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15 - PH-1 - First Reading to Ordinance to Adopt Code - 4/20/2021
1 CITY COUNCIL AGENDA REPORT MEETING DATE: APRIL 20, 2021 ITEM NUMBER: PH-1 SUBJECT: GIVE FIRST READING TO AN ORDINANCE TO ADOPT CODE AMENDMENT CO-2021-01 TO AMEND TITLE 13 (PLANNING, ZONING, AND DEVELOPMENT) AND AN ORDINANCE TO AMEND TITLE 9 (LICENSES AND BUSINESS REGULATIONS) OF THE COSTA MESA MUNICIPAL CODE REGARDING THE TAXATION, REGULATION, OPERATING REQUIREMENTS AND STANDARDS FOR CANNABIS USES INCLUDING RETAIL CANNABIS STOREFRONT AND NON- STOREFRONT USES TO IMPLEMENT THE CITY OF COSTA MESA RETAIL CANNABIS TAX AND REGULATION MEASURE (MEASURE Q) DATE: APRIL 13, 2021 FROM: DEVELOPMENT SERVICES DEPARTMENT/ PLANNING DIVISION PRESENTATION BY: NANCY HUYNH, ASSOCIATE PLANNER FOR FURTHER INFORMATION CONTACT: NANCY HUYNH (714) 754-5609 nancy.huynh@costamesaca.gov RECOMMENDATION: Staff recommends that the City Council: 1. Find that the adoption of Ordinance Nos. 2021-X1 and 2021-X2 are exempt from the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15061(b)(3), General Rule, Section 15301 (Class 1), Existing Facilities, Section 15303 (Class 3), New Construction or Conversion of Small Structures, Section 15308 (Class 8), Actions by Regulatory Agencies, and Section 15332 (Class 32), In-fill Development Projects. 2. Introduce for first reading, by title only: Ordinance No. 2021-X1 to adopt Zoning Code Amendment CO-2021-01 to amend Title 13, Chapter IX, Article 21 and Chapter IV, Table 13-30; and Ordinance No. 2021-X2 to amend Title 9, Chapter I, Article 5, Chapter II, Article 1, and Chapter VI of the Municipal Code regarding the taxation and regulation for retail cannabis uses including storefronts and non-storefronts; and 2 BACKGROUND On November 3, 2020, voters approved the “City of Costa Mesa Retail Cannabis Tax and Regulation” measure, also known as Measure Q. Measure Q authorizes the City Council to adopt an ordinance that allows and regulates cannabis retail uses including storefront retail (commonly referred to as a dispensary) and non-storefront retail (delivery). Measure Q imposes a four-percent (4%) to seven-percent (7%) gross retail tax on cannabis retail businesses. In addition, Measure Q requires cannabis retail businesses to meet specific operating requirements such as zoning, separation distance from certain sensitive uses, and security measures. Measure Q only allows cannabis retail storefront and non-storefront uses. Non-retail cannabis uses including distribution, manufacturing, research and development laboratories, as well as testing laboratories are currently allowed uses (with a cannabis business permit and a conditional use permit) under Measure X (“City of Costa Mesa Medical Marijuana Measure”) which was approved by the voters on November 8, 2016. Commercial cultivation remains a prohibited land use in the City. The proposed amendments to the Costa Mesa Municipal Code (CMMC) collectively implement Measure Q by establishing the minimum operating requirements and development standards to tax and regulate cannabis retail storefronts and non-storefronts. In addition, the amendments change all references to the term “marijuana” to “cannabis”. City Council Cannabis Ad Hoc Committee At the City Council meeting of May 19, 2020, a City Council Cannabis Ad Hoc Committee was created to advise on the development of the Measure Q ballot initiative. Following the approval of Measure Q by Costa Mesa voters, the Ad Hoc Committee provided feedback throughout staff’s preparation of the proposed ordinances. Ad Hoc Committee feedback was reflected in the proposed ordinances presented to the Planning Commission. Outreach with Local Cannabis Industry The City Council Cannabis Ad Hoc Committee and staff held outreach meetings with the local cannabis business industry (made up of manufacturers, distributors, and retail business owners/operators) to obtain feedback on the draft ordinances. Meetings were held on June 17, 2020, June 26, 2020, February 10, 2021, and April 12, 2021 with over 50 industry representatives attending the most recent outreach meeting. Cannabis industry feedback is discussed in greater detail below. Planning Commission Hearings On February 22, 2021, the Planning Commission held a public hearing, received staff’s presentation, received public comments, discussed the item, and continued the item by a 7- 0 vote to the March 22, 2021 Planning Commission meeting so that staff could provide additional information regarding specific discussion items. 3 The staff report and presentation for the February 22 meeting are available at the following links: February 22, 2021 Planning Commission staff report: http://ftp.costamesaca.gov/costamesaca/planningcommission/agenda/2021/2021-02- 22/PH-1.pdf Video from February 22, 2021 Planning Commission meeting: https://costamesa.granicus.com/player/clip/3658?view_id=10&redirect=true On March 22, 2021, the Planning Commission held a public hearing, received public comments again, discussed the follow-up information and options staff presented on specific policy matters, and recommended City Council give first reading to the proposed ordinances by a 4-2-1 vote (Commissioners Colbert and Stephens voting no; Commissioner Tourje abstained). The following is a summary of the main topics discussed by the Planning Commission: Sensitive Uses Definition: discussed the 1,000-foot separation requirement from sensitive uses listed in Measure Q (K-12 schools, child daycares, playgrounds, and homeless shelters) and definitions for those sensitive uses; Youth Centers Definition: discussed the definition of youth center and the State’s 600-foot separation requirement from youth centers; Separation Distance between Storefronts: discussed establishing a cap on the total number of retail storefronts in Costa Mesa and/or adding a minimum separation distance between storefronts to avoid clustering or overconcentration in one particular area; Required Planning Application: discussed whether a Conditional Use Permit (CUP) reviewed by the Planning Commission or a Minor Conditional Use Permit (MCUP) reviewed by the Zoning Administrator was appropriate for storefronts and non-storefronts; Prohibition on Properties with Past Illegal Cannabis Sales: discussed reducing the time period from five years to 180 days that illegal cannabis use must cease prior to applying for a cannabis business permit; and Social Equity: discussed establishing a social equity component to the City’s cannabis program to address the historic disproportionate impact of past cannabis related drug convictions in communities of color. The March 22 Planning Commission staff report and video are available at the following links: March 22, 2021 Planning Commission staff report: http://ftp.costamesaca.gov/costamesaca/planningcommission/agenda/2021/2021-03- 22/PH-1.pdf 4 Video from March 22, 2021 Planning Commission meeting: https://costamesa.granicus.com/player/clip/3691?view_id=10&redirect=true Finance & Pension Advisory Committee (FIPAC) On December 9, 2020, FIPAC took a formal vote to recommend that City Council set the gross receipts tax rate for Measure Q approved retail cannabis businesses at seven- percent. Refer to the letter from FIPAC in Attachment 4. FIPAC also previously deliberated on the Measure X tax rate for non-retail cannabis uses (excluding cultivation) which was at a tax rate of six-percent. At the March 3, 2020 City Council meeting, an ordinance was put forth recommending a 24-month temporary reduction of the cannabis business tax from six-percent to two-percent based on analyses that the City may not remain competitive if the tax rate was not reduced. As a result, City Council voted to amend the ordinance to permanently reduce the tax rate to one-percent for distribution, manufacturing, research and development laboratories, and no annual business tax for cannabis testing laboratories. The original six-percent tax rate was generating an annual amount of $763,673. In Fiscal Year (FY) 2020/21, the first full year of the one-percent tax rate, the City is expected to receive $278,000; a reduction of almost $500,000. As a result, FIPAC emphasized their vote for the seven-percent tax rate is to also compensate for the loss of revenue due to the permanent Measure X tax reduction and the funding needed for the approved staff positions related to cannabis implementation. DESCRIPTION/ANALYSIS: The following is a description of the proposed amendments to Title 9 and Title 13 of the CMMC. These amendments to the CMMC are reflected in the Draft Ordinances provided as Attachments 1 and 2 to this report. Amendments to Title 13 (Planning, Zoning and Development) With the proposed code amendment, a new section would be added to Article 21 to establish permitted zones, planning application requirements, separation distance requirements from sensitive uses, and specific development standards for cannabis storefront and non- storefront retail. An underline/strikethrough version of Title 13 with the added text and revisions are provided in Exhibit A of Attachment 1. Zoning Districts Cannabis retail storefronts would be allowed in commercial zones, while non-storefronts would be allowed in both commercial zones and the Green Zone (industrial area zoned for Measure X uses). Measure Q allows cannabis retail uses in these zones only. Cannabis retail uses would remain prohibited in all other zoning districts including industrial (other than the Green Zone) and residential zones. 5 Planning Application Required A conditional use permit (CUP) would be required for all cannabis retail businesses (storefronts and non-storefronts) operating in the City subject to a Planning Commission public hearing and decision. For existing licensed cannabis distributors or manufacturers within the Green Zone who desire to add a non-storefront use to their business, an amendment to their existing CUP would be required; the amendment would be processed as a Minor CUP (MCUP) subject to a Zoning Administrator decision. Both application types are subject to the same public notice requirements, allow the City to place conditions of approval on a proposed use, and are subject to the same approval findings. The major difference is that there is no public hearing for an MCUP (unless the Zoning Administrator forwards the application to Planning Commission); rather, the Zoning Administrator decision is posted online. The Planning Commission recommended this approach to allow the opportunity for public input at a Planning Commission public hearing for all new cannabis uses since cannabis retail storefronts will be allowed in commercial zones which may be in close proximity to residential areas in certain cases. By comparison, the City Council Ad Hoc Committee originally recommended that a CUP not be required, and instead an MCUP process apply to all cannabis retail uses as a means of streamlining the application process. A third alternative, initially recommended by staff, is to require a CUP for retail storefronts within 200-feet of a residential zone, an MCUP for retail storefronts beyond a 200-foot buffer of a residential zone, and an MCUP for all non-storefronts (delivery). Location Requirements Storefronts would be required to be located: 1,000 feet from schools providing instruction in kindergarten or grades 1 through 12, playgrounds, child daycares, or homeless shelters consistent with Measure Q; 600 feet from youth centers as defined in the State’s Health and Safety Code and as required by the State’s Bureau of Cannabis Control (BCC); and 500 feet from another licensed storefront business as recommended by Planning Commission. The above separation requirements are not applicable to standalone delivery non- storefronts (that are not operating as part of a storefront business). The separation requirements are applicable to storefront uses only. The Planning Commission recommended that the Ordinance refer to State definitions for Measure Q sensitive uses. Those definitions are: “School” means any public or private school providing instruction in kindergarten or any of grades 1 to 12, inclusive, but does not include any private school in which education is primarily conducted in private homes. (Section 11362.768(h) of HSC) 6 “Child day care facility” means a facility that provides nonmedical care to children under 18 years of age in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual on less than a 24-hour basis. Child day care facility includes day care centers, employer-sponsored child care centers, and family day care homes. (Section 1596.750 of HSC) “Playground” means any park or recreational area specifically designed to be used by children which has play equipment installed, including public grounds designed for athletic activities such as baseball, football, soccer, or basketball, or any similar facility located on public or private school grounds, or on city, county, or state parks. (Section 11353.1(e)(1) of HSC) o The definition of “playgrounds” is interpreted to refer to publicly-owned and operated playgrounds. Private playgrounds are not easily identifiable because they are not tracked as part of a State or local license database or other list. Therefore, mapping such private facilities introduces a practical challenge for implementation. “Emergency shelter” means a facility with overnight sleeping accommodations, the primary purpose of which is to provide temporary shelter for the homeless that is not in existence after the declared shelter crisis. (Section 8698.4(c)(1) of Government Code) Youth Centers For youth centers, State law requires a 600-foot separation between youth centers and storefronts. The State does allow a local jurisdiction to specify a different separation distance, either less or more than the State requirement. Regarding the definition of youth centers, the State’s definition is open-ended which leaves the City with the responsibility of determining what type of uses are or are not youth centers for mapping and separation purposes. The State’s definition is: “Youth center” means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities. The Planning Commission recommended City Council defer to the State’s definition and implement the 600-foot separation distance for youth centers, noting that studio uses with recreational classes and programs for youth should be buffered from storefront uses. As such, under the Planning Commission’s recommendation, the State’s definition would be interpreted broadly to include any “public or private facility…primarily used to host recreational or social activities for minors…” For mapping purposes, these include youth clubs and theatres like Halecrest (a private membership recreational club), Millennium Barn, and Pacific Star Riding Club, arcades like Chuck E. Cheese, tutoring uses like Kumon or Mathnasium, martial arts studios, fitness studios like gymnastics classes and Aqua Tots, and dance, music, art, or similar studio uses. Private gyms, pizza parlors, 7 dentist or doctor’s offices that serve children and other similar uses whose primary use is not social or recreational in nature are not included in the youth center definition. This approach results in a greater number of youth centers being mapped for separation distance purposes and a lesser number of properties eligible for cannabis storefront uses. The preliminary draft separation map (provided as Attachment 5 to this report) reflects these uses as youth centers. The City Council Ad Hoc Committee originally recommended that youth centers be narrowly defined to include only those uses which were specifically referenced as examples in the State’s definition (i.e. private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities). For mapping purposes, these uses would likely include only youth clubs and theatres like Halecrest (a private membership recreational club), Millennium Barn, and Pacific Star Riding Club and arcades like Chuck E. Cheese As such, at the Council’s discretion, a modified definition of youth centers could reflect a narrow definition of youth center and affirmatively exclude types of youth centers such as martial arts classes, yoga, dance classes, music classes, art classes, or similar studio uses. This approach would result in a lesser number of youth centers being mapped for separation distance purposes and a greater number of properties eligible for cannabis storefront uses. Separation Between Retail Storefronts For separation distance between storefronts, there is not a State requirement, overconcentration regulations, or a cap on number of licenses per city. Initial discussions with the City Council Cannabis Ad Hoc Committee focused on allowing zoning, location requirements, and market forces to limit the number of locations instead of a separation distance or cap. Most cities apply a separation distance between storefronts or a cap or a combination of the two to limit the total number of storefronts. For example, Santa Ana has a maximum cap of 30 licenses with 500-foot separation between storefronts; the City of Long Beach has a maximum cap of 32 licenses with 1,000-foot separation between storefronts. (The Planning Commission staff report describes best practices and several options for addressing the total number of storefronts.) Based on best practices and in consideration of a measured approach given a City of our size, staff recommended a phased in approach whereby a soft cap is established based on the City’s capacity to process concurrent cannabis business permit applications in the first year and the cap could be adjusted annually (or more frequently). Planning Commission recommended a minimum of 500 feet separation distance between storefronts to avoid clustering and overconcentration of storefronts in one particular area or property. For reference, 500 feet in most commercial areas of the City equates to approximately a half block. Planning Commission did not recommend a cap on the number of licenses since the separation between stores would organically act as a cap by limiting the number of stores a property or area could accommodate given the other required separation distances. Notwithstanding, Section 9-486 would provide City Council with the authority to limit and/or 8 restrict the number of cannabis retail permits available for issuance and/or renewal at any time by adoption of a resolution. Other Location Requirements All of the required separation distances described above are proposed to be measured in a straight line from the closest property line of the lot where the cannabis retail storefront is proposed to the closest property line of the existing sensitive use(s) and without regard to intervening structures or barriers, except for properties separated by the Interstate 405 (I- 405) Freeway. For properties that are separated by the I-405, the distance is measured as the most direct pedestrian route between properties. Freeways configured like the I-405 are impenetrable barriers which the straight-line measurement does not take into consideration. In addition to the above location requirements, storefronts are not allowed to be located within any property that has been involved in unpermitted and/or illegal cannabis sales, delivery and/or dispensing at any time in the five years preceding a cannabis business permit application – unless certain specific findings are made as outlined in Section 13- 200.93(e)(6) of the proposed Ordinance. Planning Commission recommended the time period be reduced from five years to 180 days, which has been reflected in the proposed ordinance. Development Standards for Storefronts and Non-Storefronts Storefronts would be subject to the following development standards: Opaque window coverings and permanent security bars on windows or doors are prohibited; Signage directing customers to a storefront business including but not limited to A- frame signs, flags, banners of a person holding a sign whether on the premise of the storefront or public-right-of-way is prohibited; Comply with landscaping requirements set forth in Chapter VII of Title 13 when feasible as determined by the Director; Drive-through or walk-up window services are prohibited; No outdoor seating or patio areas for the public are allowed; Special events with live entertainment is prohibited; and For storefronts located within two-hundred (200) feet of a residential zone, exterior lighting is required to be shielded/directed away from residential areas and trash facilities are required to be screened and located appropriately to minimize noise and odor impacts. These development standards are to ensure storefronts would operate in a manner compatible with existing businesses and surrounding land uses. For storefronts operating in close proximity to residential zones, additional development standards would apply to ensure the use would not have negative impacts in terms of noise, lighting, and odor. Additional conditions of approval could also be included on a proposed storefront as part of the planning application review process. 9 Non-storefronts would be subject to the following development standards: Delivery services may operate independently or as a part of a storefront, distribution, or manufacturing facility; A business license is required to conduct deliveries into or within the City; The last delivery must be completed by 10:00 p.m.; and No general public are allowed inside a non-storefront retail business. Non-storefronts could operate as standalone business or could also be a part of a licensed storefront. Additionally, deliveries could operate in conjunction with a licensed distribution or manufacturing business in the Green Zone. A business license would be required to conduct deliveries within the City regardless of whether the delivery service originates from a different jurisdiction or within the City. Land Use Matrix (Table 13-30) The amendment to Title 13 also includes updating Table 13-30 (Land Use Matrix) to revise cannabis retail storefronts from prohibited to conditionally permitted with a CUP as well as add the land use category for cannabis retail non-storefronts, also subject to a CUP. Amendments to Title 9 (Licenses and Business Regulations) The following is a description of the proposed amendments to Title 9. These amendments to the CMMC are reflected in underline/strikethrough format in Attachment X. Chapter I, Article 5 (Business Tax) Chapter I, Article 5 currently contains the tax rate for non-retail cannabis businesses. The proposed ordinance would establish different tax rates for different types of cannabis businesses allowed in the City – retail (storefront and non-storefront) versus non-retail (distributor, manufacturer, and research and development laboratory). Retail cannabis businesses would be subject to an annual business tax of seven-percent based on the gross receipts of that business. Non-retail cannabis operators that also engage in retail cannabis sales would only be subject to the retail sales tax and not required to pay the non-retail tax. Chapter II, Article 1 (Regulation of Certain Businesses) Chapter II, Article 1 currently includes regulations and processes for revocation or suspension of business permits. The textual revisions to this chapter would include expanding on the hearing process prior to revocation or suspension of a business permit and related revisions. Chapter VI (Cannabis Business Permits) Chapter VI pertains specifically to cannabis business permits. A cannabis business permit would be required for any cannabis retail use, the same as is applied to Measure X uses. 10 The proposed amendments to this chapter would include the following in addition to minor textual revisions: Section 9-482.5: Added section to expand on City Manager’s authority to make reasonable rules and procedures to administer and enforce any regulations relating to permitting commercial cannabis businesses; Section 9-485: Added definitions related to retail cannabis businesses such as “cannabis goods”, “edible cannabis product”, “Green Zone”, and “free samples” and defers to the State’s definition for sensitive uses including youth centers; Section 9-486: Includes retail cannabis storefront and non-storefront as additional types of authorized cannabis businesses permitted in the City; Section 9-487.5: Added section to specify that a cannabis business must only operate under the business name listed in the cannabis business permit, “doing business as” (DBA), or “fictitious business name” (FBN); Section 9-488: Specifies no more than one application for a cannabis business permit may be submitted per property at one time (i.e. no “stacking” applications); and Section 9-495: Additional operating requirements for storefront and non-storefront cannabis retail businesses including security measures, hours of operation, age restrictions, employees, delivery vehicles, and require owners/operators to keep and preserve tax records for a period no less than seven years. These operating requirements are in addition to the development standards proposed under Article 21 of Title 13. For definitions of sensitive uses including youth centers, Planning Commission recommended City Council defer to the State’s definition by referencing the applicable State code section in Title 9. The applicable State definitions are provided earlier in this report. Social Equity Planning Commission discussed the ordinance and its relationship to social equity, noting that Title 9 includes language, which makes any person convicted of a felony within the past seven years ineligible for operating a cannabis business or for employment at a cannabis business. Although the Planning Commission’s recommendation did not include specific text revisions, in their comments the majority of Planning Commissioners supported a social equity program and requested staff present options to the City Council. The goal of addressing social equity in a cannabis ordinance is to recognize and address the impact that federal and state enforcement policies have had on minority and low-income communities in terms of arrests and convictions for lower-level offenses such as cannabis use and possession. These communities have been the most harmed by cannabis prohibition, yet are benefiting the least from the legalization of cannabis in terms of ownership and employment opportunities. Historically disproportionate arrest and conviction rates make it particularly difficult for people of color to enter the legal cannabis marketplace. 