agent of a medical cooperative or an operator of a medical cooperative. (j) "Licensee." The person or entity to which a rnedical cooperative license or medical cooperative operator's license is issued. (k) "Chief of Police." The Chief of Police of the City of Costa Mesa or the authorized representatives thereof. (1) 'Tremises" means the space in any buildings of a medical cooperative together with the spaces within any structures, yards, open spaces, lot width, and lot area at a location that is occupied or used in the operation of the medical cooperative. (m)'Terson" means any Cooperative, individual, partnership, co -partnership, fim>, association, joint stock company, corporation, linited. (n) "Structure" means anything constructed or erected which is supported directly or indirectly on the ground, but not including any vehicle. (o) 'Vehicle" means a device by which any person or property may be propelled, moved, or drawn upon a street, including but not limited to a device moved exclusively by human power. (p) The following words or phrases when used in this Section shall be construed as defined in California Health and Safety Code Sections 1746, 11362.5, 11362.7 and 11834.02 a. "Alcoholism or drug abuse recovery ortreatinent facility"; b. "Hospice'; c. "Identification card"; d. `Terson with an identification card" e. `Trinary Caregiver'; and E "Qualified Patient; Sec. 9-483. Exceptions. This chapter shall not apply to: (a) A health care facility licensed pursuant to Chapter 2 (comvnencing with Section 1250), (b) A residential care facility for persons with chronic life- threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01), (c) a residential care facility for the elderly licensed pursuant to Chapter 3.2 (commencing with Section 1569), (d) a hospice, or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725), all of Division 2 of the California Health and Safety Code where: i. a qualified patient or person with an identification care receives medical care or support services, or both, from the clinic facility, hospice, or home health agency, and ii. the owner or operator, or one of not more than three employees designated by the owner or operator, of the clinic, facility, hospice, or home health agency has been designated as a prinary caregivers pursuant to California Health and Safety Code Section 11362.7(d) by that qualified patient or person with an identification care, or (e) Any vehicle daring only that time reasonably required for its use by: i. A qualified patient or person with an identification card to transport marijuana for his or her personal medical use, or ii. A primary caregiver to transport, distribute, deliver, or give away marijuana to a qualified patient or person with an identification card who has designated the individual as a prnnary caregiver, of the personal medical use of the qualified patient or person with an identification card, in accordance with California Health and Safety Code Section 11362.76 Sec. 9-484. Zoning Requirements. In addition to the requirements of this chapter, all medical cooperative shall comply with the requirements set forth in Article 1, Chapter 1X, of Title 13 of the City of Costa Mesa Municipal Code. Sec. 9-485. License required for each location; display of license. A separate medical cooperative license is required for each location within the boundaries of the City of Costa Mesa at which a regulated medical cooperative is to be established. Tine requirements of this chapter for a medical cooperative license are separate and in addition to a business license, or business tax registration certificate, required under Chapter I of this code. Every regulated cooperative shall display its license prominently in an area open to the public at each location, at all times when the location is open for business. Sec. 9-486. Term of medical cooperative license. An approved medical cooperative license shall be valid until revoked. Sec. 9-487. Application for medical cooperative license. (a) An applicant requesting issuance or renewal of a medical cooperative license shall file a written, signed and verified application or renewal application in a form provided by the Chief of Police. Each application shall be accompanied by a non-reflrndable fee for filing or renewal in an amount determined by resolution of the city council, which fees will be used to defray the costs of investigation, inspection and processing of such application. Such fee shall not exceed the reasonable cost of investigation, inspection and processing Of such application. License fees required under this chapter shall be in addition to any license, permit or fee required under any other chapter or title of the City of Costa Mesa Municipal Code. (b) An application for a medical cooperative license shall contain the following information: 1. 'The applicant shall be either a non-profit mutual benefit corporation or a statutory agricultural or consumer cooperative incorporated in the state of California. 2. The applicant's complete naive, the date of its incorporation, evidence that the corporation is in good standing under the laws of California, the names and capacity of all officers and directors, the name of the registered corporate agent and the address of the registered olfice for service of process. 3. If the applicant intends to operate the medical cooperative under a name other than that of the applicant, the applicant shall file the fictitious name of the medical cooperative and show proof of registration of the fictitious name at the time it submits its application. 4. A description of the type of medical cooperative for which the license is requested and the proposed address where the medical cooperative will operate, plus the names and addresses of the owners and lessors of the medical cooperative site. 5. The address to which notice of action on the application is to be mailed. 6. The names of all operators who will manage the distribution of marijuana at the medical cooperative or cultivate marguana on behalf of the medical cooperative, who are required by section 9-490 to obtain a medical cooperative operator permit. i. The medical marijuana collective shall make available to the Chief of Police the names of each person who manages the dispensing of marguana at the medical cooperative together with a successful Live Scan background check of each such person. 1. A unsuccessful or failed Live Scan is any Live Scan that shows a felony conviction having occurred within the past 10 years and/or shows that the manager is currently on parole or probation for the sale or distribution of a controlled substance; 7. A certificate and straight-line drawing prepared within thirty (30) days prior to application depicting the building and the portion thereof to be occupied by the medical cooperative, and: (1) the property Pune of any other medical cooperative within one thousand (1,000) feet of the primary entrance of the medical cooperative and any private or public school; and (2) the property lilies of ally public park, within one six hundred (600) abet of the primary entrance of the medical cooperative; and the property lines of any residential zone which is abutting or across the street from a lot which the medical cooperative for which the license is requested. (c) if the Chief of Police determines that the applicant has completed the application innproperly, the Chief of Police shall promptly notify the applicant of such fact and, on request of the applicant, grant the applicant an extension of time of ten (10) days or less to complete the application properly. In addition, the applicant may request an extension, not to exceed ten (10) days, of the time for the Chief of Police to act on the application. The time period for granting or denying a license shall be stayed during the period in which the applicant is granted an extension of time. (d) The fact that an applicant possesses other types of state or city permits or licenses does not exempt the applicant from the requirement of obtaining a medical cooperative license. Sec. 9-488. Investigation and action on medical cooperative license application. (a) Upon receipt of completed application and payment of the application and license fees, the Chief of Police shall innnedtare ly stamp the application as received and promptly investigate the information contained in the application to determine whether the applicant shall be issued a medical cooperative license. (b) Within thirty (30) days of receipt of the completed application, tine Chief of Police shall complete the investigation, grant or deny the application in accordance with the provisions of this section, and so notify the applicant as follows: 1. The Chief of Police shall write or stamp "Granted" or "Denied" on the application and date and sign such notation. 2. If the application is denied, the Chief of Police shall attach to the application a statennent of the reasons for denial. 3. If the application is granted, the Chief of Police shall attach to the application a medical cooperative license. 4. The application as granted or denied and the license, if any, shall be placed in the United States mail, first class postage prepaid, addressed to the applicant at tine address stated in the application. 5. The Chief of Police shall grant the application and issue the medical cooperative license upon findings that the proposed business meets the locational criteria of section 13-132 of Fitle 13; and that the applicant Inas met all of the development and performance standards and requirements of section 9-494(g) of this chapter, unless the application is denied for one (1) or more of the reasons set forth in section 9-489. (c) If the Chief of Police neither grants the application within thirty (30) days after it is stamped as received, the application shall deemed granted and the Chief of Police shall issue of a medical cooperative license. 1. The Clvef of Police shall issue no more than four (4) medical cooperative licenses, subject to subsection Sec. 9-488(c)1(i). If the number of licensed medical cooperative fall below four (4), then the City shall issue additional business licenses pursuant to the terms of this Chapter. i. The City Council shall have the discretion to increase, but not decrease, the number of licenses issued by the city Finance Director pursuant to the terms of this Chapter. (d) Medical cooperative priority review 1. Beginning on the date that is thirty (30) days after the effective date of this ordinance, until the date that is forty-five (45) days after the effective date of this ordinance, an applicant who meets the following requirements may subunit an application for priority review. The applicant requirements for priority review are as follows: i. applicant is an active California non-profit mutual benefit corporation or non-profit agricultural cooperative or non-profit consumer cooperative, that was incorporated prior to May 22, 2014; ii. the applicant has listed with the secretary of state a principal place of business in the City of Costa Mesa; iii. the applicant has been issued or has applied for a City of Costa Mesa business license, issued in the name of the entity, for the purpose of providing home care or therapeutic services, and the submissions of the application or issuance of license occurred prior to May 22, 2014; iv. the applicant, or an officer or director of the applicant, maintains a lease or rental agreement in the City of Costa Mesa with a possession or start date prior to May 22, 2014; and v. the non-profit mutual benefit corporation or non-profit agricultural cooperative or non-profit consumer cooperative maintains a California re- sellers permit issued in the name of the entity at its principal place of business in the City of Costa Mesa, prior to May 22, 2014. Sec. 9-489. Denial of application for medical cooperative license. (a) The Police department shall deny the application for any of the following reasons: 1. That the building, structure, equipment and location used by the business for which a license is required herein do not comply with the requirements and standards set for in section 9-494. 2. That the applicant, his or her employee, agent, partner, director, officer, stockholder or manager has knowingly made any false, misleading or fi•audulent statennent of material fact in the application for a license or in any report or record required to be filed with the police department or other department of the city. 3. That the applicant has had any type of medical cooperative license revoked by any public entity within two (2) years of the date of the application. 4. Within ten (10) years iunmediately preceding the date of the filing of the application for a license under this chapter, the director or officer of applicant has been convicted of a felony. 5. That on the date that the business for which a license is required herein connmences, and thereafter, there will be no responsible adult on the premises to act as manager at all times during which the business is open. 6. The required application fees have not been paid. (b) In the case of the Chief of Police not acting within the time period under section 9- 487(d), the Chief of Police shall pant the application and issue the license. Sec. 9-490. Medical cooperative operator permit. (a) No person shall engage in or participate as an operator of a medical cooperative, without a valid medical cooperative operator permit issued by the city. All persons who have been issued a medical cooperative operator shall promptly supplement the information provided as part of the application for the license required by section 9-488, with tine names of all operators required to obtain a medical cooperative operator permit, within thirty (30) days of any change h the information originally submitted. Failure to submit such changes shall be grounds for suspension of the medical cooperative license. (b) The Chief of Police shall grant, deny and renew medical cooperative operator permits. (c) The application for a license shall be made on a form provided by the Chief of Police. An original and two (2) copies of the completed and swom license application shall be filed with the Chief of Police. (d) The completed application shall contain the following information and be accompanied by the following documents: 1. The applicant's legal name and any other names (including aliases) used by the applicant; 2. Age, date and place of birth; 3. Height, weight, hair and eye color; 4. Present residence address and telephone number; 5. Whether the applicant has ever been convicted of felony within ten years of the application date; 6. Proof of a Live Scan background check for all felony convictions within ten (10) years of the application; 7. State driver's license or identification number; 8. Satisfactory written proof that the applicant is at least eighteen (18) years of age; 9. The applicant's fingerprints on a form provided by the police department, and a color photograph clearly showing the applicant's face. Any fees for the photographs and fingerprints shall be paid by the applicant; 10. If the application is made for the purpose of renewing a license, the applicant shall attach a copy of the license to be renewed. 11. The completed application shall be accompanied by a non-refundable application fee. `Ilse amount of the fee shall be set by resolution of the city council. 12. Upon receipt of an application and payment of the application fees, the Chief of Police shall immediately stamp the application as received and promptly investigate the application. 