HomeMy WebLinkAbout14 - OB-1 - Consideration of a City Initiative Ordin - 7/5/2016CITY COUNCIL AGENDA REPORT
MEETING DATE: July 5, 2016 ITEM NUMBER: OB -1
SUBJECT: CONSIDERATION OF A CITY INITIATIVE ORDINANCE REGARDING
MEDICAL MARIJUANA BUSINESSES
DATE: JUNE 28, 2016
FROM: CITY CLERK'S OFFICE; CITY ATTORNEY'S OFFICE
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. Consider the proposed initiative ordinance (Attachment 1) entitled, "The City of Costa
Mesa Medical Marijuana Measure" relating to medical marijuana manufacturing, testing
and related uses within certain areas of the City; and
2. Provide direction on whether to place the proposed ordinance on the November 8, 2016
ballot by adoption of the following resolutions:
a. Resolution 2016-51: 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, "The City of Costa Mesa Medical
Marijuana Measure" (Attachment 5); and
b. Adopt Resolution 2016-52: 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 a question relating to the adoption of a proposed ordinance
entitled, "The City of Costa Mesa Medical Marijuana Measure" (Attachment 5);
and
c. Adopt Resolution 2016-53: Authorizing written arguments for or against the
proposed ordinance "The City of Costa Mesa Medical Marijuana Measure",
setting priorities for filing written arguments, determining the authors of the written
arguments, and directing the City Attorney to prepare an impartial analysis
(Attachment 5); and
1
d. Adopt Resolution 2016-54: Authorizing the filing of a Notice of Exemption
pursuant to the provisions California Environmental Quality Act (Attachment 5).
3. Provide direction on informational mailers.
BACKGROUND
On April 5, 2016, the City Council directed staff to prepare a medical marijuana ballot
measure for consideration by Council, in order to compete with the two citizen initiative
measures that will be considered by the voters at the November general election. Of the
options presented at the April 5th Council meeting, the City Council directed staff to
prepare a new initiative ordinance to be placed on the ballot that would provide: 1) for
medical marijuana businesses to be located north of the South Coast Drive and west of
Harbor Blvd.; 2) to allow certain types of medical marijuana manufacturing uses in this
area; 3) to provide for future regulation of dispensaries consistent with State law; 4) to
impose a tax on medical marijuana businesses; and 5) to compete with the two citizen -
backed measures on the November 8, 2016 ballot that would allow up to 4 and 8
dispensaries, respectively, in the City.
On June 21, 2016 the City Council reviewed the proposed measure and requested the
following revisions: that references to dispensaries be deleted from the Zoning Code
amendments; that the PDI zone be included in the area north of South Coast Drive and
west of Harbor Boulevard where medical marijuana businesses can locate; that insurance
provisions be added to Medical Marijuana Business Permit requirements; and that the
definition of "distributor" be refined. The City Council also discussed imposing a
separation requirement between medical marijuana businesses and clarifying that the
intent of the ordinance is to regulate the same subject as the two other medical marijuana
initiatives that will appear on the November 8, 2016 ballot. The item was continued until
the July 5, 2016 meeting for further consideration of these and other possible revisions.
STATE LAW GOVERNING MARIJUANA
In 1996, the voters of the State of California approved Proposition 215 (codified as Health
and Safety Code Section 11362.5 and entitled "The Compassionate Use Act of 1996").
The intent of the Compassionate Use Act (CUA) was to enable persons in need of
marijuana for medical purposes to obtain and use marijuana without the threat of criminal
prosecution under limited and specified circumstances. Under the CUA, "qualified
patients" with a physician's recommendation for medical cannabis and "primary
caregivers" are exempted from being prosecuted under Health and Safety Code Section
11357 (possession of marijuana) and 11358 (cultivation of marijuana) for specified
amounts.
On January 1, 2004, the California State Legislature enacted Senate Bill 420 (the Medical
Marijuana Program Act or MMPA) to clarify the scope of the CUA to allow cities and other
governing bodies to adopt and to enforce rules, regulations, and laws consistent with
Senate Bill 420.
The California Supreme Court has made clear that neither the CUA nor the MMPA
expressly or impliedly preempts the authority of cities or counties, under their traditional
land use and police powers, to allow, restrict, limit or entirely exclude marijuana cultivation
or distribution within their jurisdictions. The MMPA allows cities and counties to adopt
local ordinances that regulate the location, operation or establishment of medical
E
1
marijuana collectives and to enforce such ordinances. The safe distribution of marijuana,
as contemplated by the CUA, and the safe distribution of marijuana edibles should include
consideration of the safety of all residents and businesses, not just the users of marijuana
or the consumers of the marijuana edibles. The proposed ordinance is designed to
address safety and professional management in the operation of any proposed medical
marijuana business.
On October 9, 2015, the Governor signed three pieces of state legislation which comprise
the Medical Marijuana Regulation and Safety Act (MMRSA): AB 266, AB 243, and SB
643. AB 266 establishes a dual licensing structure requiring a state license and a local
license or land use permit. The Department of Consumer Affairs newly created Bureau of
Medical Marijuana Regulation (BMMR) will coordinate the overall regulatory structure
establishing minimum health and safety and testing standards. AB 243 establishes a
regulatory and licensing structure for cultivation sites under the Department of Food and
Agriculture. SB 643 establishes criteria for licensing of medical marijuana businesses,
regulates physicians, and recognizes local authority to levy taxes and fees. Generally,
and altogether, the MMRSA governs the licensing and control of all medical marijuana
businesses in the state and provides criminal immunity for licensees. The legislation
protects local control in several ways: it requires dual licensing; local governments may
enforce state law in addition to local ordinance (upon request by the local jurisdiction);
civil and criminal penalties are available for unlicensed activity; and it expressly protects
local licensing practices, zoning ordinances, and local actions taken under the
constitutional police power. Under MMRSA, BMMR will regulate transporting, distribution
and testing of medical marijuana; the Departments of Food and Agriculture will regulate
cultivation; and the Department of Public Health will regulate manufacturing and testing.
Before MMRSA was enacted, the only types of marijuana businesses allowed understate
law were collectives/cooperatives where patients and primary caregiver joined a non-
profit legal entity, to collectively grow and distribute marijuana to members only. The state
law (the MMPA) does not require cooperatives/collectives to obtain a state permit or
license to operate, but they must be authorized by the local jurisdiction and meet all of
the local and state regulations pertaining to their operations. The MMRSA will revoke the
Health and Safety Code section enacted under the MMPA that permitted cooperatives
and collectives one year after the state begins issuing licenses for the various for-profit
categories of medical marijuana businesses now permitted under MMRSA. The newly
created "dispensary" category under MMRSA is entirely different from that which was
previously authorized, in that (1) it can be owned/operated by anyone, not just patients
and primary caregivers, (2) the marijuana and products can be sold to any qualified
patient or primary caregiver (not only members/employees), and (3) it can generate a
profit. Other uses under MMRSA, such as distributors, manufacturers, testing
laboratories and transporters, were not previously authorized as such under state law.
The BMMR is currently in the early stages of rulemaking necessary to implement the
provisions of MMRSA. The BMMR has stated that it anticipates publishing comprehensive
regulations and that the State will begin accepting applications for licenses by January
2018. However, it may be a matter of months after the license applications are available
before licenses are actually issued.
The MMRSA provides in Business & Profession Code section 19321(c), that
"[njotwithstand ing subdivision (a) of Section 19320, a facility or entity that is operating in
compliance with local zoning ordinances and other state and local requirements on or
before January 1, 2018, may continue its operations until is application for licensure is
approved or denied pursuant to this chapter." Under MMRSA, these new types of for -
3
profit medical marijuana businesses - including distributors, manufacturers, testing
laboratories and transporters - must obtain both a local permit or other authorization and
a state license when the state begins to issue such licenses. A conservative interpretation
of section 19321(c) is that it applies to businesses that are legally operating as
cooperatives or collectives - not as permitting all businesses that might be illegally
operating in violation of state law to continue operating until they receive a state permit.
Staff has been informed verbally by BMMR that this is BMMR's interpretation of MMRSA.
Nevertheless, MMRSA does not appear to expressly prohibit a local entity from issuing
permits for these uses prior to the date the state begins issuing licenses. However, such
non -state licensed uses may be subject to enforcement action by BMMR or other state or
federal agencies.
DISCUSSION
Following the June 21St Council meeting, staff has revised the initiative ordinance as
requested. In addition, staff refined the area within the PDI zone to exclude the South
Coast Collection properties. A red -lined version is included with this report as Attachment
2. Staff also received a request after the June 21st meeting to amend the definitions of
"distributor", "distribution", "manufacturer", "manufacturing site", "research and
development laboratory" and "testing laboratory", in Section 9-485, as follows:
"Distribution" means the procurement, sale, and transport of medical cannabis or
medical cannabis products between entities IiGBRSed pursuant to nennocA and aRy
subsequent State of G_ alif,,, nia legislatiO regarding the same who are currently in
compliance with all applicable state and local laws and regulations pertaininq to the
medical marijuana business and medical marijuana activities.
"Distributor" means a person holding a valid medical marijuana business permit for
distribution issued by the city and a valid state "GenS8 fee distribution, . Fed by state
law -and is currently in compliance with all applicable state and local laws and
regulations required to engage in the business of purchasing medical cannabis from a
licensed cultivator, or any medical cannabis products from a licensed manufacturer, for
sale to a licensed dispensary.
"Manufacturer" means a person that conducts the production, preparation, propagation,
or compounding of manufactured medical cannabis, as defined in this section, or
medical cannabis products either directly or indirectly or by extraction methods, or
independently by means of chemical synthesis at a fixed location that packages or
repackages medical cannabis or medical cannabis products or labels or relabels its
container, where the operator holds a valid medical business permit for manufacturing
from the citvand is
currently in compliance with all applicable state and local laws and regulations
pertaining to the medical marijuana business and medical marijuana activities.
"Manufacturing site" means a location that produces, prepares, propagates, or
compounds medical cannabis or medical cannabis products, directly or indirectly, by
means of chemical synthesis, or by a combination of extraction methods and chemical
synthesis and is owned by a person issued a valid Medical marijuana business permit
from the city and a Vara otat8 .14G-P-Rse as required for maRufaGtUF'Rg Of ..... Rab
is
ffreduets is currently in compliance with all applicable state and local laws and
regulations pertaining to the medical marijuana business and medical marijuana
W
activities.
"Research and development laboratory" means a facility, entity, or site in the city that
performs research into and/or the development of medical cannabis or medical
cannabis products, where cannabis in any amount is located on-site, and that is both of
the following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana permit for laboratory
testing from the city and a state liGeRse fer such, uses as squired by state lavis
currently in compliance with all applicable state and local laws and regulations
pertaining to the medical marijuana business and medical marijuana activities.
"Testing laboratory" means a facility, entity, or site in the city that offers or performs
tests of medical cannabis or medical cannabis products and that is both of the following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana permit for laboratory
testing from the city and a state !?ce^Se fGr SUGh ;..,es as required by state is
currently in compliance with all applicable state and local laws and regulations
pertaining to the medical marijuana business and medical marijuana activities.
The net effect of these proposed revisions would be to enable the City to issue Medical
Marijuana Business Permits and conditional use permits under the municipal code
following the effective date of the initiative ordinance - rather than making these uses
contingent upon a state issued license. As discussed, the BMMR anticipates that the
state will publish comprehensive regulations governing these uses, and will begin issuing
such licenses by January 1, 2018. Staff has identified only one local entity in California -
the City of Oakland - that currently authorizes medical marijuana "processing" and
"manufacturing". See Oakland Municipal Code section 5.81 et seq. However, the
definition of manufacturing therein differs from that in MMRSA. No other city or county
was identified that otherwise expressly regulates distribution, manufacturing, or testing of
medical marijuana as defined by MMRSA. However, research and/or testing laboratories
have been approved in various cities under local zoning provisions. For example, the
cities of Berkeley, Oakland, Santa Ana and Santa Cruz have all at one time permitted
these uses in certain manufacturing and/or industrial districts.
ENVIRONMENTAL DETERMINATION
This measure including the amendments to the Zoning Code and Municipal Code proposed
by this measure have been reviewed for compliance with the California Environmental
Quality Act (CEQA)(Pub. Res. Code §§ 21000 et seq.), the CEQA guidelines (14 Cal. Code
Regs. § 15000 et seq.) and the City's environmental procedures, and has been found to be
exempt pursuant to Section 15061(b)(3) (general rule) of the CEQA Guidelines, in that it can
be seen with certainty that there is no possibility that the proposed amendments to the
Zoning Code or the Municipal Code will have a significant effect on the environment. In
addition, the revisions to the Zoning Code are exempt from further environmental review
pursuant to Section 15183, because they are consistent with the General Plan for which an
EIR has been certified.
5
ALTERNATIVES CONSIDERED
1. Direct staff to make specific revisions to the proposed ordinance to be placed on the
November 8, 2016 ballot.
2. Decline to place the initiative ordinance on the ballot.
INFORMATIONAL MAILERS
Staff is requesting direction from Council on whether informational mailers on the
proposed ordinance should be prepared and how many. Each mailer would cost
approximately $8,400.00.
FISCAL IMPACT
The cost to place the initiative on the November 2016 ballot is estimated at $10,000.00 and
is included in the Fiscal Year 2016-17 budget, Elections Consulting. At present the
estimated costs of implementing the ordinance are indeterminate. The cost for citywide
mailings would be approximately $8,400.00 per mailing. In addition, the estimated annual
tax revenue, based on analysis by the Finance Department for the two citizen initiative
measures on the ballot, is between $48,000-$912,000.
The City Attorney' of
form..
TARQUIN PREZIOSI
Deputy City Attorney
RICHAR'b L. FNCIS
Assistant CEO
reviewed this report for legal content and approved it as to
&U� W&A/L
BRENDA GRELN
City Clerk
ATTACHMENTS: 1. Proposed Initiative Ordinance
2. Proposed Initiative Ordinance (redline/strikeout)
3. Zoning Map
4. June 21, 2016 Agenda Report (excluding attachments)
5. Resolutions 2016-51, 2016-52, 2016-53, and 2016-54.
M
ATTACHMENT
COUNCIL -SPONSORED INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO
THE VOTERS
The City Council for the City of Costa Mesa submits the following measure to the
voters of the City for approval and enactment:
SECTION 1. Name
This ballot measure shall be known and may be cited as "The City of Costa Mesa
Medical Marijuana Measure', and shall be referred to herein as the "Measure."
SECTION 2. Purpose
The purpose of the Measure is to provide for the specific areas in the City within
which medical marijuana distributors, manufacturers, processors, research and
development laboratories, testing laboratories and transporters can be located; to
provide for City regulation of these medical marijuana businesses in a manner
consistent with the statewide regulations to be adopted by the California Department
of Consumer Affairs - Bureau of Medical Marijuana Regulations ("BMMR") and other
state agencies, including the departments of Food and Agriculture and Public Health,
pursuant to Senate Bill 643, Assembly Bill 266, and Assembly Bill 243, as amended,
collectively referred to as the Medical Marijuana Regulation and Safety Act (MMRSA);
to reaffirm the existing ban on dispensaries and cultivation within the City; and to
impose a gross receipts tax on all medical marijuana distributors, manufacturers,
processors, testing laboratories, transporters, and research and development
laboratories, as well as any other marijuana or cannabis business at a rate of 6% of
gross receipts.
An additional purpose of this Measure is to directly compete with the two
initiatives entitled "Allow Operation of Up to Four Licensed Medical Marijuana
Businesses Within the City of Costa Mesa" and "Allow Operation of Up to Eight
Licensed Medical Marijuana (Cannabis) Businesses Within the City of Costa Mesa"
which each propose a number of amendments to City's Municipal Code regarding
medical marijuana. The Measure is intended to comprehensively regulate the same
subject as, and to expressly prohibit the activities that would be allowed by, both the
"Allow Operation of Up to Four Licensed Medical Marijuana Businesses Within the
City of Costa Mesa" and "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa". If a majority of voters approve
both this Measure and either or both of the "Allow Operation of Up to Four Licensed
Medical Marijuana Businesses Within the City of Costa Mesa" and "Allow Operation
of Up to Eight Licensed Medical Marijuana (Cannabis) Businesses Within the City of
Costa Mesa", the ballot measure with the higher percentage of the vote will control.
City of Costa Mesa
Medical Marijuana Measure Page 1 of 18
Now, therefore, the People of the City of Costa Mesa do ordain as follows:
AN ORDINANCE OF THE PEOPLE OF THE CITY OF COSTA MESA,
CALIFORNIA, ADDING A NEW SECTION TO TITLE 9, CHAPTER I,
ARTICLE 4 REGARDING MARIJUANA TAX AND A NEW CHAPTER VI
"MEDICAL MARIJUANA BUSINESS PERMITS" TO TITLE 9; ADDING A
NEW ARTICLE 21 "MEDICAL MARIJUANA DISTRIBUTING,
MANUFACTURING, RESEARCH AND DEVELOPMENT AND
TESTING" TO CHAPTER IX OF TITLE 13; AND AMENDING TABLE 13-
30 OF CHAPTER IV, CITYWIDE LAND USE MATRIX, OF TITLE 13 OF
THE COSTA MESA MUNICIPAL CODE.
SECTION 3. Title 9, Chapter I, Article 4, Schedules, is hereby amended to add a
new section 9-29.5, Marijuana tax, to read as follows:
Sec. 9-29.5 Marijuana tax.
Notwithstanding any other provision of this code, every person engaged in, managing,
conducting, or carrying on any medical marijuana business defined in Chapter VI of this
title, or any other medical marijuana, medical cannabis, marijuana and/or cannabis
business, shall pay an annual business tax of 6% based on the gross receipts of the
business.
SECTION 4. Title 9, Chapter VI., entitled "Medical Marijuana Businesses and
Permits" is hereby added to the Costa Mesa Municipal Code to read as follows:
Title 9. LICENSES AND BUSINESS REGULATIONS
Chapter VI. MEDICAL MARIJUANA BUSINESS PERMITS.
Sec. 9-481. Purpose and Intent.
It is the purpose and intent of this chapter to regulate the distributing, manufacturing,
processing, research and development, testing and transporting of cannabis and
cannabis -related products in a manner which is responsible, which protects the health,
safety, and welfare of the residents of Costa Mesa, and to enforce rules and regulations
consistent with state law. In part to meet these objectives, a permit shall be required in
order to own and/or to operate a medical marijuana business within the city. Nothing in
this chapter is intended to authorize the possession, use, or provision of marijuana for
purposes which violate state or federal law. The provisions of this chapter are in addition
to any other permits, licenses, and approvals which may be required to conduct business
in the city, and are in addition to any permits, licenses and approvals required under state
law.
Sec. 9-482. Legal Authority.
City of Costa Mesa
Medical Marijuana Measure Page 2 of 18
Pursuant to Sections 5 and 7 of Article XI of the California Constitution, and the provisions
of the MMRSA, the city is authorized to adopt ordinances that establish standards,
requirements and regulations for local licenses and permits for cannabis and cannabis -
related activity.
Sec. 9-483. Marijuana business activities prohibited unless specifically authorized by this
chapter.
Except as specifically authorized in this chapter, the manufacture, processing, storing,
laboratory testing, labeling, transporting, dispensing, distribution, delivery, or sale of
marijuana or a marijuana product is expressly prohibited in the city.
Sec. 9-484. Compliance with Laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating in a manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder.
Sec. 9-485. Definitions.
When used in this chapter, the following words shall have the meanings ascribed to them
as set forth herein. Any reference to California statutes includes any regulations
promulgated thereunder and is deemed to include any successor or amended version of
the referenced statute or regulatory provision.
"Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or
Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude
or purified, extracted from any part of the plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means
the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also
means marijuana as defined by Section 11018 of the California Health & Safety Code as
enacted by Chapter 14017 of the Statutes of 1972. "Cannabis" does not include the
mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds
of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation
of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the
sterilized seed of the plant which is incapable of germination. For the purpose of this
Chapter, "cannabis" does not mean industrial hemp as that term is defined by Section
81000 of the California Food and Agricultural Code or Section 11018.5 of the California
Health & Safety Code.
"Cannabis concentrate" means manufactured cannabis that has undergone a process to
concentrate the active cannabinoid ingredient, thereby increasing the product's potency.
An edible medical cannabis product is not considered food, as defined by Section 109935
of the California Health & Safety Code, or a drug, as defined by Section 109925 of the
California Health & Safety Code.
City of Costa Mesa
Medical Marijuana Measure Page 3 of 18
"Caregiver" or "primary caregiver" has the same meaning as that term is defined in
Section 11362.7 of the California Health & Safety Code.
"Chief Executive Officer' or "CEO" shall mean the Chief Executive Officer of the City or
his or her designee.
"Cultivation" means any activity, whether occurring indoors or outdoors, involving the
propagation, planting, growing, harvesting, drying, curing, grading, and/or trimming of
cannabis plants or any part thereof for any purpose, including medical marijuana.
"Cultivation site" means a facility where medical cannabis is cultivated, propagated,
planted, grown, harvested, dried, cured, graded, or trimmed, or that does all or any
combination of those activities.
"Delivery" means the commercial transfer of medical cannabis or medical cannabis
products from a dispensary, up to an amount determined to be authorized by the State of
California, or any of its departments or divisions, to anyone for any purpose. "Delivery"
also includes the use by a dispensary of any technology platform owned, controlled,
and/or licensed by the dispensary, or independently licensed by the State of California
under the MMRSA (as the same may be amended from time -to -time), that enables
anyone to arrange for or facilitate the commercial transfer by a licensed dispensary of
medical cannabis or medical cannabis products.
"Dispensary" means a medical marijuana business facility where cannabis, medical
cannabis products, or devices for the use of medical cannabis or medical cannabis
products are offered, either individually or in any combination, for retail sale, including an
establishment (whether fixed or mobile) that delivers, pursuant to express authorization,
medical cannabis and medical cannabis products as part of a retail sale, and where the
operator holds a valid medical marijuana business permit from the city authorizing the
operation of a dispensary, and a valid state license as required by state law to operate a
dispensary.
"Dispensing" means any activity involving the retail sale of medical cannabis or medical
cannabis products from a dispensary.