11 One of the major barriers to entry into the legal cannabis marketplace is the felony conviction prohibition. To remove barriers associated with the felony conviction prohibition clause, staff has included language in Section 9-495 and Section 9-496 of Title 9 that would exempt felony convictions involving cannabis where the underlying felony has been reduced to a misdemeanor or infraction pursuant to the provisions of the State of California’s Control, Regulate and Tax Adult Use of Marijuana Act (Prop 64). In addition, this exemption would apply to federal cannabis related felonies, should those felonies be reduced or de- criminalized in the future. This approach would exempt the majority of cannabis-related convictions, but would not exempt other cannabis violations that were not downgraded by Proposition 64 like sale of cannabis to a minor. Staff believes it is important for the felony convictions currently downgraded by Prop 64 be removed from consideration for individuals seeking to operate or be employed in a retail storefront if there is a sincere desire to address the impact of past convictions on communities of color. Future Social Equity Program In addition to addressing the felony conviction prohibition clause described above, some States and municipalities have taken proactive steps to mitigate inequities in the legal cannabis marketplace and ensure equitable participation in the industry through a cannabis social equity program. The typical criteria to determine qualification for a social equity program include income limits and arrest records. Typical benefits provided through such programs include waived (or reduced) application fees, technical assistance in preparing a cannabis business application, expedited or priority cannabis business application and plan check review, or priority application processing. The program could also encourage a local hiring policy to create more job opportunities for residents of the City or hiring people from a disproportionately impacted community or area as a result of cannabis prohibition. A more aggressive social equity program, for example from the City of Oakland, includes providing legal assistance and financial assistance through grant and loan programs. Oakland also partners with law firms, real estate companies, and other cannabis business owners to provide legal and technical assistance. In addition to the benefits for prospective social equity applicants, such a program could provide for community benefits by dedicating a certain percentage, e.g. half-percent of the proposed seven-percent retail tax rate, towards a public art fund and/or a community reinvestment fund. A reinvestment fund could be used to reinvest in communities most harmed by past cannabis enforcement practices, including making efforts to create access to capital, job training programs, and seeking assistance to expunge criminal convictions. Section 9-497 provides language which would authorize the City Manager to establish administrative procedures concerning cannabis business permits, which could include a social equity program. Staff is seeking feedback as to the City Council’s interest in establishing a social equity program and to what extent. Depending on City Council 12 direction, the City Manager’s Office could look into funding sources and pursue establishment of a robust cannabis social equity program. State Resources While the State does not have requirements or regulations regarding a cannabis social equity program, the Governor’s Office of Business and Economic Development does provide funding through the Cannabis Equity Grant Program for Local Jurisdictions to aid local equity program efforts and to support equity applicants and licensees. This program seeks to advance economic justice for populations disproportionately affected by cannabis prohibition by providing funding to local jurisdictions that are committed to promoting equity in the legal cannabis marketplace and eliminating barriers to entering the regulated cannabis industry. The grant program provides funding assistance for jurisdictions to develop a social equity program as well as funding to directly assist their social equity applicants. In fiscal year 2020-2021, a total of $15 million in grant funding was awarded to cities and counties. Grant awards to local jurisdictions this year ranged from a few millions dollars for larger jurisdictions to $800,000 for smaller communities. Cannabis Industry Feedback following Planning Commission’s Recommendation Below is a summary of the key points noted by the cannabis business industry regarding the proposed ordinances as recommended by the Planning Commission: Youth Centers: The industry suggested a narrow youth center definition which excludes certain types of youth-oriented private business uses. The industry also expressed concerns with measuring the separation distance for youth centers based on property lines. The industry suggested the separation distance from youth centers should be measured based on the entrance door of the youth center business instead of the property line. Staff recommends maintaining the measurement from property line to property line as is currently outlined in the Municipal Code. Separation Between Storefronts: The industry expressed concerns with the separation between storefronts because it reduces the number of eligible commercial properties. The industry suggested letting the market and sensitive uses buffers dictate the separation instead, noting that not all commercial property owners would be willing to sell or lease their property to a cannabis retail business. Social Equity Program: The industry noted a social equity program should also be for job and employment opportunities and not only for ownership. Incremental Retail Tax Rate: The industry suggested a gradual approach to implementing the retail tax rate i.e. start at four-percent and increase each year to seven-percent instead of establishing it at seven-percent initially. Staff does not recommend this approach. Next Steps If City Council gives first reading to the proposed Ordinances, the Ordinances would be scheduled for a “second reading” at the next available City Council meeting, May 4, 2021. If 13 approved at the second reading, the Ordinances would become effective 30 days after adoption. Concurrently with the second reading, a Fee Resolution will be agendized to establish cannabis retail application fees including fees for the cannabis business permit, conditional use permit, and permit renewals. In addition, staff will bring amendments to professional services contracts necessary to secure sufficient expertise and resources to efficiently process cannabis retail applications. Finally, following approval of the Ordinances, City staff will update the cannabis business permit application materials, administrative procedures, and update and publish the separation map showing sensitive uses, youth centers, and eligible commercially-zoned properties. ENVIRONMENTAL DETERMINATION: The Ordinances were reviewed for compliance with the California Environmental Quality Act (CEQA), the CEQA guidelines, and the City’s environmental procedures. The Ordinances are found to be exempt pursuant to CEQA Guidelines Section 15061(b)(3) (General Rule) and Section 15308 (Class 8, Actions by Regulatory Agencies for the Protection of the Environment) because a recommendation is not a final action and the recommended ordinance will not have a significant effect on the environment. The Zoning Code Amendment is also exempt pursuant to CEQA Guidelines Section 15301 (Class 1, Existing Facilities), Section 15303 (Class 3, New Construction or Conversion of Small Structures), and Section 15332 (Class 32, In-fill Development Projects) because future construction for retail cannabis businesses will largely be within existing buildings for interior tenant improvements or involve minor new construction projects that will also not have a significant effect on the environment. ALTERNATIVES CONSIDERED: The City Council may approve the Ordinances as proposed, modify the Ordinances, or not adopt the Ordinances. FISCAL REVIEW: Staff projects at least $3.2 million annually in General Fund revenue at the seven-percent tax rate implementation. The Proposed Budget for FY 2021-22 which will be presented to the City Council in May for the fiscal year beginning July 1, 2021 currently includes revenue estimates aligned with a seven-percent tax rate. Given the loss of approximately $500,000 from the permanent reduction of the Measure X tax rate of six- percent to one-percent for cannabis manufacturing and distribution, it is prudent to establish a retail cannabis tax rate that will generate sufficient revenue to recoup the $500,000 in revenue losses; fund the full annual cost of the 7.0 FTEs added to the Table of Organization for implementation of the retail cannabis program; and, to diversify the City’s General Fund which has been significantly impacted by the pandemic. 14 Moreover, unlike many other business sectors, such as hotel and leisure, retail, and restaurants, cannabis is considered an “essential business” and has been able to remain open during the entire duration of the pandemic thereby generating revenue at a time when most businesses have struggled to keep their doors open. Lastly, the seven percent tax rate is very competitive as Costa Mesa is one of only two cities in Orange County that have authorized retail storefront cannabis sales, and the closest competitor, the City of Santa Ana, has an eight percent retail cannabis tax rate. Staff recommends implementation of the seven-percent tax rate for the time being to help stimulate the local economy, restore lost revenue and to have the resources to continue providing core services to the public, such as public safety. As the economic recovery continues and the City is able to replenish its General Fund coffers to pre-pandemic levels, a reduction in the tax rate can be considered at that time. According to staff at the cities of Santa Ana and Long Beach, it may take up to two to three years for revenue estimates to be fully realized for a new retail cannabis program. A higher tax rate allows the City to achieve its revenue goals and reinvest those gains back into our core services to the community and residents, sooner rather than later. LEGAL REVIEW: The Ordinances have been prepared by the City Attorney’s Office and the staff report has been reviewed and approved as to form. PUBLIC NOTICE: Pursuant to Title 13, Section 13-29(d), of the Costa Mesa Municipal Code, public notice was published once in the Daily Pilot newspaper 10 days prior to the date of the public hearing. As of the date of this report, no public comments have been received. At the Planning Commission public hearing on February 22, 2021, eight written public comments were submitted and seven speakers commented at the hearing. On March 22, 2021, 28 written public comments were submitted and eleven speakers commented at the hearing. Written public comments received for the Planning Commission public hearings can be found at: http://ftp.costamesaca.gov/costamesaca/planningcommission/agenda/2021/2021-02- 22/PH-1-pc.pdf http://ftp.costamesaca.gov/costamesaca/planningcommission/agenda/2021/2021-03- 22/PH-1-pc.pdf Any additional written comments received prior to the April 20, 2021 will be forwarded under separate cover. 15 CONCLUSION: The adoption of the proposed Ordinances would establish a process for the City to regulate, review, and tax cannabis retail businesses pursuant to Measure Q. NANCY HUYNH JENNIFER LE Associate Planner Director of Economic and Development Services ________________________________ _________________________________ CAROL MOLINA KIMBERLY HALL BARLOW Finance Director City Attorney Attachments: 1. Draft Ordinance 2021-X1 (Title 13) Exhibit A Title 13 Revisions in underline/strikethrough (including Planning Commission recommended revisions) 2. Draft Ordinance 2021-X2 (Title 9) Exhibit A Title 9 Revisions in underline/strikethrough (including Planning Commission recommended revisions) 3. Signed Planning Commission Resolution 4. Finance and Pension Advisory Committee (FIPAC) Letter 5. Preliminary Draft Separation Distance Map 6. Map of the Measure X “Green Zone” ORDINANCE NO. 2021-X1 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA AMENDING CHAPTER IX (SPECIAL LAND USE REGULATIONS), ARTICLE 21 (LOCATION OF MARIJUANA DISTRIBUTING, MANUFACTURING, RESEARCH AND DEVELOPMENT AND TESTING LABORATORIES), AND CHAPTER IV (CITYWIDE LAND USE MATRIX), TABLE 13-30 (LAND USE MATRIX) OF TITLE 13 (CODE AMENDMENT CO-2021-01) TO ESTABLISH THE DEVELOPMENT STANDARDS FOR CANNABIS USES, INCLUDING RETAIL CANNABIS STOREFRONT AND NON-STOREFRONT USES TO IMPLEMENT THE CITY OF COSTA MESA RETAIL CANNABIS TAX AND REGULATION MEASURE (MEASURE Q) THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY ORDAIN AS FOLLOWS: WHEREAS, on July 21, 2020, the City Council voted to place a ballot measure for the 2020 General Election asking city voters whether or not to allow retail cannabis storefront (dispensaries) and non-storefront (deliveries) businesses in the City; WHEREAS, on November 3, 2020, city voters approved the “City of Costa Mesa Retail Cannabis Tax and Regulation Measure”, also known as, Measure Q; WHEREAS, Measure Q authorizes the City Council to adopt an ordinance which permits and regulates retail cannabis storefront (dispensaries) and non-storefront (deliveries) businesses; WHEREAS, Measure Q authorizes the City Council to impose a four-percent (4%) to seven-percent (7%) gross receipts tax on retail cannabis businesses. In addition, Measure Q requires retail cannabis businesses to meet certain operating requirements including permitted zones, minimum of 1,000 feet separation distance from sensitive uses such as schools, childcare centers, playgrounds and homeless shelters, security measures, and a requirement for a labor peace agreement for businesses with two or more employees; WHEREAS, a Zoning Code Amendment is necessary to implement Measure Q and establish the minimum operating requirements and development standards in the Costa Mesa Municipal Code to tax, review, and regulate retail cannabis storefront and non-storefront businesses operating in the City; Attachment 1 WHEREAS, Chapter IX (Special Land Use Regulations), Article 21 (Location of Marijuana Distributing, Manufacturing, Research and Development and Testing Laboratories), Section 13-200.92 of Title 13 (Planning, Zoning and Development) contains permitted zones and planning application requirements for cannabis distribution, manufacturing, research and development, and testing laboratory uses. Chapter IV (Citywide Land Use Matrix), Table 13-30 (Land Use Matrix) of Title 13 prohibits retail cannabis sales; WHEREAS, the proposed amendments to Chapter IX, Article 21 would add inter alia a new section, Section 13-200.93, to establish the permitted zones, planning application requirements, separation requirements from sensitive uses, and specific development standards for retail cannabis uses. The proposed amendment to Table 13- 30 (Land Use Matrix) would revise cannabis retail sales from prohibited to conditionally permitted with an MCUP as well as add a land use category for cannabis retail sales non- storefront; WHEREAS, the Title 13, “Planning, Zoning and Development”, (the Zoning Code) of the Costa Mesa Municipal Code sets forth the zoning and land use regulations for the City in general; and, WHEREAS, the City Council held a public hearing on April 20, 2021 with all persons having the opportunity to speak for and against the proposal; and, WHEREAS, the Zoning Code Amendment and Ordinance No. 2021-XX have been reviewed for compliance with the California Environmental Quality Act (CEQA), the CEQA guidelines, and the City’s environmental procedures. The Code Amendment has been found to be exempt pursuant to CEQA Guidelines Section 15061(b)(3) (General Rule) and Section 15308 (Class 8, Actions by Regulatory Agencies for the Protection of the Environment) because the recommended ordinance will not have a significant effect on the environment. The Code Amendment is also exempt pursuant to CEQA Guidelines Section 15301 (Class 1, Existing Facilities), Section 15303 (Class 3, New Construction or Conversion of Small Structures), and Section 15332 (Class 32, In-fill Development Projects) because future construction for retail cannabis businesses will largely be within existing buildings for interior tenant improvements or involve minor new construction that will also not have a significant effect on the environment; and WHEREAS, the CEQA findings reflect the City’s independent judgment and analysis; and WHEREAS, the City Council finds that the provisions of this Ordinance are consistent with the City of Costa Mesa’s General Plan; and WHEREAS, all legal prerequisites prior to the adoption of this Ordinance have occurred. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Zoning Code Amendment. Chapter IX (Special Land Use Regulations), Article 21 (Location of Marijuana Distributing, Manufacturing, Research and Development and Testing Laboratories), and Chapter IV (Citywide Land Use Matrix), Table 13-30 (Land Use Matrix) of Title 13 as specified in Exhibit 1, attached hereto and incorporated herein by this reference, are hereby amended in their entirety as set forth therein. SECTION 2. Compliance with CEQA. Pursuant to the California Environmental Quality Act (CEQA), the Code Amendment has been found to be exempt pursuant to CEQA Guidelines Section 15061(b)(3) (General Rule) and Section 15308 (Class 8, Actions by Regulatory Agencies for the Protection of the Environment) the ordinance will not have a significant effect on the environment. The Code Amendment is also exempt pursuant to CEQA Guidelines Section 15301 (Class 1, Existing Facilities), Section 15303 (Class 3, New Construction or Conversion of Small Structures), and Section 15332 (Class 32, In- fill Development Projects) because future construction for retail cannabis businesses will largely be within existing buildings for interior tenant improvements or involve minor new construction that will also not have significant effect on the environment. SECTION 3. Inconsistencies. Any provision of this ordinance which is inconsistent with state law shall be interpreted in a manner to be consistent with state law. 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 effect the provisions of this Ordinance. SECTION 4. Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Costa Mesa hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional. SECTION 5. Effective Date. This Ordinance shall take effect and be in full force thirty (30) days from and after the passage thereof, and prior to the expiration of fifteen (15) days from its passage shall be published once in the ORANGE COAST DAILY PILOT, a newspaper of general circulation, printed and published in the City of Costa Mesa or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the office of the City Clerk five (5) days prior to the date of adoption of this Ordinance, and within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post in the office of the City Clerk a certified copy of this Ordinance together with the names and member of the City Council voting for and against the same. SECTION 6. Certification. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted in the manner required by law. PASSED AND ADOPTED this _____ day of ________, 2021 by the following XX vote: _________________________________ John Stephens, Mayor ATTEST: _________________________________ Brenda Green, City Clerk APPROVED AS TO FORM: _________________________________ Kimberly Hall Barlow, 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 a true and correct copy of Ordinance No.2021-XX ____ introduced at a regular meeting of the City Council of the City of Costa Mesa held on the ____ day of _____, 2021, and was thereafter adopted at a regular meeting held on the _____ day of _______, 2021, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: Said ordinance has been published or posted pursuant to law. Witness my hand and the official seal of the City of Costa Mesa this ____ day of _______, 2021. _________________________________ Brenda Green, City Clerk (SEAL) EXHIBIT 1 ARTICLE 21. LOCATION OF CANNABIS DISTRIBUTING, MANUFACTURING, RESEARCH AND DEVELOPMENT, TESTING LABORATORIES, RETAIL STOREFRONT AND RETAIL NON- STOREFRONT USES 13-200.90. Purpose. The purpose of this article is to regulate the location of and standards for cannabis distributing facilities, manufacturing sites, research and development laboratories, testing laboratories, retail storefront and retail non-storefront uses 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 cannabis businesses. 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 or in this title, the terms used in this article shall have the meaning ascribed to them in Title 9, Chapter VI of this Code. 13-200.92. Cannabis distributing facilities, manufacturing sites, research and development laboratories, and testing laboratories. (a) Cannabis distribution, manufacturing, 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 both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection (the “Green Zone”). (b) A conditional use permit shall be required and may be issued to allow the location of any business engaged in the distribution, manufacturing, researching and developing, or testing of cannabis in the MP or PDI zones pursuant to subsection (a) of this section, subject to the following conditions: (1) The requirements of Chapter III of this title have been met; (2) The findings for granting a conditional use permit in accordance with section 13- 29(g) are met; (3) The applicant obtains a cannabis business license pursuant to Chapter VI of Title 9 of this Code; and (4) 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. 