13. If the Chief of Police determines that the applicant has completed the application improperly, the Chief of Police shall promptly notify the applicant of such fact and grant the applicant an extension of time of not more than ten (10) days to complete the application properly. In addition, the applicant may request an extension, not to exceed ten (10) days, of the time for the city manager to act on the application. The time period for granting or denying a license shall be stayed during the period in which the applicant is granted an extension of time. Sec. 9-491. hnvestigation and action on application for medical cooperative operator permit. (a) Witltin fifteen (15) days after receipt of the properly completed application, the Chief of Police shall grant or decry the application and so notify the applicant as follows: a. The Chief of Police shall write or stamp "Granted" or "Denied" on the application and date and sign such notation. b. If the application is denied, the Chief of Police shall attach to the application a statement of the reasons for denial. c. If the application is granted, the Chief of Police shall attach to the application a medical cooperative operator permit. d. The application as granted or denied and the license, if any, shall be placed in the United States mail, first class postage prepaid, addressed to the applicant at the residence address stated ul the application. e. The Chief of Police shall grant the application and issue the license unless the application is denied for one (1) or more of the reasons set forth in subsection 9- 491(f) of this section. i. If the Chief of Police neither grants nor denies the application within fifteen (15) days after it is stamped as received, the application shall be forwarded to the city finance department for issuance of a operator license. f. The Chief of Police shall deny the application for any of the following reasons: i. The applicant has knowingly made any false, misleading, or fraudulent statement of a material fact in the application for a license or in any report or document required to be filed with the application; it. The applicant is under twenty-one (2 1) years of age; iii. The applicant has been convicted of any felony within the last ten (10) years. A license may be issued to any person convicted of a felony if the conviction occurred more than ten (10) years prior to the date of the application. g. Each medical cooperative operator permit shall expire one (])year fi-om the date of issuance and may be renewed only by filing with the Chief of Police a written request for renewal, accompanied by the application fee and a copy of the license to be renewed. The request for renewal shall be made at least thirty (30) days before the expiration date of the license. When made less than thirty (30) days before the expiration date, the expiration of the license will not be stayed. Applications for renewal shall be acted on as provided herein for applications for licenses. h. Should the Chief of Police not act within the time period provided under this section, the city finance director shall then grant the application no less than five (days) following the expiration of time required section 9-491(e)i. Sec. 9-492. Employment of Operators without operator licenses unlawful. (a) It shall be unlawful for any medical cooperative to not have at least one licensed operator on premises during the hours of operation. (b) It shall be unlawful for any operator to allow any person to operate a medical cooperative who is not in possession of a valid operator license. Sec. 9-493. Suspension or revocation of medical cooperative licenses and medical cooperative operator permits. A medical cooperative license or Medical cooperative operator permit may be suspended or revoked in accordance with the procedures and standards of this section. (a) On determining that grounds for license revocation exist, the Chief of Police shall furnish written notice of the proposed suspension or revocation to the licensee. Such notice shall set forth the time and place of a hearing, and the ground or grounds upon which the hearing is based, the pertinent Code sections, and a brief statement of the factual matters in support thereof The notice shall be mailed; postage prepaid, addressed to the last known address of the licensee, or shall be delivered to the licensee personally, at least ten (10) days prior to the hearing date. Hearings shall be conducted in accordance with procedures established by the Chief of Police, but at a minimum shall include the following: (b) All parties involved shall have a right to offer testimonial, documentary, and tangible evidence bearing on the issues; may be represented by counsel; and shall have the right to confront and cross-examine witnesses. Any relevant evidence may be admitted that is the sort of evidence upon which reasonable persons are accustomed to rely in the conduct of serious affair. Any hearing under this section may be continued for a reasonable time for the convenience of a party or a witness. The Chief of Police's decision may be appealed in accordance with section 2-300 et seq. of the Costa Mesa Municipal Code. (c) A licensee may be subject to suspension or revocation of his/her license, or be subject to other appropriate disciplinary action, for any of the following causes arising from the acts or omissions of the licensee, or an employee, agent, partner, director, stockholder, or manager of medical cooperative : 1. Tine licensee has knowingly made any false, misleading or fraudulent statement of material facts in the application for a license, or in any report or record required to be filed with the City. 2. The licensee, employee, agent, partner, director, stockholder, or manager of a medical cooperative has knowingly allowed or permitted, and has failed to make a reasonable effort to prevent the occurrence of any of the following on the premises of the medical cooperative, or in the case of a medical cooperative operator, the licensee has engaged in one (1) of the activities described below while on the premises of a medical cooperative : i. Any act of unlawful distribution of marijuana; it. Any conduct prohibited by this chapter. iii. Failure to abide by any disciplinary action previously innposed by an appropriate city official. (d) After holding the hearing in accordance with the provisions of this section, if the Chief of Police finds and determines that there are grounds for disciplinary action, based upon the severity of the violation, the Chief of Police shall impose one (1) of the fallowing: 1. A warning 2. Suspension of the license for a specified period not to exceed six (6) months; or 3. Revocation of the license. i. Revocation ofthe license shall issue only after two prior determinations of violation. Sec. 9-494. Appeal of denial, suspension or revocation. After denial of an application far a medical cooperative license or a medical cooperative operator permit, or after denial of renewal ofa license, or suspension or revocation of a license, the applicant or person to whom the license was granted may seek review of such administrative action by the city council in accordance with the provisions of section 2-300 et seq. of the City of Costa Mesa Municipal Code. Any proceeding to appeal such decision to the city council shall be filed within seven (7) days of such decision. If the denial, suspension or revocation is affirmed on review, the applicant, licensee may seek prompt judicial review of such administrative action pursuant to California Code of Civil Procedure section 1094.5. The city shall make all reasonable efforts to expedite judicial review, if sought by the licensee. Sec. 9-495. Medical cooperative operational requirements. The following development and performance standards shall be satisfied by a medical cooperative and included in any approved medical cooperative license: (a) No medical cooperative shall be operated in any mariner that permits the observation of any marguana from outside the 'location. (b) Parking lot lighting shall be provided to illuminate all off-street parking areas serving such use for the purpose of increasing the personal safety of patrons and employees and reducing the incidents of vandalism and theft. The lighting shall provide a level of illumination not less than one (I) foot-candle, measured at the surface of die pavement, at all areas or the parking lot. The lighting shall be shown on the required plot plans and shall be reviewed and approved by the development services department. (c) A medical cooperative shall be open or operating for business only between the hours of 8:00 a.m. and 10:00 p.m. on any particular day. (d) No person under the age of eighteen (18) years shall be permitted within the premises at any time. (e) The medical cooperative shall possess a valid and Current State Board of Equalization seller's permit; (f) The medical cooperative shall not be located within: 1. 1000 foot radius of a "school" as defined under Health and Safety Code 11362.768 (h); 2. 600 foot radius of a public park, public library or licensed child care facility; 3. 1000 foot radius of another registered medical cooperative; (g) Medical cooperative shall not allow alcohol to be purchased or consumed at the premises or in any area of the location used for parking any vehicle; (h) Medical cooperative shall only be located in a commercial zoned property or industrial zoned property as allowed pursuant to section 13-30 of Chapter IV, Title 13. (i) Medical Maryuana Business shall not be located on property lot abutting or across the street fi•om a lot which is zoned for residential use. The above notwithstanding, this subsection shall not prohibit a medical cooperative fiom locating across a street fiom any land zoned residential if the medical cooperative and residential zone is separated by a public thoroughfare with a minimum roadway width of 80 feet. Sec. 9-496. Violations/penalties. With the exception of any violation of this chapter, any person, whether as principal, employee, agent, partner, director, officer, stockholder, or trustee or otherwise, violating or causing the violation of any of the provisions of this chapter shall be guilty of a misdemeanor, and any conviction thereof shall be punishable by a fine of not more than one thousand dollars ($1,000.00) or by imprisonment for not more than six (6) months, or by both such fine and imprisonment. Notwithstanding any violation of the nudity limitation under this chapter, any violation of the provisions of this chapter shall constitute a separate offense for each and every day during which such violation is conunitted or continued. Sec. 9-496.1. Public nuisance. In addition to the penalties set forth above, any medical cooperative which is operating in violation of this chapter or any provision thereof is hereby declared to constitute apublic nuisance and, as such, may be abated or enjoined fiom further operation. All costs to abate such public nuisance, including attorneys' fees and court costs, shall be paid by the licensee of the medical cooperative pursuant to section 13-17. Sec. 9-497 Statewide Regulation This ordinance, and the provisions herein, shall be read consistent with any statewide regulation of medical marguana that is promulgated by the legislature or by voter approval in the future. In the event Statewide Regulation is passed pursuant to the decriminalization or legalization of rnarguana for recreational use, this ordinance shall govern the conduct of those business allowed to distribute marguana under such provisions. Section 4. Amendment and Repeal. The provisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative measure may be amended to further its purposes by ordinance passed by a majority vote of the Council and approved by the Mayor. The provisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative measure shall not be repealed, except by an ordinance adopted either by petition or by the Council at its own instance and adopted by a vote of the electors. Section 5. Severability. If any section, subsection, subdivision, sentence, clause, phrase, word, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The People of the City of Costa Mesa hereby declare that they would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, word, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, words or portions thereof be declared invalid or unconstitutional. Section 6. Effective Date. The City Clerk shall certify as to the passage and adoption of this Ordinance. This Ordinance shall take effect ten (10) days following the date on which the City Council of the City of Costa Mesa declares that this Ordinance was adopted by a majority of the voters voting on the measure at the municipal election on November. Section 7. Ma_lority Approval; Effective Date. This ordinance shall be effective only if approved by a majority of voters at the next special or general election and shall go into effect on more than ninety days after the election. Section S. Competing Measure. Competing Measures. In the event that this measure and another measure or measures relating to the taxation and regulation of medical marijuana shall appear on the same ballot, the provisions of the other measures shall be deemed to be in conflict with this measure. In the event that this measure shall receive a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other relating to the taxation and regulation of medical marijuana shall be null and void. Section 9. Special or General election. This initiative Measure shall be set for a special or general election at the earliest tune allowed by law. ATTACHMENT 3' RESOLUTION NO. 16-31 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, REQUESTING THE ORANGE COUNTY BOARD OF SUPERVISORS TO CONSOLIDATE A GENERAL MUNICIPAL ELECTION TO BE HELD NOVEMBER 8, 2016, WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON THE DATE PURSUANT TO SECTION 10403 OF THE ELECTIONS CODE WHEREAS, the City Council of the City of Costa Mesa called a General Municipal Election to be held on November 8, 2016 for the purpose of submitting proposed ordinances to the voters of the City of Costa Mesa for their consideration; and WHEREAS, the City Council of the City of Costa Mesa is submitting to the voters of the City of Costa Mesa questions relating to the adoption of proposed ordinances; and WHEREAS, it is desirable that the general municipal election be consolidated with the Statewide General election to be held on the same date and that within the city, the precincts, polling places, and election officers of the two elections be the same, and that the Registrar of Voters of the County of Orange canvass the returns of the General Municipal Election and that the election be held in all respects as if there were only one election; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. That pursuant to the requirements of Section 10403 of the Elections Code, the Board of Supervisors of the County of Orange is hereby requested to consent and agree to the consolidation of a General Municipal Election with the Statewide General Election on Tuesday, November 8, 2016, for the purpose of submitting to the voters of the City of Costa Mesa two questions relating to the adoption of proposed ordinances. Resolution No. 16-31 Page 1 SECTION 2. That the following measures are to appear on the ballot as follows: 1 Measure : Allow Operation of up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana (cannabis) businesses with: six percent tax on Yes medical marijuana (estimated annual tax revenues $48,000 to $912,000); one percent tax on other products; exemption No from permits; regulations not subject to change by City No Council except for increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? 2. Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana (estimated annual tax revenues $24,000 to $456,000); required industry specific licenses; required No operator permits; regulations subject to change by City Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the two ordinances submitted to the voters is attached as Exhibit A and Exhibit B. SECTION 4. That the vote requirement for both of the measures to pass is a majority (50% +1) of the votes cast. SECTION 5. That the County of Orange Registrar of Voters is authorized to canvass the returns of the General Municipal Election. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. The election will be held and conducted in accordance with the provisions of law regulating the statewide election. SECTION 6. That the Board of Supervisors is requested to issue instructions to the county election department to take any and all steps necessary to hold the consolidated election. Resolution No. 16-31 Page 2 SECTION 7. That the City of Costa Mesa recognizes that additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County for any costs. SECTION 8. That the City Clerk is directed to file a certified copy of this Resolution with the Board of Supervisors and the county election department of the County of Orange. SECTION 9. That the City Clerk shall certify to the passage and adoption of this resolution. PASSED AND ADOPTED this 7t" day of June, 2016. Stephen M. Mensinger ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 16-31 was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 7t" day of July, 2016, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 8t" day of July, 2016. BRENDA GREEN, CITY CLERK Attachments: 1. Exhibit A — Proposed Ordinance: Allow Operation of up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa. 2. Exhibit B — Proposed Ordinance: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa. Resolution No. 16-31 Page 3 Exhibit A INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS Committee of proponents, who are residents of the City of Costa Mesa, sponsoring the petition: Robert Taft, Jr. Kevin Gardner TEXT OF THE PROPOSED MEASURE: MEDICAL CANNABIS CONTROL ACT. Section 1 — Title This initiative shall be known and may be cited as the Medical Cannabis Control Act. Section 2 — Findings and Declarations Pursuant to, and consistent with the current California law concerning medical cannabis, the City of Costa Mesa shall enact an ordinance creating Title 9, Chapter VI of the Costa Mesa Municipal Code, and amend in its entirety Title 13, Chapter 1, Article 2, Section 13-6, and amending Row 31(a) of Title 13, Chapter 4, section 13-30, and amending Title 9, Chapter 1, Article 5, Section 9-32 of the Costa Mesa Municipal Code, in order to authorize the establishment of medical cannabis businesses, to restrict and limit such medical cannabis businesses by imposing strict regulations on such businesses to protect the health, safety, and welfare of the community; WHEREAS, the Compassionate Use Act ("CUA"), adopted by California voters in 1996, and the Medical Marijuana Program Act ("MMPA"), enacted by the State Legislature in 2003, decriminalized the cultivation and use of marijuana by seriously ill individuals upon a physician's recommendation and provided California's qualified patients and their primary caregivers with specified immunities under state law, thereby helping to ensure that qualified patients and their primary caregivers, who possess and use marijuana for medical purposes, are not subject to criminal prosecution and/or sanction; WHEREAS, the Costa Mesa Police Department ("CMPD") has reported that the number of marijuana dispensaries and commercial growing operations proliferated though out the City in the past without sufficient legal oversight, the City and its neighborhoods have experienced negative secondary effects, including an increase in crime at certain locations associated with unregulated medical cannabis businesses; WHEREAS, there presently are no ordinances in the City of Costa Mesa specifically regulating or monitoring the location, zoning standards, or other aspects of the locations and facilities where medical cannabis will be dispensed to eligible persons under state law; _5_ MEDICAL CANNABIS CONTOL ACT WHEREAS, medical cannabis businesses must operate with reasonable regulation, to ensure that those seriously ill residents of the City benefit from the palliative effects of medical cannabis have access they are provided under state law; WHEREAS, by implementing a fair and reasonable registration process for medical cannabis businesses, the City will be able to maintain order while avoiding undue burdens on its already strained financial resources; WHEREAS, the City has a substantial and clear interest in ensuring that medical cannabis is distributed in an orderly manner, and in protecting the public health, safety and welfare of its residents, its businesses, the neighborhoods in which medical cannabis businesses operate, while ensuring compassionate access to seriously ill residents to medical cannabis in accordance with the CUA and the MMPA; WHEREAS, the regulations in this initiative do not interfere with a qualified patient's right to use medical cannabis as authorized under California law, nor do they criminalize the possession or cultivation of medical cannabis by specifically defined classifications of persons, as authorized under California law; WHEREAS, medical cannabis businesses shall comply with all provisions of the Costa Mesa Municipal Code ("Code"), California law, and all other applicable local laws; nothing in this initiative purports to permit activities that are otherwise illegal under state or Local law; WHEREAS, this initiative is not intended to conflict with federal or state law, nor is it intended to respond to or invite litigation over any unresolved legal questions posed by the California Attorney General or by case law regarding the scope and application of state law; it is intended that this initiative be interpreted to be compatible with federal and state enactments and in furtherance of the public purposes that those enactments encompass; WHEREAS, the People of the City of Costa Mesa find that nonprofit medical cannabis businesses which operate in full compliance with the State Compassionate Use Act, the Medical marijuana program act, and the Attorney General Guidelines demonstrate a willingness to engage in lawful activity which benefits economic costs associated with the City of Costa Mesa's local regulation and enforcement efforts; WHEREAS, to that end, the People of Costa Mesa further find that those nonprofit medial marijuana businesses, as set forth in the above paragraph, have been precluded from operation in the City of Costa Mesa due to the inability to obtain a business license under the City of Costa Mesa's Municipal Code. Those medical cannabis businesses who never operated in in Costa Mesa without a business license yet have or have attempted to comply with the Compassionate Use Act, the Medical marijuana program act, the Attorney General's Guidelines, and the Costa Mesa Municipal Code by applying for a business license and when denied did not violate the law and commence operation of a medical cannabis business illegally should be given a preference for obtaining "Priority Registration" status as that term is herein defined, to operate under Title 9, Chapter VI. WHEREAS, the People of the City of Costa Mesa recognize that an ordinance proposed by a voter initiative and adopted by a vote of the People cannot be repealed or amended, except by a vote of the People pursuant to the California Constitution, Article 2, Section 10; -6- MEDICAL CANNABIS CONTOL ACT WHEREAS, the People of the City of Costa Mesa further find and declare that this initiative is enacted pursuant to the powers reserved to the State of California, the City of Costa Mesa, and its People under the Tenth Amendment of the United States Constitution, Article 2 of the California Constitution, and the California Health and Safety Code Sections 11362.5 and 11362.7 et seg. NOW, THEREFORE, the People of the City of Costa Mesa ordain as follows: SECTION 3 — Amendment to the Costa Mesa Municipal Code to Add Title 9, Chapter VI. The People of the City of Costa Mesa do hereby enact and ordain that Title 9 of the Costa Mesa Municipal Code, entitled Licenses and Business Regulations, is hereby amended to add Chapter VI to read as follows: (Any underlined language is new and shall be inserted into the Chapter) CHAPTER VI. — MEDICAL CANNABIS BUSINESSES 9-481 Authority and title 9-482 Release of liability and hold harmless 9-483 Purpose and intent 9-484 Physicians/patient confidentiality 9-485 Definitions 9-486 Medical cannabis businesses prohibited 9-487 Limited immunity 9-487.1 Operational requirements 9-488 Cultivation of medical cannabis 9-489 Transportation of medical cannabis 9-490 Violation and enforcement 9-491 Majority approval; effective date 9-492 Competing measures. 9-493 Amendment and repeal. 9-494 Severability. 9-495 Statewide regulation. 9-496 Special or general election. SEC. 9-481 Authoritv and title. Pursuant to the authority granted by the California Constitution Article 2 and California Health and Safety Code Sections 11362 and 11362.7 et sen the People of the City of Costa Mesa do enact this Chapter, which shall be known and may be cited as the "Medical Cannabis Control Act." _7_ MEDICAL CANNABIS CONTOL ACT SEC. 9-482 — Release of liability and hold harmless. To the fullest extent permitted by law, the City of Costa Mesa shall assume no liability whatsoever, and expressly does not waive sovereign immunity, with respect to the medical cannabis business program established herein, or for the activities of any medical cannabis business. Each medical cannabis business recognized by the city shall a. Release the city, its agents officers elected officials and employees from any iniuries, damages, or liabilities of any kind that result from any arrest or prosecution of the medical cannabis provider association or its participants for a violation of state or federal law. b. Indemnify and hold harmless the City, its agents officers elected officers and employees for any claims, damages, or injuries brought by adjacent or nearby property owners or other third parties due to the operations at the medical cannabis business and or premises; and c. Indemnify and hold harmless the City its agents officers elected officials and employees for any claims, dama es, or injuries brought by any of its participants for problems injuries damages or liabilities of any kind that may arise_ out of the distribution, cultivation and/or use of medical cannabis provided at the medical cannabis business and/or premises. SEC. 9-483 - Purpose and intent. It is the purpose and intent of this Article to limit the maximum number and concentration of medical cannabis businesses in the City, to provide needed tax revenue to the City, and to regulate the operation of medical cannabis businesses in order to ensure the health safety and welfare of the residents of the City of Costa Mesa. The regulations in this Chapter, in compliance with the Compassionate Use Act, the Medical marijuana program act and the California Health and Safety Code do not interfere with a qualified patient's right to use medical cannabis as authorized under California law, nor do they criminalize the possession or cultivation of medical cannabis by specifically defined classifications of persons, as authorized under California law. Medical cannabis businesses shall comply with all provisions of the Costa Mesa Municipal Code ("Code") and California laws Nothing in this Article purports to permit activities that are otherwise illegal under federal, state or local law. This Article is not intended to conflict with federal or state law, nor is this Article intended to respond to or invite litigation over any unresolved legal questions posed by the California Attorney General or by case law regarding the scope and application of state law. It is intended that this Article be interpreted to be compatible with federal and state enactments and in furtherance of the public purposes that those enactments encompass. _g_ MEDICAL CANNABIS CONTOL ACT SEC. 9-484 — Phvsician/Patient confidentiali Requirements set forth pursuant to this Chapter shall preserve to the maximum extent possible all legal protections and privileges consistent with reasonably verifying the qualifications and status of qualified patients and primary caregivers Disclosure of anyap tient information to assert facts in support of qualified status shall not be deemed a waiver of confidentiality of that information. SEC. 9-485. Definitions. A. The following phrases and words, when used in this section shall be construed as defined below. Words and phrases not defined here shall be construed as defined in Costa Mesa municipal code or state law. "Building" means any structure having a roof supported by columns or walls for the housing shelter or enclosure of persons, animals, chattels, or property of any kind "Cannabis" or "marijuana" shall be construed as defined in California Health and Safety Code Section 11018 and further shall specifically include any product that contains marijuana or a derivative of marijuana and all parts of the plant ❑ cannabis whether growing or not; the seeds thereof, the resin extracted from any [I part of the plant and every compound manufacture salt derivative, mixture, or❑preparation of the plant, its seeds or resin. It includes marijuana infused in❑foodstuff. It does not include the manure stalks of the plant fiber produced from❑the stalks oil or cake made from the seeds of the plant, any other compound ❑manuufactuure salt derivative mixture, or preparation of the mature stalks (except []the resin extracted therefrom) fiber, oil or cake, or the sterilized seeds of the plant❑are incapable of germination ❑ "Collectives" and "cooperatives" when referring to medical cannabis[] organizations both mean associations of five or more qualified patients, persons ❑with identification cards or primary caregivers of qualified patients and persons[]with identification cards who associate as an incorporated or unincorporated 0 association,to collectively or cooperatively cultivate and distribute medical[] cannabis for use exclusively by their registered members in strict accordance with❑Califounia Health and Safety Code sections 11362.5 and 11362.7 et sec. "Cultivation" means the planting, growing harvesting, drying processing or storage of one or more marijuana plants or any part thereof in anv location indoor or outdoor, including from within a fully enclosed an secure building. "Edible products" means marijuana cultivated by medical cannabis businesses and participants thereof, that is made available in an edible form and prepared in a certified kitchen meeting all the applicable health requirements to be used and ingested solely_by qualified patient participants as part of their medical regime, in strict accordance with state law. "Felony Conviction" means any conviction whether by guilty plea judicial ruling or jury verdict, of any felonv offense. A conviction of a felonv offense that has been dismissed withdrawn, expunged, or set aside, whether pursuant to California Penal Code section 1203 4 _9_ MEDICAL CANNABIS CONTOL ACT California Penal Code section 1000 California Penal Code section 1385 the interest of justice or any other judicial ruling or agreement of the prosecution shall not be deemed a felony conviction. "Live Scan" means a system for inkless electronic fingerprinting and the automated background check developed by the California Department of Justice ("DOJ") which involves digitizing fingerprints and electronically transmitting the fingerprint image data along with personal descriptor information to computers at the DOJ for completion of a criminal record check; or such other comparable inkless electronic fingerprinting. inting_ "Location" means any parcel of land whether vacant or occupied by a building group of buildings, or accessory buildings, and includes the buildings structures yards ol2en spaces to width, and lot area. "Manager" means any person with responsibility for the establishment organization registration, supervision or oversight of a medical cannabis business including but not limited to any person who perfornis the functions of president vice president board member, director, owner, operating officer, financial officer, secretary, or treasurer of the medical cannabis business. "Medical cannabis" and "medical marijuana" means cannabis that isOgrown used and distributed pursuant to the provisions of California Health andOSafety Code sections 11362.5 and 11362.7-11362.83, including all cannabis []products, infiisions and concentrates containing the active ingredients of the[] cannabis plant. "Medical cannabis businesses" means the following: an unincorporated or incorporated entity or association of qualified patients and/or primary caregivers and/or persons with identification cards, who provide money and in-kind contributions reimbursements and reasonable compensation towards the aforementioned entity's actual expenses for activities including but not limited to; planting cultivation harvesting transporting