"Distribution" means the procurement, sale, and transport of medical cannabis or medical
cannabis products between entities licensed pursuant to MMRSA and any subsequent
State of California legislation regarding the same.
"Distributor" means a person holding a valid medical marijuana business permit for
distribution issued by the city, and, a valid state license for distribution, required by state
law to engage in the business of purchasing medical cannabis from a licensed cultivator,
or medical cannabis products from a licensed manufacturer, for sale to a licensed
dispensary. The direct and/or retail sale, distribution, or furnishing of any cannabis or
cannibis product to any consumer or end user is expressely prohibited.
City of Costa Mesa
Medical Marijuana Measure Page 4 of 18
"Dried flower" means all dead medical cannabis that has been harvested, dried, cured, or
otherwise processed, excluding leaves and stems.
"Edible cannabis product" means manufactured cannabis that is intended to be used, in
whole or in part, for human consumption. An edible medical cannabis product is not
considered food asdefined by Section 109935 of the California Health & Safety Code or
a drug as defined by Section 109925 of the California Health & Safety Code.
"Live plants" means living medical cannabis flowers and plants, including seeds, sprouts,
immature plants (including unrooted clones), and vegetative stage plants.
"Manufacturer" means a person that conducts the production, preparation, propagation,
or compounding of manufactured medical cannabis, as defined in this section, or medical
cannabis products either directly or indirectly or by extraction methods, or independently
by means of chemical synthesis at a fixed location that packages or repackages medical
cannabis or medical cannabis products or labels or relabels its container, where the
operator holds a valid medical marijuana business permit for manufacturing from the and
a valid state license for manufacturing pursuant to MMRSA.
"Manufactured cannabis" means raw cannabis that has undergone a process whereby
the raw agricultural product has been transformed into a concentrate or manufactured
product intended for internal consumption or topical application.
"Manufacturing site" means a location that produces, prepares, propagates, or
compounds medical cannabis or medical cannabis products, directly or indirectly, by
extraction methods, independently by means of chemical synthesis, or by a combination
of extraction and chemical synthesis, and is owned and operated by a person issued a
valid Medical marijuana business permit for manufacturing from the city and, a valid state
license as required for manufacturing of cannabis products.
"Marijuana" means "cannabis," as that term is defined in this chapter.
"Medical cannabis", "medical marijuana," "medical cannabis product' or "cannabis
product' means a product containing cannabis, including, but not limited to, concentrates
and extractions, intended to be sold for use by medical cannabis patients in California
pursuant to the Compassionate Use Act of 1996 (Proposition 215), found in Section
11362.5 of the California Health & Safety Code (as the same may be amended from time -
to -time). For purposes of this Title, "medical cannabis" does not include industrial hemp
as defined by Section 81000 of the California Food and Agricultural Code or Section
11018.5 of the California Health & Safety Code.
"Medical marijuana activity" includes manufacture, processing, laboratory testing,
research and development, transporting, delivery, distribution, or sale of medical
cannabis or a medical cannabis product, within the meaning of California Business and
Professions Code 19300 et seq.
City of Costa Mesa
Medical Marijuana Measure Page 5 of 18
"Medical marijuana business" means any business or operation which engages in medical
marijuana activity.
"Medical marijuana business permit" means a regulatory permit issued by the City
pursuant to this Chapter to a medical marijuana business, and is required before any
medical marijuana activity may be conducted in the City.
WMRSK means the Medical Marijuana Regulation and Safety Act adopted by Senate
Bill 643, Assembly Bill 266 and Assembly Bill 243, as amended.
"Patient" or "qualified patient' shall have the same definition as California Health & Safety
Code Section 11362.7 et seq., as it may be amended, and which means a person who is
entitled to the protections of California Health & Safety Code Section 11362.5. For
purposes of this ordinance, a qualified patient shall include a person with an identification
card as that term is defined by California Health & Safety Code Section 11362.7 et seq.
"Person" means an individual, firm, partnership, joint venture, association, corporation,
limited liability company, estate, trust, business trust, receiver, syndicate, or any other
group or combination acting as a unit and includes the plural as well as the singular
number.
"Person with an identification card" shall have the meaning given that term by California
Health & Safety Code Section 11362.7.
"Processing" and "processor" shall have the same meaning as manufacturing and
manufacturer, respectively.
"Research and development laboratory" means a facility, entity, or site in the city that
performs research into and/or the development of medical cannabis or medical cannabis
products, where cannabis in any amount is located on-site, and that is both of the
following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
laboratory testing from the city and a valid state license for such uses as
required by state law.
"South Coast Collection" or "SOCO" means all properties located at 3303 through 3323,
inclusive, Hyland Avenue, in the City of Costa Mesa, commonly known as "SoCo" or
"SOCO".
City of Costa Mesa
Medical Marijuana Measure Page 6 of 18
"State license" means a permit or license issued by the State of California, or one of its
departments or divisions, under MMRSA to engage in medical marijuana activity.
"Topical cannabis" means a product intended for external use. A topical cannabis product
is not considered a drug as defined by Section 109925 of the California Health & Safety
Code.
"Testing laboratory" means a facility, entity, or site in the city that offers or performs tests
of medical cannabis or medical cannabis products and that is both of the following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
laboratory testing from the city and a valid state license for laboratory testing
as required by state law.
"Transport" means the transfer of medical cannabis or medical cannabis products from
the permitted business location of one licensee to the permitted business location of
another licensee, for the purposes of conducting medical marijuana activity authorized by
the MMRSA.
"Transporter' means a person issued a state license, and a medical marijuana business
permit by the city, authorizing the transport of medical cannabis or medical cannabis
products in amounts authorized by the State of California, or by one of its departments or
divisions under the MMRSA.
Sec. 9-486. Type of Authorized Medical Marijuana Businesses Permitted.
(a) One of more of the following types of medical marijuana business may be permitted
to operate within the City:
1. a medical marijuana distributor;
2. a medical marijuana manufacturer or processor;
3. a medical marijuana testing laboratory;
4. a medical marijuana research and development laboratory; and
5. a medical marijuana transporter.
(b) Businesses licensed permitted pursuant to this chapter shall not engage in the retail
sale or distribution of cannabis, marijuana, medical cannabis, medical marijuana,
medical cannabis product, cannabis product, or any other item.
City of Costa Mesa
Medical Marijuana Measure Page 7 of 18
(c) No person may engage in any type of medical marijuana business that is not
specifically authorized pursuant to this section, including but not limited to, dispensing
and/or cultivating medical marijuana.
Sec. 9-487. Medical marijuana business permit required to engage in medical marijuana
business.
No person may engage in any medical marijuana business or in any medical marijuana
activity within the city including manufacture, processing, laboratory testing, transporting,
dispensing, distribution, or sale of medical cannabis or a medical cannabis product unless
the person (1) has a valid medical marijuana business permit from the city and (2) is
currently in compliance with all applicable state and local laws and regulations pertaining
to the medical marijuana business and medical marijuana business activities.
Sec. 9-488. Term of permit; fees.
(a) A medical marijuana business permit shall be valid for two (2) years from the date of
issue, unless otherwise suspended or revoked, and shall be renewed bi-annually
thereafter, provided the permittee is in compliance with the provisions of this chapter.
(b) Medical marijuana business permit and application fees shall be established by
resolution of the City Council.
Sec. 9-489. Effect of state license suspension, revocation, or termination.
Suspension of a license issued by the State of California, or by any of its departments or
divisions, shall immediately suspend the ability of a medical marijuana business to
operate within the city, until the State of California, or its respective department or division,
reinstates or reissues the State license. Should the State of California, or any of its
departments or divisions, revoke or terminate the license of a medical marijuana
business, such revocation or termination shall also revoke or terminate the ability of a
medical cannabis business to operate within the city.
Sec. 9-490. Denial and revocation.
A medical marijuana permit may be revoked upon a hearing by the director pursuant to
section 9-120 for failing to comply with the terms of the permit, the applicable provisions
of this chapter, this code, state law or regulation and/or any condition of any other permit
issued pursuant to this code.
Sec. 9-491. Appeals.
Appeals from decisions of the CEO under this chapter shall be governed by the
procedures set forth in Chapter IX of Title 2 of this code.
City of Costa Mesa
Medical Marijuana Measure Page 8 of 18
Sec. 9-492. Prohibition on transfer of medical marijuana business permits.
In the event a permit holding Medical Marijuana Business sells or transfer the business
to a new owner, the new owner must obtain a new Medical Marijuana Business Permit
prior to commencing or continuing operations. A Medical Marijuana Business shall be
deemed to have transferred to a new owner, if persons(s) or entities with controlling
interest at the time the Permit was first issued cease to possess controlling ownership
interest or an ownership interest of less than fifty-one (51) percent.
Sec. 9-493. City business license required.
Prior to commencing operations, a medical marijuana business shall obtain a city
business license pursuant to Chapter I of this title.
Sec. 9-494. Conditional use permit required.
No medical marijuana business permit shall be issued, and no person shall conduct a
medical marijuana business unless a conditional use permit has been issued therefore
pursuant to the provisions of Title 13, Chapter IX, Article 21 of this code.
Sec. 9-495. Operating requirements for all medical marijuana businesses permitted
under this chapter.
(a) Records and recordkeeping.
(1) Each owner and operator of a medical marijuana business shall maintain
accurate books and records, detailing all of the revenues and expenses of
the business, and all of its assets and liabilities. On no less than an annual
basis (at or before the time of the renewal of a medical marijuana business
permit issued pursuant to this Title), or at any time upon reasonable request
of the City, each medical marijuana business shall file a sworn statement
detailing the number of sales by the medical marijuana business during the
previous twelve month period (or shorter period based upon the timing of
the request), provided on a per -month basis. The statement shall also
include gross sales for each month, and all applicable taxes paid or due to
be paid.
(2) Each owner and operator of a medical marijuana business shall maintain a
current register of the names and the contact information (including the
name, address, and telephone number) of anyone owning or holding an
interest in the medical marijuana business, and separately of all the officers,
managers, employees, agents and volunteers currently employed or
otherwise engaged by the medical marijuana business. The register
required by this paragraph shall be provided to the CEO upon a reasonable
request.
City of Costa Mesa
Medical Marijuana Measure Page 9 of 18
(3) All medical marijuana businesses shall maintain an inventory control and
reporting system that accurately documents the present location, amounts,
and descriptions of all cannabis and cannabis products for all stages of the
production or manufacturing, laboratory testing and distribution processes.
(4) Subject to any restrictions under the Health Insurance Portability and
Accountability Act (HIPPA), each medical marijuana business shall allow
city officials to have access to the business's books, records, accounts,
together with any other data or documents relevant to its permitted medical
marijuana activities, for the purpose of conducting an audit or examination.
Books, records, accounts, and any and all relevant data or documents will
be produced no later than twenty-four (24) hours after receipt of the City's
request, unless otherwise stipulated by the City.
(b) Security measures.
(1) A permitted medical marijuana business shall implement sufficient security
measures to deter and prevent the unauthorized entrance into areas
containing medical cannabis or medical cannabis products, and to deter and
prevent the theft of medical cannabis or medical cannabis products at the
medical marijuana business. These security measures shall include:
(i) Establishing limited access areas accessible only to authorized
medical marijuana business personnel.
(ii) All medical cannabis and medical cannabis products shall be stored
in a secured and locked room, safe, or vault. All medical cannabis
and medical cannabis products shall be kept in a manner as to
prevent diversion, theft, and loss.
(iii) Sensors shall be installed to detect entry and exit from all secure
areas.
(iv) Having a professionally installed, maintained, and monitored alarm
system.
(v) Any bars installed on the windows or the doors of the medical
marijuana business shall be installed only on the interior of the
building.
(vi) Security personnel if utilized must be licensed by the State of
California Bureau of Security and Investigative Services Personnel.
(vii) Each medical marijuana business shall have the capability to remain
secure and operational during a power outage and shall ensure that
City of Costa Mesa
Medical Marijuana Measure Page 10 of 18
all access doors are not solely controlled by an electronic access
panel to ensure that locks are not released during a power outage.
(1) Each medical marijuana business shall identify a designated security
representative/liaison to the city, who shall be reasonably available to meet
with the CEO regarding any security related measures or and operational
issues.
(2) A medical marijuana business shall notify the CEO within twenty-four (24)
hours after discovering any of the following;
(i) significant discrepancies identified during inventory, as set forth in
the city's administrative regulations;
(ii) diversion, theft, loss, or any criminal activity involving the medical
marijuana business or any agent or employee of the medical
marijuana business; or
(iii) the loss or unauthorized alteration of records related to cannabis,
registering qualifying patients, primary caregivers, or employees or
agents of the medical marijuana business.
(c) Restriction on alcohol sales.
No person shall cause or permit the sale, dispensing, or consumption of alcoholic
beverages on or about the premises of the medical marijuana business.
(d) Compliance with laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating in a manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder. Nothing in this chapter shall be
construed as authorizing any actions which violate state law or local law with respect to
the operation of a medical marijuana business or any site-specific, additional operating
procedures or requirements which may be imposed as conditions of approval of the
location of the medical marijuana business.
(e) Taxes.
All medical marijuana businesses authorized to operate under this chapter shall pay all
sales, use, business and other applicable taxes, and all license, registration, and other
fees required under federal, state and local law. Each medical marijuana businesses
shall cooperate with the city with respect to any reasonable request to audit the medical
marijuana business' books and records for the purpose of verifying compliance with this
section, including but not limited to a verification of the amount of taxes required to be
paid during any period.
City of Costa Mesa
Medical Marijuana Measure Page 11 of 18
(f) Insurance.
Permittee shall obtain and maintain at all times during the term of the permit
comprehensive general liability insurance and comprehensive automotive liability
insurance protecting the permittee in an amount of not less than one million dollars
($1,000,000.00) per occurrence, combined single limit, including bodily injury and
property damage and not less than one million dollars ($1,000,000.00) aggregate for each
personal injury liability, products -completed operations and each accident, issued by an
insurance provider admitted and authorized to do business in California and shall be rated
at least A:X in A.M. Best & Company's insurance Guide.
(g) Miscellaneous operating requirements.
(1) Restriction on consumption. Cannabis shall not be consumed on the
premises of any medical marijuana businesses or elsewhere in the city
other than within private residences.
(2) No cannabis or cannabis products or graphics depicting cannabis or
cannabis products shall be visible from the exterior of any property issued
a medical marijuana business permit, or on any of the vehicles owned or
used as part of the medical marijuana business. No outdoor storage of
cannabis or cannabis products is permitted at any time.
(3) Reporting and tracking of product and of gross sales. Each medical
marijuana business shall have in place a point-of-sale tracking system to
track and report on all aspects of the medical marijuana business including,
but not limited to, such matters as cannabis tracking, inventory data, and
gross sales (by weight and by sale). The medical marijuana business shall
ensure that such information is compatible with the City's record-keeping
systems. The system must have the capability to produce historical
transactional data for review by the CEO.
(4) All cannabis and cannabis products sold, distributed or manufactured shall
be cultivated, manufactured, and transported by licensed facilities that
maintain operations in full conformance with the State and local regulations.
(5) There shall not be a physician located in or around any medical marijuana
business at any time for the purpose of evaluating patients for the issuance
of a medical marijuana prescription or card.
(7) Signage and Notices.
(i) In addition to the requirements otherwise set forth in this section,
business identification signage for a medical marijuana business
City of Costa Mesa
Medical Marijuana Measure Page 12 of 18
shall conform to the requirements of this code, including, but not
limited to, seeking the issuance of a city sign permit.
(ii) Each entrance to a medical marijuana business shall be visibly
posted with a clear and legible notice indicating that smoking,
ingesting, or otherwise consuming cannabis on the premises or in
the areas adjacent to the medical marijuana business is prohibited.
(iii) Business identification signage shall be limited to that needed for
identification only.
(9) Minors.
(i) Persons under the age of eighteen (18) years shall not be allowed
on the premises of a medical marijuana business. It shall be unlawful
and a violation of this chapter for any person to employ any person
at or for a medical marijuana business who is not at least eighteen
(18) years of age.
(ii) The entrance to the medical marijuana business shall be clearly and
legibly posted with a notice that no person under the age of eighteen
(18) years of age is permitted to enter upon the premises of the
medical marijuana business.
(10) Odor control. Odor control devices and techniques shall be incorporated in
all medical marijuana businesses to ensure that odors from marijuana are
not detectable off-site.
(11) Display of permit and city business license. The original copy of the medical
marijuana business permit issued by the City pursuant to this chapter and
the city issued business license shall be posted inside the medical
marijuana business in a conspicuous location.
(12) Background check. Every owner, manager, supervisor or employee of the
medical marijuana business must submit fingerprints and other information
deemed necessary by the CEO for a background check by the Costa Mesa
Police Department to verify that person's criminal history. No person shall
be issued a permit to operate a medical marijuana business who has been
convicted of a felony within the past 7 years, unless that felony has been
dismissed, withdrawn, expunged or set aside pursuant to Penal Code
sections 1203.4, 1000 or 1385, or who is currently on probation or parole
for the sale, distribution, possession or manufacture of a controlled
substance.
City of Costa Mesa
Medical Marijuana Measure Page 13 of 18
(13) Loitering. The owner and/or operator of a medical marijuana business shall
prohibit loitering by persons outside the facility both on the premises and
within fifty (50) feet of the premises.
(14) Permits and other approvals. Prior to the establishment of any medical
marijuana business or the operation of any such business, the person
intending to establish a medical marijuana business must first obtain all
applicable planning, zoning, building, and other applicable permits from the
relevant governmental agency which may be applicable to the zoning
district in which such medical marijuana business intends to operate.
Sec. 9-497. Medical marijuana employees.
(a) Any person who is an employee orwho otherwise works or volunteers within a medical
marijuana business must be legally authorized to do so under applicable state law.
(b) No medical marijuana business or owner thereof may employ any person who has
convicted of a felony within the past 7 years, unless that felony has been dismissed,
withdrawn, expunged or set aside pursuant to Penal Code sections 1203.4, 1000 or
1385, or who is currently on probation or parole for the sale, distribution, possession
or manufacture of a controlled substance.
(c) All employees must wear an identification badge while on the premises of the
business, in a format proscribed by the CEO.
Sec. 9-498. Promulgation of administrative regulations.
(a) The CEO is authorized to establish any additional administrative rules, regulations and
standards governing the issuance, denial or renewal of medical marijuana business
permits, or concerning any other subject necessary to carry out the purposes of this
chapter.
(c) Regulations promulgated by the CEO shall become effective upon the date of
publication. Medical marijuana businesses shall be required to comply with all state
and local laws and regulations, including but not limited to any rules, regulations or
standards adopted by the CEO.
Sec. 9-499. Inspection and enforcement.
(a) The CEO is charged with enforcing the provisions of the Costa Mesa Municipal Code,
or any provision thereof, may enter the location of a medical marijuana business at
any time during the hours of operation without notice, and inspect the location of any
medical marijuana business as well as any recordings and records required to be
maintained pursuant to this title or under applicable provisions of State law.
City of Costa Mesa
Medical Marijuana Measure Pago 14 of 18
(b) It is unlawful for any person having responsibility for the operation of a
medical marijuana business, to impede, obstruct, interfere with, or
otherwise not to allow, the City to conduct an inspection, review or copy
records, recordings or other documents required to be maintained by a
medical marijuana business under this chapter or under state or local law.
It is also unlawful for a person to conceal, destroy, deface, damage, or
falsify any records, recordings or other documents required to be
maintained by a medical marijuana business under this chapter or under
state or local law.
Sec. 9-500. Violations.
(a) Violations declared a public nuisance.
Each and every violation of the provisions of this chapter is hereby deemed unlawful and
a public nuisance.
(b) Each violation a separate offense.
Each and every violation of this chapter shall constitute a separate violation and shall be
subject to all remedies and enforcement measures authorized by the Costa Mesa
Municipal Code. Additionally, as a nuisance per se, any violation of this chapter shall be
subject to injunctive relief, any permit issued pursuant to this chapter being deemed null
and void, disgorgement and payment to the City of any monies unlawfully obtained, costs
of abatement, costs of investigation, attorney fees, and any other relief or remedy
available at law or in equity. The City may also pursue any and all remedies and actions
available and applicable under state and local laws for any violations committed by the
medical marijuana business or persons related to, or associated with, the medical
marijuana activity. Additionally, when there is determined to be an imminent threat to
public health, safety or welfare, the CEO, or the Chief of Police, may take immediate
action to temporarily suspend a medical marijuana business permit issued by the City,
pending a hearing before the City Council.
(c) Criminal Penalties.
Each and every violation of the provisions of this chapter may be prosecuted as a
misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars
($1,000) or imprisonment in the county jail for a period of not more than twelve (12)
months, or by both such fine and imprisonment. Each day a violation is committed or
permitted to continue shall constitute a separate offense.
(d) Remedies cumulative and not exclusive.
The remedies provided herein are not to be construed as exclusive remedies. The City
is authorized to pursue any proceedings or remedies provided by law.
City of Costa Mesa
Medical Marijuana Measure Page 15 of 18
SECTION 4. Title 13, Chapter IX, Article 21 is hereby added to read as follows:
Article 21. Medical Marijuana Distributing, Manufacturing, Processing, Research
and Development, Testing and Transporting Locations.
Sec. 13-200.90 Purpose.
The purpose of this article is to regulate the location of medical marijuana
distributing facilities, manufacturing sites, processing sites, research and
developing laboratories, testing laboratories and transport facilities in order to
promote the health, safety, morals and general welfare of the residents and the
businesses within the city by maintaining local control over the ability to authorize
and regulate the location of medical marijuana businesses.
Sec. 13-200.91 Applicability.
(a) Nothing in this article is intended, nor shall it be construed, to burden any defense to
criminal prosecution under the Compassionate Use Act of 1996.
(b) All the provisions of this article shall apply to all property, public and private, within
the City.
(c) All the provisions of this article shall apply indoors and outdoors.
(d) Unless otherwise provided herein, the terms used in this article shall have the
meaning ascribed to them in Title 9, Chapter VI of this code.
Sec. 13-200.91 Medical marijuana distributing facilities, manufacturing sites,
processing sites, research and developing laboratories, testing laboratories and
transport facilities.