13-200.93. Cannabis retail storefront and non-storefront uses. (a) Cannabis retail storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts. (b) Cannabis retail non-storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts and within the Green Zone. (c) The following planning application shall be required for cannabis retail uses: (1) A conditional use permit shall be required for retail storefronts and non- storefronts; and (2) An amendment to the approved conditional use permit shall be required for existing licensed cannabis distribution or manufacturing businesses to operate a retail non-storefront under the existing business and within the same licensed premise. The amendment shall be processed as a minor conditional use permit. (d) A conditional use permit may be issued to allow the location of a retail cannabis use pursuant to subsections (a) and (b) of this section, subject to the following conditions: (1) The requirements of Chapter III of this title have been met; (2) The findings for granting a minor or conditional use permit pursuant to section 13-29(g) are met; (3) The applicant obtains a cannabis business license for the location pursuant to Chapter VI of Title 9 of this Code; and (4) The use is conducted in compliance with all applicable state and local laws. (e) No cannabis retail storefront use shall be located: (1) Within one-thousand (1,000) feet from a school, playground, childcare or daycare center, or homeless shelter that is in operation at the time of submission of a completed Cannabis Business Permit application; (2) Within five-hundred (500) feet of the permitted location of another cannabis retail storefront use that exists at the time of submission of a completed Cannabis Business Permit application; (3) All distances shall be measured in a straight line from the closest property line of the lot where the cannabis retail use is to be located to the closest property line of a school, playground, childcare or daycare center, homeless shelter, youth center or licensed cannabis retail storefront; (4) All distances shall be measured without regard to the boundaries of the city and and/or intervening structures or other barriers, except only for properties separated by the Interstate 405 freeway for which the distances set forth in subsections (1) and (2) shall be measured as the most direct pedestrian route between properties; (5) At a property as for which the zoning administrator, director or planning commission determines, based on a preponderance of the evidence, that unpermitted and/or illegal cannabis activity involving sales, delivery and/or dispensing has taken place at any time in the 180 days preceding an application under this Article. (6) The zoning administrator, director or planning commission may grant relief to an otherwise qualified applicant from the prohibitions of sub-section (e)(5) for good cause based on a finding supported by a preponderance of the evidence that: i. The unpermitted use has ceased for a period of not less than 180 days; ii. The applicant is a purchaser of the property and not otherwise ineligible or the applicant is leasing the property from a purchaser or owner who is not ineligible to hold a cannabis business permit pursuant to section 9- 490; and iii. The city has been reimbursed for any and all expenditure of public funds and resources, including all costs, expenses (including but not limited to the salaries of peace and/or code enforcement officers) and/or attorney’s fees, incurred in investigating, abating or attempting to abate the unpermitted use or uses, whether or not any type of civil, criminal or administrative proceedings have been commenced against the property. (7) A determination and/or finding under sub-sections (e)(5) and/or (6) is subject to the appeal provisions of Chapter IX of Title 2 of this Code. (f) Retail storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9: (1) Opaque window coverings unless required by the City for security purposes are prohibited; (2) Permanent security or safety bars shall not be placed on any interior or exterior windows or door, unless required by the City for security purposes; (3) Directional signage to the use including but not limited to A-frame signs, sandwich board signs, banners, or flags are prohibited; (4) No use shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the premises of the commercial cannabis business or elsewhere including, but not limited to, the public right-of- way; (5) Uses shall comply with the landscaping requirements set forth in Chapter VII of this title including bringing the site landscaping into conformance when feasible as determined by the director; (6) Parking requirements shall be subject to Section 13-89; (7) The hours of operation may be established as part of the planning application subject to the final review authority and may be more restrictive than those set forth in Chapter VI of Title 9. Modification of operation hours when established as part of the planning application shall be subject to an amendment of the planning application; (8) Drive-through services or walk-up window services are prohibited; (9) Outdoor seating or patio areas are prohibited; (10) Special events that include live entertainment, dancing, and/or amplified music, or that are otherwise visible and/or audible from the public right-of-way, are prohibited; (11) All cannabis products shall be secured after business hours in a locked container under 24-hour video surveillance; and (12) For uses within two hundred (200) feet of a residential zone, all exterior lighting shall be shielded and/or directed away from residential areas. In addition, trash facilities shall be screened from view and designed and located appropriately to minimize potential noise and odor impacts to adjacent residential areas. (g) Non-storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9: (1) Uses may operate independently from a retail storefront or as a part of, and in conjunction with, a permitted storefront, distribution, or manufacturing facility; (2) Parking requirements shall be subject to Section 13-89 and shall also include sufficient parking spaces for delivery vehicles; (3) All deliveries to customers shall be completed by 10:00 p.m.; and (4) The general public shall not be permitted to enter the premises of a non-storefront retail use. (h) Except as specifically authorized in this article, all other cannabis retail uses such as but not limited to lounges and cafes are expressly prohibited in the city. (i) 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. (j) Any cannabis use, including but not limited to those involving sale, delivery and/or dispensing, that is not permitted, licensed and otherwise in full compliance with all applicable provisions of this Code and state and local law, shall not be considered a legally non-conforming use pursuant to, and notwithstanding any contrary provisions of, Chapter IX of this title. 13-200.94. 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. 13-200.95. Violations. Violations of this article shall be punishable pursuant to the provisions of section 13-16 in addition to any other remedy available at law or in equity. CHAPTER IV. CITYWIDE LAND USE MATRIX TABLE 13-30 CITY OF COSTA MESA LAND USE MATRIX ZONES LAND USES R1 R2- MD R2- HD R3 AP CL C1 C2 C1- S1 TC1 MG MP PDR- LD1 PDR- MD1 PDR- HD1 PDR- NCM1 PDC1 PDI1 I&R1 I&R- S1 I&RM LT1 P INSTITUTIONAL AND RECREATIONAL USES 31a. Marijuana and/or medical marijuana cultivation • • • • • • • • • • • • • • • • • • • • • • 31b. Cannabis and/or marijuana distributer • • • • • • • • • • • C9 • • • • • C9 • • • 31c. Cannabis and/or marijuana • • • • • • • • • • • C9 • • • • • C9 • • • manufacturer or processor 31d. Cannabis and/or marijuana retail sales: storefront • • • • • C9 C9 C9 C9 C9 • • • • • • • • • • • 31e. Cannabis and/or marijuana retail sales: non- storefront (deliveries) • • • • • C9 C9 C9 C9 C9 • C9 • • • • • C9 • • • • 31f. Cannabis and/or marijuana research and development and/or testing laboratories • • • • • • • • • • • C9 • • • • • C9 • • • • 1 Uses proposed in this zone are subject to verification of consistency with the adopted master plan. Uses not specified in the master plan, could be allowed, subject to the review process indicated in this matrix, if the proposed use is determined to be compatible with the adopted master plan. Residential uses shall not be permitted on any site or parcel of land on which residential uses are expressly prohibited by the general plan. 2 This use is subject to the requirements of the referenced Municipal Code article or section. 3 If residential uses exist, accessory uses shall be permitted. 4 For the purposes of this table, the symbols in the non-shaded areas shall have the following meaning: C—Conditional Use Permit; MC—Minor Conditional Use Permit; P—Permitted; •—Prohibited; and S—Special Use Permit. 5 Six-hundred--fifty-foot separation required between sober living homes, or from state licensed alcohol or drug abuse recovery or treatment facilities. CMMC 13-311(a)(10)(i). 6 Subject to the separation requirement set forth in sections 13-322(a)(3) and 13-323(b). 7 Small boardinghouses shall locate at least six hundred fifty (650) feet from any other small boardinghouse. Large boardinghouses shall be located at least one thousand (1,000) feet away from any other boardinghouse. 8 Uses prohibited in the base zoning district of a mixed-use overlay zone shall also be prohibited in the overlay zone. 9 Prohibited at the SoCo property, 3303 through 3323 Hyland Ave. 10 Emergency shelters located on sites owned, controlled, and/or operated by the city in the MP and/or the PDI zone are a permitted use and the standards in section 13-200.79(1), (2), (4), (8), (10) and (13) do not apply to such uses. ARTICLE 21. LOCATION OF MARIJUANA CANNABIS DISTRIBUTING, MANUFACTURING, RESEARCH AND DEVELOPMENT AND TESTING LABORATORIES 13-200.90. Purpose. The purpose of this article is to regulate the location of marijuana cannabis distributing facilities, manufacturing sites, research and development laboratories and testing laboratories 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 marijuana cannabis businesses. 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. 13-200.92. Marijuana Cannabis distributing facilities, manufacturing sites, research and development laboratories, and testing laboratories. (a) Marijuana Cannabis distribution, manufacturing, 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 both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection (the “Green Zone”). (b) A conditional use permit shall be required and may be issued to allow the location of any business engaged in the distribution, manufacturing, researching and developing, or testing of marijuana cannabis in the MP or PDI zones pursuant to subsection (a) of this section, subject to the following conditions: (1) The requirements of Chapter III of this title have been met; (2) The findings for granting a conditional use permit in accordance with section 13-29(g) are met; (3) The applicant obtains a marijuana cannabis business license pursuant to Chapter VI of Title 9 of this Code; and (4) 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. 13-200.93. Cannabis retail storefront and non-storefront uses. (a) Cannabis retail storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts. Attachment 1a (b) Cannabis retail non-storefront uses are prohibited in all zone districts within the city, except for the commercial zone districts and within the Green Zone. (c) The following planning application shall be required for cannabis retail uses: (1) A conditional use permit shall be required for retail storefronts and non-storefronts; and (2) An amendment to the approved conditional use permit shall be required for existing licensed cannabis distribution or manufacturing businesses to operate a retail non- storefront under the existing business and within the same licensed premise. The amendment shall be processed as a minor conditional use permit. (d) A conditional use permit may be issued to allow the location of a retail cannabis use pursuant to subsections (a) and (b) of this section, subject to the following conditions: (1) The requirements of Chapter III of this title have been met; (2) The findings for granting a minor or conditional use permit pursuant to section 13-29(g) are met; (3) The applicant obtains a cannabis business license for the location pursuant to Chapter VI of Title 9 of this Code; and (4) The use is conducted in compliance with all applicable state and local laws. (e) No cannabis retail storefront use shall be located: (1) Within one-thousand (1,000) feet from a school, playground, childcare or daycare center, or homeless shelter that is in operation at the time of submission of a completed Cannabis Business Permit application; (2) Within five-hundred (500) feet of the permitted location of another cannabis retail storefront that exists at the time of submission of a completed Cannabis Business Permit application; (3) All distances shall be measured in a straight line from the closest property line of the lot where the cannabis retail use is to be located to the closest property line of a school, playground, childcare or daycare center, homeless shelter, youth center or licensed cannabis retail storefront; (4) All distances shall be measured without regard to the boundaries of the city and and/or intervening structures or other barriers, except only for properties separated by the Interstate 405 freeway for which the distances set forth in subsections (1) and (2) shall be measured as the most direct pedestrian route between properties; (5) At a property as for which the zoning administrator, director, planning commission or other review authority determines, based on a preponderance of the evidence, that unpermitted and/or illegal cannabis activity involving sales, delivery and/or dispensing has taken place at any time in the 180 days preceding an application under this Article. (6) The zoning administrator, director or planning commission may grant relief to an otherwise qualified applicant from the prohibitions of sub-section (e)(5) for good cause based on a finding supported by a preponderance of the evidence that: i. The unpermitted use has ceased for a period of not less than 180 days; ii. The applicant is a purchaser of the property and not otherwise ineligible or the applicant is leasing the property from a purchaser or owner who is not ineligible to hold a cannabis business permit pursuant to section 9-490; and iii. The city has been reimbursed for any and all expenditure of public funds and resources, including all costs, expenses (including but not limited to the salaries of peace and/or code enforcement officers) and/or attorney’s fees, incurred in investigating, abating or attempting to abate the unpermitted use or uses, whether or not any type of civil, criminal or administrative proceedings have been commenced against the property. (7) A determination and/or finding under sub-sections (e)(5) and/or (6) is subject to the appeal provisions of Chapter IX of Tile 2 of this Code. (f) Retail storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9: (1) Opaque window coverings unless required by the City for security purposes are prohibited; (2) Permanent security or safety bars shall not be placed on any interior or exterior windows or door, unless required by the City for security purposes; (3) Directional signage to the use including but not limited to A-frame signs, sandwich board signs, banners, or flags are prohibited; (4) No use shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the premises of the commercial cannabis business or elsewhere including, but not limited to, the public right-of-way; (5) Uses shall comply with the landscaping requirements set forth in Chapter VII of this title including bringing the site landscaping into conformance when feasible as determined by the director; (6) Parking requirements shall be subject to Section 13-89; (7) The hours of operation may be established as part of the planning application subject to the final review authority and may be more restrictive than those set forth in Chapter VI of Title 9. Modification of operation hours when established as part of the planning application shall be subject to an amendment of the planning application; (8) Drive-through services or walk-up window services are prohibited; (9) Outdoor seating or patio areas are prohibited; (10) Special events that include live entertainment, dancing, and/or amplified music, or that are otherwise visible and/or audible from the public right-of-way, are prohibited; (11) All cannabis products shall be secured after business hours in a locked container under 24-hour video surveillance; and (12) For uses within two hundred (200) feet of a residential zone, all exterior lighting shall be shielded and/or directed away from residential areas. In addition, trash facilities shall be screened from view and designed and located appropriately to minimize potential noise and odor impacts to adjacent residential areas. (g) Non-storefront uses shall be subject to the following development standards in addition to those contained in Chapter VI of Title 9: (1) Uses may operate independently from a retail storefront or as a part of, and in conjunction with, a permitted storefront, distribution, or manufacturing facility; (2) Parking requirements shall be subject to Section 13-89 and shall also include parking spaces for delivery vehicles; (3) All deliveries to customers shall be completed by 10:00 p.m.; and (4) The general public shall not be permitted to enter the premises of a non-storefront retail use. (h) Except as specifically authorized in this article, all other cannabis retail uses such as but not limited to lounges and cafes are expressly prohibited in the city. (i) 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. (j) Any cannabis use, including but not limited to those involving sale, delivery and/or dispensing, that is not permitted, licensed and otherwise in full compliance with all applicable provisions of this Code and state and local law, shall not be considered a legally non-conforming use pursuant to, and notwithstanding any contrary provisions of, Chapter IX of this title. 13-200.943. 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. (Ord. No. 16-15, § 5, 11-8-16; Ord. No. 18-04, § 4, 4-3-18) 13-200.954. Violations. Violations of this article shall be punishable pursuant to the provisions of section 13-16. (Ord. No. 16-15, § 5, 11-8-16; Ord. No. 18-04, § 4, 4-3-18) CHAPTER IV. CITYWIDE LAND USE MATRIX TABLE 13-30 CITY OF COSTA MESA LAND USE MATRIX ZONES LAND USES R1 R2- MD R2- HD R3 AP CL C1 C2 C1-S1 TC1 MG MP PDR- LD1 PDR- MD1 PDR- HD1 PDR- NCM1 PDC1 PDI1 I&R1 I&R- S1 I&RM LT1 P INSTITUTIONAL AND RECREATIONAL USES 31a. Medical marijuana dispensary • • • • • • • • • • • • • • • • • • • • • • 31ab. Marijuana and/or medical marijuana cultivation • • • • • • • • • • • • • • • • • • • • • • 31bc. Cannabis and/or marijuana distributer • • • • • • • • • • • C9 • • • • • C9 • • • 31cd. Cannabis and/or marijuana manufacturer or processor • • • • • • • • • • • C9 • • • • • C9 • • • • 31d. Cannabis and/or marijuana retail sales: storefront • • • • • C9 C9 C9 C9 C9 • • • • • • • • • • • • 31e. Cannabis and/or marijuana retail sales: non-storefront (deliveries) • • • • • C9 C9 C9 C9 C9 • C9 • • • • • C9 • • • • 31f. Cannabis and/or marijuana research and • • • • • • • • • • • C9 • • • • • C9 • • • • development and/or testing laboratories 1 Uses proposed in this zone are subject to verification of consistency with the adopted master plan. Uses not specified in the master plan, could be allowed, subject to the review process indicated in this matrix, if the proposed use is determined to be compatible with the adopted master plan. Residential uses shall not be permitted on any site or parcel of land on which residential uses are expressly prohibited by the general plan. 2 This use is subject to the requirements of the referenced Municipal Code article or section. 3 If residential uses exist, accessory uses shall be permitted. 4 For the purposes of this table, the symbols in the non-shaded areas shall have the following meaning: C—Conditional Use Permit; MC—Minor Conditional Use Permit; P—Permitted; •—Prohibited; and S—Special Use Permit. 5 Six-hundred--fifty-foot separation required between sober living homes, or from state licensed alcohol or drug abuse recovery or treatment facilities. CMMC 13-311(a)(10)(i). 6 Subject to the separation requirement set forth in sections 13-322(a)(3) and 13-323(b). 7 Small boardinghouses shall locate at least six hundred fifty (650) feet from any other small boardinghouse. Large boardinghouses shall be located at least one thousand (1,000) feet away from any other boardinghouse. 8 Uses prohibited in the base zoning district of a mixed-use overlay zone shall also be prohibited in the overlay zone. 9 Prohibited at the SoCo property, 3303 through 3323 Hyland Ave. 10 Emergency shelters located on sites owned, controlled, and/or operated by the city in the MP and/or the PDI zone are a permitted use and the standards in section 13-200.79(1), (2), (4), (8), (10) and (13) do not apply to such uses. ORDINANCE NO. 2021-X2 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AMENDING SECTION 9-29.5 OF ARTICLE 5 (ADMINISTRATION, APPLICATION AND PROCEDURES) OF CHAPTER I (BUSINESS TAX) AND SECTIONS 9-116, 9-119, 9-120 & 9-121 OF CHAPTER II (REGULATION OF CERTAIN BUSINESSES) AND CHAPTER VI (MARIJUANA BUSINESS PERMITS) OF TITLE 9 (LICENSES AND BUSINESS REGULATIONS) TO ESTABLISH THE TAX RATE, OPERATING REQUIREMENTS AND STANDARDS FOR CANNABIS USES, INCLUDING RETAIL CANNABIS STOREFRONT AND NON-STOREFRONT USES TO IMPLEMENT THE CITY OF COSTA MESA RETAIL CANNABIS TAX AND REGULATION MEASURE (MEASURE Q) WHEREAS, the City of Costa Mesa, pursuant to its police power, may adopt regulations to protect the health, safety and welfare of the public, Cal. Const. art. XI, § 7, Cal. Gov. Code § 37100, and thereby is authorized to declare what use and condition constitutes a public nuisance; and WHEREAS, on November 3, 2020, city voters approved the “City of Costa Mesa Retail Cannabis Tax and Regulation Measure”, also known as Measure Q; WHEREAS, Measure Q authorizes the City Council to adopt an ordinance which permits and regulates retail cannabis storefront (dispensaries) and non-storefront (delivery) businesses; WHEREAS, Measure Q authorizes the City Council to impose a four percent (4%) to seven percent (7%) gross receipts tax on retail cannabis businesses. In addition, Measure Q requires retail cannabis businesses to meet certain operating requirements including permitted zones, minimum of one thousand feet (1,000’) from sensitive uses such as schools, childcare centers, playgrounds and homeless shelters, security measures, and labor peace agreement for businesses with two or more employees; WHEREAS, this Ordinance is necessary to implement Measure Q and establish the minimum operating requirements and development standards in the Costa Mesa Municipal Code to tax, review, and regulate retail cannabis storefront and non-storefront businesses in the City; WHEREAS, Ordinance No. 2021-xx has been reviewed for compliance with the California Environmental Quality Act (CEQA), the CEQA guidelines, and the City’s environmental procedures. The Code Amendment has been found to be exempt pursuant to CEQA Guidelines Section 15061(b)(3) (General Rule) and Section 15308 (Class 8, Actions by Regulatory Agencies for the Protection of the Environment) because a recommendation is not a final action and the recommended ordinance will not have a significant effect on the environment. The Code Amendment is also exempt pursuant to CEQA Guidelines Section 15301 (Class 1, Existing Facilities), Section 15303 (Class 3, New Construction or Attachment 2 Conversion of Small Structures), and Section 15332 (Class 32, In-fill Development Projects) because future construction for retail cannabis businesses will largely be within existing buildings for interior tenant improvements that will also not have significant effect on the environment; WHEREAS, the City Council finds that the provisions of this Ordinance are consistent with the City of Costa Mesa’s General Plan; and WHEREAS, all legal prerequisites prior to the adoption of this ordinance have occurred. THE COSTA MESA CITY COUNCIL DOES HEREBY ORDAIN AS FOLLOWS: Section 1: Title 9, Chapter I, Article 5, Section 9-29.5 of the Costa Mesa Municipal Code, is hereby amended to read as follows: 9-29.5. Cannabis tax. Notwithstanding any other provision of this Code, every person engaged in, managing, conducting, or carrying on any cannabis business defined in Chapter VI of this title, or any other marijuana and/or cannabis business, shall pay an annual business tax as follows: (a) Every person who is lawfully engaged in, managing, conducting, or carrying on a business as a cannabis distributor, manufacturer, and/or research and development laboratory, as set forth in Section 9-486(a), shall pay an annual business tax of one (1) percent based on the gross receipts of that business. (b) Every person who is lawfully engaged in, managing, conducting, or carrying on a business as a cannabis testing laboratory, as set forth in Section 9- 486(a), shall pay no annual business tax. (c) Every person who is engaged in, managing, conducting, or carrying on a business as a cannabis store-front retailer, as set forth in Section 9-486(a), and/or who otherwise sells, dispenses and/or furnishes cannabis anywhere within the city, shall pay an annual business tax of seven (7) percent based on the gross receipts of that business. (d) Every person who is engaged in, managing, conducting, or carrying on a business as a cannabis non-store front retailer, as set forth in Section 9- 486(a), and/or who otherwise delivers cannabis anywhere within the city, shall pay an annual business tax of seven (7) percent based on the gross receipts of that business, subject to the applicable provisions of section 9- 40. (e) Every cannabis business that is engaged as a distributor, manufacturer, or research and development laboratory, that is also engaged in retail sales or delivery of the same cannabis products, shall pay the business tax as set forth in 9-29.5 subsections (c) and (d), as applicable, for the retail sale or delivery of the same cannabis and cannabis products and is not required to pay business taxes set forth in 9-29.5(a). The operator has the burden of proving that the cannabis or cannabis products involved in the distribution, manufacturing, and/or research and development are the same. (f) The proceeds of the tax set forth in sub-sections (a), (c), (d), and (e) shall be subject to an annual audit as scheduled by the City Manager or Director of Finance. Section 2: Title 9, Chapter II, Article 1, Sections 9-116, 9-119, 9-120 and 9-121 of the Costa Mesa Municipal Code, are each hereby amended to read as follows: 9-116. Issuing officer. “Issuing officer” shall mean the city council of Costa Mesa, the city manager, the Director of Finance, the fire chief, the chief of police, or the director of Economic and Development Services, as applicable, including such person’s designee. 