manufacturing, compounding convertins processing preparing storing_ packaging providing and/or retail sales of medical cannabis. A medical cannabis business may provide medical cannabis products services and assistance to qualified patients, persons with a medical cannabis identification card (as set forth in the MMPA) or the primary caregiver of such persons Medical cannabis businesses may assist with the acquisition of skills necessary to cultivate or provide marijuana for medical purposes in compliance with State Law. A medical cannabis business includes any facility, building, structure or location, whether permanent or temporary, where marijuana is made available, sold, given away, distributed or otherwise provided in accordance with Health and Safety Code section 11362.5 el sea, A medical cannabis business includes medical cannabis collectives, cooperatives, dispensaries cultivations and marijuana delivery services Medical Cannabis businesses include "medical marijuana businesses." (1) "Medical cannabis business" shall not include nor be interpreted to include any of the following: a. Any location which is a legal dwelling zoned exclusively for residential use and not permitted for any commercial activity where three (3) or less people who reside at a property cultivate marijuana. _ to - MEDICAL CANNABIS CONTOL ACT b. The location of anv clinic licensed pursuant to Chapter 1 (commencing with Section 1200), a health care facility licensed pursuant to Chapter 2 (commencing with Section 1250) a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01) a residential care facility for the elderly licensed pursuant to Chapter 3.2 (commencing with Section 1569) a hospice or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725), any facility specified in Division 2 of the California Health and Safety Code where: (i) a qualified patient or person with an identification card receives medical care or supportive services or both from the clinic facility, hospice, or home health agency and (ii) the owner or operator, or one of not more than three employees designated by the owner or operator of the clinic facility, hospice, or home health agency has been designated as a primary caregiver pursuant to California Health and Safety Code Section 11362 7(d) by that qualified patient or person with an identification card "Medical cannabis identification card," "Medical marijuana identification card," and "identification card" mean a❑document issued by the State Department of Health Services pursuant to❑Califomia Health and Safety Code sections 11362.7 et sea that identifies a person Li authorized to engage in the medical use of cannabis and the person's designated[] primary caregiver, if any, or identifies a person as a primary caregiver for a[] medical cannabis patient. "Premises" means the space in any buildings of a medical cannabis business together with the spaces within any structures, yards, open spaces lot width and lot area at a location that is occupied or used in the operation of the medical cannabis business "Reasonable compensation" means compensation commensurate with reasonable wages and benefits paid to employees of IRS -qualified non-profit organizations who have similar job descriptions and duties, required level of education and experience prior individual earnings history. and number of hours worked. "Structure" means anvthing constructed or erected which is supported directly or indirectly on the ground, but not including any vehicle. "Vehicle" means a conveyance or device by which any person or property may be propelled, moved, or drawn upon a street, sidewalk or waterway, including but not limited to a device moved exclusively by human power. B. The following words or phrases when used in this section shall be construed as defined in California Health and Safety Code Sections 1746 1136 2.5, and 11362.7. "Hospice'% "Identification card"; "Person with an identification card•" "Primary caregiver'% and "Qualified patient." -u- MGDICAL CANNABIS CONTOL ACT SEC. 9-486. Medical cannabis businesses prohibited. A. It shall be unlawful to own, establish operate use or permit the establishment or operation of a medical cannabis business or to participate as an employee contractor, agent, volunteer, or in any manner or capacity other than as provided in this Chapter. B. The general prohibition contained in this section shall include renting leasing or otherwise permitting a medical cannabis business to occupy or use a location vehicle or other mode of transportation. SEC. 9-487. Limited immunity. A medical cannabis business shall be immune to the prohibition set out in Section 9-486 and the remedies set forth in Costa Mesa Municipal Code including criminal prosecution, so long as that medical cannabis business obtains a Business License for the operation of a medical cannabis business from the City, through the Treasury Division Management Department and/or City Tax Collector, as well as complies with all operational requirements provided in this section A. Business license. 1. The City Tax Collector and/or The City Treasury Division Management Department shall issue a business license for a medical cannabis business that meets priority registration or non-priority registration requirements detailed below in this section. a. Priority Registration. Beginning on the date that is thirty (30) days after the effective date of this ordinance, and lasting for ten 0 0) business days a medical cannabis business may submit a priority registration application and obtain a business license for the purpose of operating a medical cannabis business from the City of Costa Mesa if, on or before Mav 30 2014 such applicant: (a) Has never operated a medical cannabis or medical mariivana business in the city of Costa Mesa has never been convicted of operating a medical cannabis business, or never been civilly adjudicated of operating a medical cannabis business or medical marijuana business without a business license in the City of Costa Mesa; a. The lack of any court record of a citation conviction or civil adjudication by the city shall be sufficient proof to satisfy that applicant has not operated a medical cannabis business in the Citv of Costa Mesa (b) Has been issued a business license or has applied for a business license from the City of Costa Mesa for a I2_ MEDICAL CANNABIS CONTOL ACT medical cannabis business or medical mariivana business; a. Proof of application or attempt to apply for a Costa Mesa business license for the purpose of a medical cannabis business or medical marijuana business shall be satisfied by any competent verifiable documentation, including but not limited to, a date stamped business license application from the City, a filed application a copy of a denial letter for a medical cannabis business from City of Costa Mesa or a dated copy of an application for a medical cannabis business license alone with some proof that a mailing was sent to the City of Costa Mesa Treasury Management Division P.O Box 1200 Costa Mesa, CA 92628-1200 within seven (7) days of the signing of the application or any documentation stamped "Received" by the city including but not limited to a printout of City_ of Costa Mesa Land Use Matrix Table 13-30 or a copy of a received stamped copy of a business card of a senior planner for the City of Costa Mesa. (c) Has filed for Incorporation filed Chapters of Association for a limited liability company, or articles of organization with the Secretary of State of California for the purl2ose of operating a non-profit medical cannabis business or medical marijuana business: a. Proof of incorporation, articles of association or limited company status shall be satisfied by a true and correct copy of the articles of incomoration filed with the Secretary of State Chapters of Association or any other competent verifiable documentation; (d) Possesses or has applied for a Seller's Permit from the State Board of Equalization in the name of the business (e) Possesses or has applied for a License to Sell Nursery Stock for the City of Costa Mesa which was applied for or issued by the Department of Food and Agriculture; (f) Has applied for a Live Scan background check; (g) Possesses a physician's medical cannabis or medical marijuana recommendation pursuant to California Health and Safety Code section 11362 et sec (h) Possess or has applied for a medical marijuana identification card pursuant to Health and Safety Code Section 11362.7 et sec.; (i) Possesses or has applied for a general liability insurance policy (bodily injury, property damage and medical —13— MEDICAL CANNABIS CONTOL ACT cannabis liability), which specifically includes liability for medical cannabis and/or medical marijuana a. Proof of application for a general liability insurance policy, which specifically includes liability for medical cannabis and/or medical marijuana may be shown by a quote from an insurance company or any other verifiable documentation. (j) The applicant possesses a notarized signed and dated authorization to submit to fingerprinting and photographing and authorizing the City in writing to obtain information from criminal iustice agencies financial institutions, Federal State and local government agencies and other persons and entities The written authorization shall include consent to release the information to the City for use in connection with the business license. (k) The applicant possesses a notarized signed and dated statement indicating to the City that the applicant will hold harmless, indemnify, and defend the City against all claims and litigation arising from the issuance of a licenses, including any claims and litigation arising from the establishment, operation or ownership of the medical cannabis establishment. b. Non -Priority Registration: Beginning on the date that is thirty (30) days after the effective date of this ordinance plus ten 0 0) business days any medical cannabis business may submit a non-priorityegistration application to the Treasury Division Management Department and/or City Tax Collector for a business license provided the medical cannabis business meets the following criteria: (a) Has never operated a medical cannabis or medical mariivana business in the city of Costa Mesa has never been convicted of operating a medical cannabis business, or never been civilly adjudicated of operating a medical cannabis business or medical marijuana business without a business license in the City of Costa Mesa; a. The lack of any court record of a citation conviction or civil adjudication by the city shall be sufficient proof to satisfy that applicant has not operated a medical cannabis business in the City of Costa Mesa. (b) Has been issued a business license or has applied for a business license from the City of Costa Mesa for a -- 14 - MEDICAL a - MEDICAL CANNABIS CONTOI- ACT medical cannabis business or medical mariivana business; a. Proof of application or attempt to apply for a Costa Mesa business license for the purpose of a medical cannabis business or medical mariivana business shall be satisfied by any competent verifiable documentation, including but not limited to. a date stamped business license application from the City a filed application a copy of a denial letter for a medical cannabis business from Citv of Costa Mesa or a dated copy of an application for a medical cannabis business license along with some proof that a mailing was sent to the City of Costa Mesa Treasury Management Division P.O. Box 1200 Costa Mesa, CA 92628-1200 within seven (7) days of the signing of the application, or any documentation stamped "Received" by the city including, but not limited to, a printout of City_ of Costa Mesa Land Use Matrix Table 13-30 or a copy of a received stamped copy of a business card of a senior planner for the City of Costa Mesa. (c) Has filed for Incorporation. filed Chapters of Association for a limited liability company, or articles of organization with the Secretary of State of California for the purpose of operating a non-profit medical cannabis business or medical marijuana business; a. Proof of incoMoration, articles of association or limited company status shall be satisfied by a true and correct copy of the articles of incorporation filed with the Secretary of State Chapters of Association or any other competent verifiable documentation: (d) Possesses or has applied for a Seller's Permit from the State Board of Equalization in the name of the business (e) Possesses or has applied for a License to Sell Nursery Stock for the City of Costa Mesa which was applied for or issued by the Department of Food and Agriculture: (f) Has applied for a Live Scan background check; (g) Possesses a physician's medical cannabis or medical marijuana recommendation pursuant to California Health and Safety Code section 11362 et sec (h) Possess or has applied for a medical marijuana identification card pursuant to Health and Safety Code Section 11362.7 et sec.: (i) Possesses or has applied for a general liability insurance policy (bodily injury, property damage, and medical Ig_ MEDICAL CANNABIS CONCOL ACT cannabis liability), which specifically includes liability for medical cannabis and/or medical marijuana a. Proof of application for a general liability insurance policy, which specifically includes liability for medical cannabis and/or medical marijuana may be shown by a quote from an insurance company or any other verifiable documentation. (j) The applicant possesses a notarized, signed and dated authorization to submit to fingerprinting and photographing and authorizing the City in writing to obtain information from criminal justice agencies, financial institutions, Federal, State and local government agencies, and other persons and entities The written authorization shall include consent to release the information to the City for use in connection with the business license. (k) The applicant possesses a notarized, signed and dated statement indicating to the City that the applicant will hold harmless, indemnify, and defend the City against all claims and litigation arising from the issuance of a licenses, including any claims and litigation arising from the establishment, operation or ownershipof f the medical cannabis establishment. c. The Tax Collector or City shall issue _a business license or a reiection with a written explanation, to an applicant within 45 des of the applicant's written request for a business license The failure of the Tax Collector to issue a business license within the 45 day period shall be deemed an acceptance of the application for the business license and the medical cannabis business shall be permitted tooperate. d. The business license shall be valid for two (2) nears, irrespective of whether or not the business is active operating duringthat hat period An application for renewal of a medical cannabis business license must be filed no later than thirty (30) calendar days prior to the expiration of the registration, but no earlier than sixty (60) calendar days prior to the expiration of the registration. A registration shall be renewed for an additional period of two (2) years by submitting an application to the Tax Collector or City. e. The fee required for application and registration for a medical cannabis business license shall not exceed five hundred dollars ($500.00) 2. No permit required: The People of the City of Costa Mesa hereby declare that the operation of a medical cannabis dispensary in compliance with this Chapter is not detrimental to the public health safety, welfare or moral standards of the City. As such, the City shall not require the medical cannabis -16- MEDICAL CANNABIS CONTOL ACT business to obtain any pecial use permit conditional use permit or anv other permit pursuant to any section of this code specifically, but not limited to Sections 9-33 and 9-114, as a condition president or condition subsequent to obtaining a business license and/or business tax registration certificate. Additionally no special site plan variance or any other permit or certificate shall be required for a medical cannabis business, other than those specified in this Chapter. Business tax registration certificate — Transfer: Notwithstanding Section 9-44, Medical cannabis Business licenses shall be transferable only so long as the medical cannabis business taxed is transferred whether by sale or otherwise, to another person or entity under such circumstances that the real or ultimate ownership of the business after the transfer is substantially similar to the real or ultimate ownership existing before the transfer and the transferee meets all the non-priority registration requirements listed in Subsections (a) through (f) of Section 9-487(A.)