(a) Medical marijuana distribution, dispensing, manufacturing, processing, transporting,
research and development and testing is prohibited in all zone districts within the city,
except for those portions of the Manufacturing Park (MP) and Planned Development
Industrial (PDI) zones that are located north of South Coast Drive and west of Harbor
Blvd, excluding any portion of the South Coast Collection.
(b) A conditional use permit shall be required and may be issued to allow the location of
any business engaged in the distribution, manufacturing, processing, researching
and developing, testing or transporting of medical marijuana in the MP or PDI zones
pursuant to subsection (a), subject to the following conditions:
(i) the requirements of Chapter III of this title have been met;
(ii) the findings for granting a conditional use permit in accordance with
section 13-29(g) are met;
City of Costa Mesa
Medical Marijuana Measure Page 16 of 18
(iii) the applicant obtains a medical marijuana business license pursuant to
Chapter VI of Title 9 of this code; and
(iv) the use is conducted in compliance with all applicable state and local laws.
(c) No person shall engage in any use set forth in this article unless that use is specifically
authorized by Chapter VI of Title 9 of this code.
Sec. 13-200.92 Declaration of public nuisance.
Any use, structure, or property that is altered, enlarged, erected, established, maintained,
moved, or operated contrary to the provisions of this article, is hereby declared to be
unlawful and a public nuisance and may be abated by the city through civil and/or
administrative proceedings by means of a restraining order, preliminary or permanent
injunction, or in any other manner provided by law for the abatement of such nuisances.
Sec. 13-200.93 Violations.
Violations of this article shall be punishable pursuant to the provisions of section 13-16.
SECTION 5. Table 13-30 of Chapter IV (Citywide Land Use Matrix) of Title 13
(Planning, Zoning and Development) is hereby amended to modify row 128 and add rows
31 c, 31 d, 31 e and 31f as follows:
Section 13-30, Table 13-30, Row 31 c., 31 d., 31 e., 31 f and 128.
9 Subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, 3303 through 3323 Hyland Ave.
City of Costa Mesa
Medical Marijuana Measure Page 17 of 18
ZONES
P
P
P
P
RR
LAND USES
ACCCCTMMDDDRPPI&
IMH3PLI2IC'GPRRRNDD&RP
S'
LMH
C'
I'
R'
DD
C
S1
D'
D'
D'
M'
31 c. Cannabis and/or marijuana
C9
C9
distributer
31 d. Cannabis and/or marijuana
C�
C9
manufacturer or processor
31 e. Cannabis and/or marijuana
C9
C9
transporter
31f. Cannabis and/or marijuana
C9
C9
research and development and/or testing laboratories
128 Research and development
laboratories — other than cannabis
C
C C
P C
C
P
P
P
and/or marijuana testing
laboratories
9 Subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, 3303 through 3323 Hyland Ave.
City of Costa Mesa
Medical Marijuana Measure Page 17 of 18
SECTION 6. Rejection of the Initiative to "Allow Operation of Up to Four
Licensed Medical Marijuana Businesses Within the City of Costa Mesa" and the
Initiative to "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa". Bythis Measure, the People
of the City of Costa Mesa hereby reject each and every change and addition to the Costa
Mesa Municipal Code proposed by the initiative entitled "Allow Operation of Up to Four
Licensed Medical Marijuana Businesses Within the City of Costa Mesa" and by the
initiative entitled "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa".
SECTION 7. Inconsistencies. Any provision of the Costa Mesa Municipal Code
or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of
such inconsistencies and no further, is hereby repealed or modified to that extent
necessary to affect the provisions of this Ordinance.
SECTION 8. Future Changes.
Any future changes or amendments to this ordinance, including any future chances
or amendments any Municipal Code section affected by the Measure or a reduction in the
tax imposed by this Measure, may occur in the manner set forth in the Government Code
and the City's Municipal Code, and shall not reouire a vote of the people.
SECTION 9. Severability.
If any section, subsection, sentence, clause, or phrase 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 declares that they would have
adopted this ordinance, and each and every section, subsection, sentence, clause, or
phrase not declared invalid or unconstitutional, without regard to whether any portion of
the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 10. Effective Date
This ordinance shall take effect according to law ten days after certification of the
election at which it is adopted.
City of Costa Mesa
Medical Marijuana Measure Page 18 of 18
ATTACHMENT 2
ATTACHMENT
COUNCIL -SPONSORED INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO
THE VOTERS
The City Council for the City of Costa Mesa submits the following measure to the
voters of the City for approval and enactment:
SECTION 1. Name
This ballot measure shall be known and may be cited as "The City of Costa Mesa
Medical Marijuana Measure", and shall be referred to herein as the "Measure."
SECTION 2. Purpose
The purpose of the Measure is to provideforthe specific areas in the City within
which medical marijuana distributors, manufacturers, processors, research and
development laboratories, testing laboratories and transporters can be located; to
provide for City regulation of these medical marijuana businesses,, ^^`ism to PFOyide ivre
the SpeGifiG aFeas n the City where .,,,.aGal m a dispeRsaFies , be located,
in a manner consistent with the statewide regulations to be adopted by the California
Department of Consumer Affairs - Bureau of Medical Marijuana Regulations
('BMMR") and other state agencies, including the departments of Food and
Agriculture and Public Health, pursuant to Senate Bill 643, Assembly Bill 266, and
Assembly Bill 243, as amended, collectively referred to as the Medical Marijuana
Regulation and Safety Act (MMRSA); to reaffirm the existing ban on dispensaries and
cultivation within the City: and to impose a gross receipts tax on all medical marijuana
distributors, manufacturers, processors, testing laboratories, transporters, and
research and development laboratories, as well as any other marijuana or cannabis
business at a rate of 6% of gross receipts.
An additional purpose of this Measure is to directly compete with the two
initiatives entitled "Allow Operation of Up to Four Licensed Medical Marijuana
Businesses Within the City of Costa Mesa" and "Allow Operation of Up to Eight
Licensed Medical Marijuana (Cannabis) Businesses Within the City of Costa Mesa"
which each propose a number of amendments to City's Municipal Code regarding
medical marijuana. The Measure is intended to comprehensively regulate_ the same
subject as, and to expresesely prohibit the activities that would be allowed by, both
the "Allow Operation of Up to Four Licensed Medical Marijuana Businesses Within
the City of Costa Mesa" and "Allow Operation of Up to Eight Licensed Medical
Marijuana (Cannabis) Businesses Within the City of Costa Mesa". If a majority of
voters approve both this Measure and either or both of the "Allow Operation of Up to
Four Licensed Medical Marijuana Businesses Within the City of Costa Mesa" and
"Allow Operation of Up to Eight Licensed Medical Marijuana (Cannabis) Businesses
Within the City of Costa Mesa", the ballot measure with the higher percentage of the
vote will control.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 1 of 20
Now, therefore, the People of the City of Costa Mesa do ordain as follows
AN ORDINANCE OF THE PEOPLE OF THE CITY OF COSTA MESA,
CALIFORNIA, ADDING A NEW SECTION TO TITLE 9, CHAPTER I,
ARTICLE 4 REGARDING MARIJUANA TAX AND A NEW CHAPTER VI
"MEDICAL MARIJUANA BUSINESS PERMITS" TO TITLE 9;
.AMENDING SECTION -43-14 -OF TITLIE 113, CHAPTER 1, ARTICLE 4
REGARDING ENFORCEMENT; ADDING A NEW ARTICLE 21
"MEDICAL MARIJUANA D4SR€NSN4G—, -DISTRIBUTING,
MANUFACTURING, RESEARCH AND DEVELOPMENT AND
TESTING" TO CHAPTER IX OF TITLE 13; AND AMENDING TABLE 13-
30 OF CHAPTER IV, CITYWIDE LAND USE MATRIX, OF TITLE 13 OF
THE COSTA MESA MUNICIPAL CODE.
SECTION 3. Title 9, Chapter I, Article 4, Schedules, is hereby amended to add a
new section 9-29.5, Marijuana tax, to read as follows:
Sec. 9-29.5 Marijuana tax.
Notwithstanding any other provision of this code, every person engaged in, managing,
conducting, or carrying on any medical marijuana business defined in Chapter VI of this
title, or any other medical marijuana, medical cannabis, marijuana and/or cannabis
business, shall pay an annual business tax of 6% based on the gross receipts of the
business.
SECTION 4. Title 9, Chapter VI., entitled "Medical Marijuana Businesses and
Permits' is hereby added to the Costa Mesa Municipal Code to read as follows:
Title 9. LICENSES AND BUSINESS REGULATIONS
Chapter VI. MEDICAL MARIJUANA BUSINESS PERMITS.
Sec. 9-481. Purpose and Intent.
It is the purpose and intent of this chapter to regulate the distributing, manufacturing,
processing, research and development, testing and transporting of cannabis and
cannabis -related products in a manner which is responsible, which protects the health,
safety, and welfare of the residents of Costa Mesa, and to enforce rules and regulations
consistent with state law. In part to meet these objectives, a permit shall be required in
order to own and/or to operate a medical marijuana business within the city. Nothing in
this chapter is intended to authorize the possession, use, or provision of marijuana for
purposes which violate state or federal law. The provisions of this chapter are in addition
to any other permits, licenses, and approvals which may be required to conduct business
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 2 of 20
in the city, and are in addition to any permits, licenses and approvals required understate
law.
Sec. 9-482. Legal Authority.
Pursuant to Sections 5 and 7 of Article XI of the California Constitution, and the provisions
of the MMRSA, the city is authorized to adopt ordinances that establish standards,
requirements and regulations for local licenses and permits for cannabis and cannabis -
related activity.
Sec. 9-483. Marijuana business activities prohibited unless specifically authorized by this
chapter.
Except as specifically authorized in this chapter, the manufacture, processing, storing,
laboratory testing, labeling, transporting, dispensing, distribution, delivery, or sale of
marijuana or a marijuana product is expressly prohibited in the city.
Sec. 9-484. Compliance with Laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating in a: manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder. '.
Sec. 9-485, Definitions,
When used in this chapter, the following words shall have the meanings ascribed to them
as set forth herein. Any reference to California statutes includes any regulations
promulgated thereunder and is deemed to include any successor or amended version of
the referenced statute or regulatory provision.
'Cannabis'. means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or
Cannabis ruderalis, whether' -growing or not; the seeds thereof; the resin, whether crude
or purified, extracted from any part of the plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means
the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also
means marijuana as defined by Section 11018 of the California Health & Safety Code as
enacted by Chapter 14017 of the Statutes of 1972. "Cannabis' does not include the
mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds
of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation
of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the
sterilized seed of the plant which is incapable of germination. For the purpose of this
Chapter, "cannabis" does not mean industrial hemp as that term is defined by Section
81000 of the California Food and Agricultural Code or Section 11018.5 of the California
Health & Safety Code.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 3 of 20
"Cannabis concentrate" means manufactured cannabis that has undergone a process to
concentrate the active cannabinoid ingredient, thereby increasing the product's potency.
An edible medical cannabis product is not considered food, as defined by Section 109935
of the California Health & Safety Code, or a drug, as defined by Section 109925 of the
California Health & Safety Code.
"Caregiver" or "primary caregiver" has the same meaning as that term is defined in
Section 11362.7 of the California Health & Safety Code.
"Chief Executive Officer" or "CEO" shall mean the Chief Executive Officer of the City or
his or her designee.
"Cultivation" means any activity, whether occurring Indoors or outdoors, involving the
propagation, planting, growing, harvesting, drying, curing, grading, and/or trimming of
cannabis plants or any part thereof for any purpose, including' medical marijuana.
"Cultivation site" means a facility where medical cannabis is cultivated, propagated,
planted, grown, harvested, dried, cured, graded, or trimmed, or that does all or any
combination of those activities.
"Delivery" means the commercial` transfer of medical cannabis or medical cannabis
products from a dispensary, up to an amount determined to be authorized by the State of
California, or any of its departments or divisions, to anyone for any purpose. "Delivery"
also includes the use by a;dispensary of any technology platform owned, controlled,
and/or licensed by the dispensary, or Independently licensed by the State of California
under the MMRSA (as the same may be amended from time -to -time), that enables
anyone to arrange for or facilitate the commercial transfer by a licensed dispensary of
medical cannabis or medical cannabis, products.
"Dispensary" meansa medical marijuana business facility where cannabis, medical
cannabis products, or devices for the use of medical cannabis or medical cannabis
products are offered, either individually or in any combination, for retail sale, including an
establishment (whether fixed or mobile) that delivers, pursuant to express authorization,
medical cannabis and medical cannabis products as part of a retail sale, and where the
operator holds a`valid medical` marijuana business permit from the city authorizing the
operation of a dispensary, and`a valid state license as required by state law to operate a
dispensary.
"Dispensing" means any activity involving the retail sale of medical cannabis or medical
cannabis products from a dispensary.
"Distribution" means the procurement, sale, and transport of medical cannabis or medical
cannabis products between entities licensed pursuant to MMRSA and any subsequent
State of California legislation regarding the same.
City of Costa Masa
Medical Marijuana Activity Ordinance Page 4 of 20
"Distributor" means a person holding a valid medical marijuana business permit for
distribution issued by the city, and, a valid state license for distribution, required by state
law to engage in the business of purchasing medical cannabis from a licensed cultivator,
or medical cannabis products from a licensed manufacturer, for sale to a licensed
dispensary-. The direct and/or retail sale, distribution, or furnishing of any cannabis or
cannibis product to anv consumer or end user is exoressely orohibited.-
"Dried flower" means all dead medical cannabis that has been harvested, dried, cured, or
otherwise processed, excluding leaves and stems.
"Edible cannabis product" means manufactured cannabis that is intended to be used, in
whole or in part, for human consumption. An edible medical cannabis product is not
considered food as defined by Section 109935 of the California Health & Safety Code or
a drug as defined by Section 109925 of the California Health & Safety Code.
"Live plants" means living medical cannabis flowers and plants, including seeds, sprouts,
immature plants (including unrooted clones), and vegetative stage plants.
"Manufacturer" means a person that conducts the production, preparation, propagation,
or compounding of manufactured medical cannabis, as defined in this section, or medical
cannabis products either directly or indirectly or by extraction methods, or independently
by means of chemical synthesis at a fixed location that packages or repackages medical
cannabis or medical cannabis products or labels or relabels its container, where the
operator holds a valid medical marijuana business permit for manufacturing from the and
a valid state license for manufacturing pursuant to MMRSA.
"Manufactured cannabis" means raw cannabis that has undergone a process whereby
the raw agricultural product has been transformed into a concentrate or manufactured
product intended for internal consumption or topical application.
"Manufacturing site" means a location that produces, prepares, propagates, or
compounds medical cannabis or medical cannabis products, directly or indirectly, by
extraction methods, independently by means of chemical synthesis, or by a combination
of extraction and chemical synthesis, and is owned and operated by a person issued a
valid Medical marijuana business permit for manufacturing from the city and, a valid state
license as required for manufacturing of cannabis products.
"Marijuana" means "cannabis," as that term is defined in this chapter.
"Medical cannabis", "medical marijuana," "medical cannabis product' or "cannabis
product' means a product containing cannabis, including, but not limited to, concentrates
and extractions, intended to be sold for use by medical cannabis patients in California
pursuant to the Compassionate Use Act of 1996 (Proposition 215), found in Section
11362.5 of the California Health & Safety Code (as the same may be amended from time -
to -time). For purposes of this Title, "medical cannabis" does not include industrial hemp
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 5 of 20
as defined by Section 81000 of the California Food and Agricultural Code or Section
11018.5 of the California Health & Safety Code.
"Medical marijuana activity" includes manufacture, processing, laboratory testing,
research and development, transporting, delivery, distribution, or sale of medical
cannabis or a medical cannabis product, within the meaning of California Business and
Professions Code 19300 et seq.
"Medical marijuana business" means any business or operation which engages in medical
marijuana activity.
"Medical marijuana business permit" means a regulatory permit issued by the City
pursuant to this Chapter to a medical marijuana, business, and is required before any
medical marijuana activity may be conducted in the City.
"MMRSA" means the Medical Marijuana Regulation and Safety Act adopted by Senate
Bill 643, Assembly Bill 266 and Assembly Bill 243, as amended.
"Patient" or "qualified patient" shall have the same definition as California: Health & Safety
Code Section 11362.7 et seq., as it may be amended, and which means a person who is
entitled to the protections of California Health & Safety Code Section 11362.5. For
purposes of this ordinance, a qualified patient shall include -a person with an identification
card as that term is defined by California Health &-Safety Code Section 11362.7 et seq.
"Person" means an individual firm partnership, joint venture, association, corporation,
limited liability company, estate, trust business trust, receiver, syndicate, or any other
group or combination acting as unit and includes the plural as well as the singular
number.
"Person with an identification card" shall have the meaning given that term by California
Health &'Safety Code Section 11362.7.
"Processing" and "processor" shall have the same meaning as manufacturing and
manufacturer, respectively.
"Research and development laboratory" means a facility, entity, or site in the city that
performs research into and/or the development of medical cannabis or medical cannabis
products, where cannabis in any amount is located on-site, and that is both of the
following:
Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 6 of 20
laboratory testing from the city and a valid state license for such uses as
required by state law.
"South Coast Collection" or "SoCo" means all properties located at 3303 through 3323
inclusive Hyland Avenue in the City of Costa Mesa commonly known as "SoCo" or
"SOCO".
"State license" means a permit or license issued by the State of California, or one of its
departments or divisions, under MMRSA to engage in medical marijuana activity.
"Topical cannabis" means a product intended for external use. Atopical cannabis product
is not considered a drug as defined by Section 109925 of the California Health & Safety
Code.
"Testing laboratory" means a facility, entity, or site in the city that offers or performs tests
of medical cannabis or medical cannabis products and that is both of the following:
Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
laboratory testing from the city and a valid state license for laboratory testing
as required by state law.
"Transport" means the transfer of medical cannabis or medical cannabis products from
the permitted business location of one licensee to the permitted business location of
another licensee, forthe purposes of conducting medical marijuana activity authorized by
the MMRSA.
"Transporter' means a person issued a state license, and a medical marijuana business
permit by the city, authorizing the transport of medical cannabis or medical cannabis
products in amounts authorized by the State of California, or by one of its departments or
divisions under the MMRSA.
Sec. 9-486. Type of Authorized Medical Marijuana Businesses Permitted.
(a) One of more of the following types of medical marijuana business may be permitted
to operate within the City:
1. a medical marijuana distributor;
2. a medical marijuana manufacturer or processor;
3. a medical marijuana testing laboratory;
City of Costa Masa
Medical Marijuana Activity Ordinance Page 7 of 20
4. a medical marijuana research and development laboratory; and
5. a medical marijuana transporter.
(b) Businesses licensed permitted pursuant to this chapter shall not engage in the retail
sale or distribution of cannabis, marijuana, medical cannabis, medical marijuana,
medical cannabis product, cannabis product, or any other item.
(c) No person may engage in any type of medical marijuana business that is not
specifically authorized pursuant to this section, including but not limited to, dispensing
and/or cultivating medical marijuana.
Sec. 9-487. Medical marijuana business permit required to engage in medical marijuana
business.
No person may engage in any medical marijuana business or in any medical marijuana
activity within the city including manufacture, processing, laboratory testing, transporting,
dispensing, distribution, or sale of medical cannabis or a medical cannabis product unless
the person (1) has a valid medical marijuana business permit from the city and (2) is
currently in compliance with all applicable state and local laws and regulations pertaining
to the medical marijuana business and medical marijuana business activities.
Sec. 9-488. Term of permit; fees
(a) A medical marijuana business permit shall be valid for two (2) years from the date of
issue, unless otherwise suspended or revoked, and shall be renewed bi-annually
thereafter, provided the permittee is in compliance with the provisions of this chapter.
(b) Medical marijuana business permit and application fees shall be established by
resolution of the City Council.
Sec. 9-489. Effect of state license suspension, revocation, or termination
Suspension of a license issued by the State of California, or by any of its departments or
divisions, shall immediately suspend the ability of a medical marijuana business to
operate within the city, until the State of California, or its respective department or division,
reinstates or reissues the State license. Should the State of California, or any of its
departments or divisions, revoke or terminate the license of a medical marijuana
business, such revocation or termination shall also revoke or terminate the ability of a
medical cannabis business to operate within the city.
Sec. 9-490. Denial and revocation.
City of Costa Mesa
Medical Manluana Activity Ordinance Page 8 of 20
A medical marijuana permit may be revoked upon a hearing by the director pursuant to
section 9-120 for failing to comply with the terms of the permit, the applicable provisions
of this chapter, this code, state law or regulation and/or any condition of any other permit
issued pursuant to this code.
Sec. 9-491. Appeals.
Appeals from decisions of the CEO under this chapter shall be governed by the
procedures set forth in Chapter IX of Title 2 of this code.
Sec. 9-492. Prohibition on transfer of medical marijuana tipsiness permits.
In the event a permit holding Medical Marijuana Business sells or transfer the business
to a new owner, the new owner must obtain a- new Medical Marijuana Business Permit
prior to commencing or continuing operations. A Medical Marijuana Business shall be
deemed to have transferred to a new owner,if persons(s) or entities with controlling
interest at the time the Permit was first issued cease to possess controlling ownership
interest or an ownership interest of less than fifty-one (51) percent.
Sec. 9-493. City business license required.
Prior to commencing operations, a medical marijuana > business shall obtain a city
business license pursuant to Chapter I of this title:.
Sec. 9-494. Conditional use permit required.
No medical marijuana business permit shall be issued, and no person shall conduct a
medical marijuana business unless a conditional use permit has been issued therefore
pursuant: to the provisions of Title 13 Chapter IX, Article 21 of this code.
Sec. 9-495, Operating requirements for all medical marijuana businesses permitted
under this chapter.
(a) Records and'recordkeeping.
(1) Each owner and operator of a medical marijuana business shall maintain
accurate Books and records, detailing all of the revenues and expenses of
the business, and all of its assets and liabilities. On no less than an annual
basis (at or before the time of the renewal of a medical marijuana business
permit issued pursuant to this Title), or at any time upon reasonable request
of the City, each medical marijuana business shall file a sworn statement
detailing the number of sales by the medical marijuana business during the
previous twelve month period (or shorter period based upon the timing of
the request), provided on a per -month basis. The statement shall also
include gross sales for each month, and all applicable taxes paid or due to
be paid.