9-119. Revocation or suspension of permits. A business tax registration certificate or any other permit issued under this title may be revoked or suspended on the following grounds: (a) Where said issuing officer has found and determined that the preservation of the public health, safety, peace and welfare necessitate revocation of said business tax registration certificate or permit. (b) Where the applicant or permittee has violated any applicable provisions of this title, other provisions of this Code as defined in section 1-35, order of the Health Officer or the Emergency Services Director and/or any other provision of law. (c) Where a business tax registration certificate or permit has been granted on false or fraudulent evidence, testimony, or application. (d) Where the applicant or permittee has violated the terms and provisions of said business tax registration certificate or permit. Exception. Notwithstanding the foregoing or any other provision of this title to the contrary, licenses issued to chiropractors, laboratory technicians, dentists, medical doctors, opticians, physical therapists, nurses, psychologists, pharmacists, veterinarians, accountants, advertising architects, landscape architects, building designers, attorneys, barbers, engineers, collection agencies, contractors, cosmetologists, private detectives, funeral directors, shorthand reporters, structural pest control operations, land surveyors, ship brokers, cleaners and dyers, electronic repair dealers, real estate agents and brokers, marriage counselors, auto dealers, boxers and wrestlers, furniture and bedding dealers and manufacturers, manufacturers of paints, petroleum activities, dealers in secondhand goods, or any other business, profession or trade where the determination of issuance or revocation of the right of any person to engage in such business, profession, or trade is solely vested in a state board or agency and is not otherwise regulated by this code, shall be issued upon filing the requisite application and payment of the requisite fees and shall not be subject to revocation or suspension except any such business tax registration certificate may be revoked for nonpayment of fees or upon revocation of the state board or agency license. 9-120. Permittee entitled to hearing prior to revocation or suspension. (a) No business tax registration certificate or permit shall be revoked or suspended until said permittee has had an opportunity for a hearing before the issuing officer. (b) Written notice of the revocation or suspension, the reasons therefore and the requirement to request a hearing shall be given by certified mail to a certificate holder or permittee’s last known mailing address or by such other method reasonably calculated to provide notice. (c) The revocation or suspension shall be final and effective after ten (10) calendar days following the date of mailing set forth in sub-section (b), unless the certificate holder or permittee files an application for a hearing with the city clerk prior to such effective date. There shall be no cost to the certificate holder or permittee for such a hearing under this section. (d) Except as otherwise provided in sub-section (e) the hearing shall be commenced within 30 calendar days of the fling of an application for hearing. Hearings conducted pursuant to this section shall be open to the public, shall not be conducted according to the technical or traditional rules relating to evidence, and shall provide, personally or by counsel or both, an opportunity for certificate holder or permittee to defend and present evidence on their behalf. At least ten calendar days prior to the hearing, certificate holder or permittee shall be provided with any documentation upon which the revocation or suspension is based. Following the close of the hearing the issuing officer shall within 30 days render a written decision whether or not to impose revocation or suspension. (e) Notwithstanding the foregoing, the city manager or director of finance may suspend, pending a hearing, any business tax registration certificate or permit where it has been determined by said official that an immediate suspension of the business tax registration certificate or permit is necessary for the protection of the public health, safety, peace and welfare. In the event of such a suspension, the director of finance shall, within twelve (12) hours after said suspension, cause to be served upon said business or permittee a written statement containing the grounds for said suspension, any written documentation upon which the revocation is based and a notice of hearing to show cause before the issuing officer why said permit should not be permanently revoked, which said hearing shall be commenced no later than five (5) calendar days following the service of said notice unless the parties thereto agree otherwise, and thereafter followed by a written decision pursuant to sub-section (d). 9-121. Appeal from the decision of the issuing officer. Appeals from decision of the hearing officer provided for herein shall be made in accordance with the procedure of Chapter IX of Title 2 of this Code. Section 3: Title 9, Chapter VI of the Costa Mesa Municipal Code, is hereby amended in its entirety to read as follows: CHAPTER VI. CANNABIS BUSINESS PERMITS 9-481. Purpose and intent. It is the purpose and intent of this chapter to regulate the distributing, manufacturing, processing, research and development, retail sale, 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 cannabis business within the city. Nothing in this chapter is intended to authorize the possession, use, or provision of cannabis 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. 9-482. Legal authority. Pursuant to Sections 5 and 7 of Article XI of the California Constitution and the provisions of Division 10 of the Business and Professions Code, the city is authorized to adopt ordinances that establish standards, requirements and regulations for local licenses and permits for cannabis and cannabis-related activity. 9-482.5 Authority of the City Manager The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter as may be necessary to administer and enforce the provisions of this Chapter and any other ordinances, regulations or laws relating to and affecting the permitting and operations of commercial cannabis businesses. The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter concerning the applications, the application process, the information required of applicants, the application procedures, and the administration and procedures to be used and followed in the application process for permit applications and requests for permit changes or modifications pursuant to this Chapter. 9-483. Cannabis 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, furnishing, distribution, delivery, or sale of cannabis or a cannabis product is expressly prohibited in the city. 9-484. Compliance with laws. It is the responsibility of the owners and operators of the cannabis 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. 9-485. Definitions. Unless otherwise defined in this chapter or in chapter I of Title 13, the words used in this chapter shall have the same definitions ascribed to them in Division 10 of the Business and Professions Code or the definitions of the Health and Safety Code applicable to school, child daycare, playground and emergency shelter. 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 and 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 and Safety Code. Cannabis business permit means a regulatory permit issued by the city pursuant to this chapter to a cannabis business, and is required before any cannabis activity may be conducted in the city. Cannabis goods means cannabis and/or cannabis products. Cannabis product or manufactured cannabis product or product means cannabis that has undergone a process whereby the plant material is transformed into a concentrate for internal consumption or topical application, including, but not limited to, concentrated cannabis, an edible cannabis product, or a topical cannabis product containing cannabis or concentrated cannabis in combination with other ingredients. Caregiver or primary caregiver has the same meaning as that term is defined in section 11362.7 of the California Health and Safety Code. City manager shall mean the city manager of the city or designee. Director shall mean the city’s Director of the Economic and Development Services department or designee, unless otherwise specified. Dispensing means any activity involving the retail sale of cannabis or cannabis products. Distributor means a person or entity that engages in distribution. The direct and/or retail sale, distribution, or furnishing of any cannabis or cannabis product to any consumer or end user by a distributor is expressly prohibited, unless otherwise authorized pursuant to this chapter. Edible cannabis product means manufactured cannabis that is intended to be used, in whole or in part, for oral human consumption including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the California Food and Agricultural Code. An edible cannabis product is not considered food as defined by California Health and Safety Code Section 109935 or a drug as defined by California Health and Safety Code Section 109925. Free sample means any amount of cannabis goods provided to a patron of a business or member of the public without cost or payment or exchange for any other thing of value. Green Zone means those portions of the manufacturing park (MP) and planned development industrial (PDI) zones that are located both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection. Labor Peace Agreement has the same meaning set forth in Business and Professions Code section 26001. Manufacturing site means a location where cannabis products are manufactured. Marijuana means “cannabis,” as that term is defined in this chapter. Marijuana activity and/or cannabis activity includes manufacture, processing, laboratory testing, research and development, transporting, delivery, dispensing, distribution, furnishing, giving away or sale or any other activity involving cannabis or a cannabis product. Marijuana business and/or cannabis business means any business or operation which engages in any marijuana or cannabis activity. Marijuana business permit has the same meaning as cannabis business permit. Patient or qualified patient shall have the same definition as California Health and 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 and Safety Code section 11362.5. For purposes of this chapter, a qualified patient shall include a person with an identification card as that term is defined by California Health and Safety Code section 11362.7 et seq. Person with an identification card shall have the meaning given that term by California Health and Safety Code section 11362.7. Processing and processor shall have the same meaning as manufacturing and manufacturer, respectively. Property shall mean any single development lot that has been subdivided bearing its own assessor’s parcel number or with an approved subdivision map or condominium map unless the context clearly indicates a different meaning. Research and development laboratory means a facility, entity, or site in the city that performs research into and/or the development of cannabis or 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 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 cannabis business permit for laboratory testing from the city and is currently in compliance with all applicable state and local laws and regulations pertaining to the cannabis business and cannabis activities. 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 means the State of California, including any of its departments, divisions, and/or bureaus. State license means a permit or license issued by the state to engage in cannabis activity. 9-486. Type of authorized cannabis businesses permitted. (a) One (1) or more of the following types of adult (A-license) and/or medical (M- license) cannabis business may be permitted to operate within the city: 1. Cannabis distributor (includes license classification type 11); 2. Cannabis manufacturer (includes license classification type 6 and 7); 3. Cannabis testing laboratory (includes license classification type 8); 4. Cannabis retail - storefront (includes license classification type 10); 5. Cannabis retail - non-storefront (includes license classification type 9); and 6. Cannabis research and development laboratory. (b) Businesses permitted pursuant to this chapter shall not engage in the retail sale, delivery or dispensing of cannabis, cannabis product, hemp or hemp products unless expressly permitted to do so pursuant to the terms of their cannabis business permit. (c) No person may engage in any type of cannabis business that is not specifically authorized pursuant to this section and this code, including, but not limited to, cultivating cannabis. (d) The City Council may by resolution limit and/or restrict the number of cannabis retail permits available for issuance and/or renewal. 9-487. Cannabis business permit required to engage in a cannabis business. No person may engage in any cannabis business or in any cannabis activity within the city including manufacturing, processing, laboratory testing, transporting, dispensing, distribution, or sale of cannabis or a cannabis product unless the person: 1) has a valid cannabis business permit from the city that authorizes the specific business and activity at specific location; 2) has a valid business license issued to the entity that is listed on the cannabis business permit; and 3) is currently in compliance with all other applicable state and local laws and regulations pertaining to the cannabis business and cannabis activity. 9-487.5. Change in business name. No operator shall operate, conduct, manage, engage in, or carry on a cannabis business under any name other than the business name specified in the permit and/or any “doing business as” or “DBA”, or “fictitious business name” or “FBN”, provided in the permit application and/or business license. Proof of the “DBA” or “FBN” filing with the County Clerk Recorder shall be required. Any approved changes and/or updates to the permit may require payment of fees as set by resolution of the City Council. 9-488. Term of permit-Fees. (a) A cannabis business permit shall be valid for two (2) years from the date of issue, unless otherwise suspended or revoked, and may be renewed bi-annually thereafter, provided the permittee is in compliance with the provisions of this chapter. (b) Cannabis business permit application fees and renewal fees shall be established by resolution of the city council as may be amended from time to time. 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 cannabis business to operate within the city, until the State of California, or its respective departments or divisions, reinstates or reissues the State license within 90 days. Should the state license remain suspended for 90 days or longer, any permit issued pursuant to this chapter shall expire and be of no further force and effect. Should the State of California, or any of its departments or divisions, revoke or terminate the license of a cannabis business, such revocation or termination shall also revoke or terminate the ability of a business permitted pursuant to this chapter including the persons and entities set forth in section 9-490(c) to operate any cannabis business within the city for a period of five years from the date of such revocation or termination. 9-490. Denial and revocation. (a) Revocation. A cannabis business permit may be revoked or suspended pursuant to the procedures of section 9-120 for failing to comply with the terms of the permit, the applicable provisions of this chapter, this Code, city regulations, state law or regulations and/or any conditions of any other permit issued pursuant to this Code. (b) Denial. An application for a cannabis business permit may be denied where it fails to provide all required information, documentation and/or fees and/or where it does not or would not be able to comply with the applicable provisions of this chapter, this Code, city regulations and/or state law or regulations and/or where the applicant is otherwise ineligible for such permit. (c) Effect of revocation and denial. Whenever an application for a permit is denied, no other similar application by such applicant or permittee will be considered for a period of one (1) year from the date of the denial of an application. Whenever a permit has been revoked, no other similar application by such permittee shall be considered for a period of five (5) years from either the date the notice of the permit revocation was mailed or the date of the final decision of the city to revoke the permit, whichever is later. The prohibitions of this subsection shall also apply to the following: 1. Any individual whose permit was revoked or whose application was denied who later becomes a director or officer of a corporation, profit or nonprofit, or a member of a partnership or a person owning or possessing any portion of the shares of a corporation seeking to obtain a new permit. 2. A corporation, profit or nonprofit, whose permit was revoked, or application was denied, to any of its directors or officers or to any person who owned any portion of its shares, who attempts by way of a new corporation or using their individual names or becoming a member of a partnership or a director or officer or a person owning or possessing any portion of the shares in another corporation seeking to obtain a new permit. (d) Ineligibility. In addition to any other law, no person or entity shall be eligible for and/or receive a cannabis permit if that person or entity, or any director or officer of that entity or a person who owned any portion of that entity’s shares, engaged in unpermitted and/or illegal cannabis activity involving sales, delivery and/or dispensing in the city, or had an ownership interest in any property set forth in section 13-200.93(e)(5), in the five (5) years preceding an application under this chapter. A determination of ineligibility under this sub-section (d) may be made by the City Manager and shall be based on the preponderance of the evidence. 9-491. Appeals. Notwithstanding any other provision of this code, only a decision by the city manager to suspend, revoke or deny a cannabis business permit under this chapter shall be subject to appeal, which shall be governed by the procedures set forth in Chapter IX of Title 2 of this code. 9-492. Prohibition on transfer of cannabis business permits. In the event a permit holding cannabis business sells or transfers the business to a new owner and/or operates the business under a new entity and/or name not listed on the permit, the new owner must obtain a new cannabis business permit and business license prior to commencing or continuing operations. A cannabis business shall be deemed to have transferred to a new owner within the meaning of this section if person(s) or entities with controlling interest at the time the permit was first issued cease(s) at any time to possess controlling ownership interest and/or an ownership interest of less than fifty-one (51) percent. 9-493. City business license required. Prior to commencing operations, a cannabis business shall obtain and thereafter maintain a valid city business license pursuant to Chapter I of this title. Failure to do so will render the cannabis permit invalid. 9-494. Conditional use permit required. No cannabis business permit shall be issued, and no person shall conduct a cannabis business unless a conditional use permit has been issued therefore pursuant to the provisions of Title 13, Chapter IX, Article 21 of this Code. 9-495. Operating requirements for all cannabis businesses permitted under this chapter. (a) Records and recordkeeping. 1. Each owner and operator of a cannabis 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 cannabis business permit issued pursuant to this title), or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number of sales by the cannabis business during the previous twelve (12) 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. Each owner and operator shall keep and preserve for a period of no less than seven (7) years, all records as may be necessary to determine the amount of such tax the operator may have been liable to collect and remit to the city. 2. Each owner and operator of a cannabis business shall maintain a current register of the names and the contact information (including the name, address, telephone number, a copy of that person’s government issued identification, and email address) of anyone owning or holding an interest in the cannabis business, and separately of all the officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the cannabis business. The register required by this paragraph shall be provided to the city manager upon a reasonable request. 3. All cannabis 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 cannabis 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 cannabis 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 cannabis business shall implement sufficient security measures to deter and prevent the unauthorized entrance into areas containing cannabis or cannabis products, and to deter and prevent the theft of cannabis or cannabis products at the cannabis business. These security measures shall include: a. Establishing limited access areas accessible only to authorized cannabis business personnel; b. All cannabis and cannabis products shall be stored in a secured and locked room, safe, or vault, and shall be kept in a manner as to prevent diversion, theft, and loss; c. Sensors shall be installed to detect entry and exit from all secure areas; d. Having a professionally installed, maintained, and monitored alarm system; e. Any bars to be installed on the windows or the doors of the cannabis business for security purposes, if permitted by the city, shall be installed only on the interior of the building; f. Security personnel if utilized must be licensed by the State of California Bureau of Security and Investigative Services Personnel, shall comply with the requirements of California Business and Professions Code Chapters 11.4 and 11.5 of Division 3, and have a valid business license from the city; and g. Each cannabis 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. 