(1.)(b.,)(i ) 4. Maximum number of businesses: City shall issue no more than eight (8) business licenses for the operation of medical cannabis businesses subject to Subsections 4(a) below. If the number of certified medical cannabis businesses falls below nine (9), then the City shall issue additional business licenses pursuant to the terms of this Chapter. a. City council shall have the discretion to increase but not decrease the number of business licenses issued by the Tax Collector City Treasury Division Management Department, or City to medical cannabis businesses pursuant to the terms of this Chapter. 5. Any such exercise of discretion under Section 4(a) above increasing the number of new business licenses above the current maximum number of nine (9) shall comply with the minimum non-priority registration standards enumerated in in Subsections (a) through (f) of Section 9-487(A.)(1 )(b)(i ) SEC. 9-487.1. Operational requirements. A medical cannabis business shall be immune to the prohibition set out in Section 9-486 and the remedies set forth in Costa Mesa Municipal Code so long as that medical cannabis business obtains a business license and complies with the following operational requirements: Safe radius restrictions: The medical cannabis business is not located within: _I7_ MEDICAL CANNABIS CONTOL ACT A 600 -foot radius of a public school as defined under Health and Safety Code §11362.768 (h); ii. The distances specified in this paragraph shall be the horizontal distance measured in a straight line from the property line of the school to the Property line of the medical cannabis business without regard to intervening structures• iii. Medical cannabis businesses shall be permitted in the following use districts or zones in the City: AP, CL, C2, C1 -S, MG MP PDC PDI C1 & TC Medical cannabis businesses are prohibited in all other use districts or zones Non -concentration of businesses requirement: The medical cannabis businesses shall be disbursed in accordance with the following: A marijuana business shall not be located within a 1000 -foot radius of any other licensed medical cannabis business. The distances specified in thisap ragraph shall be the horizontal distance measured in a straight line from the property line of the first licensed medical cannabis business to the closest property line of the second medical cannabis business without regard to intervening structures: 3. Delivery restrictions: The medical cannabis business shall not deliver marijuana to its members within the City of Costa Mesa unless the medical cannabis business maintains insurance for its managers, volunteers or employees who deliver the marijuana and the medical cannabis business maintains a location within the City of Costa Mesa which possesses a business license under this Chapter. 4. License requirements: The medical cannabis business shall maintain a valid state Board of Equalization state Seller's permit in the name of the business Insurance Requirement: The medical cannabis business shall possesses a commercial general liability insurance policy (bodily injury, propertdamage and medical cannabis liability), which specifically includes liability for medical cannabis 6. Restriction of minors on premises: The medical cannabis business shall not allow minors under the age of 18 Years to enter its premises during any hours of operation Restriction of minors as employees: It shall be unlawful for anv medical cannabis business to employ any person who is not at least 18 years of age Restriction on hours of operation: Hours of operation are limited to the hours between 9 a.m. and 10 p.m.. seven days a week. Visible marijuana restrictions: Any marijuana within a medical cannabis business shall not be visible with the naked eve from the exterior of the business's premises Ig_ MEDICAL CANNABIS CONTOL ACT 10. Alcohol restrictions: The medical cannabis business shall prohibit the sale, dispensing or consumption of alcoholic beverages at its location, in the parking area of the location or within fifty (50) feet of the business. 11. Premises use restrictions: The medical cannabis business shall not allow any nersons to inhale, smoke, eat, ingest, or otherwise consume marijuana at the location in the Parking areas of the location, within fifty (50) feet of the premises, or in those areas restricted under the provisions of California Health and Safety Code section 11362.79 This prohibition shall not apply to a qualified patient's use of marijuana for his or her own medical needs if the qualified patient's permanent legal residence is at the medical licensed residential medical and elder care facilities. 12. Legal notice requirements: A sign shall be posted inside the medical cannabis businesses stating substantially as follows: "The diversion of cannabis for non-medical purposes is a violation of State Law. Loitering at the location of a medical cannabis dispensing or business for an illegal purpose is prohibited by California Penal Code section 647(h). No medical cannabis shall be smoked, ingested or otherwise consumed on the premises of the business or within fifty (50) feet of a medical cannabis business" Such sign shall be printed in 14 -point font or larger upon 8 % by 11 patter and posted at some conspicuous part of such site. 13. Restrictions relating to cultivation, manufacturing, and processing: Medical cannabis businesses shall exchange, sell, transfer, and distribute only marijuana or cannabis cultivated, manufactured, or processed in the State of California and that has not left the State before arriving at the business and that has been cultivated only by, provided only to its verified members in a closed-circuit of production and consumption. 14. Medicine inventory restrictions: The medical cannabis business may possess and cultivate a reasonable quantity of dried marijuana and marijuana plants to meet the personal medical needs of their members. 15. Employee background requirements: The medical cannabis business shall utilize the Live Scan background check system as set forth in this Article prior to employing any manager, volunteer or employee. The medical cannabis businesses' managers must be registered members of the medical cannabis business. Verification of all Live Scan applications received by a medical cannabis business shall be processed and received by the Costa Mesa Police Department in accordance with California Department of Justice guidelines. 16. Employee background restrictions: Prior to being offered a position of management or employment at a medical cannabis business an applicant for a position of manager volunteer, or employee of the medical cannabis business who dispenses medical cannabis -19- MEDICAL CANNABIS CONTOL ACT must submit and successfully pass an annual Live Scan background check by December 31 of each year in order to be employed at the medical cannabis business A failed Live Scan is any Live Scan that shows a felony conviction having occurred within the past 7 years and/or shows that the manager, volunteer or employee is currently on parole or probation for the sale or distribution of a controlled substance For the purposes of this section, a conviction of a felony that has been dismissed withdrawn, expunged, or set aside, whether pursuant to California Penal Code section 1203.4, California Penal Code section 1000, California Penal Code section 1385 or any other judicial ruling or prosecution agreement shall not be deemed a felony conviction and, consequently, shall not result in a failed Live Scan. 17. Patient confidentiality: In order to protect confidentiality, the medical cannabis business may maintain records of all qualified patients with a valid identification card and primary caregivers with a valid identification card using only the identification card number issued by the State or County pursuant to California Health and Safety Code section 113 62.7, et sen. 18. Manufacture of concentrated cannabis restrictions: The medical cannabis business shall not participate in or otherwise engage in the manufacture of concentrated cannabis in violation of California Health and Safety Code section 11379.6 19. Security requirements: The medical cannabis business shall provide the following security measures: the medical cannabis business shall maintain an alarm system reasonably designed to ensure the safety of persons and to protect the premises from theft• ii. the business shall provide a security ug and patrol for the premises during all hours of operation; iii. the security guard patrol shall be a duly -licensed and uniformed security guard ap trol. 20. Packaging requirements: All medical cannabis businesses shall distribute all non -live marijuana in sealed packaging or in "Child Proof' containers equipped with either a "Push or Turn", "Reversible" top vial, or "Pop Top" or "Squeeze Top" locking mechanism. 21. Warning labels requirements: All medical cannabis packaging shall contain a warning that the product contains marijuana, and it is to be consumed only with a physician's recommendation. _2p_ MEDICAL CANNABIS CONTOL ACT 22. mage restrictions: Outdoor signage on medical cannabis business premises shall comply with all City signage restrictions and shall not contain pictorial representations of the marijuana plant or pictorial representations of marijuana use. 23. Edible restrictions: Medical cannabis businesses that prepare. dispense or sell edible medical cannabis products, or food containing any form of medical cannabis must comply with and are subject to the provisions of all relevant state and local laws regarding the preparation, distribution, and sale of food Failure to obtain and comply with all necessary permits related to the preparation, distribution, and sale of food will be an express violation of this Chapter. 24. Odor restrictions: A business shall have an air treatment filtration or ventilation system that reasonably prevents odors generated from the storage of marijuana on the business propeertv. 25. Taxation of medical cannabis businesses: The rate of sales tax and use tax imposed by this Chapter shall be: i. Every person engaged in operating or otherwise conducting a medical cannabis busines not otherwise specifically taxed by other business tax provisions of this Chapter, shall pay a business tax of six (6) percent or $60.00 for each $1000.00 of gross receipt or fractional parts thereof on all proceeds from the distribution sale transfer of medical cannabis by the operation of a medical cannabis business ii. One (1) percent or $10.00 for each $1,000 on the sale of all other tangible personal property at retail. iii. For the purposes of this Section, the above taxes apply onlyProspectively. The city shall make no claim, current, retroactive, or prospective for payment by any medial marijuana business or any other City tax except for the City portion of any Sales Tax collected by the California State Board of Equalization iv. For the purpose of this section, a "medical cannabis business" means any activity regulated or permitted by Chapter VI of this Code and California Health and Safety Code sections 113 62.5, et seq., that involves transporting dis ep nsin& delivering, providing or manufacturing, compounding converting processing preparing, storing, packaging, or testing harvesting of any part of the marijuana plant for medical purposes. Sec. 9-488. Cultivation of medical cannabis: Medical cannabis businesses may cultivate a reasonable amount of marijuana consistent with their member patient's needs. All medical cannabis cultivation subject to this Chapter shall be concealed from public view at all stages of growth, and there shall be no exterior evidence of cultivation occurring at the premises from a public right of way or from an adjacent parcel. Medical cannabis cultivation subject to this Chapter shall not create unreasonably offensive odors, create excessive dust, noise, heat smoke or other impacts that are unreasonably disturbing to persons of non -nal sensitivitv present on adjacent propert Sec. 9-489. Transportation of medical cannabis: Activities entailing the transportation of medical cannabis in accordance with the Compassionate Use Act, the Medical marijuana program act, The Attornev General Guidelines, and this Chapter, shall be lawful only when —21— MEDICAL CANNABIS CONTOL ACT conducted by participant of a recognized medical cannabis business, or collective, or cultivation site for deliver toaparticipant member of the same medical cannabis collective or medial marijuana business of the same medical cannabis collective or association when the quantity transported and the method, timing, and distance of the transportation are reasonably related to the medical needs of the qualified patient or medical cannabis businesses receiving the medication. Sec. 9-490. Violation and enforcement: Each violation of this Chapter shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by Costa Mesa Municipal Code. Additionally, as a nuisance per se any violation of this Chapter shall be subject to legally authorized remedies, including procedures for injunctive relief, disgorgement and payment to the City of any and all monies unlawfully obtained, costs of abatement, costs of investigation, attomey's fees, and any other relief or remedy available at law or equity. The City may also pursue any and all remedies and actions available and applicable under local and state laws for any violations committed by the medical cannabis business and persons related or associated with such medical cannabis business. Sec. 9-491. Majority approval; Effective date: This Measure shall be effective only if approved by a majority of voters and shall go into effect immediately upon passage. Sec. 9-492. Competing measures: In the event that this Measure and another Measure or Measures relating to the regulation of medical cannabis in the City of Costa Mesa shall appear on the same ballot, the provisions of the other Measures shall be deemed to be in conflict with this Measure. In the event that this Measure shall receive a greater number of affirmative votes, the provisions of this Measure shall prevail in their entirety, and the provisions of the other relating to the regulation of medical cannabis in the City of Costa Mesa shall be null and void. Sec. 9-493. Amendment and repeal: The provisions of the Costa Mesa Municipal Code added by. amended by, or contained in this initiative Measure may be amended only as provided in each section. The provisions of the Costa Mesa Municipal Code added by, amended by. or contained in this initiative measure shall not be repealed, except by an ordinance adopted either by petition or by the Council at its own instance and adopted by a majority vote of the electors. Sec 9-494. Severability: If any portion of this initiative Measure is for any reason held to be unconstitutional, invalid or unenforceable by a court of competent jurisdiction, that invalidity shall not affect the remaining portions of this initiative Measure that can be implemented without the invalid provision, and, to this end, the provisions of this initiative Measure are severable. Sec. 9-495. Statewide regulation: This initiative Measure, and the provisions herein, shall be read consistent with any statewide regulation of medical cannabis or recreational marijuana that is promulgated by the legislature or by voter approval in the firture. Sec. 9-496. Special or General election: This initiative Measure shall be set for a special or regular election at the earliest time allowed by law. _22_ MEDICAL CANNABIS CONTOL ACT SECTION 4 — AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 9, CHAPTER 1, ARTICLE 5, SECTION 9-32. The People of the City of Costa Mesa do hereby enact and ordain