City of Coat. Mesa
Medical Marijuana Activity Ordinance Page 9 of 20
(2) Each owner and operator of a medical marijuana business shall maintain a
current register of the names and the contact information (including the
name, address, and telephone number) of anyone owning or holding an
interest in the medical marijuana business, and separately of all the officers,
managers, employees, agents and volunteers currently employed or
otherwise engaged by the medical marijuana business. The register
required by this paragraph shall be provided to the CEO upon a reasonable
request.
(3) All medical marijuana businesses shall maintain an inventory control and
reporting system that accurately documents the present location, amounts,
and descriptions of all cannabis and cannabis products for all stages of the
production or manufacturing, laboratory testing and distribution processes.
(4) Subject to any restrictions under the Health Insurance Portability and
Accountability Act (HIPPA), each medical marijuana business shall allow
city officials to have access to the business's books, records, accounts,
together with any other data or documents relevant to its permitted medical
marijuana activities, for the purpose of conducting an audit or examination.
Books, records, accounts,; and any and ail.. relevant data or documents will
be produced no later than twenty-four (24) hours after receipt of the City's
request, unless otherwise -stipulated rby the City.
(b) Security measures
(1) A permitted medical: marijuana business shall implement sufficient security
measures to deter and prevent the unauthorized entrance into areas
containing medical cannabis or medical cannabis products, and to deter and
prevent the theft of medical cal7nabis or medical cannabis products at the
medical marijuana business. These security measures shall include:
Establishing limited access areas accessible only to authorized
medical marijuana business personnel.
(ii) All medical cannabis and medical cannabis products shall be stored
in a secured and locked room, safe, or vault. All medical cannabis
and medical cannabis products shall be kept in a manner as to
prevent diversion, theft, and loss.
(iii) Sensors shall be installed to detect entry and exit from all secure
areas.
(iv) Having a professionally installed, maintained, and monitored alarm
system.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 10 of 20
(v) Any bars installed on the windows or the doors of the medical
marijuana business shall be installed only on the interior of the
building.
(vi) Security personnel if utilized must be licensed by the State of
California Bureau of Security and Investigative Services Personnel.
(vii) Each medical marijuana business shall have the capability to remain
secure and operational during a power outage and shall ensure that
all access doors are not solely controlled by an electronic access
panel to ensure that locks are not released during a power outage.
(1) Each medical marijuana business shall identify a designated security
representative/liaison to the city, who shall be reasonably available to meet
with the CEO regarding any security related measures or and operational
issues.
(2) A medical marijuana business shall notify the CEO within twenty-four (24)
hours after discovering any of the following•
(i) significant discrepancies identified;: during inventory, as set forth in
the city's administrative regulations;
(ii) diversion,_ theft loss„ or any criminal activity involving the medical
marijuana business ;or any agent or employee of the medical
marijuana business; or
(w), the loss or unauthorized alteration of records related to cannabis,
registering qualifying patients, primary caregivers, or employees or
agents of the medical marijuana business.
(c) Restriction on alcohol sales.
No person shallcause or permit the sale, dispensing, or consumption of alcoholic
beverages on or about the premises of the medical marijuana business.
(d) Compliance with laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating In a manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder. Nothing in this chapter shall be
construed as authorizing any actions which violate state law or local law with respect to
the operation of a medical marijuana business or any site-specific, additional operating
procedures or requirements which may be imposed as conditions of approval of the
location of the medical marijuana business.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 11 of 20
(e)Taxes.
All medical marijuana businesses authorized to operate under this chapter shall pay all
sales, use, business and other applicable taxes, and all license, registration, and other
fees required under federal, state and local law. Each medical marijuana businesses
shall cooperate with the city with respect to any reasonable request to audit the medical
marijuana business' books and records for the purpose of verifying compliance with this
section, including but not limited to a verification of the amount of taxes required to be
paid during any period.
(f) Insurance.
(gf) Miscellaneous operating requirements.
(1) Restriction on consumption. Cannabis shall not be consumed on the
premises of any medical marijuana businesses or elsewhere in the city
other than within private residences.
(2) No cannabis or cannabis products or graphics depicting cannabis or
cannabis products shall be visible from the exterior of any property issued
a medical marijuana business permit, or on any of the vehicles owned or
used as part of the medical marijuana business. No outdoor storage of
cannabis or cannabis products is permitted at any time.
(3) Reporting and tracking of product and of gross sales. Each medical
marijuana business shall have in place a point-of-sale tracking system to
track and report on all aspects of the medical marijuana business including,
but not limited to, such matters as cannabis tracking, inventory data, and
gross sales (by weight and by sale). The medical marijuana business shall
ensure that such information is compatible with the City's record-keeping
systems. The system must have the capability to produce historical
transactional data for review by the CEO.
City of Coate Mesa
Medical Marijuana Activity Ordinance Page 12 of 20
Formatted:
Font Ada], 12 pt, Not Bold, Font color.
Auto
Formatted:
Font: Arial, 12 pt, Not Bold, Font color.
Auto
Formatted:
Font: Arial, 12 pt Not Bold, Font color.
Auto
Formatted:
Font: Arial, 12 pt Not Bold, Font color.
Auto
Formatted: Font color. Auto
Formatted: Font: Arial, 12 pt, Not Bold, Font color:
Auto
(4) All cannabis and cannabis products sold, distributed or manufactured shall
be cultivated, manufactured, and transported by licensed facilities that
maintain operations in full conformance with the State and local regulations.
(5) There shall not be a physician located in or around any medical marijuana
business at any time for the purpose of evaluating patients for the issuance
of a medical marijuana prescription or card.
(7) Signage and Notices.
(i) In addition to the requirements otherwise set forth in this section,
business identification signage for medical marijuana business
shall conform to the requirements of this code, including, but not
limited to, seeking the issuance of a city sign permit.
(ii) Each entrance to a medical marijuana business shall be visibly
posted with a clear and legible notice indicating that smoking,
ingesting, or otherwise consumingcannabis on the premises or in
the areas adjacent to the medical. marijuana business is prohibited.
(iii) Business identification signage shall be limited to that needed for
identification only,
(9) Minors.
(i) Persons under the age of eighteen (18) years shall not be allowed
on the premises of a medical marijuana business. It shall be unlawful
and a violation of this chapter for any person to employ any person
at or for a medical marijuana business who is not at least eighteen
(18) years of age
(ii) The entrance to the medical marijuana business shall be clearly and
legibly posted with a notice that no person under the age of eighteen
(18) years of age is permitted to enter upon the premises of the
medical marijuana business.
(10) Odor control. Odor control devices and techniques shall be incorporated in
all medical marijuana businesses to ensure that odors from marijuana are
not detectable off-site.
(11) Display of permit and city business license. The original copy of the medical
marijuana business permit issued by the City pursuant to this chapter and
the city issued business license shall be posted inside the medical
marijuana business in a conspicuous location.
City of Costa Mesa
Medical Marijuana AcMity Ordinance Page 13 of 20
(12) Background check. Every owner, manager, supervisor or employee of the
medical marijuana business must submit fingerprints and other information
deemed necessary by the CEO for a background check by the Costa Mesa
Police Department to verify that person's criminal history. No person shall
be issued a permit to operate a medical marijuana business who has been
convicted of a felony within the past 7 years, unless that felony has been
dismissed, withdrawn, expunged or set aside pursuant to Penal Code
sections 1203.4, 1000 or 1385, or who is currently on probation or parole
for the sale, distribution, possession or manufacture of a controlled
substance.
(13) Loitering. The owner and/or operator of a medical marijuana business shall
prohibit loitering by persons outside the facility both on the premises and
within fifty (50) feet of the premises.''
(14) Permits and other approvals, Prior to the establishment of any medical
marijuana business or the operation of any such business, the person
intending to establish a medical .marijuana. business must first obtain all
applicable planning,. zoning, building, and other applicable permits from the
relevant governmental agency which may be applicable to the zoning
district in which such medical_ marijuana business intends to operate.
Sec. 9-497. Medical marijuana employees.
(a) Any person who is an employee or who otherwise works orvolunteers within a medical
marijuana business must be legally authorized to do sounder applicable state law.
(b) No medical marijuana business or owner thereof may employ any person who has
convicted of a felony within the past 7 years, unless that felony has been dismissed,
withdrawn, expunged or set: aside pursuant to Penal Code sections 1203.4, 1000 or
1385, or who is currently on probation or parole for the sale, distribution, possession
or manufacture of a controlled substance.
(c) All employeesmust wear an identification badge while on the premises of the
business, in a format proscribed by the CEO.
Sec. 9-498. Promulgation of administrative regulations.
(a) The CEO is authorized to establish any additional administrative rules, regulations and
standards governing the issuance, denial or renewal of medical marijuana business
permits, or concerning any other subject necessary to carry out the purposes of this
chapter.
(c) Regulations promulgated by the CEO shall become effective upon the date of
publication. Medical marijuana businesses shall be required to comply with all state
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 14 of 20
and local laws and regulations, including but not limited to any rules, regulations or
standards adopted by the CEO.
Sec. 9-499. Inspection and enforcement.
(a) The CEO is charged with enforcing the provisions of the Costa Mesa Municipal Code,
or any provision thereof, may enter the location of a medical marijuana business at
any time during the hours of operation without notice, and inspect the location of any
medical marijuana business as well as any recordings and records required to be
maintained pursuant to this title or under applicable provisions of State law.
(b) It is unlawful for any person having responsibility for the operation of a
medical marijuana business, to impede ...obstruct, interfere with, or
otherwise not to allow, the City to conduct an inspection, review or copy
records, recordings or other documents required, to be maintained by a
medical marijuana business under this chapter or under state or local law.
It is also unlawful for a person to conceal, destroy, deface, damage, or
falsify any records, recordings;, or other documents required to be
maintained by a medical marijuana business under this chapter or under
state or local law.
Sec. 9-500. Violations.
(a) Violations declared a public nuisance
Each and every violation of the provisions of this chapter is hereby deemed unlawful and
a public nuisance.
(b) Each violation a separate offense
Each and every violation of this chapter shall constitute a separate violation and shall be
subject to all remedies and enforcement measures authorized by the Costa Mesa
Municipal Code,. Additionally, as a nuisance per se, any violation of this chapter shall be
subject to injunctive relief, anypermit issued pursuant to this chapter being deemed null
and void, disgorgement and payment to the City of any monies unlawfully obtained, costs
of abatement, costs of investigation, attorney fees, and any other relief or remedy
available at law or in equity. The City may also pursue any and all remedies and actions
available and applicable under state and local laws for any violations committed by the
medical marijuana business or persons related to, or associated with, the medical
marijuana activity. Additionally, when there is determined to be an imminent threat to
public health, safety or welfare, the CEO, or the Chief of Police, may take immediate
action to temporarily suspend a medical marijuana business permit issued by the City,
pending a hearing before the City Council.
(c) Criminal Penalties.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 15 of 20
Each and every violation of the provisions of this chapter may be prosecuted as a
misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars
($1,000) or imprisonment in the county jail for a period of not more than twelve (12)
months, or by both such fine and imprisonment. Each day a violation is committed or
permitted to continue shall constitute a separate offense.
(d) Remedies cumulative and not exclusive.
The remedies provided herein are not to be construed as exclusive remedies. The City
is authorized to pursue any proceedings or remedies provided by law.
orinninal PeRalty,for any violation of the ipfgivs ens Gfsect
_ , _ - - Field Code Changed
Field Code Changed
of the .,
ef Chapter Iv Art Gl, on Felated to the Fehi�.;ton against ,.,..aGal
maf#JUana-6HitIVat On.
City of Costa Mesa
Medical Manjuana Activity Ordinance Page 16 of 20
SECTION 45. Title 13, Chapter IX, Article 21 is hereby added to read as follows
Article 21. Medical Marijuana Dispensing, Distributing, Manufacturing, Processing,
Research and Development, Testing and Transporting Locations.
Sec. 13-200.90 Purpose.
The purpose of this article is to regulate the location of medical marijuana
dispenisaFies, distributing facilities, manufacturing sites, processing sites, research
and developing laboratories, testing laboratories and transport facilities in order to
promote the health, safety, morals and general welfare of the residents and the
businesses within the city by maintaining local control over the ability to authorize
and regulate the location of medical marijuana businesses.
Sec. 13-200.91 Applicability.
(a) Nothing in this article is intended, nor shall it be construed, to burden any defense to
criminal prosecution under the Compassionate Use Act of 1996.
(b) All the provisions of this article shall apply to all property, public and private, within
the City.
(c) All the provisions of this article shall apply indoors and outdoors.
(d) Unless otherwise provided herein, the terms used in this article shall have the
meaning ascribed to them in Title 9, Chapter VI of this code.
Sec. 13-200.91 Medical marijuana dispensaries—distributing facilities,
manufacturing sites, processing sites, research and developing laboratories,
testing laboratories and transport facilities.
(a) Medical marijuana distribution, dispensing, manufacturing, processing, transporting,
research and development and testing is prohibited in all zone districts within the city,
except for those portions of the Manufacturing Park (MP) and Planned Development
Industrial (PDI) zones that are located north of South Coast Drive and west of Harbor
Blvd excluding any portion of the South Coast Collection.
(b) A conditional use permit shall be required and may be issued to allow the location of
any business engaged in the distribution, manufacturing, processing, researching
and developing, testing or transporting of medical marijuana in the MP or PDI zones
pursuant to subsection (a), subject to the following conditions:
(i) the requirements of Chapter III of this title have been met;
(ii) the findings for granting a conditional use permit in accordance with
section 13-29(g) are met; and
City of Costa Mesa
Medical Medicare Activity Ordinance Page 17 of 20
010 he applicant obtains a medical marijuana business license pursuant to
Chapter VI of Title 9 of this code, and
'-----" Formatted: Indent: Leh: 1.06'l No bullets or
(�(iv) the use is conducted in compliance with all applicable state and local numbering
laws.:
(c) No person shall engage in any use set forth in this article unless that use is specifically
authorized by Chapter VI of Title 9 of this code.
k through12-gFade.
Sec. 13-200.92 Declaration of public nuisance.
Any use, structure, or property that is altered, enlarged, erected, established, maintained,
moved, or operated contrary to the provisions of this article, is hereby declared to be
unlawful and a public nuisance and may be abated by the city through civil and/or
administrative proceedings by means of a restraining order, preliminary or permanent
injunction, or in any other manner provided by law for the abatement of such nuisances.
Sec. 13-200.93 Violations.
Violations of this article shall be punishable pursuant to the provisions of section 13-16.
SECTION 56. Table 13-30 of Chapter IV (Citywide Land Use Matrix) of Title
13 (Planning, Zoning and Development) is hereby amended to modify row 2 ca.,d 128
and add rows 31c, 31 d, We and 31f as follows:
Section 13-30, Table 13-30, Row; 31 a., 31d., 31e., 31f and 128.
City of Costa Mesa
Medical Marijuana ActoAty Ordinance Page 18 of 20
9 Subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, '3303 through 3323 Hyland Ave..
of the City of Costa Mesa hereby reiect each and every change and addition to the Costa
Mesa Municipal Code proposed by the initiative entitled "Allow Operation of Up to Four
SECTION 77. Inconsistencies. Any provision of the Costa Mesa Municipal Code
or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of
such inconsistencies and no further, is hereby repealed or modified to that extent
necessary to affect the provisions of this Ordinance.
SECTION 88. Future Changes.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 19 of 20
----- I Formatted Table
ONES
P P
P
R
CT
DDD
D
PPI
I
LAND USES
22
M
RRRNDD&R
R
1lv1H3PL121�G
S
P
LMHC
!1
D
S1
D
M•
31 c. Cannabis and/or mart uana
c9p
ci
distributer
—
31d. Cannabis and/or mad'uana
manufacturer or processor2lr,. 2annabisandleo
C°
31 e. Cannabis and/or mad'uana
trans orter3ld-Cannabisandler ar�uana
C90
C`
31f. Cannabis and/or mari'uana
research and development and/or testing laboratories34e:
v
C
Gannabisand/or marijuana
128 Research and develo ment
laboratories - other than cannabis
and/or marijuana testin
P
C C
P PC"
P
laboratories311 Gann,. and/OFina:� -
PCCP-
-128
Reseassh and develepmep
P
CP
P
P
9 Subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, '3303 through 3323 Hyland Ave..
of the City of Costa Mesa hereby reiect each and every change and addition to the Costa
Mesa Municipal Code proposed by the initiative entitled "Allow Operation of Up to Four
SECTION 77. Inconsistencies. Any provision of the Costa Mesa Municipal Code
or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of
such inconsistencies and no further, is hereby repealed or modified to that extent
necessary to affect the provisions of this Ordinance.
SECTION 88. Future Changes.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 19 of 20
----- I Formatted Table
SECTION 98. Severability.
If any section, subsection, sentence, clause, or phrase 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 Eity-Ceuaci4People of the City of Costa Mesa hereby declares that they it
would have adopted this ordinance, and each and every section, subsection, sentence,
clause, or phrase not declared invalid or unconstitutional, without regard to whether any
portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 1044. Effective Date
This ordinance shall take effect according to law ten days after certification of the
election at which it is adopted.
City of Costa Mesa
Medical Marijuana Activity Ordinance Page 20 of 20
ATTACH M ENT 3
t7lz,:
F
a.
AV V-LOS3NNIW
ATTACHMENT 4
CITY COUNCIL AGENDA REPORT
MEETING DATE: June 21, 2016 ITEM NUMBER: N13-4
SUBJECT: CONSIDERATION OF A CITY INITIATIVE PETITION REGARDING
MEDICAL MARIJUANA BUSINESSES
DATE: JUNE 16, 2016
FROM: CITY CLERK'S OFFICE; CITY ATTORNEY'S OFFICE
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:
Consider and provide direction on whether to place the attached initiative ordinance entitled
"The City of Costa Mesa Medical Marijuana Measure" on the November 8, 2016 ballot
relating to medical marijuana manufacturing, testing and related uses within certain areas
of the City. If so directed, Resolutions calling for a consolidated municipal election, and
submission of the measure to the ballot, will be presented for adoption at the July 5, 2016
City Council meeting.
BACKGROUND
On April 5, 2016, the City Council directed staff to prepare a medical marijuana ballot
measure for consideration by Council, in order to compete with the two citizen initiative
measures that will be considered by the voters at the November general election. Of the
options presented at the April 5'h Council meeting, the City Council directed staff to
prepare a new initiative ordinance to be placed on the ballot that would provide: 1) for
medical marijuana businesses to be located north of the
Harbor Blvd.; 2) to allow certain types of medical mariju
area; 3) to provide for future regulation of dispensaries\
impose a tax on medical marijuana businesses; and 5) 1
backed measures on the November 8, 2016 ballot th
dispensaries, respectively, in the City. \
STATE LAW GOVERNING MARIJUANA
outh Coast Drive and west of
la manufacturing uses in this
insistent with State law; 4) to
compete with the two citizen -
\would allow up to 4 and 8
In 1996, the voters of the State of California approved Proposition 215 (codified as Health
and Safety Code Section 11362.5 and entitled "The Compassionate Use Act of 1996").
The intent of the Compassionate Use Act (CUA) was to enable persons in need of
marijuana for medical purposes to obtain and use marijuana without the threat of criminal
prosecution under limited and specified circumstances. Under the CUA, "qualified
patients" with a physician's recommendation for medical cannabis and "primary
caregivers" are exempted from being prosecuted under Health and Safety Code Section
11357 (possession of marijuana) and 11358 (cultivation of marijuana) for specified
amounts.
On January 1, 2004, the California State Legislature enacted Senate Bill 420 (the Medical
Marijuana Program Act or MMPA) to clarify the scope of the CUA to allow cities and other
governing bodies to adopt and to enforce rules, regulations, and laws consistent with
Senate Bill 420.
The California Supreme Court has made clear that neither the CUA nor the MMPA
expressly or impliedly preempts the authority of cities or counties, under their traditional
land use and police powers, to allow, restrict, limit or entirely exclude marijuana cultivation
or distribution within their jurisdictions. The MMPA allows cities and counties to adopt
local ordinances that regulate the location, operation or establishment of medical
marijuana collectives and to enforce such ordinances. The safe distribution of marijuana,
as contemplated by the CUA, and the safe distribution of marijuana edibles should include
consideration of the safety of all residents and businesses, not just the users of marijuana
or the consumers of the marijuana edibles. The proposed ordinance is designed to
address safety and professional management in the operation of any proposed medical
marijuana business.
On October 9, 2015, the Governor signed three pieces of state legislation which comprise
the Medical Marijuana Regulation and Safety Act (MMRSA): AB 266, AB 243, and SB
643. AB 266 establishes a dual licensing structure requiring a state license and a local
license or land use permit. The Department of Consumer Affairs newly created Bureau of
Medical Marijuana Regulation (BMMR) will coordinate the overall regulatory structure
establishing minimum health and safety and testing standards. AB 243 establishes a
regulatory and licensing structure for cultivation sites under the Department of Food and
Agriculture. SB 643 establishes criteria for licensing of medical marijuana businesses,
regulates physicians, and recognizes local authority to levy taxes and fees. Generally,
and altogether, the MMRSA governs the licensing and control of all medical marijuana
businesses in the state and provides criminal immunity for licensees. The legislation
protects local control in several ways: it requires dual licensing; local governments may
enforce state law in addition to local ordinance (upon request by the local jurisdiction);
civil and criminal penalties are available for unlicensed activity; and it expressly protects
local licensing practices, zoning ordinances, and local actions taken under the
constitutional police power. Under MMRSA, BMMR will regulate transporting, distribution
and testing of medical marijuana; the Departments of Food and Agriculture will regulate
cultivation; and the Department of Public Health will regulate manufacturing and testing.
Before MMRSA was enacted, the only types of marijuana businesses allowed under state
law were collectives/cooperatives where patients and primary caregiver joined a non-
profit legal entity, to collectively grow and distribute marijuana to members only. The state
law (the MMPA) does not require cooperatives/collectives to obtain a state permit or
license to operate, but they must be authorized by the local jurisdiction and meet all of
the local and state regulations pertaining to their operations. The MMRSA will revoke the
Health and Safety Code section enacted under the MMPA that permitted cooperatives
and collectives one year after the state begins issuing licenses for the various for-profit
categories of medical marijuana businesses now permitted under MMRSA. The BMMR
is currently in the early stages of rulemaking necessary to implement the provisions of
2
MMRSA. The BMMR has stated that it anticipates publishing comprehensive regulations
and that the State will begin issuing licenses by January 2018. Under MMRSA, these
new types of for-profit medical marijuana businesses - including distributors,
manufacturers, testing laboratories and transporters - must obtain both a state license
and a City permit before they can commence operations. This is because these new
categories of medical marijuana businesses allowed under MMRSA were not previously
permitted by state law to operate as a collective or cooperative.