2. Each cannabis business shall identify a designated security representative/liaison to the city, who shall be reasonably available to meet with the city manager regarding any security related measures or and operational issues. 3. A cannabis business shall notify the city manager within twenty-four (24) hours after discovering any of the following: a. Significant discrepancies identified during inventory, as set forth in the city’s administrative regulations; b. Diversion, theft, loss, or any criminal activity involving the cannabis business or any agent or employee of the cannabis business; or c. The loss or unauthorized alteration of records related to cannabis, registering qualifying patients, primary caregivers, or employees or agents of the cannabis business and/or cannabis sales. (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 cannabis business. (d) Compliance with laws. It is the responsibility of the owners and operators of the cannabis 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 cannabis business or any site-specific, additional operating procedures or requirements which may be imposed as conditions of approval of the location of the cannabis business. (e) Taxes. All cannabis 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 cannabis business shall cooperate with the city with respect to any reasonable request to audit the cannabis business’s 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. 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 rated at least A-:VIII in A.M. Best and Company’s Insurance Guide and either admitted and authorized to do business in California or is listed on the California Department of Insurance’s List of Approved Surplus Line Insurers. (g) Miscellaneous operating requirements. 1. Restriction on consumption. Cannabis shall not be consumed on the premises of any cannabis 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 cannabis business permit, or on any of the vehicles owned or used as part of the cannabis 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 cannabis business shall have in place a point-of-sale tracking system to track and report on all aspects of the cannabis business including, but not limited to, such matters as cannabis tracking, inventory data, and gross sales (by weight and by sale). The cannabis 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 city manager. 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 all state and local regulations. 5. There shall not be a physician located in or around any cannabis business at any time for the purpose of evaluating patients for the issuance of a cannabis prescription or card. 6. Signage and notices. a. In addition to the requirements otherwise set forth in this section, business identification signage for a cannabis business shall conform to the requirements of this Code, including, but not limited to, seeking the issuance of a city sign permit. b. Each entrance to a cannabis 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 cannabis business is prohibited. c. Business identification signage shall be limited to that needed for identification only. d. The business shall at all times comply with the advertising and marketing restrictions of Business and Professions Code sections 26150-26156, in addition to the requirements of this code. 7. Minors. a. Persons under the age of twenty-one (21) years shall not be allowed on the premises of a cannabis business, except as otherwise specifically provided for by state law. It is unlawful and a violation of this chapter for any person to employ any person at or for a cannabis business who is not at least twenty-one (21) years of age. b. The entrance to the cannabis business shall be clearly and legibly posted with a notice that no person under the age of twenty-one (21) years of age is permitted to enter upon the premises of the cannabis business except as specifically provided for herein. 8. Odor control. Odor control devices and techniques shall be incorporated in all cannabis businesses to ensure that odors from cannabis are not detectable off-site. 9. Display of permit and city business license. The original copy of the cannabis business permit issued by the city pursuant to this chapter and the city-issued business license shall be posted inside the cannabis business in a conspicuous location. 10. Background check. Every owner, manager, supervisor or employee of the cannabis business must submit fingerprints and other information deemed necessary by the city manager 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 cannabis business who has been convicted of a felony within the past seven (7) years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law. 11. Loitering. The owner and/or operator of a cannabis business shall prohibit loitering by persons outside the facility both on the premises and within fifty (50) feet of the premises. 12. Permits and other approvals. Prior to the establishment of any cannabis business or the operation of any such business, the person intending to establish a cannabis 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 cannabis business intends to operate. 13. Free samples. No cannabis business shall provide or cause to be provided any free sample of cannabis goods to any person within the city. 14. A licensed retailer may only sell cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials (h) Additional operating requirements for retail sale (storefront) businesses. In addition to every other requirement of this section, other than those set forth in subsection (i) (retail sale, non-storefront) that are expressly inapplicable, every business that sells cannabis as a storefront retailer shall comply with the following requirements: 1. The security plan shall include at least one (1) licensed private security guard or guards who shall be present at the premises twenty-four (24) hours per day, exterior lighting, and continuous video monitoring and recording of the interior and exterior of the premises. Video surveillance recordings must also include video of all entryways and exits of the premises. All video recordings shall be maintained for a minimum of ninety (90) days. 2. Both the private security guard and the business personnel shall monitor the premises and the immediate vicinity of the premises to ensure that patrons immediately leave the premises and do not consume cannabis in the vicinity of the retail business or on the property or in the parking lot, and shall ensure that persons do not loiter, linger, or otherwise congregate within fifty (50) feet of the entrance to the premises. 3. There shall be no on-site sales of alcohol or tobacco products, (excluding rolling papers and lighters) and no on-site consumption of food, alcohol, cannabis or tobacco by patrons. 4. Hours of operation shall be limited to: 7:00 a.m. to 10:00 p.m. daily. No licensed retail business shall be open to the public between the hours of 10:01 p.m. and 6:59 a.m. of any day. 5. The cannabis retail business shall notify patrons of the following both verbally and through posting of a sign in a conspicuous location: a. Unlawful sale, barter or distribution of cannabis is a crime and subject to a fine or arrest. b. Loitering on and around the retail premises is prohibited by California Penal Code section 647 and that patrons must immediately leave the premises and not consume cannabis in the vicinity and/or on the property or in the parking lot. c. A warning that patrons and/or employees may be subject to prosecution under federal cannabis laws, if applicable. d. That the use of cannabis may impair a person’s ability to drive a motor vehicle or operate machinery and that doing so is illegal. 6. No one under the age of twenty-one (21) shall be allowed to enter the premises of a cannabis business unless the business holds a retail medical cannabis license (M-license) issued by the State. 7. No person shall be permitted to enter the premises without government- issued identification, and cannabis goods may not be provided to any person, whether by purchase, trade, gift, or otherwise, who does not possess a valid government-issued identification and who does not meet the age requirements of this Chapter. 8. Electronic age verification device required. Proof of age of every person other than employees entering the business shall be verified with an electronic age verification device, prior to entry of the retail area or delivery to that person. The electronic age verification device may be mobile or fixed, and shall be able to retain a log of all scans that includes the following information: date, time, and age. Said log shall be kept for a minimum of one hundred eighty (180) business days and all records shall be made available to the City Manager upon request. 9. Point-of-sale tracking required. The business shall facilitate the sale, making available, furnishing and/or delivery of cannabis goods with a technology platform that uses point-of-sale technology to track, and database technology to record and store, the following information for each transaction involving the exchange of cannabis goods between the business and consumer: a. The date and time of transaction. b. The first name and employee number of the employee who processed the sale of cannabis goods on behalf of the business. c. A list of all the cannabis goods purchased, including the quantity purchased. d. The total amount paid for the sale, including the individual prices paid for cannabis or cannabis products purchased, and any amounts paid for taxes. 10. Cannabis retail businesses shall also record on the video surveillance system point-of-sale areas and areas where cannabis goods are displayed for sale. 11. Adequate signage shall clearly state who has inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location. 12. Shipments of cannabis goods may only be accepted during regular business hours. 13. Inventory shall be secured using a lockable storage system during non- business hours. 14. No cannabis product shall be visible from the exterior of the business. 15. All required labelling shall be maintained on all product, as required by State law, at all times. 16. A permitted commercial cannabis retail business shall have one hundred eighty (180) days after permit issuance by the city to commence operations, after which the permit shall be void and of no further force and effect. A permitted commercial cannabis retail business that ceases to operate for more than ninety (90) calendar days after commencing operations shall be deemed “abandoned” and the permit shall be forfeited. A permitted commercial cannabis business may temporarily suspend operations for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the director or city manager. For the purposes of this subsection, “operate” shall mean by the end of the one hundred eighty (180) day period. 17. Obtain and maintain at all times during the term of the permit the insurance required pursuant to subsection (f) of this section in the minimum amounts of two million dollars ($2,000,000.00), and enter into an agreement approved by the city attorney to defend, with attorneys of city’s choosing, indemnify, release and hold harmless the city, its city council, boards, commissions, officers and employees from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys’ fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to the permittee or the permittee’s activities. This indemnification shall include, but not be limited to, damages awarded against the city, if any, costs of suit, attorneys’ fees, and other expenses incurred in connection with such claim, action, or proceeding whether incurred by the permittee, city, and/or the parties initiating or bringing such proceeding, and shall not be limited by the types and/or amounts of insurance required herein; 18. For an applicant with two or more employees, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement as otherwise required by Business and Professions Code section 26105.5. (i) Additional operating requirements for retail sale (non-storefront) delivery businesses. In addition to every other requirement of this section, except only for subsection (h)(1) through (5) and (10) (retail sale, store-front), every business that sells and/or delivers cannabis as a non-store front retailer shall comply with the following requirements: 1. Commercial cannabis retail deliveries may be made only from a commercial cannabis retail business permitted by the City in compliance with this chapter, and in compliance with all State regulations. 2. All employees who deliver cannabis shall have valid identification and a copy of the retail business' cannabis business permit and State license at all times while making deliveries. 3. All commercial cannabis retail businesses shall maintain proof of vehicle insurance for any and all vehicles being used to transport cannabis goods as required by State law. 4. Deliveries may only take place during normal business hours of the commercial cannabis retail business. 5. During delivery, the delivery employee shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The delivery request documentation shall comply with State law. 6. A licensed delivery employee shall not leave the State of California while possessing cannabis products while performing his or her duties for the cannabis retailer. 7. A commercial cannabis retail business shall maintain a list of all deliveries, including the address delivered to, the amount and type of product delivered, and any other information required by the State. 8. A manifest with all information required in this section shall accompany any delivery person at all times during the delivery process and delivery hours. 9. Any delivery method shall be made in compliance with State law, as amended, including use of a vehicle that has a dedicated GPS device for identifying the location of the vehicle (cell phones and tablets are not sufficient). 10. Each delivery request shall have a receipt prepared by the commercial cannabis retail business with the following information: a. Name and address of the commercial cannabis retail business. b. The name of the employee who delivered the order. c. The date and time the delivery request was made. d. The complete delivery addresses. e. A detailed description of the cannabis goods requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested. f. The total amount paid for the delivery including any fees or taxes. g. At the time of the delivery, the date and time delivery was made, and the signature of the person who received the delivery. h. No cannabis delivery vehicle shall display signs, decals or any other form of advertisement. i. Inspections by an authorized City representative may be conducted anytime during regular business hours. 11. Delivery must be made to a physical address that is not on publicly owned land, a school, a day care, or a youth center. 12. The delivery employee shall not carry cannabis goods valued in excess of $5,000 at any time with no more than $3,000 of cannabis goods that are not already part of a customer order that was processed prior to leaving the premises. 13. Delivery must be made in person by a direct employee of the licensed retailer. An independent contractor, third-party courier service, or an individual employed through a staffing agency would not be considered directly employed by the licensed retailer. 9-496. Cannabis employees. (a) Any person who is an employee or who otherwise works within a cannabis business must be legally authorized to do so under applicable state law. (b) No cannabis business or owner thereof may employ any person who has been convicted of a felony within the past seven (7) years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law. (c) All employees must wear an identification badge while on the premises of the business, in a format authorized by the city manager. 9-497. Promulgation of administrative regulations. (a) The city manager is also authorized to establish any additional administrative rules, regulations, policies, procedures and/or standards governing the issuance, denial or renewal of cannabis business permits, or concerning any other subject necessary to carry out the purposes of this chapter. (b) Regulations promulgated by the city manager shall become effective upon the date of publication. Cannabis businesses shall be required to comply with all state and local laws and regulations, including, but not limited to, any rules, regulations policies, procedures and/or standards adopted by the city manager. (c) Such administrative rules, regulations and/or standards may include establishing standards and timing for application processing, including but not limited to providing priority for existing licensees in good standing. 9-498. Inspection and enforcement. (a) The city manager is charged with enforcing the provisions of the Costa Mesa Municipal Code, or any provision thereof, and may enter the location of a cannabis business at any time during the hours of operation without notice, and inspect the location of any cannabis 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 cannabis 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 cannabis 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 cannabis business under this chapter or under state or local law. 9-499. 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 cannabis business or persons related to, or associated with, the cannabis activity. Additionally, when there is determined to be an imminent threat to public health, safety or welfare, the city manager, or the chief of police, may take immediate action to temporarily suspend a cannabis 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 ($1,000.00) 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. Section 4: Environmental Compliance. This Ordinance has been reviewed for compliance with the California Environmental Quality Act (CEQA), the CEQA guidelines, and the City’s environmental procedures, and has been found to be exempt pursuant to CEQA Guidelines Section 15061(b)(3) (General Rule) and Section 15308 (Class 8, Actions by Regulatory Agencies for the Protection of the Environment) because a recommendation is not a final action and the recommended ordinance will not have a significant effect on the environment. The Code Amendment is also exempt pursuant to CEQA Guidelines Section 15301 (Class 1, Existing Facilities), Section 15303 (Class 3, New Construction or Conversion of Small Structures), and Section 15332 (Class 32, In- fill Development Projects) because future construction for retail cannabis businesses will largely be within existing buildings for interior tenant improvements that will also not have significant effect on the environment. Section 5: 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 6: Severability. If any chapter, article, section, subsection, subdivision, sentence, clause, phrase, word, or portion of this Ordinance, or the application thereof to any person, 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 portion of this Ordinance or its application to other persons. The City Council hereby declares that it would have adopted this Ordinance and each chapter, article, section, subsection, subdivision, sentence, clause, phrase, word, or portion thereof, irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, phrases, or portions of the application thereof to any person, be declared invalid or unconstitutional. No portion of this Ordinance shall supersede any local, state, or federal law, regulation, or codes dealing with life safety factors. Section 7: Effective Date. This Ordinance shall take effect and be in full force thirty (30) days from and after the passage thereof, and prior to the expiration of fifteen (15) days from its passage shall be published once in the ORANGE COAST DAILY PILOT, a newspaper of general circulation, printed and published in the City of Costa Mesa or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the office of the City Clerk five (5) days prior to the date of adoption of this Ordinance, and within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post in the office of the City Clerk a certified copy of this Ordinance together with the names and member of the City Council voting for and against the same. APPROVED AND ADOPTED on this ______ day of ___________, 2021. ________________________ John Stephens, Mayor ATTEST: _________________________ Brenda Green City Clerk I, BRENDA GREEN, CITY CLERK of the City of Costa Mesa, California, do hereby certify that the foregoing urgency ordinance was regularly introduced and adopted by the City Council of the City of Costa Mesa, California, at a regular meeting thereof held on the ___ day of __________, 2021, by the following vote of the City Council: AYES: NOES: ABSENT: ABSTAIN: APPROVED AS TO FORM: ____________________________ Kimberly Hall Barlow City Attorney CHAPTER I. BUSINESS TAX ARTICLE 5. ADMINISTRATION, APPLICATION AND PROCEDURES 9-29.5. Marijuana Cannabis tax. Notwithstanding any other provision of this Code, every person engaged in, managing, conducting, or carrying on any marijuana cannabis business defined in Chapter VI of this title, or any other marijuana and/or cannabis business, shall pay an annual business tax as follows: of six (6) percent based on the gross receipts of the business. (a) Every person who is lawfully engaged in, managing, conducting, or carrying on a business as a cannabis distributor, manufacturer, and/or research and development laboratory, as set forth in Section 9-486(a), shall pay an annual business tax of one (1) percent based on the gross receipts of that business. (b) Every person who is lawfully engaged in, managing, conducting, or carrying on a business as a cannabis testing laboratory, as set forth in Section 9-486(a), shall pay no annual business tax. (c) Every person who is engaged in, managing, conducting, or carrying on a business as a cannabis store-front retailer, as set forth in Section 9-486(a), and/or who otherwise sells, dispenses and/or furnishes cannabis anywhere within the city, shall pay an annual business tax of seven (7) percent based on the gross receipts of that business. (d) Every person who is engaged in, managing, conducting, or carrying on a business as a cannabis non-store front retailer, as set forth in Section 9- 486(a), and/or who otherwise delivers cannabis anywhere within the city, shall pay an annual business tax of seven (7) percent based on the gross receipts of that business, subject to the applicable provisions of section 9-40. (e) Every cannabis business that is engaged as a distributor, manufacturer, or research and development laboratory, that is also engaged in retail sales or delivery of the same cannabis products, shall pay the business tax as set forth in 9-29.5 subsections (c) and (d), as applicable, for the retail sale or delivery of the same cannabis and cannabis products and is not required to pay business taxes set forth in 9-29.5(a). The operator has the burden of proving that the cannabis or cannabis products involved in the distribution, manufacturing, and/or research and development are the same. (f) The proceeds of the tax set forth in sub-sections (a), (c), (d), and (e) shall be subject to an annual audit as scheduled by the City Manager or Director of Finance. CHAPTER II. REGULATIONS OF CERTAIN BUSINESSES 9-116. Issuing officer. “Issuing officer” shall mean the city council of Costa Mesa, the city manager, the director of finance, the fire chief, the chief of police, or the director of Economic and Development services director, as applicable, including such person’s designee. 