that Title 9, Chapter 1, Article 5, Section 9-32, entitled Unlawful Business Not Authorized, is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted.) Sec. 9-32 Unlawful business not authorized. No business license or permit issued under the provisions of this title, nor the payment of any tax required under the provisions of this title shall be construed as authorizing the conduct or continuance of any illegal business businesses deemed illegal by state law or a legal business in an illegal manner. SECTION 5 - AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 13, CHAPTER 1, ARTICLE 2, SECTION 13-6. The People of the City of Costa Mesa do hereby enact and ordain that Title 13, Chapter 1, Article 2, Section 13-6, entitled , is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted) Section 13-6. Definitions by .. other means made available t....nd/er .1:..t«; l..,to.7 l.. t tY. !3\ F 1, b' b strict aeeerdariee with State Health and Safety Cede Sections 11362.5 et seEl. and 11362.7 et seq,whieh shall include, bu4 net be limited to, any faeilit�y or leeatien b. b . sale,sale, dispensation, or distribution of maf�uana for medical purpeses that does net have an aetive role in the cultivation of the mafijuana product tha4 it sells, dispenses, or distribiites, 0 when its cultivation of the marijuana produet is eff site from the faeility or leeation for retail of distribution. dispensation, Medical Cannabis Business. An unincorporated or incorporated entity or association of qualified patients and/or primary caregivers and/or persons with identification cards, who provide money and in-kind contributions, reimbursements, and reasonable compensation towards the aforementioned entity's actual expenses for activities including but not limited to; planting cultivation, harvesting, transporting, manufacturing, compounding. converting, processing preparing, storing, packaging providing and/or retail sales of medical cannabis A medical cannabis business may provide medical cannabis, products, services and assistance to qualified patients, persons with a medical marijuana identification card (as set forth in the MMPA) or the primary caregiver of such persons. Medical cannabis businesses may assist with the acquisition of skills necessary to cultivate or provide marijuana for medical piuKposes in compliance with State Law. A medical cannabis business includes any facility, building, structure or location. whether permanent, or temporary. where marijuana is made available, sold, given away, -23 MEDICAL CANNABIS CONTOL ACT distributed, or otherwise provided in accordance with Health and Safety Code section 11362.5 et seg. A medical cannabis business includes medical cannabis "cooperatives" and marijuana delivery services. (1) "Medical cannabis business" shall not include, nor be interpreted to include, any o the following: a. Any location which is a legal dwelling zoned exclusively for residential use and not permitted for any commercial activity where three (3) or less people who reside at a property cultivate marijuana. b. The location of any clinic licensed pursuant to Chapter 1 (commencing with Section 1200), a health care facility licensed pursuant to Chapter 2 (commencing with Section 1250), a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01), a residential care facility for the elderly licensed pursuant to Chapter 3.2 (commencing with Section 1569), a hospice or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725), any facility specified in Division 2 of the California Health and Safety Code where: (i) a qualified patient or person with an identification card receives medical care or supportive services, or both, from the clinic, facility, hospice, or home health agency; and (ii) the owner or operator, or one of not more than three employees designated by the owner or operator, of the clinic, facility, hospice, or home health agency has been designated as a primary care ig ver pursuant to California Health and Safety Code Section 11362.7(d) b t�qualified patient or person with an identification card. SECTION 6 - AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 13, CHAPTER 4, SECTION 13-30, ROW 31 a OF TABLE 13-30 THE COSTA MESA LAND USE MATRIX. The People of the City of Costa Mesa do hereby enact and ordain that Title 13, Chapter 4, Section 1.3-30, Table 13-30, Row 31a, entitled City of Costa Mesa Land Use Matrix, is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted.) _24_ MEDICAL CANNABIS CONTOL ACT Section 13-30, Table 13-30 Section 13-30, Table 13-30, Row 31a _25_ MEDICAL CANNABIS CONTOL ACT Zones LAND USES R R R RA C C C C T M M P P P P P P I I P 1 2 2 3 P L 1 2 1 C G P D D D D D D&& M H S R R R R C I R R D D L M H N S D D D C M 31a. Medical P P P P P P P P P p • • • dispeiisary Cannabis Businesses (subject to the requirements of TITLE 9, CHAPTER VI, MEDICAL CANNABIS BUSINESSES) _25_ MEDICAL CANNABIS CONTOL ACT Exhibit B INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS AN ORDINANCE OF THE PEOPLE OF THE CITY OF COSTA MESA AMENDING THE THE COSTA MESA ZONING CODE AND MUNICIPAL CODE Corrunittee of proponents, who are registered voters of the City of Costa Mesa, sponsoring the petition: Taylor Webster Michael Levesque TEXT OF PROPOSED MEASURE: "AN INITIATIVE TO PROVIDE REVENUE TO COSTA MESA CITIZENS" WHEREAS, the Costa Mesa Police Department ("CM'PD') has reported that, as the number of nnarguana dispensaries and connmercial growing operations proliferated without sufficient legal oversight, the City and its neighborhoods have experienced negative secondary elects, including an increase in crime at certain locations associated with unregulated marijuana dispensaries; WHEREAS, The League of California Cities and California Chief of Polices Association have authored statewide legislation, presented by veteran State Senator Lou Correa to provide a clear road map for reasonable statewide implementation of Proposition 215 and the Medical Marguana Program Act of 2004 in California; WHEREAS, legislation regulating the medical marijuana industry is supported by the Association for Los Angeles Deputy Sheriffs; Association of Orange County Deputy Sheriffs; California Fraternal Order of Police; International Faith Based Coalition; Long Beach Police Officers Association; Los Angeles County Professional Peace Officers Association; Los Angeles Police Protective League; Riverside Sheriffs Association and Santa Ana Police Officers Association; WHEREAS, it is in the interest of the citizens of Costa Mesa to have medical cooperatives operate with reasonable regulation that mirror those put forward by The League of California Cities and California Chief of Polices Association in order to regulate the distribution of medical marijuana, which if unregulated threatens the interests of local neighborhoods and dispensaries, as well as negatively impacting those seriously ill residents of the City; WHEREAS, the City has a substantial and clear interest in ensuring that medical marguana is distributed in an orderly manner, in protecting the public health, safety and welfare of its residents, its dispensaries, the neighborhoods in which Medical Cooperative operate, while ensuring compassionate access by seriously ill residents to medical marguana in accordance with the CUA and the MMPA; WHEREAS, the City seeks to create a gross receipts tax on medical cooperative at a rate of $60 per $1,000 of gross receipts, which will help to fund necessary general municipal services, which may include but is not limited to, code enforcement, building inspections, police protection and crime suppression services, fire prevention and suppression services, which will facilitate the purposes of this law and which will fi nd necessary services as determined by the City Council; NOW, THEREFORE, THE PEOPLE OF THE CITY OF COSTA MESA HEREBY ORDAIN AS FOLLOWS: Section 1. Code Amendment. Section 16-14, of Chapter II in Title 16 of the Costa Mesa Municipal code is hereby amended in its entirety to read as follows: (a) The rate of sales tax and use tax imposed by this chapter shall be one per cent on all businesses except for medical cooperative. (b) Every person engaged in operating or otherwise conducting a business where maryuana is cultivated, distributed or transferred pursuant to Title 9, Chapter VI shall pay a tax proportionate to gross receipts earned within the taxing jurisdiction at a rate of six (6) per cent. (c) The City Council may impose the tax authorized by this section at a lower rate and may establish exemptions, incentives, or other reductions as otherwise allowed by California law. No action by the Council under this paragraph shall prevent it from later increasing the tax, up to six per cent, or removing any exemption, incentive, or reduction and restoring the maximum tax specified in this section. Section 2. Code Amendment. Row 3 1 a of the Costa Mesa Land Use Matrix Table in section 13- 30 of Chapter IV, Title 13, is hereby amended to read as follows: Section 13-30, Table 13-30, Row 31a Zones LAND USES R R R R A C C C C T M M P P P P P P I ] P 1 2 2 3 P L 1 2 1 C G P D D D D D D&& M H S R R R R C I R R D D L M H N S D D D C M 31a. Medical P P P P P P P_ P P P_ cooperative (Subject to the requirements to TITLE 9, CHAPTER VI, Medical cooperative) Section 3. Code Amendment. TITLE 9 is hereby amended to include TITLE 9, Chapter VI, henceforth entitled "Medical Cooperative Regulations" and is hereby amended in its entirety to read as follows: Sec. 9-481. Purpose. The people of the city of Costa Mesa hereby declares that the purpose of the regulations in this chapter is to provide a Oviform and enforceable set of nudes for the operation of medical cooperative, in compliance with state law and future state-wide regulation, to prevent the proliferation of medical cooperatives, to tax the distribution of medical marijuana as well as to protect the public health, safety and welfare of residents. Sec. 9-482. Definitions. The following terms and phrases, whenever used in this section, shall be construed as defined in this section: (a) "Medical cooperative" or "Cooperative" shall be defined in section 13-6 if Title 13 of the Costa Mesa Municipal Code. (b) `Build ing" means any structure having a roof supported by columns or walls, for the housing, shelter or enclosure of persons, animals, chattels, or property of any kind. (c) `Live Scan" means a system for iinldess electronic fingerprinting and the autornated background check developed by the California Department of Justice (DO.) which nrvolves digitizing fingerprints and electronically transmitting the fingerprint image data along with personal descriptor information to computers at the DOJ for completion of a criminal record check; or such other comparable inkless electronic fingerprinting and automated background check process as determined by the City Council\ (d) "Live Scan application" means a form developed by the City Clerk to request Live Scan services and to contain information relevant to the Live Scan process. (e) "Location" means any parcel of land, whether vacant or occupied by a building, group of buildings, or accessory buildings, and includes the buildings, structures, yards, open spaces, lot width, and lot area. (fl "Establishment. " Includes any of the fallowing: a. The opening or comnnencement of any such business as a new business; b. The conversion of an existing business, whether or not a medical cooperative, to any of the medical cooperative defined herein; c. The addition of any of the medical cooperative defined herein to any other existing medical maryuana business; or d. The relocation of any such medical cooperative. (g) "Marguana" shall be construed as defined in California Health and Safety Code Section 1 1018 and fii-ther shall specifically include any product that contains nkiryuana or a derivative of niarijuana. (h) "Operator" means any person with responsibility for the establishment, organization, registration, supervision, or oversight of a medical cooperative, including but not limited to any person who performs the functions of president, vice president, board member, director, owner, operating officer, financial officer, secretary, or treasurer of the medical cooperative. (i) "Applicant." A person who is required to file an application for a license under this chapter, including an individual owner, managing partner, officer of a corporation, or any other operator, manager, employee, or agent of a medical cooperative or an operator of a medical cooperative. (j) "Licensee." The person or entity to which a medical cooperative license or medical cooperative operator's license is issued. (k) "Chief of Police." The Chief of Police of the City of Costa Mesa or the authorized representatives thereof. (1) `Premises" means the space in any buildings of a medical cooperative together with the spaces within any structures, yards, open spaces, lot width, and lot area at a location that is occupied or used in the operation of the medical cooperative. (m)`Person" means any Cooperative, individual, partnership, co -partnership, firm, association, joint stock company, corporation, limited. (n) "Structure" means anything constructed or erected which is supported directly or indirectly on the ground, but not including any vehicle. (o) " Vehic le" means a device by which any person or property may be propelled, moved, or drawn upon a street, including but not limited to a device moved exclusively by human power. (p) The following words or phrases when used in this Section shall be construed as defined in California Health and Safety Code Sections 1746, 11362.5, 11362.7 and 11834.02 a. "Alcoholism or drug abuse recovery or treatment facility'; b. "Hospice"; c. "Identification card'; d. `Person with an identification card" e. "Primary Caregiver'; and f. "Qualified Patient'; Sec. 9-483. Exceptions. This chapter shall not apply to: (a) A health care facility licensed pursuant to Chapter 2 (commencing with Section 1250), (b) A residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01), (c) a residential care facility for the elderly licensed pursuant to Chapter 3.2 (comnneneing with Section 1569), (d) a hospice, or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725), all of Division 2 of the California Health and Safety Code where: i. a qualified patient or person with an identification care receives medical care or support services, or both, from the clinic facility, hospice, or home health agency, and ii, the owner or operator, or one of not more than tl- ee employees designated by the owner or operator, of the clinic, facility, hospice, or home health agency has been designated as a primary caregivers pursuant to California Health and Safety Code Section 11362.7(d) by that qualified patient or person with an identification care, or (e) Any vehicle during only that time reasonably required for its use by: i. A qualified patient or person with an identification card to transport marijuana for his or her personal medical use, or ii. A prinaiy caregiver to transport, distribute, deliver, or give away marguana to a qualified patient or person with an identification card who has designated the individual as a primary caregiver, of the personal medical use of the qualified patient or person with an identification card, in accordance with California Health and Safety Code Section 11362.76 Sec. 9-484. Zoning Requirements. In addition to the requirements of this chapter, all medical cooperative shall comply with the requirements set forth in Article 1, Chapter IX, of Title 13 of the City of Costa Mesa Municipal Code. Sec. 9-485. License required for each location; display of license. A separate medical cooperative license is required for each location within the boundaries of the City of Costa Mesa at which a regulated medical cooperative is to be established. The requirements of this chapter for a medical cooperative license are separate and in addition to a business license, or business tax registration certificate, required under Chapter I of this code. Every regulated cooperative shall display its license prominently in an area open to the public at each location, at all times when the location is open for business. Sec. 9-486. Term of medical cooperative license. An approved medical cooperative license shall be valid until revoked. Sec. 9-487. Application for medical cooperative license. (a) An applicant requesting issuance or renewal of a medical cooperative license shall 'file a written, signed and verified application or renewal application in a form provided by the Chief of Police. Each application shall be accompanied by a non-refundable The for filing or renewal in an amount determined by resolution of the city council, which fees will be used to defray the costs, of investigation, inspection and processing of such application. Such fee shall not exceed the reasonable cost of investigation, inspection and processing of such application. License fees required under this chapter shall be in addition to any license, permit or fee required under any other chapter or title of the City of Costa Mesa Municipal Code. (b) An application for a medical cooperative license shall contain the following information: 1. The applicant shall be either a non-profit mutual benefit corporation or a statutory agricultural or consumer cooperative incorporated in the state of California. 