Currently, medical marijuana related uses — cultivation and dispensaries — are prohibited
in all areas of the City. The proposed initiative ordinance would require a medical
marijuana business permit to engage in wholesale distribution, manufacturing, testing,
research and development, and transportation of medical marijuana. The ordinance does
not alter the City's current ban on dispensaries or cultivation, other than to regulate where
dispensaries may be located in the future. The ordinance would permit these medical
marijuana businesses to be located only in the Manufacturing Park (MP) zone north of
South Coast Drive and west of Harbor Boulevard. Such business would require a
conditional use permit (CUP) to locate in this zone, in addition to the medical marijuana
business permit. The ordinance would impose a 6% business tax on these uses. The
ordinance could be amended by the City Council, expect for matters relating to tax, as
discussed below.
The ordinance would add a new Section 9-29.5 to Article 4 (Schedules) of Chapter I
(Business Tax), of Title 9 (Licenses and Business Regulations) of the Costa Mesa
Municipal Code (CMMC). Section 9-29.5 imposes a 6% gross receipts business tax on
all medical marijuana businesses authorized under Chapter VI, as well as any non-
medical marijuana or cannabis businesses that may arise in the future — unless otherwise
prohibited by state law. The initiative provides that this amount may be decreased by the
City Council. However, as a general tax, this amount can only be increased by approval
of a majority (51%) vote of the electorate in a general election. Under state law, such
businesses would not be allowed to operate until licensed by the state.
The ordinance would also add a new Chapter VI (Medical Marijuana Business Permits)
to Title 9. Chapter VI requires a business permit to engage in distribution (wholesale),
manufacturing, testing, research and development, and transportation of medical
marijuana. Chapter VI generally provides the following:
• The purpose of the ordinance, which is to regulate these in a responsible manner
and that protects the health, safety, and welfare of the residents of the City.
• Legal Authority and Definitions, which generally follow the definitions set forth in
MMRSA.
• The authority of the CEO to issue permits under this Chapter, which valid for two
years.
• The ability of the CEO to establish procedures and regulations to implement the
permit process.
• Authority to revoke the permit for any violation of the Municipal Code or state law.
• Security measures, including employee background checks, limited access,
storage and alarm system, and restrictions relating to owners and employees with
felony convictions.
K3
• Operating requirements including recordkeeping and inventory control, signage
and notices, odor control, restriction of minors, loitering prohibition.
• The requirement to obtain a regular City business license.
• Requirements to maintain transaction and sale records for inspection.
Further, the ordinance would add a new Article 21 to Chapter IX of Title 13 (Zoning Code)
and would amend Article Chapter IV (Citywide Land Use Matrix). Article 21 provides that
medical marijuana distributers (wholesale), manufacturers, testing laboratories, research
and development laboratories, and transporters may be located in the Manufacturing Park
(MP) zone north of South Coast Drive and west of Harbor Boulevard with a conditional
use permit. Attachment 4 depicts the area zoned for these medical marijuana uses.
These business would require a conditional use permit to locate in this zone, in addition
to the medical marijuana business permit. Article 21 would also allow dispensaries to be
located in this area, if and when dispensaries are authorized under by the CMMC.
Dispensaries would not be authorized to locate within 500 feet of any school or day care
facility. As currently written, future dispensary uses would not require a CUP, since it is
anticipated that any such use would be subject to a detailed permitting and selection
process that may not be amenable to a CUP.
ALTERNATIVES CONSIDERED
1. Accept the ordinance as written to be brought back on the July 5, 2016 agenda for
placement on the November 8, 2016 ballot.
2. Direct staff to revise the ordinance and consider those revisions at the July 5, 2016
agenda for placement on the November 8, 2016 ballot.
3. Decline to place the initiative ordinance on the ballot.
FISCAL IMPACT OF PLACING MEASURE ON BALLOT
The cost to place the initiative on the November 2016 ballot is estimated at $10,000.00 and
is included in the Fiscal Year 2016-17 budget, Elections Consulting. At present the
estimated costs of implementing the ordinance are indeterminate.
LEGAL REVIEW
The City Attorney's office has reviewed this report for legal content and approved it as to
form.
THOMAS P. DUARTE BRENDAGREEN
City Attorney City Clerk
RICHARD L. FRANCIS
Assistant CEO
M
ATTACHMENTS:
1. April 5, 2016 Agenda Report (excluding attachments)
2.
3.
4.
ATTACHMENT 5
RESOLUTION NO. 16-51
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA CALLING FOR THE HOLDING OF A GENERAL MUNICIPAL ELECTION
TO BE HELD ON TUESDAY, NOVEMBER 8, 2016, FOR THE SUBMISSION TO THE
VOTERS A QUESTION RELATING TO MEDICAL MARIJUANA BUSINESSES
WHEREAS, in 1996 the California voters approved Proposition 215 (known as
the Compassionate Use Act (the "CUA") and codified as Health and Safety Code
Section 11362.5 et seq.) to exempt certain patients and their primary caregivers from
criminal liability under state law for the possession and cultivation of marijuana for
medical purposes; and
WHEREAS, in 2003 the California legislature enacted Senate Bill 420 (known as
the Medical Marijuana Program Act (the "MMPA") and codified as Health and Safety
Code Section 11362.7 et seq.), as later amended, to clarify the scope of the
Compassionate Use Act relating to the possession and cultivation of marijuana for
medical purpose, and to authorize local governing bodies to adopt and enforce laws
consistent with its provisions; and
WHEREAS, in 2005 the California Board of Equalization began issuing seller's
permits for sales consisting only of medical marijuana; and
WHEREAS, in 2008 the California Attorney General issued guidelines for the
security and non -diversion of marijuana grown for medical use; and
WHEREAS, marijuana remains an illegal substance under the Federal Controlled
Substances Act, 21 USC 801 et seq., which makes it unlawful for any person to
cultivate, manufacture, distribute or dispense, or possess with intent to manufacture,
distribute or dispense marijuana. The Federal Controlled Substances Act contains no
statutory exemption for the cultivation of marijuana for medical purposes. Federal law
lists marijuana as a Schedule I drug, meaning that it has a high potential for abuse, it
has no currently accepted medical use in treatment, and there is a lack of accepted
safety for use under medical supervision; and
WHEREAS, in 2014 the U.S. House of Representatives voted to stop federal law
enforcement from interfering with medical marijuana operations in the various states
which have decriminalized and/or authorized such operations; and
WHEREAS, despite this classification and treatment under federal law, federal
executive and law enforcement agencies have issued memoranda and other guidelines
allowing for the development of state -specific regulatory schemes that include the
provision of marijuana and marijuana -derived products for medical purposes, as long as
the administration of those schemes is consistent with the aims of federal law; and
WHEREAS, the City Council of the City of Costa Mesa intends that nothing in
this Initiative ordinance shall be deemed to conflict with federal law as contained in the
Controlled Substances Act, nor to otherwise permit any activity that is prohibited under
that Act or other applicable law; and
Resolution No. 16-51 Page 1 of 5
WHEREAS, the California Constitution grants local governments in Article XI,
Section 7 the authority under their police powers to regulate land use; and
WHEREAS, on October 9, 2015, Governor Brown signed into law the Medical
Marijuana Regulation and Safety Act (MMRSA) which consisted of three interrelated
pieces of legislation (SB 643, AB 243, and AB 266), intended to provide a
comprehensive regulatory framework for the licensing, control, and taxation of medical
marijuana related businesses in California; and
WHEREAS, the MMRSA expressly protects a City's local licensing practices,
zoning authority, and other local actions taken under the City's constitutional municipal
and police powers; and
WHEREAS, the MMRSA contains statutory provisions that: (1) Allow local
governments to enact initiative ordinances expressing their intent to allow or prohibit the
cultivation of marijuana and their intent to administer or not administer a conditional
permit program pursuant to California Health and Safety Code section 11362.777 for
the cultivation of marijuana; (2) Expressly provide that the Act does not supersede or
limit local authority for local law enforcement activity, enforcement of local initiative
ordinances or enforcement of local permit or licensing requirements regarding
marijuana per California Business and Professions Code section 19315(a); (3)
Expressly provide that the Act does not limit the civil or administrative authority or
remedies of a local government provision of law regarding marijuana including, but not
limited to, a local government's right to make and to enforce within its limits all
regulations not in conflict with general laws per California Business and Professions
Code section 19316(c); (4) Specifically requires, as a condition of state licensure,
compliance with any and all local requirements for all cannabis -related operations;
WHEREAS, the California Supreme Court has made clear that neither the CUA
nor the MMPA expressly or impliedly preempts the authority of cities or counties, under
their traditional land use and police powers, to allow, restrict, limit or entirely exclude
facilities that distribute medical marijuana. The MMPA allowed cities and counties to
adopt local ordinances that regulate the location, operation or establishment of medical
marijuana collectives and to enforce such initiative ordinances. (City of Riverside v.
Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 CalAth 729; Health
and Safety Code section 11362.83). The same authority encompasses the regulation,
operation, or establishment of marijuana cultivation. (Mara) v. City of Live Oak (2013)
221 Cal.AppAth 975.) That authority remains undisturbed under MMRSA; and
WHEREAS, the City has received inquiries from individuals and entities inquiring
about the ability to open medical marijuana related businesses within the City, including
testing laboratories and research and development laboratories and
manufacturing/processing businesses. Other than a general prohibition of dispensaries
and cultivation, the City has not yet adopted land use controls or regulations or other
requirements for the operation of these types of businesses pursuant to MMRSA; and
Resolution No. 16-51 Page 2 of 5
WHEREAS, without sufficient regulations and standards in effect and which are
enforceable pursuant to an adopted initiative ordinance, there is a current and
immediate threat to the public health, safety, and welfare of current and future residents
of the City, from the establishment of medical marijuana related businesses in the City
in a manner which is likely to lead to confusion, public harm, and possible violation of
federal executive guidelines; and
WHEREAS, the City Council recognizes that supply chains for medical marijuana
and marijuana -related products as they currently exist, in the absence of state and local
regulatory schemes, can and do benefit criminal elements to the detriment of residents
without full regard for public safety, health, and welfare issues; and
WHEREAS, the City Council desires to establish reasonable land use controls
and reasonable regulations on the operation of medical marijuana related businesses
which are intended to operate in conjunction with the zoning and land use regulations of
the City of Costa Mesa, and which are intended to address the negative impacts,
nuisance impacts, and criminal impacts of unregulated cannabis -related businesses;
and
WHEREAS, the City Council desires to establish regulations to allow the
establishment of limited types of medical marijuana businesses, including wholesale
distribution, manufacturing, testing and transporting as defined in, allowed by and as
consistent with MMRSA,
WHEREAS, the City Council desires to maintain the prohibitions against
cultivation and dispensaries within the City;
WHEREAS, under the provisions of the laws relating to general -law cities in the
State of California, a General Municipal Election shall be held on November 8, 2016; and
WHEREAS, the City Council desires to submit to the voters of the City, at a
General Municipal Election to be held on November 8, 2016 a question relating to medical
marijuana businesses;
WHEREAS, the City Council is authorized by the law of the State of California to
submit the proposed ordinance to the voters;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
Resolution No. 16-51 Page 3 of 5
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 a proposed ordinance.
SECTION 3. That the City Council, pursuant to its right and authority, does order
submitted to the voters at the General Municipal Election the following question:
Measure _: The City of Costa Mesa Medical Marijuana
Measure
Response
Vote
Shall the ordinance, to allow medical marijuana
manufacturing, processing, wholesale distribution and
Yes
transporting, and research, development and testing, in
manufacturing and industrial zones north of South Coast Dr.
No
and west of Harbor Blvd., subject to conditional use permit
and business permits, including requirements for background
checks, premises security, business records, that is subject
to amendment by City Council, and that levies an annual 6%
gross receipts tax (estimated annual revenue $48,000 -
$912,000), be adopted?
SECTION 4. That the proposed complete text of the ordinance submitted to the
voters is attached as Exhibit A.
SECTION 5. That the vote requirement for the measure to pass is a majority (50%
+1) of the votes cast.
SECTION 6. That the ballots to be used at the election shall be in the form and
content as required by law.
SECTION 7. 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 8. 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 9. That the Orange County Registrar of Voters is authorized to canvass
the returns of the General Municipal Election.
Resolution No. 16-51 Page 4 of 5
SECTION 10. The ballot measure shall not take effect, unless and until the ballot
measure receives the approval of a majority of the votes cast by the voters of the City
voting upon the ballot measure at the November 8, 2016 general municipal election.
SECTION 11. That in all particulars not recited in this resolution, the election shall
be held and conducted as provided by law and in accordance with the provisions of law
regulating the statewide election.
SECTION 12. That notice of the time and place of holding the election is given
and the City Clerk is authorized, instructed and directed to give further or additional notice
of the election, in time, form and manner as required by law.
SECTION 13. 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 July 5, 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. 16-51 was duly passed and adopted by the City Council of
the City of Costa Mesa at a regular meeting held on the 5th 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 6th day of July, 2016.
BRENDA GREEN, CITY CLERK
Resolution No. 16-51 Page 5 of 5
COUNCIL -SPONSORED INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO
THE VOTERS
The City Council for the City of Costa Mesa submits the following measure to the
voters of the City for approval and enactment:
SECTION 1. Name
This ballot measure shall be known and may be cited as "The City of Costa Mesa
Medical Marijuana Measure", and shall be referred to herein as the "Measure."
SECTION 2. Purpose
The purpose of the Measure is to provide for the specific areas in the City within
which medical marijuana distributors, manufacturers, processors, research and
development laboratories, testing laboratories and transporters can be located; to
provide for City regulation of these medical marijuana businesses in a manner
consistent with the statewide regulations to be adopted by the California Department
of Consumer Affairs - Bureau of Medical Marijuana Regulations ("BMMR") and other
state agencies, including the departments of Food and Agriculture and Public Health,
pursuant to Senate Bill 643, Assembly Bill 266, and Assembly Bill 243, as amended,
collectively referred to as the Medical Marijuana Regulation and Safety Act (MMRSA);
to reaffirm the existing ban on dispensaries and cultivation within the City; and to
impose a gross receipts tax on all medical marijuana distributors, manufacturers,
processors, testing laboratories, transporters, and research and development
laboratories, as well as any other marijuana or cannabis business at a rate of 6% of
gross receipts.
An additional purpose of this Measure is to directly compete with the two
initiatives entitled "Allow Operation of Up to Four Licensed Medical Marijuana
Businesses Within the City of Costa Mesa" and "Allow Operation of Up to Eight
Licensed Medical Marijuana (Cannabis) Businesses Within the City of Costa Mesa"
which each propose a number of amendments to City's Municipal Code regarding
medical marijuana. The Measure is intended to comprehensively regulate the same
subject as, and to expressly prohibit the activities that would be allowed by, both the
"Allow Operation of Up to Four Licensed Medical Marijuana Businesses Within the
City of Costa Mesa" and "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa". If a majority of voters approve
both this Measure and either or both of the "Allow Operation of Up to Four Licensed
Medical Marijuana Businesses Within the City of Costa Mesa" and "Allow Operation
of Up to Eight Licensed Medical Marijuana (Cannabis) Businesses Within the City of
Costa Mesa", the ballot measure with the higher percentage of the vote will control.
City of Costa Mesa
Medical Marijuana Measure Page 1 of 18
Now, therefore, the People of the City of Costa Mesa do ordain as follows:
AN ORDINANCE OF THE PEOPLE OF THE CITY OF COSTA MESA,
CALIFORNIA, ADDING A NEW SECTION TO TITLE 9, CHAPTER I,
ARTICLE 4 REGARDING MARIJUANA TAX AND A NEW CHAPTER VI
"MEDICAL MARIJUANA BUSINESS PERMITS" TO TITLE 9; ADDING A
NEW ARTICLE 21 "MEDICAL MARIJUANA DISTRIBUTING,
MANUFACTURING, RESEARCH AND DEVELOPMENT AND
TESTING" TO CHAPTER IX OF TITLE 13; AND AMENDING TABLE 13-
30 OF CHAPTER IV, CITYWIDE LAND USE MATRIX, OF TITLE 13 OF
THE COSTA MESA MUNICIPAL CODE.
SECTION 3. Title 9, Chapter I, Article 4, Schedules, is hereby amended to add a
new section 9-29.5, Marijuana tax, to read as follows:
Sec. 9-29.5 Marijuana tax.
Notwithstanding any other provision of this code, every person engaged in, managing,
conducting, or carrying on any medical marijuana business defined in Chapter VI of this
title, or any other medical marijuana, medical cannabis, marijuana and/or cannabis
business, shall pay an annual business tax of 6% based on the gross receipts of the
business.
SECTION 4. Title 9, Chapter VI., entitled "Medical Marijuana Businesses and
Permits" is hereby added to the Costa Mesa Municipal Code to read as follows:
Title 9. LICENSES AND BUSINESS REGULATIONS
Chapter VI. MEDICAL MARIJUANA BUSINESS PERMITS.
Sec. 9-481. Purpose and Intent.
It is the purpose and intent of this chapter to regulate the distributing, manufacturing,
processing, research and development, testing and transporting of cannabis and
cannabis -related products in a manner which is responsible, which protects the health,
safety, and welfare of the residents of Costa Mesa, and to enforce rules and regulations
consistent with state law. In part to meet these objectives, a permit shall be required in
order to own and/or to operate a medical marijuana business within the city. Nothing in
this chapter is intended to authorize the possession, use, or provision of marijuana for
purposes which violate state or federal law. The provisions of this chapter are in addition
to any other permits, licenses, and approvals which may be required to conduct business
in the city, and are in addition to any permits, licenses and approvals required under state
law.
Sec. 9-482. Legal Authority.
City of Costa Mesa
Medical Marijuana Measure Page 2 of 18
Pursuant to Sections 5 and 7 of Article XI of the California Constitution, and the provisions
of the MMRSA, the city is authorized to adopt ordinances that establish standards,
requirements and regulations for local licenses and permits for cannabis and cannabis -
related activity.
Sec. 9-483. Marijuana business activities prohibited unless specifically authorized by this
chapter.
Except as specifically authorized in this chapter, the manufacture, processing, storing,
laboratory testing, labeling, transporting, dispensing, distribution, delivery, or sale of
marijuana or a marijuana product is expressly prohibited in the city.
Sec. 9-484. Compliance with Laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating in a manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder.
Sec. 9-485. Definitions.
When used in this chapter, the following words shall have the meanings ascribed to them
as set forth herein. Any reference to California statutes includes any regulations
promulgated thereunder and is deemed to include any successor or amended version of
the referenced statute or regulatory provision.
"Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or
Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude
or purified, extracted from any part of the plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means
the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also
means marijuana as defined by Section 11018 of the California Health & Safety Code as
enacted by Chapter 14017 of the Statutes of 1972. "Cannabis" does not include the
mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds
of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation
of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the
sterilized seed of the plant which is incapable of germination. For the purpose of this
Chapter, "cannabis" does not mean industrial hemp as that term is defined by Section
81000 of the California Food and Agricultural Code or Section 11018.5 of the California
Health & Safety Code.
"Cannabis concentrate" means manufactured cannabis that has undergone a process to
concentrate the active cannabinoid ingredient, thereby increasing the product's potency.
An edible medical cannabis product is not considered food, as defined by Section 109935
of the California Health & Safety Code, or a drug, as defined by Section 109925 of the
California Health & Safety Code.
City of Costa Mesa
Medical Marijuana Measure Page 3 of 18
"Caregiver or "primary caregiver' has the same meaning as that term is defined in
Section 11362.7 of the California Health & Safety Code.
"Chief Executive Officer or "CEO" shall mean the Chief Executive Officer of the City or
his or her designee.
"Cultivation" means any activity, whether occurring indoors or outdoors, involving the
propagation, planting, growing, harvesting, drying, curing, grading, and/or trimming of
cannabis plants or any part thereof for any purpose, including medical marijuana.
"Cultivation site" means a facility where medical cannabis is cultivated, propagated,
planted, grown, harvested, dried, cured, graded, or trimmed, or that does all or any
combination of those activities.
"Delivery" means the commercial transfer of medical cannabis or medical cannabis
products from a dispensary, up to an amount determined to be authorized by the State of
California, or any of its departments or divisions, to anyone for any purpose. "Delivery'
also includes the use by a dispensary of any technology platform owned, controlled,
and/or licensed by the dispensary, or independently licensed by the State of California
under the MMRSA (as the same may be amended from time -to -time), that enables
anyone to arrange for or facilitate the commercial transfer by a licensed dispensary of
medical cannabis or medical cannabis products.
"Dispensary" means a medical marijuana business facility where cannabis, medical
cannabis products, or devices for the use of medical cannabis or medical cannabis
products are offered, either individually or in any combination, for retail sale, including an
establishment (whether fixed or mobile) that delivers, pursuant to express authorization,
medical cannabis and medical cannabis products as part of a retail sale, and where the
operator holds a valid medical marijuana business permit from the city authorizing the
operation of a dispensary, and a valid state license as required by state law to operate a
dispensary.
"Dispensing" means any activity involving the retail sale of medical cannabis or medical
cannabis products from a dispensary.
"Distribution" means the procurement, sale, and transport of medical cannabis or medical
cannabis products between entities licensed pursuant to MMRSA and any subsequent
State of California legislation regarding the same.
"Distributor" means a person holding a valid medical marijuana business permit for
distribution issued by the city, and, a valid state license for distribution, required by state
law to engage in the business of purchasing medical cannabis from a licensed cultivator,
or medical cannabis products from a licensed manufacturer, for sale to a licensed
dispensary. The direct and/or retail sale, distribution, or furnishing of any cannabis or
cannibis product to any consumer or end user is expressely prohibited.
City of Costa Mesa
Medical Marijuana Measure Page 4 of 18
"Dried flower" means all dead medical cannabis that has been harvested, dried, cured, or
otherwise processed, excluding leaves and stems.