9-119. Revocation or suspension of permits. Attachment 2a Any business tax registration certificate or any other permit issued under this title the business tax ordinance may be revoked or suspended in on the following grounds instances: (a) Where said issuing officer has found and determined that the preservation of the public health, safety, peace and welfare demand necessitate revocation of said business tax registration certificate or permit. (b) Where the applicant or permittee has violated any applicable provisions of this title the business tax ordinance or any other provisions of the Costa Mesa Municipal this Code as defined in section 1-35, order of the Health Officer or the Emergency Services Director and/or any other provision of law. (c) Where a business tax registration certificate or permit has been granted on false or fraudulent evidence, testimony, or application. (d) Where the applicant or permittee has violated the terms and provisions of said business tax registration certificate or permit. Exception. Notwithstanding the foregoing or any other provision of this title to the contrary, licenses issued to chiropractors, laboratory technicians, dentists, medical doctors, opticians, physical therapists, nurses, psychologists, pharmacists, veterinarians, accountants, advertising architects, landscape architects, building designers, attorneys, barbers, engineers, collection agencies, contractors, cosmetologists, private detectives, funeral directors, shorthand reporters, structural pest control operations, land surveyors, ship brokers, cleaners and dyers, electronic repair dealers, real estate agents and brokers, marriage counselors, auto dealers, boxers and wrestlers, furniture and bedding dealers and manufacturers, manufacturers of paints, petroleum activities, dealers in secondhand goods, or any other business, profession or trade where the determination of issuance or revocation of the right of any person to engage in such business, profession, or trade is solely vested in a state board or agency and is not otherwise regulated by this code, shall be issued upon filing the requisite application and payment of the requisite fees and shall not be subject to revocation or suspension except any such business tax registration certificate may be revoked for nonpayment of fees or upon revocation of the state board or agency license. 9-120. Permittee entitled to hearing prior to revocation or suspension. (a) No business tax registration certificate or permit shall be revoked or suspended until said permittee has had an opportunity for a public hearing before the issuing officer. (b) Written notice of the revocation or suspension, the reasons therefore and the requirement to request a hearing shall be given by mail to certificate holder or permittee’s last known mailing address or by such other method reasonably calculated to provide notice. (c) The revocation or suspension shall be final and effective after ten (10) calendar days following the date of mailing set forth in in sub-section (b), unless the certificate holder or permittee files an application for a hearing with the city clerk prior to such effective date. There shall be no cost to the certificate holder or permittee for such a hearing under this section. (d) Except as otherwise provided in sub-section (e) the hearing shall be commenced within 30 calendar days of the fling of an application for hearing. Hearings conducted pursuant to this section shall be open to the public, shall not be conducted according to the technical or traditional rules relating to evidence, and shall provide, personally or by counsel or both, an opportunity for certificate holder or permittee to defend and present evidence on their behalf. At least ten calendar days prior to the hearing, certificate holder or permittee shall be provided with any documentation upon which the revocation or suspension is based. Following the close of the hearing the issuing officer shall within 30 days render a written decision whether or not to impose revocation or suspension. (e) Notwithstanding the foregoing, the city manager or director of finance may suspend, pending a hearing, any business tax registration certificate or permit where it has been determined by said official that an immediate suspension of the business tax registration certificate or permit is necessary for the protection of the public health, safety, peace and welfare. In the event of such a suspension, the director of finance shall, within twelve (12) hours after said suspension, cause to be served upon said business or permittee a written statement containing the grounds for said suspension, any written documentation upon which the revocation is based and a notice of hearing to show cause before the issuing officer why said permit should not be permanently revoked, which said hearing shall be commenced no later than five (5) calendar days following the service of said notice unless the parties thereto agree otherwise, and thereafter followed by a written decision pursuant to sub-section (d). No business tax registration certificate or permit shall be revoked or suspended until said permittee has had a public hearing before the issuing officer and has had an opportunity either personally or by counsel or by both to defend himself and present evidence on his behalf. Such public hearing shall be proceeded by reasonable notice as provided in these rules and regulations. Notwithstanding the foregoing, the director of finance may suspend, pending such a hearing, any business tax registration certificate or permit where it has been determined that: (a) Upon the recommendation of the law enforcement agency or upon the recommendation of the city council that an immediate suspension of the business tax registration certificate is necessary for the protection of the public health, safety, peace and welfare. (b) In the event of such a suspension, the director of finance shall, within twelve (12) hours after said suspension, cause to be served upon said business or permittee a written statement containing the grounds for said suspension and a notice of hearing to show cause before the issuing officer why said permit should not be permanently revoked, which said hearing shall be held no later than five (5) days following the service of said notice. 9-121. Appeal from the decision of the issuing officer. Appeals from decision of the hearing officer provided herein shall be made in accordance with the procedure of Chapter IX of Title 2 of this section 2-300 through and including section 2-308 of the Costa Mesa Municipal Code. CHAPTER VI. MARIJUANA CANNABIS BUSINESS PERMITS 9-481. Purpose and intent. It is the purpose and intent of this chapter to regulate the distributing, manufacturing, processing, research and development, retail sale, 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 marijuana cannabis business within the city. Nothing in this chapter is intended to authorize the possession, use, or provision of marijuana cannabis 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. 9-482. Legal authority. Pursuant to Sections 5 and 7 of Article XI of the California Constitution and the provisions of Division 10 of the Business and Professions Code, the city is authorized to adopt ordinances that establish standards, requirements and regulations for local licenses and permits for cannabis and cannabis-related activity. 9-482.5. Authority of the city manager. The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter as may be necessary to administer and enforce the provisions of this Chapter and any other ordinances, regulations or laws relating to and affecting the permitting and operations of commercial cannabis businesses. The City Manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this Chapter concerning the applications, the application process, the information required of applicants, the application procedures, and the administration and procedures to be used and followed in the application process for permit applications and requests for permit changes or modifications pursuant to this Chapter. 9-483. Marijuana Cannabis 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, furnishing, distribution, delivery, or sale of marijuana cannabis or a marijuana cannabis product is expressly prohibited in the city. 9-484. Compliance with laws. It is the responsibility of the owners and operators of the marijuana cannabis 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. 9-485. Definitions. Unless otherwise defined in this chapter or in chapter I of Title 13, the words used in this chapter shall have the same definitions ascribed to them in Division 10 of the Business and Professions Code or the definitions of the Health and Safety Code applicable to school, child daycare, playground and emergency shelter . 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 and 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 and Safety Code. Cannabis business permit means a regulatory permit issued by the city pursuant to this chapter to a cannabis business, and is required before any cannabis activity may be conducted in the city. Cannabis goods means cannabis and/or cannabis products. Cannabis product or manufactured cannabis product or product means cannabis that has undergone a process whereby the plant material is transformed into a concentrate for internal consumption or topical application, including, but not limited to, concentrated cannabis, an edible cannabis product, or a topical cannabis product containing cannabis or concentrated cannabis in combination with other ingredients. Caregiver or primary caregiver has the same meaning as that term is defined in section 11362.7 of the California Health and Safety Code. City manager shall mean the city manager of the city or designee. Director shall mean the city’s Director of the Economic and Development Services department or designee. Dispensing means any activity involving the retail sale of cannabis or cannabis products from a dispensary. Distributor means a person or entity that engages in distribution. The direct and/or retail sale, distribution, or furnishing of any cannabis or cannabis product to any consumer or end user is expressly prohibited. Edible cannabis product means manufactured cannabis that is intended to be used, in whole or in part, for oral human consumption including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the California Food and Agricultural Code. An edible cannabis product is not considered food as defined by California Health and Safety Code Section 109935 or a drug as defined by California Health and Safety Code Section 109925. Free sample means any amount of cannabis goods provided to a patron of a business or member of the public without cost or payment or exchange for any other thing of value. Green Zone means those portions of the manufacturing park (MP) and planned development industrial (PDI) zones that are located both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection. Labor Peace Agreement has the same meaning set forth in Business and Professions Code section 26001. Manufacturing site means a location where cannabis products are manufactured. Marijuana means “cannabis,” as that term is defined in this chapter. Marijuana activity and/or cannabis activity includes manufacture, processing, laboratory testing, research and development, transporting, delivery, dispensing, distribution, furnishing, giving away or sale or any other activity involving cannabis or a cannabis product. Marijuana business and/or cannabis business means any business or operation which engages in any marijuana activity. Marijuana business permit has the same meaning as cannabis business permit. means a regulatory permit issued by the city pursuant to this chapter to a marijuana business, and is required before any marijuana activity may be conducted in the city. Patient or qualified patient shall have the same definition as California Health and 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 and Safety Code section 11362.5. For purposes of this chapter, a qualified patient shall include a person with an identification card as that term is defined by California Health and Safety Code section 11362.7 et seq. Person with an identification card shall have the meaning given that term by California Health and Safety Code section 11362.7. Processing and processor shall have the same meaning as manufacturing and manufacturer, respectively. Property shall mean any single development lot that has been subdivided bearing its own assessor’s parcel number or with an approved subdivision map or condominium map unless the context clearly indicates a different meaning. Research and development laboratory means a facility, entity, or site in the city that performs research into and/or the development of cannabis or 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 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 marijuana cannabis business permit for laboratory testing from the city is currently in compliance with all applicable state and local laws and regulations pertaining to the marijuana cannabis business and marijuana cannabis activities. 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 means the State of California, including any of its departments, divisions, and/or bureaus. State license means a permit or license issued by the state to engage in marijuana cannabis activity. 9-486. Type of authorized marijuana cannabis businesses permitted. (a) One (1) or more of the following types of adult (A-license) and/or medical (M-license) marijuana cannabis business may be permitted to operate within the city: (1) Marijuana Cannabis distributor (includes license classification type 11); (2) Marijuana Cannabis manufacturer (includes license classification type 6 and 7); (3) Marijuana Cannabis testing laboratory (includes license classification type 8); and (4) Cannabis retail – storefront (includes license classification type 10); (5) Cannabis retail – non-storefront (includes license classification type 9); and (6)(4) Marijuana Cannabis research and development laboratory. (b) Businesses permitted pursuant to this chapter shall not engage in the retail sale, delivery or dispensing or distribution of cannabis, marijuana, cannabis product, marijuana product, hemp or hemp products or any other item, unless expressly permitted to do so pursuant to the terms of their cannabis business permit. (c) No person may engage in any type of marijuana cannabis business that is not specifically authorized pursuant to this section and this code, including, but not limited to, dispensing and/or cultivating marijuana cannabis. (d) The City Council may by resolution limit and/or restrict the number of cannabis retail permits available for issuance and/or renewal. 9-487. Marijuana Cannabis business permit required to engage in a marijuana cannabis business. No person may engage in any marijuana cannabis business or in any marijuana cannabis activity within the city including manufacturing, processing, laboratory testing, transporting, dispensing, distribution, or sale of cannabis or a cannabis product including delivery thereof unless the person: (1) has a valid marijuana cannabis business permit from the city that authorizes the specific business and activity at specific location; and (2) has a valid business license issued to the entity that is listed on the cannabis business permit; and (3) is currently in compliance with all other applicable state and local laws and regulations pertaining to the marijuana cannabis business and marijuana cannabis activity, including, but not limited to, having a currently valid license therefore issued by the state. 9-487. Change in business name. No operator shall operate, conduct, manage, engage in, or carry on a cannabis business under any name other than the business name specified in the permit and/or any “doing business as” or “DBA”, or “fictitious business name” or “FBN”, provided in the permit application and/or business license. Proof of the “DBA” or “FBN” filing with the County Clerk Recorder shall be required. Any approved changes and/or updates to the permit may require payment of fees as set by resolution of the City Council. 9-488. Term of permit—Fees. (a) A marijuana cannabis 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) Cannabis Marijuana business permit and application fees shall be established by resolution of the city council as may be amended from time to time. 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 marijuana cannabis business to operate within the city, until the State of California, or its respective departments or divisions, reinstates or reissues the State license within 90 days. Should the state license remain suspended for 90 days or longer, any permit issued pursuant to this chapter shall expire and be of no further force and effect. Should the State of California, or any of its departments or divisions, revoke or terminate the license of a marijuana cannabis business, such revocation or termination shall also revoke or terminate the ability of a business permitted pursuant to this chapter including the persons and entities set forth in section 9-489(c)(2) to operate any cannabis business within the city for a period of five years from the date such revocation or termination. 9-490. Denial and revocation. A marijuana business 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. (Ord. No. 16-15, § 4, 11-8-16; Ord. No. 18-04, § 2, 4-3-18) (a) Revocation. A cannabis business permit may be revoked or suspended pursuant to the procedures of section 9-120 for failing to comply with the terms of the permit, the applicable provisions of this chapter, this Code, city regulation, state law or regulation and/or any condition of any other permit issued pursuant to this Code. (b) Denial. An application for a cannabis business permit may be denied where it fails to provide all required information, documentation and/or fees and/or where it does not or would not be able to comply with the applicable provisions of this chapter, this Code, city regulation and/or state law or regulation and/or where the applicant is otherwise ineligible for such permit. (c) Effect of revocation and denial. Whenever an application for a permit is denied, no other similar application by such applicant or permittee will be considered for a period of one (1) year from the date of the denial of an application. Whenever a permit has been revoked, no other similar application by such permittee shall be considered for a period of five (5) years from either the date the notice of the permit revocation was mailed or the date of the final decision of the city to revoke the permit, whichever is later. The prohibitions of this subsection shall also apply the following: 1. Any individual whose permit was revoked or whose application was denied who later becomes a director or officer of a corporation, profit or nonprofit, or a member of a partnership or a person owning or possessing any portion of the shares of a corporation seeking to obtain a new permit. 2. A corporation, profit or nonprofit, whose permit was revoked or application was denied, to any of its directors or officers or to any person who owned any portion of its shares, who attempts by way of a new corporation or using their individual names or becoming a member of a partnership or a director or officer or a person owning or possessing any portion of the shares in another corporation seeking to obtain a new permit. (d) Ineligibility. In addition to any other law, no person or entity shall be eligible for and/or receive a cannabis permit if that person or entity, or any director or officer of that entity or a person who owned any portion of that entity’s shares, engaged in unpermitted and/or illegal cannabis activity involving sales, delivery and/or dispensing in the city, or had an ownership (including a leasehold) interest in any property set forth in section 13-200.93(e)(5), in the five (5) years preceding an application under this chapter. A determination of ineligibility under this under this sub-section (d) may be made by the City Manager and shall be based on the preponderance of the evidence. 9-491. Appeals. Appeals from decisions of the city manager under this chapter shall be governed by the procedures set forth in Chapter IX of Title 2 of this Code. Notwithstanding any other provision of this code, only a decision by the city manager to revoke, suspend or deny a cannabis business permit under this chapter shall be subject to appeal, which shall be governed by the procedures set forth in Chapter IX of Title 2 of this code. An appellate body hearing an appeal related to a cannabis business permit or an appeal related to a conditional use permit where both such permits are subject to appeal, revocation and/or suspension, may in its discretion combine the appeal in order to hold a single hearing for both permits. 9-492. Prohibition on transfer of marijuana cannabis business permits. In the event a permit holding marijuana cannabis business sells or transfer the business to a new owner, the new owner must obtain a new marijuana cannabis business permit prior to commencing or continuing operations. A marijuana cannabis business shall be deemed to have transferred to a new owner within the meaning of this section if person(s) or entities with controlling interest at the time the permit was first issued cease(s) at any time to possess controlling ownership interest or an ownership interest of less than fifty-one (51) percent. 9-493. City business license required. Prior to commencing operations, a marijuana cannabis business shall obtain a city business license pursuant to Chapter I of this title. 9-494. Conditional use permit required. No marijuana cannabis business permit shall be issued, and no person shall conduct a marijuana cannabis business unless a conditional use permit has been issued therefore pursuant to the provisions of Title 13, Chapter IX, Article 21 of this Code. 9-495. Operating requirements for all marijuana cannabis businesses permitted under this chapter. (a) Records and recordkeeping. (1) Each owner and operator of a marijuana cannabis 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 marijuana cannabis business permit issued pursuant to this title), or at any time upon reasonable request of the city, each marijuana cannabis business shall file a sworn statement detailing the number of sales by the marijuana cannabis business during the previous twelve (12) 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 marijuana cannabis 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 marijuana cannabis business, and separately of all the officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the marijuana cannabis business. The register required by this paragraph shall be provided to the city manager upon a reasonable request. (3) All marijuana cannabis 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 marijuana cannabis 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 marijuana cannabis 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 marijuana cannabis business shall implement sufficient security measures to deter and prevent the unauthorized entrance into areas containing cannabis or cannabis products, and to deter and prevent the theft of cannabis or cannabis products at the marijuana cannabis business. These security measures shall include: a. Establishing limited access areas accessible only to authorized marijuana cannabis business personnel; b. All cannabis and cannabis products shall be stored in a secured and locked room, safe, or vault, and shall be kept in a manner as to prevent diversion, theft, and loss; c. Sensors shall be installed to detect entry and exit from all secure areas; d. Having a professionally installed, maintained, and monitored alarm system; e. Any bars to be installed on the windows or the doors of the marijuana cannabis business for security purposes shall be installed only on the interior of the building; f. Security personnel if utilized must be licensed by the State of California Bureau of Security and Investigative Services Personnel, shall comply with the requirements of California Business and Professions Code Chapters 11.4 and 11.5 of Division 3, and have a valid business license from the city; and g. Each marijuana cannabis 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. (2) Each marijuana cannabis business shall identify a designated security representative/liaison to the city, who shall be reasonably available to meet with the city manager regarding any security related measures or and operational issues. (3) A marijuana cannabis business shall notify the city manager within twenty-four (24) hours after discovering any of the following: a. Significant discrepancies identified during inventory, as set forth in the city’s administrative regulations; b. Diversion, theft, loss, or any criminal activity involving the marijuana business or any agent or employee of the marijuana cannabis business; or c. The loss or unauthorized alteration of records related to cannabis, registering qualifying patients, primary caregivers, or employees or agents of the marijuana cannabis business and/or cannabis sales. (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 marijuana cannabis business. (d) Compliance with laws. It is the responsibility of the owners and operators of the marijuana cannabis 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 marijuana cannabis business or any site-specific, additional operating procedures or requirements which may be imposed as conditions of approval of the location of the marijuana cannabis business. (e) Taxes. All marijuana cannabis 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 marijuana cannabis business shall cooperate with the city with respect to any reasonable request to audit the marijuana cannabis business’s 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. 