2. The applicant's complete name, the date of its incorporation, evidence that the corporation is in good standing under the laws of California, the names and capacity of all officers and directors, the name of the registered corporate agent and the address of the registered office for service of process. 3. If the applicant intends to operate the medical cooperative under a name other than that of the applicant, the applicant shall file the fictitious name of the medical cooperative and show proof of registration of the fictitious name at the time it submits its application. 4. A description of the type of medical cooperative for which the license is requested and the proposed address where the medical cooperative will operate, plus the names and addresses of the owners and lessors of the medical cooperative site. 5. The address to which notice of action on the application is to be mailed. 6. The names of all operators who will rrianage the distribution of marijuana at the medical cooperative or cultivate margUana on behalf of the medical cooperative, who are required by section 9-490 to obtain a medical cooperative operator permit. i. The medical marijuana collective shall make available to the Chief of Police the names of each person who manages the dispensing of marijuana at the medical cooperative together with a successful Live Scan background check of each such person. 1. A unsuccessful or failed Live Scan is any Live Scan that shows a felony conviction having occurred within the past 10 years and/or shows that the manager is currently on parole or probation for the sale or distribution of a controlled substance; 7. A certificate and straight-line drawing prepared within thirty (30) days prior to application depicting the build'ung and the portion thereof to be occupied by the medical cooperative, and: (1) the property line of any other medical cooperative Within one thousand (1,000) feet of the primary entrance of the medical cooperative and any private or public school; and (2) the property lines of any public park, within one six hundred (600) feet of the primary entrance of the medical cooperative; and the property lines of any residential zone which is abutting or across the street fiom a lot which the medical cooperative for which the license is requested. (c) If the Chief of Police determines that the applicant has completed the application improperly, the Chief of Police shall promptly notify, the applicant of such fact and, on request of the applicant, grant the applicant an extension of time of ten (10) days or less to complete the application properly. In addition, the applicant may request an extension, not to exceed ten (10) days, of the time for the Chief of Police to act on the application. The time period for granting or denying a license shall be stayed during the period in which the applicant is granted an extension of time. (d) The fact that an applicant possesses other types of state or city permits or licenses does not exempt the applicant from the requirement of obtaining a medical cooperative license. Sec. 9-488. Investigation and action on medical cooperative license application. (a) Upon receipt of a completed application and payment of the application and license fees, the Chief of Police shall immediately stamp the application as received and promptly investigate the information contained in the application to determine whether the applicant shall be issued a medical cooperative license. (b) Within thirty (30) days of receipt of the completed application, the Chief of Police shall complete the investigation, grant or deny the application in accordance with the provisions of this section, and so notify the applicant as follows: 1. The Chief of Police shall write or stamp "Granted" or 'Denied" on the application and date and sign such notation. 2. If the application is denied, the Chief of Police shall attach to the application a statement of the reasons for denial. 3. If the application is granted, the Chief of Police shall attach to the application a medical cooperative license. 4. The application as granted or denied and the license, if any, shall be placed in the United States mail, fust class postage prepaid, addressed to the applicant at the address stated in the application. 5. The Chief of Police shall grant the application and issue the medical cooperative license upon findings that the proposed business meets the locational criteria of section 13-132 of Title 13; and that the applicant has met all of the development and performance standards and requirements of section 9-494(g) of this chapter, unless the application is denied for one (1) or more of the reasons set forth in section 9-489. (c) If the Chief of Police neither grants the application within thirty (30) days after it is stamped as received, the application shall deemed granted and the Chief of Police shall issue of a medical cooperative license. 1. The Chief of Police shall issue no more than four (4) medical cooperative licenses, subject to subsection Sec. 9-488(c)1(i). If the number of licensed medical cooperative fall below four (4), then the City shall issue additional business licenses pursuant to the terms of this Chapter. i. The City Council shall have the discretion to increase, but not decrease, the number of licenses issued by the city Finance Director pursuant to the terms of this Chapter. (d) Medical cooperative priority review 1. Beginning on the date that is thirty (3 0) days after the effective date of this ordinance, until the date that is forty -'five (45) days after the effective date of this ordinance, an applicant who meets the following requirements may submit an application for priority review. The applicant requirements for priority review are as follows: i. applicant is an active California non-profit mutual benefit corporation or non-profit agricultural cooperative or non-profit consumer cooperative, that was incorporated prior to May 22, 2014; H. the applicant has listed with the secretary of state a principal place of business in the City of Costa Mesa; iii. the applicant has been issued or has applied for a City of Costa Mesa business license, issued in the name of the entity, for the purpose of providing hone care or therapeutic services, and the submissions of the application or issuance of license occurred prior to May 22, 2014; iv. the applicant, or an officer or director of the applicant, maintains a lease or rental agreement in the City of Costa Mesa with a possession or start date prior to May 22, 2014; and v. the non-profit mutual benefit corporation or non-profit agricultural cooperative or non-profit consumer cooperative maintains a California re- sellers permit issued in the name of the entity at its principal place of business in the City of Costa Mesa, prior to May 22, 2014. Sec. 9-489. Denial of application for medical cooperative license. (a) The Police department shall deny the application for any of the following reasons: I . That the building, structure, equipment and location used by the business for which a license is required herein do not comply with the requirements and standards set for in section 9-494. 2. That the applicant, his or her employee, agent, partner, director, officer, stockholder or manager has knowingly made any false, misleading or fiaudulent statement of material fact in the application for a license or in any report or record required to be filed with the police department or other department of the city. 3. That the applicant has had any type of medical cooperative license revoked by any public entity within two (2) years of the date of the application. 4. Within ten (10) years immediately preceding the date of the filing of the application for a license under this chapter, the director or officer of applicant has been convicted of a felony. 5. That on the date that the business for which a license is required herein commences, and thereafter, there will be no responsible adult on the premises to act as manager at all times during which the business is open. 6. The required application fees have not been paid. (b) In the case of the Chief of Police not acting within the time period under section 9- 487(d), the Chief of Police shall grant the application and issue the license. Sec. 9-490. Medical cooperative operator permit. (a) No person shall engage in or participate as an operator of a medical cooperative, without a valid medical cooperative operator permit issued by the city. All persons who have been issued a medical cooperative operator shall promptly supplement the information provided as part of the application for the license required by section 9-488, with the names of all operators required to obtain a medical cooperative operator permit, within thirty (30) days of any change in the information originally submitted. Failure to submit such changes shall be grounds for suspension of the medical cooperative license. (b) The Chief of Police shall grant, deny and renew medical cooperative operator permits. (c) The application for a license shall be made on a form provided by the Chief of Police. An original and two (2) copies of the completed and sworn license application shall be filed with the Chief of Police. (d) The completed application shall contain the following information and be accomparlied by the following documents: 1. The applicant's legal name and any other names (includ ing aliases) used by the applicant; 2. Age, date and place of birth; 3. Height, weight, hair and eye color; 4. Present residence address and telephone number; 5. Whether the applicant has ever been convicted of felony within ten years of the application date; 6. Proof of a Live Scan background check for all felony convictions within ten (10) years ofthe application; 7. State driver's license or identification number; S. Satisfactory written proof that the applicant is at least eighteen (18) years of age; 9. The applicant's fingerprints on a form provided by the police department, and a color photograph clearly showing the applicant's face. Any fees for the photographs and fingerprints shall be paid by the applicant; 10. If the application is made for the purpose of renewing a license, the applicant shall attach a copy of the license to be renewed. 11. The completed application shall be accompanied by a non-refundable application fee. The amount of the fee shall be set by resolution of the city council. 12. Upon receipt of an application and payment of the application fees, the Chief of Police shall inniediately stamp the application as received and promptly investigate the application. 13. If the Chief of Police deternwnes that the applicant has completed the application improperly, the Chief of Police shall promptly notify the applicant of such fact and grant the applicant an extension of tine of not more than ten (10) days to complete the application properly. In addition, the applicant may request an extension, not to exceed ten (10) days, of the time for the city manager to act on the application. The time period for granting or denying a license shall be stayed during the period in which the applicant is granted an extension of time. See. 9-491. Investigation and action on application for medical cooperative operator permit. (a) Within fifteen (15) days after receipt of the properly completed application, the Chief of Police shall grant or deny the application and so notify the applicant as follows: a. The Chief of Police shall write or stamp "Granted" or "Denied" on the application and date and sign such notation. b. If the application is denied, the Chief of Police shall attach to the application a statement of the reasons for denial. c. If the application is granted, the Chief of Police shall attach to the application a medical cooperative operator permit. d. The application as granted or denied and the license, if any, shall be placed in the United States mail, first class postage prepaid, addressed to the applicant at the residence address stated in the application. e. The Chief of Police shall grant the application and issue the license unless the application is denied for one (1) or more of the reasons set forth in subsection 9- 491(f) of this section. i. If the Chef of Police neither grants nor denies the application within fifteen (15) days after it is stamped as received, the application shall be forwarded to the city finance department for issuance of a operator license. E The Chief of Police shall deny the application for any of the following reasons: i. The applicant has knowingly made any false, misleading, or fraudulent statement of a material fact in the application for a license or in any report or document required to be filed with the application; it. The applicant is under twenty-one (2 1) years of age; iii. The applicant has been convicted of any felony within the last ten (10) years. A license may be issued to any person convicted of a felony if the conviction occurred more than ten (10) years prior to the date of the application. g. Each medical cooperative operator permit shall expire one (1) year fiom the date Of issuance and may be renewed only by filing with the Chief of Police a written request for renewal, accompanied by the application fee and a copy of the license to be renewed. The request for renewal shall be made at least thirty (30) days before the expiration date of the license. When made less than thirty (30) days before the expiration date, the expiration of the license will not be stayed. Applications for renewal shall be acted on as provided herein for applications for licenses. h. Should the Chief of Police not act within the time period provided under this section, the city finance director shall then grant the application no less than five (days) following the expiration oftime required section 9-491(e)i. Sec. 9-492. Employment of Operators without operator licenses urilawfi 1. (a) It shall be unlawful for any medical cooperative to not have at least one licensed operator on premises during the hours of operation. (b) It shall be unlawful for any operator to allow any person to operate a medical cooperative who is not in possession of a valid operator license. Sec. 9-493. Suspension or revocation of medical cooperative licenses and medical cooperative operator permits. A medical cooperative license or medical cooperative operator permit may be suspended or revolted in accordance with the procedures and standards of this section. (a) On determining that grounds for license revocation exist, the Chief of Police shall Punish written notice of the proposed suspension or revocation to the licensee. Stich notice shall set forth the time and place of a hearing, and the ground or grounds upon which the hearing is based, the pertinent Code sections, and a brief statement of the factual matters in support thereof. The notice shall be mailed; postage prepaid, addressed to the last known address of the licensee, or shall be delivered to the licensee personally, at least ten (10) days prior to the hearing date. Hearings shall be conducted in accordance with procedures established by