"Edible cannabis product" means manufactured cannabis that is intended to be used, in
whole or in part, for human consumption. An edible medical cannabis product is not
considered food as defined by Section 109935 of the California Health & Safety Code or
a drug as defined by Section 109925 of the California Health & Safety Code.
"Live plants" means living medical cannabis flowers and plants, including seeds, sprouts,
immature plants (including unrooted clones), and vegetative stage plants.
"Manufacturer' means a person that conducts the production, preparation, propagation,
or compounding of manufactured medical cannabis, as defined in this section, or medical
cannabis products either directly or indirectly or by extraction methods, or independently
by means of chemical synthesis at a fixed location that packages or repackages medical
cannabis or medical cannabis products or labels or relabels its container, where the
operator holds a valid medical marijuana business permit for manufacturing from the and
a valid state license for manufacturing pursuant to MMRSA.
"Manufactured cannabis" means raw cannabis that has undergone a process whereby
the raw agricultural product has been transformed into a concentrate or manufactured
product intended for internal consumption or topical application.
"Manufacturing site" means a location that produces, prepares, propagates, or
compounds medical cannabis or medical cannabis products, directly or indirectly, by
extraction methods, independently by means of chemical synthesis, or by a combination
of extraction and chemical synthesis, and is owned and operated by a person issued a
valid Medical marijuana business permit for manufacturing from the city and, a valid state
license as required for manufacturing of cannabis products.
"Marijuana" means "cannabis," as that term is defined in this chapter.
"Medical cannabis", "medical marijuana," "medical cannabis product" or "cannabis
product" means a product containing cannabis, including, but not limited to, concentrates
and extractions, intended to be sold for use by medical cannabis patients in California
pursuant to the Compassionate Use Act of 1996 (Proposition 215), found in Section
11362.5 of the California Health & Safety Code (as the same may be amended from time -
to -time). For purposes of this Title, "medical cannabis" does not include industrial hemp
as defined by Section 81000 of the California Food and Agricultural Code or Section
11018.5 of the California Health & Safety Code.
"Medical marijuana activity" includes manufacture, processing, laboratory testing,
research and development, transporting, delivery, distribution, or sale of medical
cannabis or a medical cannabis product, within the meaning of California Business and
Professions Code 19300 et seq.
City of Costa Mesa
Medical Marijuana Measure Page 5 of 18
"Medical marijuana business" means any business or operation which engages in medical
marijuana activity.
"Medical marijuana business permit" means a regulatory permit issued by the City
pursuant to this Chapter to a medical marijuana business, and is required before any
medical marijuana activity may be conducted in the City.
"MMRSA" means the Medical Marijuana Regulation and Safety Act adopted by Senate
Bill 643, Assembly Bill 266 and Assembly Bill 243, as amended.
"Patient' or "qualified patient' shall have the same definition as California Health & Safety
Code Section 11362.7 et seq., as it may be amended, and which means a person who is
entitled to the protections of California Health & Safety Code Section 11362.5. For
purposes of this ordinance, a qualified patient shall include a person with an identification
card as that term is defined by California Health & Safety Code Section 11362.7 et seq.
"Person" means an individual, firm, partnership, joint venture, association, corporation,
limited liability company, estate, trust, business trust, receiver, syndicate, or any other
group or combination acting as a unit and includes the plural as well as the singular
number.
"Person with an identification card" shall have the meaning given that term by California
Health & Safety Code Section 11362.7.
"Processing" and "processor' shall have the same meaning as manufacturing and
manufacturer, respectively.
"Research and development laboratory" means a facility, entity, or site in the city that
performs research into and/or the development of medical cannabis or medical cannabis
products, where cannabis in any amount is located on-site, and that is both of the
following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
laboratory testing from the city and a valid state license for such uses as
required by state law.
"South Coast Collection" or "SoCo" means all properties located at 3303 through 3323,
inclusive, Hyland Avenue, in the City of Costa Mesa, commonly known as "SoCo" or
"SOCO".
City of Costa Mesa
Medical Marijuana Measure Page 6 of 18
"State license" means a permit or license issued by the State of California, or one of its
departments or divisions, under MMRSA to engage in medical marijuana activity.
"Topical cannabis" means a product intended for external use. A topical cannabis product
is not considered a drug as defined by Section 109925 of the California Health & Safety
Code.
"Testing laboratory" means a facility, entity, or site in the city that offers or performs tests
of medical cannabis or medical cannabis products and that is both of the following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
laboratory testing from the city and a valid state license for laboratory testing
as required by state law.
"Transport" means the transfer of medical cannabis or medical cannabis products from
the permitted business location of one licensee to the permitted business location of
another licensee, for the purposes of conducting medical marijuana activity authorized by
the MMRSA.
"Transporter" means a person issued a state license, and a medical marijuana business
permit by the city, authorizing the transport of medical cannabis or medical cannabis
products in amounts authorized by the State of California, or by one of its departments or
divisions under the MMRSA.
Sec. 9-486. Type of Authorized Medical Marijuana Businesses Permitted.
(a) One of more of the following types of medical marijuana business may be permitted
to operate within the City:
1. a medical marijuana distributor;
2. a medical marijuana manufacturer or processor;
3. a medical marijuana testing laboratory;
4. a medical marijuana research and development laboratory; and
5. a medical marijuana transporter.
(b) Businesses licensed permitted pursuant to this chapter shall not engage in the retail
sale or distribution of cannabis, marijuana, medical cannabis, medical marijuana,
medical cannabis product, cannabis product, or any other item.
City of Costa Mesa
Medical Marijuana Measure Page 7 of 18
(c) No person may engage in any type of medical marijuana business that is not
specifically authorized pursuant to this section, including but not limited to, dispensing
and/or cultivating medical marijuana.
Sec. 9-487. Medical marijuana business permit required to engage in medical marijuana
business.
No person may engage in any medical marijuana business or in any medical marijuana
activity within the city including manufacture, processing, laboratory testing, transporting,
dispensing, distribution, or sale of medical cannabis or a medical cannabis product unless
the person (1) has a valid medical marijuana business permit from the city and (2) is
currently in compliance with all applicable state and local laws and regulations pertaining
to the medical marijuana business and medical marijuana business activities.
Sec. 9-488. Term of permit; fees.
(a) A medical marijuana business permit shall be valid for two (2) years from the date of
issue, unless otherwise suspended or revoked, and shall be renewed bi-annually
thereafter, provided the permittee is in compliance with the provisions of this chapter.
(b) Medical marijuana business permit and application fees shall be established by
resolution of the City Council.
Sec. 9-489. Effect of state license suspension, revocation, or termination.
Suspension of a license issued by the State of California, or by any of its departments or
divisions, shall immediately suspend the ability of a medical marijuana business to
operate within the city, until the State of California, or its respective department or division,
reinstates or reissues the State license. Should the State of California, or any of its
departments or divisions, revoke or terminate the license of a medical marijuana
business, such revocation or termination shall also revoke or terminate the ability of a
medical cannabis business to operate within the city.
Sec. 9-490. Denial and revocation.
A medical marijuana permit may be revoked upon a hearing by the director pursuant to
section 9-120 for failing to comply with the terms of the permit, the applicable provisions
of this chapter, this code, state law or regulation and/or any condition of any other permit
issued pursuant to this code.
Sec. 9-491. Appeals.
Appeals from decisions of the CEO under this chapter shall be governed by the
procedures set forth in Chapter IX of Title 2 of this code.
City of Costa Mesa
Medical Marijuana Measure Page 8 of 18
Sec. 9-492. Prohibition on transfer of medical marijuana business permits.
In the event a permit holding Medical Marijuana Business sells or transfer the business
to a new owner, the new owner must obtain a new Medical Marijuana Business Permit
prior to commencing or continuing operations. A Medical Marijuana Business shall be
deemed to have transferred to a new owner, if persons(s) or entities with controlling
interest at the time the Permit was first issued cease to possess controlling ownership
interest or an ownership interest of less than fifty-one (51) percent.
Sec. 9-493. City business license required.
Prior to commencing operations, a medical marijuana business shall obtain a city
business license pursuant to Chapter I of this title.
Sec. 9-494. Conditional use permit required.
No medical marijuana business permit shall be issued, and no person shall conduct a
medical marijuana business unless a conditional use permit has been issued therefore
pursuant to the provisions of Title 13, Chapter IX, Article 21 of this code.
Sec. 9-495. Operating requirements for all medical marijuana businesses permitted
under this chapter.
(a) Records and recordkeeping.
(1) Each owner and operator of a medical marijuana business shall maintain
accurate books and records, detailing all of the revenues and expenses of
the business, and all of its assets and liabilities. On no less than an annual
basis (at or before the time of the renewal of a medical marijuana business
permit issued pursuant to this Title), or at any time upon reasonable request
of the City, each medical marijuana business shall file a sworn statement
detailing the number of sales by the medical marijuana business during the
previous twelve month period (or shorter period based upon the timing of
the request), provided on a per -month basis. The statement shall also
include gross sales for each month, and all applicable taxes paid or due to
be paid.
(2) Each owner and operator of a medical marijuana business shall maintain a
current register of the names and the contact information (including the
name, address, and telephone number) of anyone owning or holding an
interest in the medical marijuana business, and separately of all the officers,
managers, employees, agents and volunteers currently employed or
otherwise engaged by the medical marijuana business. The register
required by this paragraph shall be provided to the CEO upon a reasonable
request.
City of Costa Mesa
Medical Marijuana Measure Page 9 of 18
(3) All medical marijuana businesses shall maintain an inventory control and
reporting system that accurately documents the present location, amounts,
and descriptions of all cannabis and cannabis products for all stages of the
production or manufacturing, laboratory testing and distribution processes.
(4) Subject to any restrictions under the Health Insurance Portability and
Accountability Act (HIPPA), each medical marijuana business shall allow
city officials to have access to the business's books, records, accounts,
together with any other data or documents relevant to its permitted medical
marijuana activities, for the purpose of conducting an audit or examination.
Books, records, accounts, and any and all relevant data or documents will
be produced no later than twenty-four (24) hours after receipt of the City's
request, unless otherwise stipulated by the City.
(b) Security measures.
(1) A permitted medical marijuana business shall implement sufficient security
measures to deter and prevent the unauthorized entrance into areas
containing medical cannabis or medical cannabis products, and to deter and
prevent the theft of medical cannabis or medical cannabis products at the
medical marijuana business. These security measures shall include:
(i) Establishing limited access areas accessible only to authorized
medical marijuana business personnel.
(ii) All medical cannabis and medical cannabis products shall be stored
in a secured and locked room, safe, or vault. All medical cannabis
and medical cannabis products shall be kept in a manner as to
prevent diversion, theft, and loss.
(iii) Sensors shall be installed to detect entry and exit from all secure
areas.
(iv) Having a professionally installed, maintained, and monitored alarm
system.
(v) Any bars installed on the windows or the doors of the medical
marijuana business shall be installed only on the interior of the
building.
(vi) Security personnel if utilized must be licensed by the State of
California Bureau of Security and Investigative Services Personnel.
(vii) Each medical marijuana business shall have the capability to remain
secure and operational during a power outage and shall ensure that
City of Costa Mesa
Medical Marijuana Measure Page 10 of 18
all access doors are not solely controlled by an electronic access
panel to ensure that locks are not released during a power outage.
(1) Each medical marijuana business shall identify a designated security
representative/liaison to the city, who shall be reasonably available to meet
with the CEO regarding any security related measures or and operational
issues.
(2) A medical marijuana business shall notify the CEO within twenty-four (24)
hours after discovering any of the following:
(i) significant discrepancies identified during inventory, as set forth in
the city's administrative regulations;
(ii) diversion, theft, loss, or any criminal activity involving the medical
marijuana business or any agent or employee of the medical
marijuana business; or
(iii) the loss or unauthorized alteration of records related to cannabis,
registering qualifying patients, primary caregivers, or employees or
agents of the medical marijuana business.
(c) Restriction on alcohol sales.
No person shall cause or permit the sale, dispensing, or consumption of alcoholic
beverages on or about the premises of the medical marijuana business.
(d) Compliance with laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating in a manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder. Nothing in this chapter shall be
construed as authorizing any actions which violate state law or local law with respect to
the operation of a medical marijuana business or any site-specific, additional operating
procedures or requirements which may be imposed as conditions of approval of the
location of the medical marijuana business.
(e) Taxes.
All medical marijuana businesses authorized to operate under this chapter shall pay all
sales, use, business and other applicable taxes, and all license, registration, and other
fees required under federal, state and local law. Each medical marijuana businesses
shall cooperate with the city with respect to any reasonable request to audit the medical
marijuana business' books and records for the purpose of verifying compliance with this
section, including but not limited to a verification of the amount of taxes required to be
paid during any period.
City of Costa Mesa
Medical Marijuana Measure Page 11 of 18
(f) Insurance.
Permittee shall obtain and maintain at all times during the term of the permit
comprehensive general liability insurance and comprehensive automotive liability
insurance protecting the permittee in an amount of not less than one million dollars
($1,000,000.00) per occurrence, combined single limit, including bodily injury and
property damage and not less than one million dollars ($1,000,000.00) aggregate for each
personal injury liability, products -completed operations and each accident, issued by an
insurance provider admitted and authorized to do business in California and shall be rated
at least A:X in A.M. Best & Company's insurance Guide.
(g) Miscellaneous operating requirements.
(1) Restriction on consumption. Cannabis shall not be consumed on the
premises of any medical marijuana businesses or elsewhere in the city
other than within private residences.
(2) No cannabis or cannabis products or graphics depicting cannabis or
cannabis products shall be visible from the exterior of any property issued
a medical marijuana business permit, or on any of the vehicles owned or
used as part of the medical marijuana business. No outdoor storage of
cannabis or cannabis products is permitted at any time.
(3) Reporting and tracking of product and of gross sales. Each medical
marijuana business shall have in place a point-of-sale tracking system to
track and report on all aspects of the medical marijuana business including,
but not limited to, such matters as cannabis tracking, inventory data, and
gross sales (by weight and by sale). The medical marijuana business shall
ensure that such information is compatible with the City's record-keeping
systems. The system must have the capability to produce historical
transactional data for review by the CEO.
(4) All cannabis and cannabis products sold, distributed or manufactured shall
be cultivated, manufactured, and transported by licensed facilities that
maintain operations in full conformance with the State and local regulations.
(5) There shall not be a physician located in or around any medical marijuana
business at any time for the purpose of evaluating patients for the issuance
of a medical marijuana prescription or card.
(7) Signage and Notices.
(i) In addition to the requirements otherwise set forth in this section,
business identification signage for a medical marijuana business
City of Costa Mesa
Medical Marijuana Measure Page 12 of 18
shall conform to the requirements of this code, including, but not
limited to, seeking the issuance of a city sign permit.
(ii) Each entrance to a medical marijuana business shall be visibly
posted with a clear and legible notice indicating that smoking,
ingesting, or otherwise consuming cannabis on the premises or in
the areas adjacent to the medical marijuana business is prohibited.
(iii) Business identification signage shall be limited to that needed for
identification only.
(9) Minors.
(i) Persons under the age of eighteen (18) years shall not be allowed
on the premises of a medical marijuana business. It shall be unlawful
and a violation of this chapter for any person to employ any person
at or for a medical marijuana business who is not at least eighteen
(18) years of age.
(ii) The entrance to the medical marijuana business shall be clearly and
legibly posted with a notice that no person under the age of eighteen
(18) years of age is permitted to enter upon the premises of the
medical marijuana business.
(10) Odor control. Odor control devices and techniques shall be incorporated in
all medical marijuana businesses to ensure that odors from marijuana are
not detectable off-site.
(11) Display of permit and city business license. The original copy of the medical
marijuana business permit issued by the City pursuant to this chapter and
the city issued business license shall be posted inside the medical
marijuana business in a conspicuous location.
(12) Background check. Every owner, manager, supervisor or employee of the
medical marijuana business must submit fingerprints and other information
deemed necessary by the CEO for a background check by the Costa Mesa
Police Department to verify that person's criminal history. No person shall
be issued a permit to operate a medical marijuana business who has been
convicted of a felony within the past 7 years, unless that felony has been
dismissed, withdrawn, expunged or set aside pursuant to Penal Code
sections 1203.4, 1000 or 1385, or who is currently on probation or parole
for the sale, distribution, possession or manufacture of a controlled
substance.
City of Costa Mesa
Medical Marijuana Measure Page 13 of 13
(13) Loitering. The owner and/or operator of a medical marijuana business shall
prohibit loitering by persons outside the facility both on the premises and
within fifty (50) feet of the premises.
(14) Permits and other approvals. Prior to the establishment of any medical
marijuana business or the operation of any such business, the person
intending to establish a medical marijuana business must first obtain all
applicable planning, zoning, building, and other applicable permits from the
relevant governmental agency which may be applicable to the zoning
district in which such medical marijuana business intends to operate.
Sec. 9-497. Medical marijuana employees.
(a) Any person who is an employee or who otherwise works or volunteers within a medical
marijuana business must be legally authorized to do so under applicable state law.
(b) No medical marijuana business or owner thereof may employ any person who has
convicted of a felony within the past 7 years, unless that felony has been dismissed,
withdrawn, expunged or set aside pursuant to Penal Code sections 1203.4, 1000 or
1385, or who is currently on probation or parole for the sale, distribution, possession
or manufacture of a controlled substance.
(c) All employees must wear an identification badge while on the premises of the
business, in a format proscribed by the CEO.
Sec. 9-498. Promulgation of administrative regulations.
(a) The CEO is authorized to establish any additional administrative rules, regulations and
standards governing the issuance, denial or renewal of medical marijuana business
permits, or concerning any other subject necessary to carry out the purposes of this
chapter.
(c) Regulations promulgated by the CEO shall become effective upon the date of
publication. Medical marijuana businesses shall be required to comply with all state
and local laws and regulations, including but not limited to any rules, regulations or
standards adopted by the CEO.
Sec. 9-499. Inspection and enforcement.
(a) The CEO is charged with enforcing the provisions of the Costa Mesa Municipal Code,
or any provision thereof, may enter the location of a medical marijuana business at
any time during the hours of operation without notice, and inspect the location of any
medical marijuana business as well as any recordings and records required to be
maintained pursuant to this title or under applicable provisions of State law.
City of Costa Mesa
Medical Marijuana Measure Page 14 of 18
(b) It is unlawful for any person having responsibility for the operation of a
medical marijuana business, to impede, obstruct, interfere with, or
otherwise not to allow, the City to conduct an inspection, review or copy
records, recordings or other documents required to be maintained by a
medical marijuana business under this chapter or under state or local law.
It is also unlawful for a person to conceal, destroy, deface, damage, or
falsify any records, recordings or other documents required to be
maintained by a medical marijuana business under this chapter or under
state or local law.
Sec. 9-500. Violations.
(a) Violations declared a public nuisance.
Each and every violation of the provisions of this chapter is hereby deemed unlawful and
a public nuisance.
(b) Each violation a separate offense.
Each and every violation of this chapter shall constitute a separate violation and shall be
subject to all remedies and enforcement measures authorized by the Costa Mesa
Municipal Code. Additionally, as a nuisance per se, any violation of this chapter shall be
subject to injunctive relief, any permit issued pursuant to this chapter being deemed null
and void, disgorgement and payment to the City of any monies unlawfully obtained, costs
of abatement, costs of investigation, attorney fees, and any other relief or remedy
available at law or in equity. The City may also pursue any and all remedies and actions
available and applicable under state and local laws for any violations committed by the
medical marijuana business or persons related to, or associated with, the medical
marijuana activity. Additionally, when there is determined to be an imminent threat to
public health, safety or welfare, the CEO, or the Chief of Police, may take immediate
action to temporarily suspend a medical marijuana business permit issued by the City,
pending a hearing before the City Council.
(c) Criminal Penalties.
Each and every violation of the provisions of this chapter may be prosecuted as a
misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars
($1,000) or imprisonment in the county jail for a period of not more than twelve (12)
months, or by both such fine and imprisonment. Each day a violation is committed or
permitted to continue shall constitute a separate offense.
(d) Remedies cumulative and not exclusive.
The remedies provided herein are not to be construed as exclusive remedies. The City
is authorized to pursue any proceedings or remedies provided by law.
City of Costa Mesa
Medical Marijuana Measure Page 15 of 18
SECTION 4. Title 13, Chapter IX, Article 21 is hereby added to read as follows:
Article 21. Medical Marijuana Distributing, Manufacturing, Processing, Research
and Development, Testing and Transporting Locations.
Sec. 13-200.90 Purpose.
The purpose of this article is to regulate the location of medical marijuana
distributing facilities, manufacturing sites, processing sites, research and
developing laboratories, testing laboratories and transport facilities in order to
promote the health, safety, morals and general welfare of the residents and the
businesses within the city by maintaining local control over the ability to authorize
and regulate the location of medical marijuana businesses.
Sec. 13-200.91 Applicability.
(a) Nothing in this article is intended, nor shall it be construed, to burden any defense to
criminal prosecution under the Compassionate Use Act of 1996.
(b) All the provisions of this article shall apply to all property, public and private, within
the City.
(c) All the provisions of this article shall apply indoors and outdoors
(d) Unless otherwise provided herein, the terms used in this article shall have the
meaning ascribed to them in Title 9, Chapter VI of this code.
Sec. 13-200.91 Medical marijuana distributing facilities, manufacturing sites,
processing sites, research and developing laboratories, testing laboratories and
transport facilities.
(a) Medical marijuana distribution, dispensing, manufacturing, processing, transporting,
research and development and testing is prohibited in all zone districts within the city,
except for those portions of the Manufacturing Park (MP) and Planned Development
Industrial (PDI) zones that are located north of South Coast Drive and west of Harbor
Blvd, excluding any portion of the South Coast Collection.
(b) A conditional use permit shall be required and may be issued to allow the location of
any business engaged in the distribution, manufacturing, processing, researching
and developing, testing or transporting of medical marijuana in the MP or PDI zones
pursuant to subsection (a), subject to the following conditions:
(i) the requirements of Chapter III of this title have been met;
(ii) the findings for granting a conditional use permit in accordance with
section 13-29(g) are met;
City of Costa Mesa
Medical Marijuana Measure Page 16 of 18
(iii) the applicant obtains a medical marijuana business license pursuant to
Chapter VI of Title 9 of this code; and
(iv) the use is conducted in compliance with all applicable state and local laws.