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 rated at least A-:VIII in A.M. Best and Company’s Insurance Guide and either admitted and authorized to do business in California or is listed on the California Department of Insurance’s List of Approved Surplus Line Insurers. (g) Miscellaneous operating requirements. (1) Restriction on consumption. Cannabis shall not be consumed on the premises of any marijuana cannabis 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 marijuana cannabis business permit, or on any of the vehicles owned or used as part of the marijuana cannabis 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 marijuana cannabis business shall have in place a point-of-sale tracking system to track and report on all aspects of the marijuana cannabis business including, but not limited to, such matters as cannabis tracking, inventory data, and gross sales (by weight and by sale). The marijuana cannabis 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 city manager. (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 marijuana cannabis business at any time for the purpose of evaluating patients for the issuance of a marijuana cannabis prescription or card. (6) Signage and notices. a. In addition to the requirements otherwise set forth in this section, business identification signage for a marijuana cannabis business shall conform to the requirements of this Code, including, but not limited to, seeking the issuance of a city sign permit. b. Each entrance to a marijuana cannabis 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 marijuana cannabis business is prohibited. c. Business identification signage shall be limited to that needed for identification only. d. The business shall at all times comply with the advertising and marketing restrictions of Business and Professions Code sections 26150-26156, in addition to the requirements of this code. (7) Minors. a. Persons under the age of twenty-one (21) years shall not be allowed on the premises of a marijuana cannabis business, except as otherwise specifically provided for herein. It is unlawful and a violation of this chapter for any person to employ any person at or for a marijuana cannabis business who is not at least twenty-one (21) years of age. b. The entrance to the marijuana cannabis business shall be clearly and legibly posted with a notice that no person under the age of twenty-one (21) years of age is permitted to enter upon the premises of the marijuana business, except as specifically provided for herein. (8) Odor control. Odor control devices and techniques shall be incorporated in all marijuana cannabis businesses to ensure that odors from marijuana are not detectable off-site. (9) Display of permit and city business license. The original copy of the marijuana cannabis business permit issued by the city pursuant to this chapter and the city-issued business license shall be posted inside the marijuana cannabis business in a conspicuous location. (10) Background check. Every owner, manager, supervisor or employee of the marijuana cannabis business must submit fingerprints and other information deemed necessary by the city manager 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 marijuana cannabis business who has been convicted of a felony within the past seven (7) years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law. (11) Loitering. The owner and/or operator of a marijuana cannabis business shall prohibit loitering by persons outside the facility both on the premises and within fifty (50) feet of the premises. (12) Permits and other approvals. Prior to the establishment of any marijuana cannabis business or the operation of any such business, the person intending to establish a marijuana cannabis 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 marijuana cannabis business intends to operate. (13) Free samples. No cannabis shall provide or cause to be provided any free sample of cannabis goods to any person within the city. (14) A licensed retailer may only sell cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials (h) Additional operating requirements for retail sale (storefront) businesses. In addition to every other requirement of this section, other than those set forth in subsection (i) (retail sale, non- storefront) that are expressly made inapplicable, every business that sells cannabis as a storefront retailer shall comply with the following requirements: (1) The security plan shall include at least one (1) licensed private security guard or guards who shall be present at the premises twenty-four (24) hours per day, exterior lighting, and continuous video monitoring and recording of the interior and exterior of the premises. Video surveillance recordings must also include video of all entryways and exits of the premises. All video recordings shall be maintained for a minimum of ninety (90) days. (2) Both the private security guard and the business personnel shall monitor the premises and the immediate vicinity of the premises to ensure that patrons immediately leave the premises and do not consume cannabis in the vicinity of the retail business or on the property or in the parking lot, and shall ensure that persons do not loiter, linger, or otherwise congregate within fifty (50) feet of the entrance to the premises. (3) There shall be no on-site sales of alcohol or tobacco products, (excluding rolling papers and lighters) and no on-site consumption of food, alcohol, cannabis or tobacco by patrons. (4) Hours of operation shall be limited to: 7:00 a.m. to 10:00 p.m. daily. No licensed retail business shall be open to the public between the hours of 10:01 p.m. and 6:59 a.m. of any day. (5) The cannabis retail business shall notify patrons of the following both verbally and through posting of a sign in a conspicuous location: a. Unlawful sale, barter or distribution of cannabis is a crime and subject to a fine or arrest. b. Loitering on and around the retail premises is prohibited by California Penal Code section 647 and that patrons must immediately leave the premises and not consume cannabis in the vicinity and/or in the property or in the parking lot. c. A warning that patrons and/or employees may be subject to prosecution under federal cannabis laws, if applicable. d. That the use of cannabis may impair a person’s ability to drive a motor vehicle or operate machinery and that doing so is illegal. (6) No one under the age of twenty-one (21) shall be allowed to enter the premises of a cannabis business unless the business holds a retail medical cannabis license (M-license) issued by the State. (7) No person shall be permitted to enter the premises without government-issued identification, and cannabis goods may not be provided to any person, whether by purchase, trade, gift, or otherwise, who does not possess a valid government-issued identification and who does not meet the age requirements of this Chapter. (8) Electronic age verification device required. Proof of age of every person other than employees entering the business shall be verified with an electronic age verification device, prior to entry of the retail area or delivery to that person. The electronic age verification device may be mobile or fixed, and shall be able to retain a log of all scans that includes the following information: date, time, and age. Said log shall be kept for a minimum of one hundred eighty (180) business days and all records shall be made available to the City Manager upon request. (9) Point-of-sale tracking required. The business shall facilitate the sale, making available, furnishing and/or delivery of cannabis products with a technology platform that uses point-of-sale technology to track, and database technology to record and store, the following information for each transaction involving the exchange of cannabis goods between the business and consumer: a. The date and time of transaction. b. The first name and employee number of the employee who processed the sale of cannabis product on behalf of the business. c. A list of all the cannabis goods purchased, including the quantity purchased. d. The total amount paid for the sale, including the individual prices paid for cannabis or cannabis products purchased, and any amounts paid for taxes. (10) Cannabis retail businesses shall also record on the video surveillance system point-of-sale areas and areas where cannabis goods are displayed for sale. (11) Adequate signage shall clearly state who has inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location. (12) Shipments of cannabis goods may only be accepted during regular business hours. (13) Inventory shall be secured using a lockable storage system during non-business hours. (14) No cannabis product shall be visible from the exterior of the business. (15) All required labelling shall be maintained on all product, as required by State law, at all times. (16) A permitted commercial cannabis retail business shall have one hundred eighty (180) days after permit issuance by the city to commence operations, after which the permit shall be void and of no further force and effect. A permitted commercial cannabis retail business that ceases to operate for more than ninety (90) calendar days after commencing operations shall be deemed “abandoned” and the permit shall be forfeited. A permitted commercial cannabis business may temporarily suspend operations for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the director or city manager. For the purposes of this subsection, “operate” shall mean the direct retail sale of at least ten-thousand dollars ($10,000.00) in gross receipts to consumers by the end of the one hundred eighty (180) day period, for which the permittee shall bear the burden to establish by the records and payment of taxes as required under this chapter. (17) Obtain and maintain at all times during the term of the permit the insurance required pursuant to subsection (f) of this section in the minimum amounts of two million dollars ($2,000,000.00), and enter into an agreement approved by the city attorney to defend, with attorneys of city’s choosing, indemnify, release and hold harmless the city, its city council, boards, commissions, officers and employees from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys’ fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to the permittee or the permittee’s activities. This indemnification shall include, but not be limited to, damages awarded against the city, if any, costs of suit, attorneys’ fees, and other expenses incurred in connection with such claim, action, or proceeding whether incurred by the permittee, city, and/or the parties initiating or bringing such proceeding, and shall not be limited by the types and/or amounts of insurance required herein; (18) For an applicant with two or more employees, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement as otherwise required by Business and Professions Code section 26105.5. (i) Additional operating requirements for retail sale (non-storefront) delivery businesses. In addition to every other requirement of this section, except only for subsection (h)(1) through (5) and (10) (retail sale, store-front), every business that sells and/or delivers cannabis as a non-store front retailer shall comply with the following requirements: (1) Commercial cannabis retail deliveries may be made only from a commercial cannabis retail business permitted by the City in compliance with this chapter, and in compliance with all State regulations. (2) All employees who deliver cannabis shall have valid identification and a copy of the retail business' cannabis business permit and State license at all times while making deliveries. (3) All commercial cannabis retail businesses shall maintain proof of vehicle insurance for any and all vehicles being used to transport cannabis goods as required by State law. (4) Deliveries may only take place during normal business hours of the commercial cannabis retail business. (5) During delivery, the delivery employee shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The delivery request documentation shall comply with State law. (6) A licensed delivery employee shall not leave the State of California while possessing cannabis products and acting within the scope of employment as a delivery employee. (7) A commercial cannabis retail business shall maintain a list of all deliveries, including the address delivered to, the amount and type of product delivered, and any other information required by the State. (8) A manifest with all information required in this section shall accompany any delivery person at all times during the delivery process and delivery hours. (9) Any delivery method shall be made in compliance with State law, as amended, including use of a vehicle that has a dedicated GPS device for identifying the location of the vehicle (cell phones and tablets are not sufficient). (10) Each delivery request shall have a receipt prepared by the commercial cannabis retail business with the following information: a. Name and address of the commercial cannabis retail business. b. The name of the employee who delivered the order. c. The date and time the delivery request was made. d. The complete delivery addresses. e. A detailed description of the cannabis goods requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested. f. The total amount paid for the delivery including any fees or taxes. g. At the time of the delivery, the date and time delivery was made and the signature of the person who received the delivery. h. No cannabis delivery vehicle shall display signs, decals or any other form of advertisement. i. Inspections by an authorized City representative may be conducted anytime during regular business hours. (11) Delivery must be made to a physical address that is not on publicly owned land, a school, a day care, or a youth center. (12) The delivery employee shall not carry cannabis goods valued in excess of $5,000 at any time with no more than $3,000 of cannabis goods that are not already part of a customer order that was processed prior to leaving the premises. (13) Delivery must be made in person by a direct employee of the licensed retailer. An independent contractor, third-party courier service, or an individual employed through a staffing agency would not be considered directly employed by the licensed retailer. 9-496. Cannabis Marijuana employees. (a) Any person who is an employee or who otherwise works or volunteers within a marijuana cannabis business must be legally authorized to do so under applicable state law. (b) No marijuana cannabis business or owner thereof may employ any person who has been convicted of a felony within the past seven (7) years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law. (c) All employees must wear an identification badge while on the premises of the business, in a format proscribed authorized by the city manager. 9-497. Promulgation of administrative regulations. (a) The city manager is also authorized to establish any additional administrative rules, regulations and standards governing the issuance, denial or renewal of marijuana cannabis business permits, or concerning any other subject necessary to carry out the purposes of this chapter. (b) Regulations promulgated by the city manager shall become effective upon the date of publication. Cannabis 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 city manager. (c) Such administrative rules, regulations and/or standards may include establishing standards and timing for application processing, including but not limited to providing priority for existing licensees in good standing. 9-498. Inspection and enforcement. (a) The city manager is charged with enforcing the provisions of the Costa Mesa Municipal Code, or any provision thereof, and may enter the location of a marijuana cannabis business at any time during the hours of operation without notice, and inspect the location of any marijuana cannabis 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 marijuana cannabis 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 marijuana cannabis 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 marijuana cannabis business under this chapter or under state or local law. 9-499. 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 marijuana cannabis business or persons related to, or associated with, the marijuana cannabis activity. Additionally, when there is determined to be an imminent threat to public health, safety or welfare, the city manager, or the chief of police, may take immediate action to temporarily suspend a marijuana cannabis 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 ($1,000.00) 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. Attachment 3 Date: April 14, 2021 To: Costa Mesa City Council CC: Lori Ann Farrell Harrison – City Manager, Carol Molina – Finance Director From: Finance and Pension Advisory Committee (FiPAC) Subject: Gross Receipts Tax Rate for Retail Cannabis In November 2020, FiPAC was asked to make a recommendation for a Gross Receipts Tax Rate for the retail sales and delivery of cannabis. These sales were approved by Measure Q in November 2020. We discussed the topic at our December 2020, meeting. I deferred sending this letter until the issue came before Council. Since December some additional information is available. Background: In July 2020, Council voted to place on the November ballot Measure Q. With certain restrictions, Measure Q would allow legal retail sales and delivery of cannabis within Costa Mesa. The measure passed and imposes a Gross Receipts Tax ranging from 4% to 7%. It was left to Council to determine the actual rate. A vote of the people is required to impose a rate below 4%, or above 7%. The November ballot material stated the Gross Receipts Tax would raise approximately $3.0M annually. This estimate assumed a 7% tax rate and equates to about $43M of annual retail sales. A staff report presented at the September 1, 2020 Council meeting estimated annual revenue ranging from $1.4 - $3.1 million depending on the tax rate and number of retail stores. The City’s current year budget includes a modest $108,000 of cannabis tax revenue. Committee Discussion: The committee did not have a lot of information available to base a recommendation on. Primarily for this reason several members voted against making a recommendation at the time. Santa Ana has an 8% tax rate. Their current year’s budget forecasts $9.7 million of tax revenue equating to about $121M of retail sales. At the time, Staff estimated the need to add about five new staff positions to support retail sales and delivery, with Finance, Police, and Code Enforcement needing additional staff. At the time there was no cost estimate for the additional positions. In March 2020, Council voted to permanently reduce the tax rate associated with non- retail cannabis sales (Measure X) from 6% to 1%. Attachment 4 Since December: In March 2021, staff recommended and Council approved 7.25 additional staff positions. Estimated (fully loaded) annual cost of additional staff is $1.2M. Recommendation: FiPAC recommended a 7% tax rate. The vote was 4 to 3. The “no” votes were primarily due to the lack of information available at the time. Reasons for voting for 7% vs one of the lower rates: 1) The 7% rate is the highest option but a point lower than Santa Ana which may give Costa Mesa some advantage. 2) Did not have local data on the price elasticity of cannabis, but did not believe a point or two on the tax rate would have a significant impact on sales volume. 3) 7% helps compensate for the loss of revenue due to the Measure X permanent rate reduction. 4) 7% provides additional revenue to help fund the new staff positions. If there are any questions, please advise. Thank you __________________________ Ralph Taboada, Chair BAKER STHARBOR BLVDPLACENTIA AVEADAMS AVE FAIRVIEW RDSUNFLOWER AVE E 20TH ST SOUTH COAST DR E BAKER ST E 17TH ST W 19TH ST W 17TH ST VICTORIA ST ORANGE AVEPreliminary Draft Separation Distance Map 0 0.55 1.10.2 75 Miles °Sources: City of C osta Mesa businesslicense records; Department of H ealth Care Services (DHCS); Department of Social Services (DSS) Potential Sites Outside of MQ Sensitive Uses & Youth Center Areas - 288 Potential Sites Outside of MQ Sensitive Uses Area - 499 Commercially Zoned Sites - 1,195 Youth Centers (State's Definition) 600 ft Buffer: Youth Centers (State's Definition) MQ Sensitive Uses: Parks, Schools, Daycare Facilities, Homeless Shelter 1,000 ft Buffer: MQ Sensitive Uses Area Disclaimer: The City of Costa Mesa makesno guarantee as to the accuracy of any ofthe inforrmation provided and assumes noliability for any errors, omissions, or inaccuracies.Please note that the determination of a siteseligibility will only be determined once a requesthas been made and the potential eligibility calculated based on current distribution ofsensitive uses DRAF T O NL Y Attachment 5 NB405 FY GISLER AV IOWA ST SOUTH COAST DRHYLAND AVSCENIC AV CALIFORNIA ST MACARTHUR BLVD COUNTRY CLUB DRCADILLAC AVGIBRALTAR AVDAKOTA AVNEW HAMPSHIRE DR MINNESOTA AVMICHIGAN AVCINNAMON AVMETRO DR SICILY AVOREGON AVBERMUDA DRNEVADA AVWASHINGTON AVCORPORATE DR MONTANA AVWESTMINSTER DRHARBOR GATEWAY NALASKA AV SUNLAND WYHAITI CIRNB405 FY GISLER AV IOWA ST SOUTH COAST DRHYLAND AVSCENIC AV CALIFORNIA ST MACARTHUR BLVD COUNTRY CLUB DRCADILLAC AVGIBRALTAR AVDAKOTA AVNEW HAMPSHIRE DR MINNESOTA AVMICHIGAN AVCINNAMON AVMETRO DR SICILY AVOREGON AVBERMUDA DRNEVADA AVWASHINGTON AVCORPORATE DR MONTANA AVWESTMINSTER DRHARBOR GATEWAY NALASKA AV SUNLAND WYHAITI CIRMedical Marijuana Measure X Area 250 0 250 500 Feet ´ Not Allowed City Boundary City Freeways ± SOCO(Ineligible) Medical Marijuana Measure X Area Attachment 6 REEFER BLUES. BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... 