the Chief of Police, but at a minimum shallvnclude the following: (b) All parties involved shall have a right to offer testimonial, documentary, and tangible evidence bearing on the issues; may be represented by counsel; and shall have the right to confront and cross-examine witnesses. Any relevant evidence may be admitted that is the sort of evidence upon which reasonable persons are accustomed to rely in the conduct of serious affair. Any hearing under this section may be contiiued for a reasonable time for the convenience of a party or a witness. The Chief of Police's decision may be appealed in accordance with section 2-300 et seq, of the Costa Mesa Municipal Code. (c) A licensee may be subject to suspension or revocation of his/her license, or be subject to other appropriate disciplinary action, for any of the following causes arising from the acts or omissions of the licensee, or an employee, agent, partner, director, stockholder, or manager of a medical cooperative : 1. The licensee has knowingly made any false, misleading or fi-audulent statement of material facts in the application for a license, or in any report or record required to be filed with the City. 2. The licensee, employee, agent, partner, director, stockholder, or manager of a medical cooperative has knowingly allowed or permitted, and has failed to make a reasonable e$art to prevent the occurrence of any of the following on the premises of the medical cooperative, or in the case of a medical cooperative operator, the licensee has engaged in one (1) of the activities described below while on the premises of medical cooperative : i. Any act of unlawful distributio a of marijuana; ii. Any conduct prohibited by this chapter. iii. Failure to abide by any disciplinary action previously imposed by an appropriate city official. (d) After holding the hearing in accordance with the provisions of this section, if the Chief of Police finds and determines that there are grounds for disciplinary action, based upon the severity of the violation, the Chief of Police shall impose one (1) of the fallowing: 1. A warning; 2. Suspension of the license for a specified period not to exceed six (6) months; or 3. Revocation of the license. i. Revocation of the license shall issue only after two prior determinations of violation. Sec. 9-494. Appeal of denial, suspension or revocation. After denial of an application for a medical cooperative license or a medical cooperative operator permit, or after denial of renewal of a license, or suspension or revocation of a license, the applicant or person to whom the license was granted may seek review of such administrative action by the city council in accordance with the provisions of section 2-300 et seq. of the City of Costa Mesa Municipal Code. Any proceeding to appeal such decision to the city council shall be filed within seven (7) days of such decision. If the denial, suspension or revocation is affirmed on review, the applicant, licensee may seek prompt judicial review of such administrative action pursuant to California Code of Civil Procedure section 1094.5. The city shall make all reasonable efforts to expedite judicial review, if sought by the licensee. Sec. 9-495. Medical cooperative operational requirements. The following development and performance standards shall be satisfied by a medical cooperative and included in any approved medical cooperative license: (a) No medical cooperative shall be operated in any manner that permits the observation of any rnarguana from outside the location. (b) Parking lot fighting shall be provided to illuminate all off-street parking areas serving such use for the purpose of increasing the personal safety of patrons and employees and reducing the incidents of vandalism and theft. The lighting shall provide a level of illumination not less than one (1) foot-candle, measured at the surface of the pavement, at all areas or the parking lot. The lighting shall be shown on the required plot plans and shall be reviewed and approved by the development services department. (c) A medical cooperative shall be open or operating for business only between the hours of 8:00 a.m. and 10:00 p.m. on any particular day. (d) No person under the age of eighteen (18) years shall be permitted within the premises at any time. (e) The medical cooperative shall possess a valid and current State Board of Equalization seller's permit; (f) The medical cooperative shall not be located within: 1. 1000 foot radius of a "school" as defined under Health and Safety Code 11362.768 (h); 2. 600 foot radius of a public park, public library or licensed child care facility; 3. 1000 foot radius of another registered medical cooperative; (g) Medical cooperative shall not allow alcohol to be purchased or consumed at the premises or in any area of the location used for parking any vehicle; (h) Medical cooperative shall only be located in a cornrmercial zoned property or industrial zoned property as allowed pursuant to section 13-30 of Chapter IV, Title 13. O Medical Marijuana Business shall not be located on property lot abutting or across the street fiom a lot which is zoned for residential use. The above notwithstanding, this subsection shall not prohibit a medical cooperative from locating across a street fiom any land zoned residential if the medical cooperative and residential zone is separated by a public thoroughfare with a minimum roadway width of 80 feet. Sec. 9-496. Violations/penalties. With the exception of any violation of this chapter, any person, whether as principal, employee, agent, partner, director, officer, stockholder, or trustee or otherwise, violating or causing the violation of any of the provisions of this chapter shall be guilty of a misdemeanor, and any conviction thereof shall be punishable by a fine of not more than one thousand dollars ($1,000.00) or by imprisonment for not more than six (6) months, or by both such fine and inprisonine nt. Notwithstanding any violation of the nudity limitation under this chapter, any violation of the provisions of this chapter shall constitute a separate offense for each and every day during which such violation is committed or continued. Sec. 9-496.1. Public nuisance. In addition to the penalties set forth above, any medical cooperative which is operating in violation of this chapter or any provision thereof is hereby declared to constitute apublic nuisance and, as such, may be abated or enjoined from father operation. All costs to abate such public nuisance, including attorneys' fees and court costs, shall be paid by the licensee of the medical cooperative pursuant to section 13-17. Sec. 9-497 Statewide Regulation. This ordinance, and the provisions herein, shall be read consistent with any statewide regulation ofinedical marijuana that is promulgated by the legislature or by voter approval in the fixture. in the event Statewide Regulation is passed pursuant to the decriminalization or legalization of marguana for recreational use, the ordinance shall govern the conduct of those business allowed to distribute marijuana under such provisions. Section 4. Amendment and Repeal. The provisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative measure may be amended to further its purposes by ordinance passed by a majority vote of the Council and approved by the Mayor. The provisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative measure shall not be repealed, except by an ordinance adopted either by petition or by the Council at its own instance and adopted by a vote of the electors. Section 5. Severability. If any section, subsection, subdivision, sentence, clause, phrase, word, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The People of the City of Costa Mesa hereby declare that they would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, word, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, words or portions thereof be declared invalid or unconstitutional. Section 6. Effective Date. The City Clerk shall certify as to the passage and adoption of this Ordinance. This Ordinance shall take effect ten (10) days following the date on which the City Council of the City of Costa Mesa declares that this Ordinance was adopted by a majority of the voters voting on the measure at the municipal election on November. Section 7. Majority Approval; Effective Date. This ordinance shall be effective only if approved by a majority of voters at the next special or general election and shall go into effect on more than ninety days after the election. Section S. Competing Measure. Competing Measures. In the event that this measure and another measure or measures relating to the taxation and regulation of medical marguana shall appear on the same ballot, the provisions of the other measures shall be deemed to been conflict with this measure. In the event that this measure shall receive a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other relating to the taxation and regulation of medical marijuana shall be null and void. Section 9. Special or General election. This initiative Measure shall be set for a special or general election at the earliest time allowed by law. ATTACH ME NT 4 RESOLUTION NO. 16-32 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED ORDINANCE TO ALLOW OPERATION OF UP TO EIGHT MEDICAL MARIJUANA (CANNABIS) BUSINESSES IN THE CITY OF COSTA MESA; SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING THE MEASURE AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a General Municipal Election is to be held in the City of Costa Mesa, California, on November 8, 2016, at which there will be submitted to the voters the following proposed measure: Measure : Allow Operation of up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana businesses with: six percent tax on medical Yes marijuana (estimated annual tax revenues $48,000 to $912,000); one percent tax on other products; exemption from No permits; regulations not subject to change by City Council except for increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council affirms for measures placed on the ballot by petition, the persons filing an initiative petition, pursuant to Elections Code Section 9282(a) may file a written argument in favor of the ordinance, not exceeding 300 words, and the legislative body may submit an argument against the ordinance. SECTION 2. That the City Council authorizes the following member(s) of it's body (Mayor Against) (Mayor Pro Tem Against) (Council Member Against) (Council Member Against) (Council Member Against) to file a written argument Against Measure as specified above not exceeding 300 words, accompanied by the printed names(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and including June 17, 2016, 5:00 p.m.,.the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. Resolution No. 16-32 Page 1 of 3 The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 3. That the City Council directs the City Clerk to transmit a copy of the measure to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. a. The City Attorney shall prepare an impartial analysis of the measure not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. b. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. c. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is an impartial analysis of Ordinance or Measure _. If you desire a copy of the ordinance or measure, please call the election official's office at 714-754-5225 and a copy will be mailed at no cost to you. d. The impartial analysis shall be filed by June 17, 2016, 5:00 p.m., the date set by the City Clerk for the filing of primary arguments. SECTION 4. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED AND ADOPTED ON JUNE 7, 2016. Stephen M. Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney Resolution No. 16-32 Page 2 of 3 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 16-32 was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 7t" day of June, 2016, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 8th day of June, 2016. BRENDA GREEN, CITY CLERK Resolution No. 16-32 Page 3 of 3 RESOLUTION NO. 16-33 ATTACHMENT 5 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED MEASURE TO ALLOW OPERATION OF UP TO FOUR LICENSED MEDICAL MARIJUANA BUSINESSES IN THE CITY OF COSTA MESA; SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING THE MEASURE AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a General Municipal Election is to be held in the City of Costa Mesa, California, on Tuesday, November 8, 2016, at which there will be submitted to the voters the following measure: Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana (estimated annual tax revenues $24,000 to $456,000); required industry specific licenses; required No operator permits; regulations subject to change by City Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council affirms for measures placed on the ballot by petition, the persons filing an initiative petition, pursuant to Elections Code Section 9282(a) may file a written argument in favor of the ordinance, not exceeding 300 words, and the legislative body may submit an argument against the ordinance. SECTION 2. That the City Council authorizes the following member(s) of it's body (Mayor Against) (Mayor Pro Tem Member Against) (Council Member Against) (Council Member Against) (Council Member Against) to file a written argument Against Measure as specified above not exceeding 300 words, accompanied by the printed names(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and including June 17, 2016, 5:00 p.m., the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. Resolution No. 16-33 Page 1 of 3 The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 3. That the City Council directs the City Clerk to transmit a copy of the measure to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. a. The City Attorney shall prepare an impartial analysis of the measure not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. b. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. c. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is an impartial analysis of Ordinance or Measure _. If you desire a copy of the ordinance or measure, please call the election official's office at 714-754-5225 and a copy will be mailed at no cost to you. d. The impartial analysis shall be filed by June 17, 2016, 5:00 p.m., the date set by the City Clerk for the filing of primary arguments. SECTION 4. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED AND ADOPTED ON JUNE 7, 2016. Stephen M. Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney Resolution No. 16-33 Page 2 of 3 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 16-33 was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 71" day of June, 2016, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 8t" day of June, 2016. BRENDA GREEN, CITY CLERK Resolution No. 16-33 Page 3 of 3 ATTACHMENT 6 RESOLUTION NO. 16-34 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR CITY MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, Section 9282 of the Elections Code of the State of California provides for written arguments to be filed in favor of or against city measures not to exceed 300 words in length; and WHEREAS, Section 9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for city measures submitted at municipal elections; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the elections official has selected the arguments for and against the measure (not exceeding 300 words each) which will be printed and distributed to the voters, the elections official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a city measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Authors(s) of Argument. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on November 8, 2016, and shall then be repealed. Resolution No. 16-34 Page 1 of 2 SECTION 4. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED AND ADOPTED ON JUNE 7, 2016. Stephen M. Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 16-34 was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 7th day of June, 2016, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 8th day of June, 2016. BRENDA GREEN, CITY CLERK Resolution No. 16-34 Page 2 of 2