(c) No person shall engage in any use set forth in this article unless that use is specifically
authorized by Chapter VI of Title 9 of this code.
Sec. 13-200.92 Declaration of public nuisance.
Any use, structure, or property that is altered, enlarged, erected, established, maintained,
moved, or operated contrary to the provisions of this article, is hereby declared to be
unlawful and a public nuisance and may be abated by the city through civil and/or
administrative proceedings by means of a restraining order, preliminary or permanent
injunction, or in any other manner provided by law for the abatement of such nuisances.
Sec. 13-200.93 Violations.
Violations of this article shall be punishable pursuant to the provisions of section 13-16.
SECTION 5. Table 13-30 of Chapter IV (Citywide Land Use Matrix) of Title 13
(Planning, Zoning and Development) is hereby amended to modify row 128 and add rows
31 c, 31 d, 31 e and 31 f as follows:
Section 13-30. Table 13-30. Row 31 c.. 31 d.. 31 e.. 31f and 128.
y Subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, 3303 through 3323 Nyland Ave.
City of Costa Mesa
Medical Marijuana Measure Page 17 of 18
ZONES
P
P
P
P
LAND USES
22
ACCCCTMMDDDRPP
I&
IMH3PL121
S
CIG
P
R
R
R
N
D
D
&
R
P
DD
LMH
CC'PR'S,
D'
D'
D'
M'
31 c. Cannabis and/or marijuana
C9
C9
distributer
31 d. Cannabis and/or marijuana
C 9
C 9
manufacturer or processor
31 e. Cannabis and/or marijuana
C9
C9
transporter
31 f. Cannabis and/or marijuana
C9
C9
research and development and/or testing laboratories
128 Research and development
laboratories — other than cannabis
C
C C
P
C
C
P
P
P
and/or marUuana testing
laboratories
y Subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, 3303 through 3323 Nyland Ave.
City of Costa Mesa
Medical Marijuana Measure Page 17 of 18
SECTION 6. Rejection of the Initiative to "Allow Operation of Up to Four
Licensed Medical Marijuana Businesses Within the City of Costa Mesa" and the
Initiative to "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa". Bythis Measure, the People
of the City of Costa Mesa hereby reject each and every change and addition to the Costa
Mesa Municipal Code proposed by the initiative entitled "Allow Operation of Up to Four
Licensed Medical Marijuana Businesses Within the City of Costa Mesa" and by the
initiative entitled "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa".
SECTION 7. Inconsistencies. Any provision of the Costa Mesa Municipal Code
or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of
such inconsistencies and no further, is hereby repealed or modified to that extent
necessary to affect the provisions of this Ordinance.
SECTION 8. Future Changes.
Any future changes or amendments to this ordinance including any future changes
or amendments any Municipal Code section affected by the Measure or a reduction in the
tax imposed by this Measure, may occur in the manner set forth in the Government Code
and the City's Municipal Code and shall not require a vote of the people
SECTION 9. Severability.
If any section, subsection, sentence, clause, or phrase 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 declares that they would have
adopted this ordinance, and each and every section, subsection, sentence, clause, or
phrase not declared invalid or unconstitutional, without regard to whether any portion of
the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 10. Effective Date
This ordinance shall take effect according to law ten days after certification of the
election at which it is adopted.
City of Costa Mesa
Medical Marijuana Measure Page 18 of 18
RESOLUTION NO. 2016-52
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 a proposed
ordinance 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 a question relating to the adoption of a proposed ordinance;
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 a question relating to the adoption of a proposed
ordinance.
Resolution No. 16-52 Page 1
SECTION 2. That the following measure is to appear on the ballot as follows:
Measure _: The City of Costa Mesa Medical Marijuana
Measure
Response
Vote
Shall the ordinance, to allow medical marijuana
manufacturing, processing, wholesale distribution and
Yes
transporting, and research, development and testing, in
manufacturing and industrial zones north of South Coast Dr.
No
and west of Harbor Blvd., subject to conditional use permit
and business permits, including requirements for background
checks, premises security, business records, that is subject
to amendment by City Council, and that levies an annual 6%
gross receipts tax (estimated annual revenue $48,000 -
$912,000), be adopted?
SECTION 3. That the proposed complete text of the ordinance to be submitted to
the voters is attached as Exhibit A.
SECTION 4. That the vote requirement for 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. 16-52 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 5th day of July, 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. 16-52 was duly passed and adopted by the City
Council of the City of Costa Mesa at a regular meeting held on the 5th 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 6th day of July, 2016.
BRENDA GREEN, CITY CLERK
Attachments:
1. Exhibit A — Proposed Ordinance: The City of Costa Mesa Medical Marijuana
Measure
Resolution No. 16-52 Page 3
COUNCIL -SPONSORED INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO
THE VOTERS
The City Council for the City of Costa Mesa submits the following measure to the
voters of the City for approval and enactment:
SECTION 1. Name
This ballot measure shall be known and may be cited as "The City of Costa Mesa
Medical Marijuana Measure", and shall be referred to herein as the "Measure."
SECTION 2. Purpose
The purpose of the Measure is to provide for the specific areas in the City within
which medical marijuana distributors, manufacturers, processors, research and
development laboratories, testing laboratories and transporters can be located; to
provide for City regulation of these medical marijuana businesses in a manner
consistent with the statewide regulations to be adopted by the California Department
of Consumer Affairs - Bureau of Medical Marijuana Regulations ("BMMR") and other
state agencies, including the departments of Food and Agriculture and Public Health,
pursuant to Senate Bill 643, Assembly Bill 266, and Assembly Bill 243, as amended,
collectively referred to as the Medical Marijuana Regulation and Safety Act (MMRSA);
to reaffirm the existing ban on dispensaries and cultivation within the City; and to
impose a gross receipts tax on all medical marijuana distributors, manufacturers,
processors, testing laboratories, transporters, and research and development
laboratories, as well as any other marijuana or cannabis business at a rate of 6% of
gross receipts.
An additional purpose of this Measure is to directly compete with the two
initiatives entitled "Allow Operation of Up to Four Licensed Medical Marijuana
Businesses Within the City of Costa Mesa" and "Allow Operation of Up to Eight
Licensed Medical Marijuana (Cannabis) Businesses Within the City of Costa Mesa"
which each propose a number of amendments to City's Municipal Code regarding
medical marijuana. The Measure is intended to comprehensively regulate the same
subject as, and to expressly prohibit the activities that would be allowed by, both the
"Allow Operation of Up to Four Licensed Medical Marijuana Businesses Within the
City of Costa Mesa" and "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa". If a majority of voters approve
both this Measure and either or both of the "Allow Operation of Up to Four Licensed
Medical Marijuana Businesses Within the City of Costa Mesa" and "Allow Operation
of Up to Eight Licensed Medical Marijuana (Cannabis) Businesses Within the City of
Costa Mesa", the ballot measure with the higher percentage of the vote will control.
City of Costa Mesa
Medical Marijuana Measure Page 1 of 18
Now, therefore, the People of the City of Costa Mesa do ordain as follows:
AN ORDINANCE OF THE PEOPLE OF THE CITY OF COSTA MESA,
CALIFORNIA, ADDING A NEW SECTION TO TITLE 9, CHAPTER I,
ARTICLE 4 REGARDING MARIJUANA TAX AND A NEW CHAPTER VI
"MEDICAL MARIJUANA BUSINESS PERMITS" TO TITLE 9; ADDING A
NEW ARTICLE 21 "MEDICAL MARIJUANA DISTRIBUTING,
MANUFACTURING, RESEARCH AND DEVELOPMENT AND
TESTING" TO CHAPTER IX OF TITLE 13; AND AMENDING TABLE 13-
30 OF CHAPTER IV, CITYWIDE LAND USE MATRIX, OF TITLE 13 OF
THE COSTA MESA MUNICIPAL CODE.
SECTION 3. Title 9, Chapter I, Article 4, Schedules, is hereby amended to add a
new section 9-29.5, Marijuana tax, to read as follows:
Sec. 9-29.5 Marijuana tax.
Notwithstanding any other provision of this code, every person engaged in, managing,
conducting, or carrying on any medical marijuana business defined in Chapter VI of this
title, or any other medical marijuana, medical cannabis, marijuana and/or cannabis
business, shall pay an annual business tax of 6% based on the gross receipts of the
business.
SECTION 4. Title 9, Chapter VI., entitled "Medical Marijuana Businesses and
Permits" is hereby added to the Costa Mesa Municipal Code to read as follows:
Title 9. LICENSES AND BUSINESS REGULATIONS
Chapter VI. MEDICAL MARIJUANA BUSINESS PERMITS.
Sec. 9-481. Purpose and Intent.
It is the purpose and intent of this chapter to regulate the distributing, manufacturing,
processing, research and development, testing and transporting of cannabis and
cannabis -related products in a manner which is responsible, which protects the health,
safety, and welfare of the residents of Costa Mesa, and to enforce rules and regulations
consistent with state law. In part to meet these objectives, a permit shall be required in
order to own and/or to operate a medical marijuana business within the city. Nothing in
this chapter is intended to authorize the possession, use, or provision of marijuana for
purposes which violate state or federal law. The provisions of this chapter are in addition
to any other permits, licenses, and approvals which may be required to conduct business
in the city, and are in addition to any permits, licenses and approvals required under state
law.
Sec. 9-482. Legal Authority.
City of Costa Mesa
Medical Marijuana Measure Page 2 of 18
Pursuant to Sections 5 and 7 of Article XI of the California Constitution, and the provisions
of the MMRSA, the city is authorized to adopt ordinances that establish standards,
requirements and regulations for local licenses and permits for cannabis and cannabis -
related activity.
Sec. 9-483. Marijuana business activities prohibited unless specifically authorized by this
chapter.
Except as specifically authorized in this chapter, the manufacture, processing, storing,
laboratory testing, labeling, transporting, dispensing, distribution, delivery, or sale of
marijuana or a marijuana product is expressly prohibited in the city.
Sec. 9-484. Compliance with Laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating in a manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder.
Sec. 9-485. Definitions.
When used in this chapter, the following words shall have the meanings ascribed to them
as set forth herein. Any reference to California statutes includes any regulations
promulgated thereunder and is deemed to include any successor or amended version of
the referenced statute or regulatory provision.
"Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or
Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude
or purified, extracted from any part of the plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means
the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also
means marijuana as defined by Section 11018 of the California Health & Safety Code as
enacted by Chapter 14017 of the Statutes of 1972. "Cannabis" does not include the
mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds
of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation
of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the
sterilized seed of the plant which is incapable of germination. For the purpose of this
Chapter, "cannabis" does not mean industrial hemp as that term is defined by Section
81000 of the California Food and Agricultural Code or Section 11018.5 of the California
Health & Safety Code.
"Cannabis concentrate" means manufactured cannabis that has undergone a process to
concentrate the active cannabinoid ingredient, thereby increasing the product's potency.
An edible medical cannabis product is not considered food, as defined by Section 109935
of the California Health & Safety Code, or a drug, as defined by Section 109925 of the
California Health & Safety Code.
City of Costa Mesa
Medical Marijuana Measure Page 3 of 18
"Caregiver" or "primary caregiver' has the same meaning as that term is defined in
Section 11362.7 of the California Health & Safety Code.
"Chief Executive Officer' or "CEO" shall mean the Chief Executive Officer of the City or
his or her designee.
"Cultivation" means any activity, whether occurring indoors or outdoors, involving the
propagation, planting, growing, harvesting, drying, curing, grading, and/or trimming of
cannabis plants or any part thereof for any purpose, including medical marijuana.
"Cultivation site" means a facility where medical cannabis is cultivated, propagated,
planted, grown, harvested, dried, cured, graded, or trimmed, or that does all or any
combination of those activities.
"Delivery" means the commercial transfer of medical cannabis or medical cannabis
products from a dispensary, up to an amount determined to be authorized by the State of
California, or any of its departments or divisions, to anyone for any purpose. "Delivery"
also includes the use by a dispensary of any technology platform owned, controlled,
and/or licensed by the dispensary, or independently licensed by the State of California
under the MMRSA (as the same may be amended from time -to -time), that enables
anyone to arrange for or facilitate the commercial transfer by a licensed dispensary of
medical cannabis or medical cannabis products.
"Dispensary" means a medical marijuana business facility where cannabis, medical
cannabis products, or devices for the use of medical cannabis or medical cannabis
products are offered, either individually or in any combination, for retail sale, including an
establishment (whether fixed or mobile) that delivers, pursuant to express authorization,
medical cannabis and medical cannabis products as part of a retail sale, and where the
operator holds a valid medical marijuana business permit from the city authorizing the
operation of a dispensary, and a valid state license as required by state law to operate a
dispensary.
"Dispensing" means any activity involving the retail sale of medical cannabis or medical
cannabis products from a dispensary.
"Distribution" means the procurement, sale, and transport of medical cannabis or medical
cannabis products between entities licensed pursuant to MMRSA and any subsequent
State of California legislation regarding the same.
"Distributor" means a person holding a valid medical marijuana business permit for
distribution issued by the city, and, a valid state license for distribution, required by state
law to engage in the business of purchasing medical cannabis from a licensed cultivator,
or medical cannabis products from a licensed manufacturer, for sale to a licensed
dispensary. The direct and/or retail sale, distribution, or furnishing of any cannabis or
cannibis product to any consumer or end user is expressely prohibited.
City of Costa Mesa
Medical Marijuana Measure Page 4 of 18
"Dried flower" means all dead medical cannabis that has been harvested, dried, cured, or
otherwise processed, excluding leaves and stems.
"Edible cannabis product" means manufactured cannabis that is intended to be used, in
whole or in part, for human consumption. An edible medical cannabis product is not
considered food as defined by Section 109935 of the California Health & Safety Code or
a drug as defined by Section 109925 of the California Health & Safety Code.
"Live plants" means living medical cannabis flowers and plants, including seeds, sprouts,
immature plants (including unrooted clones), and vegetative stage plants.
"Manufacturer" means a person that conducts the production, preparation, propagation,
or compounding of manufactured medical cannabis, as defined in this section, or medical
cannabis products either directly or indirectly or by extraction methods, or independently
by means of chemical synthesis at a fixed location that packages or repackages medical
cannabis or medical cannabis products or labels or relabels its container, where the
operator holds a valid medical marijuana business permit for manufacturing from the and
a valid state license for manufacturing pursuant to MMRSA.
"Manufactured cannabis" means raw cannabis that has undergone a process whereby
the raw agricultural product has been transformed into a concentrate or manufactured
product intended for internal consumption or topical application.
"Manufacturing site" means a location that produces, prepares, propagates, or
compounds medical cannabis or medical cannabis products, directly or indirectly, by
extraction methods, independently by means of chemical synthesis, or by a combination
of extraction and chemical synthesis, and is owned and operated by a person issued a
valid Medical marijuana business permit for manufacturing from the city and, a valid state
license as required for manufacturing of cannabis products.
"Marijuana" means "cannabis," as that term is defined in this chapter.
"Medical cannabis", "medical marijuana," "medical cannabis product' or "cannabis
product' means a product containing cannabis, including, but not limited to, concentrates
and extractions, intended to be sold for use by medical cannabis patients in California
pursuant to the Compassionate Use Act of 1996 (Proposition 215), found in Section
11362.5 of the California Health & Safety Code (as the same may be amended from time -
to -time). For purposes of this Title, "medical cannabis' does not include industrial hemp
as defined by Section 81000 of the California Food and Agricultural Code or Section
11018.5 of the California Health & Safety Code.
"Medical marijuana activity" includes manufacture, processing, laboratory testing,
research and development, transporting, delivery, distribution, or sale of medical
cannabis or a medical cannabis product, within the meaning of California Business and
Professions Code 19300 et seq.
City of Costa Mesa
Medical Marijuana Measure Page 5 of 18
"Medical marijuana business" means any business or operation which engages in medical
marijuana activity.
"Medical marijuana business permit" means a regulatory permit issued by the City
pursuant to this Chapter to a medical marijuana business, and is required before any
medical marijuana activity may be conducted in the City.
"MMRSA" means the Medical Marijuana Regulation and Safety Act adopted by Senate
Bill 643, Assembly Bill 266 and Assembly Bill 243, as amended.
'Patient' or "qualified patient' shall have the same definition as California Health & Safety
Code Section 11362.7 et seq., as it may be amended, and which means a person who is
entitled to the protections of California Health & Safety Code Section 11362.5. For
purposes of this ordinance, a qualified patient shall include a person with an identification
card as that term is defined by California Health & Safety Code Section 11362.7 et seq.
"Person" means an individual, firm, partnership, joint venture, association, corporation,
limited liability company, estate, trust, business trust, receiver, syndicate, or any other
group or combination acting as a unit and includes the plural as well as the singular
number.
"Person with an identification card" shall have the meaning given that term by California
Health & Safety Code Section 11362.7.
"Processing" and "processor" shall have the same meaning as manufacturing and
manufacturer, respectively.
"Research and development laboratory" means a facility, entity, or site in the city that
performs research into and/orthe development of medical cannabis or medical cannabis
products, where cannabis in any amount is located on-site, and that is both of the
following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
laboratory testing from the city and a valid state license for such uses as
required by state law.
"South Coast Collection" or "SoCo" means all properties located at 3303 through 3323,
inclusive, Hyland Avenue, in the City of Costa Mesa, commonly known as "SoCo" or
"SOCO".
City of Costa Mesa
Medical Marijuana Measure Page 6 of 18
"State license" means a permit or license issued by the State of California, or one of its
departments or divisions, under MMRSA to engage in medical marijuana activity.
"Topical cannabis" means a product intended for external use. A topical cannabis product
is not considered a drug as defined by Section 109925 of the California Health & Safety
Code.
"Testing laboratory" means a facility, entity, or site in the city that offers or performs tests
of medical cannabis or medical cannabis products and that is both of the following:
1. Accredited by an accrediting body that is independent of all other persons
involved in the medical cannabis industry in the state.
2. Registered with the State Department of Public Health, and is owned and
operated by a person issued a valid medical marijuana business permit for
laboratory testing from the city and a valid state license for laboratory testing
as required by state law.
"Transport" means the transfer of medical cannabis or medical cannabis products from
the permitted business location of one licensee to the permitted business location of
another licensee, for the purposes of conducting medical marijuana activity authorized by
the MMRSA.
"Transporter" means a person issued a state license, and a medical marijuana business
permit by the city, authorizing the transport of medical cannabis or medical cannabis
products in amounts authorized by the State of California, or by one of its departments or
divisions under the MMRSA.
Sec. 9-486. Type of Authorized Medical Marijuana Businesses Permitted.
(a) One of more of the following types of medical marijuana business may be permitted
to operate within the City:
1. a medical marijuana distributor;
2. a medical marijuana manufacturer or processor;
3. a medical marijuana testing laboratory;
4. a medical marijuana research and development laboratory; and
5. a medical marijuana transporter.
(b) Businesses licensed permitted pursuant to this chapter shall not engage in the retail
sale or distribution of cannabis, marijuana, medical cannabis, medical marijuana,
medical cannabis product, cannabis product, or any other item.
City of Costa Mesa
Medical Marijuana Measure Page 7 of 18
(c) No person may engage in any type of medical marijuana business that is not
specifically authorized pursuant to this section, including but not limited to, dispensing
and/or cultivating medical marijuana.
Sec. 9-487. Medical marijuana business permit required to engage in medical marijuana
business.
No person may engage in any medical marijuana business or in any medical marijuana
activity within the city including manufacture, processing, laboratory testing, transporting,
dispensing, distribution, or sale of medical cannabis or a medical cannabis product unless
the person (1) has a valid medical marijuana business permit from the city and (2) is
currently in compliance with all applicable state and local laws and regulations pertaining
to the medical marijuana business and medical marijuana business activities.
Sec. 9-488. Term of permit; fees.
(a) A medical marijuana business permit shall be valid for two (2) years from the date of
issue, unless otherwise suspended or revoked, and shall be renewed bi-annually
thereafter, provided the permittee is in compliance with the provisions of this chapter.
(b) Medical marijuana business permit and application fees shall be established by
resolution of the City Council.
Sec. 9-489. Effect of state license suspension, revocation, or termination.
Suspension of a license issued by the State of California, or by any of its departments or
divisions, shall immediately suspend the ability of a medical marijuana business to
operate within the city, until the State of California, or its respective department or division,
reinstates or reissues the State license. Should the State of California, or any of its
departments or divisions, revoke or terminate the license of a medical marijuana
business, such revocation or termination shall also revoke or terminate the ability of a
medical cannabis business to operate within the city.
Sec. 9-490. Denial and revocation.
A medical marijuana permit may be revoked upon a hearing by the director pursuant to
section 9-120 for failing to comply with the terms of the permit, the applicable provisions
of this chapter, this code, state law or regulation and/or any condition of any other permit
issued pursuant to this code.
Sec. 9-491. Appeals.
Appeals from decisions of the CEO under this chapter shall be governed by the
procedures set forth in Chapter IX of Title 2 of this code.
City of Costa Mesa
Medical Marijuana Measure Page 8 of 18
Sec. 9-492. Prohibition on transfer of medical marijuana business permits.
In the event a permit holding Medical Marijuana Business sells or transfer the business
to a new owner, the new owner must obtain a new Medical Marijuana Business Permit
prior to commencing or continuing operations. A Medical Marijuana Business shall be
deemed to have transferred to a new owner, if persons(s) or entities with controlling
interest at the time the Permit was first issued cease to possess controlling ownership
interest or an ownership interest of less than fifty-one (51) percent.
Sec. 9-493. City business license required.
Prior to commencing operations, a medical marijuana business shall obtain a city
business license pursuant to Chapter I of this title.
Sec. 9-494. Conditional use permit required.
No medical marijuana business permit shall be issued, and no person shall conduct a
medical marijuana business unless a conditional use permit has been issued therefore
pursuant to the provisions of Title 13, Chapter IX, Article 21 of this code.
Sec. 9-495. Operating requirements for all medical marijuana businesses permitted
under this chapter.
(a) Records and recordkeeping.
(1) Each owner and operator of a medical marijuana business shall maintain
accurate books and records, detailing all of the revenues and expenses of
the business, and all of its assets and liabilities. On no less than an annual
basis (at or before the time of the renewal of a medical marijuana business
permit issued pursuant to this Title), or at anytime upon reasonable request
of the City, each medical marijuana business shall file a sworn statement
detailing the number of sales by the medical marijuana business during the
previous twelve month period (or shorter period based upon the timing of
the request), provided on a per -month basis. The statement shall also
include gross sales for each month, and all applicable taxes paid or due to
be paid.
(2) Each owner and operator of a medical marijuana business shall maintain a
current register of the names and the contact information (including the
name, address, and telephone number) of anyone owning or holding an
interest in the medical marijuana business, and separately of all the officers,
managers, employees, agents and volunteers currently employed or
otherwise engaged by the medical marijuana business. The register
required by this paragraph shall be provided to the CEO upon a reasonable
request.
City of Costa Mesa
Medical Marijuana Measure Page 9 of 18
(3) All medical marijuana businesses shall maintain an inventory control and
reporting system that accurately documents the present location, amounts,
and descriptions of all cannabis and cannabis products for all stages of the
production or manufacturing, laboratory testing and distribution processes.
(4) Subject to any restrictions under the Health Insurance Portability and
Accountability Act (HIPPA), each medical marijuana business shall allow
city officials to have access to the business's books, records, accounts,
together with any other data or documents relevant to its permitted medical
marijuana activities, for the purpose of conducting an audit or examination.
Books, records, accounts, and any and all relevant data or documents will
be produced no later than twenty-four (24) hours after receipt of the City's
request, unless otherwise stipulated by the City.
(b) Security measures.
(1) A permitted medical marijuana business shall implement sufficient security
measures to deter and prevent the unauthorized entrance into areas
containing medical cannabis or medical cannabis products, and to deter and
prevent the theft of medical cannabis or medical cannabis products at the
medical marijuana business. These security measures shall include:
(i) Establishing limited access areas accessible only to authorized
medical marijuana business personnel.
(ii) All medical cannabis and medical cannabis products shall be stored
in a secured and locked room, safe, or vault. All medical cannabis
and medical cannabis products shall be kept in a manner as to
prevent diversion, theft, and loss.
(iii) Sensors shall be installed to detect entry and exit from all secure
areas.
(iv) Having a professionally installed, maintained, and monitored alarm
system.
(v) Any bars installed on the windows or the doors of the medical
marijuana business shall be installed only on the interior of the
building.
(vi) Security personnel if utilized must be licensed by the State of
California Bureau of Security and Investigative Services Personnel.
(vii) Each medical marijuana business shall have the capability to remain
secure and operational during a power outage and shall ensure that
City of Costa Mesa
Medical Marijuana Measure Page 10 of 18
all access doors are not solely controlled by an electronic access
panel to ensure that locks are not released during a power outage.
(1) Each medical marijuana business shall identify a designated security
representative/liaison to the city, who shall be reasonably available to meet
with the CEO regarding any security related measures or and operational
issues.
(2) A medical marijuana business shall notify the CEO within twenty-four (24)
hours after discovering any of the following:
(i) significant discrepancies identified during inventory, as set forth in
the city's administrative regulations;
(ii) diversion, theft, loss, or any criminal activity involving the medical
marijuana business or any agent or employee of the medical
marijuana business; or
(iii) the loss or unauthorized alteration of records related to cannabis,
registering qualifying patients, primary caregivers, or employees or
agents of the medical marijuana business.
(c) Restriction on alcohol sales.
No person shall cause or permit the sale, dispensing, or consumption of alcoholic
beverages on or about the premises of the medical marijuana business.
(d) Compliance with laws.
It is the responsibility of the owners and operators of the medical marijuana business to
ensure that it is, at all times, operating in a manner compliant with all applicable state and
local laws, and any regulations promulgated thereunder. Nothing in this chapter shall be
construed as authorizing any actions which violate state law or local law with respect to
the operation of a medical marijuana business or any site-specific, additional operating
procedures or requirements which may be imposed as conditions of approval of the
location of the medical marijuana business.
(e) Taxes.
All medical marijuana businesses authorized to operate under this chapter shall pay all
sales, use, business and other applicable taxes, and all license, registration, and other
fees required under federal, state and local law. Each medical marijuana businesses
shall cooperate with the city with respect to any reasonable request to audit the medical
marijuana business' books and records for the purpose of verifying compliance with this
section, including but not limited to a verification of the amount of taxes required to be
paid during any period.
City of Costa Mesa
Medical Marijuana Measure Page 11 of 18
(f) Insurance.
Permittee shall obtain and maintain at all times during the term of the permit
comprehensive general liability insurance and comprehensive automotive liability
insurance protecting the permittee in an amount of not less than one million dollars
($1,000,000.00) per occurrence, combined single limit, including bodily injury and
property damage and not less than one million dollars ($1,000,000.00) aggregate for each
personal injury liability, products -completed operations and each accident, issued by an
insurance provider admitted and authorized to do business in California and shall be rated
at least A:X in A.M. Best & Company's insurance Guide.
(g) Miscellaneous operating requirements.
(1) Restriction on consumption. Cannabis shall not be consumed on the
premises of any medical marijuana businesses or elsewhere in the city
other than within private residences.
(2) No cannabis or cannabis products or graphics depicting cannabis or
cannabis products shall be visible from the exterior of any property issued
a medical marijuana business permit, or on any of the vehicles owned or
used as part of the medical marijuana business. No outdoor storage of
cannabis or cannabis products is permitted at any time.
(3) Reporting and tracking of product and of gross sales. Each medical
marijuana business shall have in place a point-of-sale tracking system to
track and report on all aspects of the medical marijuana business including,
but not limited to, such matters as cannabis tracking, inventory data, and
gross sales (by weight and by sale). The medical marijuana business shall
ensure that such information is compatible with the City's record-keeping
systems. The system must have the capability to produce historical
transactional data for review by the CEO.
(4) All cannabis and cannabis products sold, distributed or manufactured shall
be cultivated, manufactured, and transported by licensed facilities that
maintain operations in full conformance with the State and local regulations.
(5) There shall not be a physician located in or around any medical marijuana
business at any time for the purpose of evaluating patients for the issuance
of a medical marijuana prescription or card.
(7) Signage and Notices.
(i) In addition to the requirements otherwise set forth in this section,
business identification signage for a medical marijuana business
City of Costa Mesa
Medical Marijuana Measure Page 12 of 18
shall conform to the requirements of this code, including, but not
limited to, seeking the issuance of a city sign permit.
(ii) Each entrance to a medical marijuana business shall be visibly
posted with a clear and legible notice indicating that smoking,
ingesting, or otherwise consuming cannabis on the premises or in
the areas adjacent to the medical marijuana business is prohibited.
(iii) Business identification signage shall be limited to that needed for
identification only.
(9) Minors.
(i) Persons under the age of eighteen (18) years shall not be allowed
on the premises of a medical marijuana business. It shall be unlawful
and a violation of this chapter for any person to employ any person
at or for a medical marijuana business who is not at least eighteen
(18) years of age.
(ii) The entrance to the medical marijuana business shall be clearly and
legibly posted with a notice that no person under the age of eighteen
(18) years of age is permitted to enter upon the premises of the
medical marijuana business.
(10) Odor control. Odor control devices and techniques shall be incorporated in
all medical marijuana businesses to ensure that odors from marijuana are
not detectable off-site.
(11) Display of permit and city business license. The original copy of the medical
marijuana business permit issued by the City pursuant to this chapter and
the city issued business license shall be posted inside the medical
marijuana business in a conspicuous location.
(12) Background check. Every owner, manager, supervisor or employee of the
medical marijuana business must submit fingerprints and other information
deemed necessary by the CEO for a background check by the Costa Mesa
Police Department to verify that person's criminal history. No person shall
be issued a permit to operate a medical marijuana business who has been
convicted of a felony within the past 7 years, unless that felony has been
dismissed, withdrawn, expunged or set aside pursuant to Penal Code
sections 1203.4, 1000 or 1385, or who is currently on probation or parole
for the sale, distribution, possession or manufacture of a controlled
substance.
City of Costa Mesa
Medical Marijuana Measure Page 13 of 18
(13) Loitering. The owner and/or operator of a medical marijuana business shall
prohibit loitering by persons outside the facility both on the premises and
within fifty (50) feet of the premises.
(14) Permits and other approvals. Prior to the establishment of any medical
marijuana business or the operation of any such business, the person
intending to establish a medical marijuana business must first obtain all
applicable planning, zoning, building, and other applicable permits from the
relevant governmental agency which may be applicable to the zoning
district in which such medical marijuana business intends to operate.
Sec. 9-497. Medical marijuana employees.
(a) Any person who is an employee or who otherwise works or volunteers within a medical
marijuana business must be legally authorized to do so under applicable state law.
(b) No medical marijuana business or owner thereof may employ any person who has
convicted of a felony within the past 7 years, unless that felony has been dismissed,
withdrawn, expunged or set aside pursuant to Penal Code sections 1203.4, 1000 or
1385, or who is currently on probation or parole for the sale, distribution, possession
or manufacture of a controlled substance.
(c) All employees must wear an identification badge while on the premises of the
business, in a format proscribed by the CEO.
Sec. 9-498. Promulgation of administrative regulations.
(a) The CEO is authorized to establish any additional administrative rules, regulations and
standards governing the issuance, denial or renewal of medical marijuana business
permits, or concerning any other subject necessary to carry out the purposes of this
chapter.
(c) Regulations promulgated by the CEO shall become effective upon the date of
publication. Medical marijuana businesses shall be required to comply with all state
and local laws and regulations, including but not limited to any rules, regulations or
standards adopted by the CEO.
Sec. 9-499. Inspection and enforcement.
(a) The CEO is charged with enforcing the provisions of the Costa Mesa Municipal Code,
or any provision thereof, may enter the location of a medical marijuana business at
any time during the hours of operation without notice, and inspect the location of any
medical marijuana business as well as any recordings and records required to be
maintained pursuant to this title or under applicable provisions of State law.
City of Costa Mesa
Medical Marijuana Measure Page 14 of 18
(b) It is unlawful for any person having responsibility for the operation of a
medical marijuana business, to impede, obstruct, interfere with, or
otherwise not to allow, the City to conduct an inspection, review or copy
records, recordings or other documents required to be maintained by a
medical marijuana business under this chapter or under state or local law.
It is also unlawful for a person to conceal, destroy, deface, damage, or
falsify any records, recordings or other documents required to be
maintained by a medical marijuana business under this chapter or under
state or local law.
Sec. 9-500. Violations.
(a) Violations declared a public nuisance.
Each and every violation of the provisions of this chapter is hereby deemed unlawful and
a public nuisance.
(b) Each violation a separate offense.
Each and every violation of this chapter shall constitute a separate violation and shall be
subject to all remedies and enforcement measures authorized by the Costa Mesa
Municipal Code. Additionally, as a nuisance per se, any violation of this chapter shall be
subject to injunctive relief, any permit issued pursuant to this chapter being deemed null
and void, disgorgement and payment to the City of any monies unlawfully obtained, costs
of abatement, costs of investigation, attorney fees, and any other relief or remedy
available at law or in equity. The City may also pursue any and all remedies and actions
available and applicable under state and local laws for any violations committed by the
medical marijuana business or persons related to, or associated with, the medical
marijuana activity. Additionally, when there is determined to be an imminent threat to
public health, safety or welfare, the CEO, or the Chief of Police, may take immediate
action to temporarily suspend a medical marijuana business permit issued by the City,
pending a hearing before the City Council.
(c) Criminal Penalties.
Each and every violation of the provisions of this chapter may be prosecuted as a
misdemeanor and upon conviction be subject to a fine not to exceed one thousand dollars
($1,000) or imprisonment in the county jail for a period of not more than twelve (12)
months, or by both such fine and imprisonment. Each day a violation is committed or
permitted to continue shall constitute a separate offense.
(d) Remedies cumulative and not exclusive.
The remedies provided herein are not to be construed as exclusive remedies. The City
is authorized to pursue any proceedings or remedies provided by law.
City of Costa Mesa
Medical Marijuana Measure Page 15 of 18
SECTION 4. Title 13, Chapter IX, Article 21 is hereby added to read as follows:
Article 21. Medical Marijuana Distributing, Manufacturing, Processing, Research
and Development, Testing and Transporting Locations.
Sec. 13-200.90 Purpose.
The purpose of this article is to regulate the location of medical marijuana
distributing facilities, manufacturing sites, processing sites, research and
developing laboratories, testing laboratories and transport facilities in order to
promote the health, safety, morals and general welfare of the residents and the
businesses within the city by maintaining local control over the ability to authorize
and regulate the location of medical marijuana businesses.
Sec. 13-200.91 Applicability.
(a) Nothing in this article is intended, nor shall it be construed, to burden any defense to
criminal prosecution under the Compassionate Use Act of 1996.
(b) All the provisions of this article shall apply to all property, public and private, within
the City.
(c) All the provisions of this article shall apply indoors and outdoors
(d) Unless otherwise provided herein, the terms used in this article shall have the
meaning ascribed to them in Title 9, Chapter VI of this code.
Sec. 13-200.91 Medical marijuana distributing facilities, manufacturing sites,
processing sites, research and developing laboratories, testing laboratories and
transport facilities.
(a) Medical marijuana distribution, dispensing, manufacturing, processing, transporting,
research and development and testing is prohibited in all zone districts within the city,
except for those portions of the Manufacturing Park (MP) and Planned Development
Industrial (PDI) zones that are located north of South Coast Drive and west of Harbor
Blvd, excluding any portion of the South Coast Collection.
(b) A conditional use permit shall be required and may be issued to allow the location of
any business engaged in the distribution, manufacturing, processing, researching
and developing, testing or transporting of medical marijuana in the MP or PDI zones
pursuant to subsection (a), subject to the following conditions:
(i) the requirements of Chapter III of this title have been met;
(ii) the findings for granting a conditional use permit in accordance with
section 13-29(g) are met;
City of Costa Mesa
Medical Marijuana Measure Page 16 of 18
(iii) the applicant obtains a medical marijuana business license pursuant to
Chapter VI of Title 9 of this code; and
(iv) the use is conducted in compliance with all applicable state and local laws.
(c) No person shall engage in any use set forth in this article unless that use is specifically
authorized by Chapter VI of Title 9 of this code.
Sec. 13-200.92 Declaration of public nuisance.
Any use, structure, or property that is altered, enlarged, erected, established, maintained,
moved, or operated contrary to the provisions of this article, is hereby declared to be
unlawful and a public nuisance and may be abated by the city through civil and/or
administrative proceedings by means of a restraining order, preliminary or permanent
injunction, or in any other manner provided by law for the abatement of such nuisances.
Sec. 13-200.93 Violations.
Violations of this article shall be punishable pursuant to the provisions of section 13-16.
SECTION 5. Table 13-30 of Chapter IV (Citywide Land Use Matrix) of Title 13
(Planning, Zoning and Development) is hereby amended to modify row 128 and add rows
31 c, 31 d, 31 e and 31f as follows:
Section 13-30. Table 13-30. Row 31r._ 31d 31a R1f and 19R
subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, 3303 through 3323 Hyland Ave.
City of Costa Mesa
Medical Marijuana Measure Page 17 of 18
ZONES
P
P
P
P
LAND USES
2
2
CCC
A
C
T
M
M
D
D
D
R
P
P
I&
1MH3PL121C1GP
S'
R
R
R
N
D
D
&
R
P
DD
LMH
CC'PR'St
D'
D'
D'
M'
31c. Cannabis and/or marijuana
C9
C9
distributer
31d. Cannabis and/or marijuana
C9
C9
manufacturer or processor
31 e. Cannabis and/or marijuana
C9
T
C9
transporter
I
31f. Cannabis and/or marijuana
Ce
Ce
research and development and/or testing laboratories
128 Research and development
laboratories — other than cannabis
and/or marijuana testing
C
C
IC
P
P
P
laboratories
subject to the location restrictions of Section 13-200.91 and prohibited at the SoCo
property, 3303 through 3323 Hyland Ave.
City of Costa Mesa
Medical Marijuana Measure Page 17 of 18
SECTION 6. Rejection of the Initiative to "Allow Operation of Up to Four
Licensed Medical Marijuana Businesses Within the City of Costa Mesa" and the
Initiative to "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa". Bythis Measure, the People
of the City of Costa Mesa hereby reject each and every change and addition to the Costa
Mesa Municipal Code proposed by the initiative entitled "Allow Operation of Up to Four
Licensed Medical Marijuana Businesses Within the City of Costa Mesa" and by the
initiative entitled "Allow Operation of Up to Eight Licensed Medical Marijuana
(Cannabis) Businesses Within the City of Costa Mesa".
SECTION 7. Inconsistencies. Any provision of the Costa Mesa Municipal Code
or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of
such inconsistencies and no further, is hereby repealed or modified to that extent
necessary to affect the provisions of this Ordinance.
SECTION 8. Future Changes.
Anvfuture changes oramendments to this ordinance including any future changes
or amendments any Municipal Code section affected by the Measure or a reduction in the
tax imposed by this Measure, may occur in the manner set forth in the Government Code
and the City's Municipal Code and shall not require a vote of the people
SECTION 9. Severability.
If any section, subsection, sentence, clause, or phrase 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 declares that they would have
adopted this ordinance, and each and every section, subsection, sentence, clause, or
phrase not declared invalid or unconstitutional, without regard to whether any portion of
the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 10. Effective Date
This ordinance shall take effect according to law ten days after certification of the
election at which it is adopted.
City of Costa Mesa
Medical Marijuana Measure Page 18 or 18
RESOLUTION NO.16-53
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA SETTING PRIORITIES FOR FILING A WRITTEN ARGUMENT
REGARDING A CITY 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 _: The City of Costa Mesa Medical Marijuana
Measure
Response
Vote
Shall the ordinance, to allow medical marijuana
manufacturing, processing, wholesale distribution and
Yes
transporting, and research, development and testing, in
manufacturing and industrial zones north of South Coast Dr.
No
and west of Harbor Blvd., subject to conditional use permit
and business permits, including requirements for background
checks, premises security, business records, that is subject
to amendment by City Council, and that levies an annual 6%
gross receipts tax (estimated annual revenue $48,000 -
$912,000), be adopted?
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 2. That the City Council authorizes the following member(s) of it's body
(Mayor I
(Mayor I
(Council
(Council
(Council
i Favor)
To Tem In Favor)
Member In Favor)
Member In Favor)
Member In Favor)
or (Mayor Against)
or (Mayor Pro Tem Against)
or (Council Member Against)
or (Council Member Against)
or (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 the date the
fixed by the City Clerk after which no arguments for or against the City measure may be
submitted to the City Clerk.
Resolution No. 16-53 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 the date set by the City Clerk 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 JULY 5, 2016.
Stephen M. Mensinger, Mayor
ATTEST:
APPROVED AS TO FORM:
Brenda Green, City Clerk Thomas Duarte, City Attorney
Resolution No. 16-53 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. 16-53 was duly passed and adopted by the City Council of
the City of Costa Mesa at a regular meeting held on the 5th 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 6th day of July, 2016.
BRENDA GREEN, CITY CLERK
Resolution No. 16-53 Page 3 of 3
RESOLUTION NO. 16-54
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA, APPROVING THE DETERMINATION AND FILING OF A NOTICE OF
EXEMPTION PURSUANT TO THE PROVISIONS THE CALIFORNIA QUALITY ACT
(CEQA) FOR AN INITIATIVE ORDINANCE ENTITLED THE COSTA MESA MEDICAL
MARIJUANA MEASURE
THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS
FOLLOWS:
WHEREAS, City staff have reviewed the proposed initiative ordinance, entitled
the Costa Mesa Marijuana Measure ("CMMM"), adding a new Section to Title 9,
Chapter I, Article 4 regarding Marijuana Tax and a new Chapter VI "Medical Marijuana
Business Permits" to Title 9; adding a new Article 21 "Medical Marijuana Distributing,
Manufacturing, Research and Development and Testing to Chapter IX of Title 13;
and amending Table 13-30 Of Chapter IV, Citywide Land Use Matrix, of Title 13 of the
Costa Mesa Municipal Code ("CMMC");
WHEREAS, the revisions to the CMMC have been reviewed for compliancewith
the California Environmental Quality Act ("CEQA"), CEQA Guidelines, and the City's
environmental processing procedures;
WHEREAS, City staff have determined that the CMMMM is exempt from review
under the California Environmental Quality Act pursuant to the following Sections of
Title 14, Chapter 3, California Code of Regulations:
A. The initiative ordinance is exempt under Section 15061(b)(3) because it is
covered by the general rule that CEQA applies only to projects which have
the potential for causing a significant effect on the environment. In this case, it
can be seen with certainty that there is no possibility that the proposed
initiative ordinance may have a significant effect on the environment and is
therefore not subject to CEQA.
B. The initiative ordinance is also exempt under Section 15183 (projects
consistent with a community plan, general plan, or zoning) for which an EIR
has been previously certified, since the types of businesses that would be
conditionally permitted by the revisions to the CMMC are consistent with
those contemplated by the general plan and existing zoning, such as
distribution, manufacturing, and laboratory testing of other products; and
WHEREAS, a Notice of Exemption shall be prepared for the Project.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Costa Mesa
does resolve as follows:
Resolution No. 16-54 Page 1 of 2
SECTION 1. Based on the review and determination of the Development
Services Division, the City Council of the City of Costa Mesa finds that the initiative
ordinance is exempt from review under the California Environmental Quality Act.
SECTION 2. A Notice of Exemption is approved for the Project.
SECTION 3. The City Clerk may file the Notice of Exemption with the County
Clerk of Orange County and, if the Project requires a discretionary approval from any
state agency, with the State Office of Planning and Research, pursuant to the provisions
of Section 21152(b) of the Public Resources Code and the State EIR Guidelines
adopted pursuant thereto.
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 this 5th day of July, 2016.
Stephen M. Mensinger, Mayor
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
the above and foregoing is the original of Resolution No. 16-54 and was duly passed
and adopted by the City Council of the City of Costa Mesa at a regular meeting held on
the 5th 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 5th day of July, 2016.
Brenda Green, City Clerk
(SEAL)
Resolution No. 16-54 Page 2 of 2