24 U.C. Davis Sac. Just, L. Rev. 95 U.C. Davis Social Justice Law Review Summer, 2020 Article Melissa Perintang$ Copyright 0 2020 by the Regents of the University of California; Melissa Perlman REEFER SLUES: BUILDING SOCIAL EQUITY IN THE ERA OF MARIJUANA LEGALIZATION *96 Abstract This article is inspired by the convergence of entrepreneurship as a way to build social and economic value and the need for the equity conversation. Diversity in the market is what keeps it running, but the barriers to entry for minority entrepreneurs often prevent them from participating in the mainstream economy. With marijuana legalization on the horizon, this is quickly becoming another example of minority business owners being left out of the market. Politically marijuana legalization is a double-edged sword that both past and present Presidents were not willing to wield for differing reasons but the climate is changing. Presently, marijuana legalization has profited those that once claimed it was America's enemy number one, which does not seem right in my eyes and is what led me to write this piece. Importantly, states as well as the federal government need to be mindful of the social impact this will .have on minority communities across the country. Each state that chooses to legalize marijuana should have social equity at the forefront of their decision making because the legalization of marijuana could end up just being another chance for the white majority to bar Black and Brown cormnunilies from getting a fair chance, Not to mention how the War on Drugs has persecuted and locked up so many Black and Brown men for the very substance that the white man now sees to make a profit, hand over fist. The War on Drugs has just been another way for the federal government to police minority communities, and its failed attempts at lowering drug use rates have instead only really been successful in spreading propaganda about marijuana and its users. Michele Alexander refers to effects of the War on Drugs on minority communities as the New Jim Crow in her book, so appropriately titled; The New Jim Crow. To right the wrongs of the War on Drugs and encourage minority entrepreneurs to participate in the new legalized marijuana market, the federal government needs to remove marijuana from the schedule one list, which is noted in Cory Booker's Marijuana Justice Act, and each state that decides to legalize should require certain portion of minority applications for marijuana business licenses before opening the market up to the rest of the community and with the tax revenue from marijuana a percentage should be put towards a fund for zero interest loans to continue to promote minority business ownership, California has legalized marijuana and has created both legislative relief as well as economic support for minority run marijuana businesses through a Venture accelerator that not only provides financial assistance but also business acumen. Ameliorative relief is another important action for the states that decide to legalize to somehow make amends with those that have previous marijuana charges. But, none of this *97 will get done unless equity is part of the legalization conversation from the beginning and it is now on us to ensure we do not let our country's racist tendencies to continue hindering the lives of our minority communities. And, our minority communities deserve better. YWESrI-aw V 2021 Thomson Reuters. No claim to original U.S. Government Works. i REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... Table of Contents 1. PaT( 1 100 A. Historical Basis for Criminalization 100 B. The War on Drugs 101 C. The "Justice " System's Role in Criminalization 102 D. Status Criminalization on the Black Community Today 104 E. Assessing Criminalization 105 II. PAI Il IV(, A. The Stales' Counterculture Uprising 106 B. Federal Implications to Legalization 106 C. Current Legalization Statistics 107 D. What's Coming Next for Legalization 108 111, Rad III 108 A. Societal Barriers Due to Marijuana Prohibition 108 B. Economic Impact of Criminalization on Minority Communities 110 C. The Need for MarUuana Jusdee Reform I H D. Attempting Restorative Justice Ili IV. Pn,r IV 1 W A. No Legalization Without Social Equity 114 8, The Barriers to Enter the Legal Cannabis Markel for Minorily Communities 116 C. They Executive "Gateway" to Legalization 117 D. Weed and the Future of the While House 118 E. The Politics of Legalization 119 F. Making Room for Social Justice in the Legalization Conversation 121 G. Solving the Equity Prohlem 122 Conclusion 123 *99 "The power of the white world is threatened whenever a Black man refuses to accept the white world's definitions. " WESTLAW 02021 Thomson Reuters. No claim to original U.S. Government Works. 2 REEFER BLUES: BUILDING $OCIAL EQUITY IN THE..., 24 U.C. Davis Soc.,,. James Baldwin The criminalization of marijuana has a complex history_ The discussion below looks to portions of this historical record and critiques the current regulatory design that is informing marijuana's inevitable commercialization. It contends that marijuana's licensing regimes will establish market entry requirements that preserve racial inequity, albeit in reconstituted form. Nigh licensing fees, delayed rights of market entry for registrants with criminal histories, and other barriers disfavor African -Americans and Latinos seeking to participate in a newly legalized marketplace with enormous economic potential. The specific combination of these entry requirements warrants inquiry into their true intent. What was the logic behind such requirements and how do they exploit the racially problematic history of American drug enforcement? The penal system is among the most consequential expressions of state power. Criminalizing certain conduct offers an institutional mechanism for sanctioning particular kinds of behavior, uses incarceration to animate particularly invasive expressions of government, and cements into place a set legacy effects on its targets and their families long past the period of criminal involvement. The racially harmful aspects of these institutional practices are reflected in the history of marijuana's criminalization, which facilitated opportunistic policing of African -American communities, The commensurate effects of a drug -related criminal record on prospects for employment, housing, intergenerational transfers of wealth, and other vehicles for upward economic mobility were predictable --even as they reinforced the systemic pressures feeding the drug trade itself. This cyclical system of disenfranchisement has been especially harmful to America's Slack communities, which continue to experience gaps in education, income, employment, access to housing, and criminal justice involvement. As will be discussed further below, legalization of marijuana marks a significant cultural, legal, and commercial shift insofar as it will profoundly alter structural relationships between communities of color and law enforcement. While decriminalization seems to facially change one of law enforcement's gateways into policing Black communities, it will give rise to other problematic arrangements governing access to lawful marijuana. Importantly, as registration and licensing requirements exclude prospective market participants with limited means and criminal histories, the emerging regulatory frameworks will do little to dismantle cyclical systems of disenfranchisement which disproportionately harm communities of color. *100 Ms note is organized as follows; Part I briefly summarizes the history of marijuana. criminalization, which dates back to the early 1900's, Part II discusses the emergence of marijuana's status as a countercultural symbol, juxtaposing state rights and individual sovereignty against the mighty, ail -powerful federal government. Part III discusses the compounding collateral consequences of criminalization for communities of color. Part IV discusses the cultural shift in societal attitudes towards marijuana use and focuses on die necessity of social equity to ensure justice in enacting legislation. The note concludes by calling for a comprehensive restricting of the entire cannabis industry so as to minimize racially harmful practices while supporting fair competition. I. Part 1 A. Historical Basis for Criminalizotion As our nation begins to overcome the rhetoric of the War on Drugs, which demonized marijuana and its users over the last century, the resulting systematic oppression can no longer go unnoticed. Surprisingly enough, marijuana was not stigmatized in the U.S. until it was targeted by prohibitionists during the early 20th century as an "alien scourge.", Marijuana was then often associated with "landless [vagrants,] bandits, bootleggers, prisoners, and [others of the like, which] made marijuana the perfect scapegoat for deep-rooted social inequities.", Moreover, those in power began to blame the problems of the less fortunate on the use of marijuana. And, while most recognize the Nixon and Reagan administrations as when marijuana criminalization began, it can be linked back to as early as 1915 when California outlawed marijuana as pre -textual move to harassing the Mexican community, which is the same tactic state governments have used to disenfranchise minority groups throughout American history.' Prohibiting marijuana has never been about health and safety, but rather marginalizing despised minorities. In 1930, Harry Anslinger, who would eventually be deemed "the Godfather of modern drug prohibition,"; became the first commissioner of the Federal Bureau of Narcotics. After losing the war against prohibition in 1933, Anslinger "was aware of the weakness of his new position," but also * 101 of the potential power that it could offer, As a result, he went on a crusade WESTLAW 02021 Thomson Reuters. No claim to original U.S. Government Works. 3 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis to rid the country of all drugs, starting with marijuana, and it was not a coincidence that marijuana was linked communities of color.' Anslinger provided the foundation for what would later become the War on Drugs. He sensationalized anti -marijuana propaganda as an "assassination of youth" in magazines and films, which led to Congress banning marijuana with the Marihuana Tax Act of 1937.' Anslinger used marijuana to play off the racial tensions in the country to create fear in the American people. As drug use began to rise in the late 40's into the 50's (especially heroin), Anslinger began his second wave of propaganda to hype marijuana as a "gateway drug ... that had to be controlled because it would eventually lead its users to heroin."' The legacy of his 32 year reign as the nation's first Drug Czar includes the popularization of reefer madness films, the gateway drug theory, and the association of cannabis use with psychosis.' Today, prisons are overcrowded with nonviolent cannabis offenders, the cost of which totals into billions of taxpayer dollars.' Anslinger effectively used his position and the country's racial divide to mobilize the War on Drugs to create a way to legally discriminate against people of color, undercutting the effectiveness of The Civil Rights Act of 1964 that would arrive 30 years later. Harry Anslinger planted the first "seed of the marijuana `menace' in the public mind," and each administration that followed him continued to nurture its growth."' B. The War on Drugs The Nixon administration declared the War on Drugs in 1971, making drug abuse public enemy munber one, and the Reagans followed up *102 with an expansion of the drug policy that had previously been enacted by creating a zero tolerance policy for drug use, which created mandatory minimum penalties for drug offenses." The mandatory minimum penalties are "increasingly criticized for promoting significant racial disparities in the prison population because of the differences in sentencing for crack and powder cocaine," and these penalties also heavily influenced the discriminatory policing practices of the Mack community." Due to their low income status, minority groups were targets under these new drugs laws; "possession of crack, which [was] cheaper, [resulted] in a harsher sentence," and marijuana had the same appeal since it was even cheaper than crack," Nancy Reagan's legacy lives on in three simple words: "just say no."" On one of her school visits, Nancy Meagan was asked, "Mrs, Reagan, what do you do if somebody offers you drugs?"" And she simply replied, "Well, you just say no."1" 'Those three little words spread across the nation like wildfire, a movement was horn." According to the Ronald Reagan Presidential Foundation and Library, more than 12,000 ".lust Say No" clubs and school programs had been formed by 1988.1" Marijuana use had become so politically toxic that when Bill Clinton ran for president in 1992, he was so fearful of the political backlash and smear campaigns that could ensue around his past marijuana use that he made the bizarre claim that he "didn't inhale"" C. The "Justice",Syslem's Role in Crinrinrrlizalion People of color are disproportionately targeted ui the criminalization of marijuana. In spite of equivalent usage rates, "Black Americans are nearly four times more likely to be arrested for marijuana than their white *103 peers."," Moreover, "Black Americans make up nearly 30 percent of all drug -related arrests, despite accounting for only 12.5 percent of all substance users."" And, what is even more jarring is that Black Americans are "nearly six times more likely to be incarcerated for drug -related offenses than their white counterparts ..,"u In 2017, 91% of marijuana -related arrests were "for possession alone (as opposed to manufacturing or trafficking) and 47% of those [seized] were Black or Latino."'-' The justice system is additionally riddled with racial disparity and injustice for people of color: Almost 80 percent of people serving time for a federal drug offense are [Bjlack or Latino, In state prisons, people of color make up 60 percent of those serving time for drug charges .... In the federal system, the average [B]lack defendant convicted of a drug offense will serve nearly the same amount of time as a white defendant would for a violent crime .... People of color account for 70 percent of all defendant convicted of charges with a mandatory minimum sentence. Prosecutors are twice as likely to pursue a mandatory minimum sentence for a [Bjlack defendant than a white defendant charged with the same offense, and []hack defendants are less likely to receive relief from mandatory minimums." The racially disproportionate pattern of police searches and arrests breeds fear and mistrust of police and of the society that tolerates or condones such. behavior. All these numbers are hard evidence that the cat is out of the bag; Black America "found out their country don't love them."" The war against marijuana is based on false claims to keep alive a government agency WEStt.AYV Cc] 2021 Thomson Reuters. No claim to erlginal U.S. Government Works. 4 REEFER 13LUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis S❑C.... that has snowballed into a "waste of resources" and that has "[fallen] most harshly and most unfairly on racial minorities and the *104 poor.",, On its face, the prohibition of marijuana is not discriminatory in its purpose, but rather produces racially disparate results." The Supreme Court has ruled "that there is no constitutional right to be free from the disparate impact of facially neutral policies," but enforcement of those drug laws is in no way neutral, unbiased, nonpartisan or indifferent --it is plain unjust. Decriminalizing marijuana means giving Black Americans their freedom back. It is the first step of many to help people of color build equity in today's America. D. Slalus Criminallxallotr on lire Black Community Today History has structured our nation's society to accept the Black community as Iess than, and Black Americans have been trapped by that notion ever since, The War on Drugs perpetuates the racial caste system in the modern era." The whits world is desperate to keep its power and position in society, and consequently conditioned the Black corrununity to expect to be treated as second rate so that moving up in society's standing seems unattainable. The fear of a Black uprising prompted the white world to weaponize. the justice system, Criminalizing marijuana has allowed society to discriminate against people of color, but because it is masked under the cloak of the justice system, it is "the law." Remarkably, a criminal has "scarcely more rights, and arguably Icss respect, than a Black man living in Alabama at the height of Tim Crow."' Simply put, the criminalization of marijuana has resulted in an elimination of access to basic needs for predominately communities of color, Now, "the old forms of discriminatlon—employment discrimination, housing discrimination, denial of the right vote, denial of educational opportunity, denial of food stamps and other public benefits, and exclusion from jury service --are suddenly IegaL'"" "In each generation new tactics have been used for achieving the same goals" --the very same goals shared by the founding fathers." So let's go ahead and call it what it is --legalized racism. * 105 E. Assessing Criminalizarlon Despite the fact that people of color are arrested every day for possession, marijuana has been normalized as part of our culture. This has exacerbated the 'White world's fear that they will someday lose control, which is why the "War on Drugs" has been deemed a failure. The only thing the "War on Drugs" has been successful in is reducing is the number of Black Americans able to walk freely amongst their peers. The United States government spent over $1 trillion on the "War on Drugs" since 197I, but society's attitude towards drugs and how we should treat addiction is changing." The federal government is spending two times more on enforcement than on education and prevention, but education and prevention are how illegal drug use is actually reduced." The Drug Enforcement Administration (DEA) is responsible for upholding the nation's drug laws, but they have obviously been unsuccessful." When assessing the DEA, the Office of Management and Budget found that the DEA has failed to reduce illegal drug use due to "a lack of specificity of targets and timefrarnes for achieving strategic goals and objectives, and DEA managers were not held accountable for achieving results."" And, the National Drug Intelligence Center (NDIC) reported "that there has been a sharp rise in domestic production of marijuana since 2000.", Despite the numerous federal agencies put in place to reduce illegal drug use, "marijuana continues to be the most widely used and readily available drug in the United States."" Enforcement is easier to measure since it produces actual numbers in terms of arrest rates and incarceration rate, And, since education and prevention are much harder to measure, less effort has been put towards these areas.,, Marijuana prohibition has helped support and elevate the authority of the federal drug enforcement agencies, and has almost single handedly kept state and local prisons filled, which feeds the privatization of the prison system. Since prisons are now privatized, the private contracts that states have with their prisons are now informing public policy to keep rnarijuana illegal. But as the national *106 attitude moves towards legalization, the enforcement, education, and prevention programing around marijuana is no longer necessary, and the nation has wasted enough money on this failed endeavor. The effort now should be placed on the development of ameliorative relief in the justice system for those with previous marijuana charges and towards building social equity for minority communities to participate in the legal cannabis industry. 11. Part 11 WfSTLAW t9 2021 Thomson Reuters. No claim to original U.S. Government Works_ REEFER BLUES. BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis A, The States' Counterculture Uprising In light of the growing demand for the decriminalization of marij Liana, more and more states are taking on their own legalized rebellion against the War on Drugs --an exemplary illustration of federalism. Federalism is a magical thing, is it not? The states at the end of the day have the ability to do as they please --within reason of course. Ultimately, the purpose of the Constitution is to ensure states can regulate their citizens, their way. Federal law will almost always preempt state law, but .it is times when states exorcise their power to do as they please that we really see how our nation's governrnent should operate. Marijuana Moment, a well -regarded cannabis news site, notes that "there are currently 1,005 cannabis related bills under review between state and federal government;" furthermore, for state governments, the legalization of marijuana is a pressing issue that will be transformative in the next decade.- Modern day federalism is exemplified by the movement by states for the legalization of marijuana. B. Federal Implications to Legalization Marijuana remains a Schedule 1 drug on the federal government's controlled substance list. Yet, by the handful, states are legalizing marijuana, often, first comes medical marijuana, which is then followed by recreational marijuana. The Supreme Court has not yet ruled that states that have already legalized marijuana in some form or decriminalized it are in violation of the Constitution, but the Department of Justice may attempt to obtain a ruling that federal marijuana laws are peremptory, which would *107 render those state laws void." In Gonzales v. Ralch, the Supreme Court held that "federal prosecution of persons who complied with state medical marijuana laws is lawful under the Commerce and Supremacy Clauses."" Based on this ruling, some experts have noted that as long as federal law criminalizes marijuana possession, "state laws that do not are invalid;" .however, state laws that decriminalize, legalize, or medicalize marijuana are not "[authorizing] anyone to violate federal law nor are they requiring anyone to do anything contrary to federal law.."" No Supremo Court decision holds that the federal government may compel states to criminalize and prosecute people who violate federal criminal law." On the contrary, the Supreme Court has held in several decisions that they are in fact barred from doing so." However, if the federal government suddenly decided to enforce the existing federal laws criminalizing cannabis and prosecute users, growers, and distributors, it would have a chilling effect on the progress being made towards legalization. C. Cut'rent Legalization Statistics The federal government could almost instantaneously nullify the state laws and put an end to marijuana reform as we know it, but this has not prevented the rise of state legalization. Looking at a map of the United States, 11 states have legalized recreational marijuana and 13 states have decriminalized marijuana_", During the 2019 midterm election, at least 21 major party gubernatorial nominees on the U.S ballots supported legalizing marijuana." By the end of 2019, it is estimated that another nine states will move to legalize marijuana.,' The governor -elect of Connecticut said during, his campaign that "the time has come" for marijuana legailzation and that it *108 will be one of his priorities in 2019,11 Incoming Governor J,13. Pritzker of Illinois made legalizing marijuana a ceriterpiece of his campaign and says it will be something he will start working on right away.5' The Governors of Minnesota, New Hampshire, New Jrrsey, New York, New Mexico, and Rhode Island are too joining the legal weed party." Kansas, Wisconsin, Pennsylvania, and Texas are close behind, as they are poised to potentially legalize andlor decriminalize marijuana." D. 10at's Coming Next for Legalization Looking ahead to 2020, states like Arizona, Florida, Ohio, and North Dakota could consider ballot measures to fully legalize marijuana, while Mississippi, Nebraska, and South Dakota could sec medical cannabis go before voters in the current election cycle." Lawmakers across the country are corning out of the woodwork in favor of legalization in its many forms. Every state that moves to deregulate marijuana is putting more and more pressure on the federal government to remove marijuana from the Schedule 1 controlled substances list. 11c states have spoken, and the nation is ready for marijuana reform_ ill. Part It] WESTLAVY 0 2021 Thomson Reuters. No claim to original U.S. Government Works_ 6 REEFER BLUES: BUILDINGS SOCIAL EQUITY IN THE..., 24 U.C. Davis Sac.... A. Societal Barriers Due to Marijuana Prohlbirion One by one, states are realizing that marijuana is not the villain that Nancy and Ronald made it out to be. Misconceptions have been refuted and the attitude towards marijuana is becoming increasingly tolerant as the acknowledgement of marijuana's benefits exponentially outweigh its negative associations. The country is just more educated on the matters of marijuana. Prohibition is too expensive, and the consequences of marijuana prohibition on communities of color go far beyond imprisomnent. "An individual need not have spent time behind bars or even had a conviction in order to face tremendous barriers due to having a criminal record; even a minor criminal record now creates barriers to nearly all the basic building blocks of economic security Consequently, the War on Drugs "locked *109 many [Black men] out of the college classroom."33 "Decreased college enrollment has life-long consequences," not only on the individual, but on society as a whole, The effects of a criminal record have a lifelong ripple effect. "Without a college degree, steady employment, and support services, formerly incarcerated people struggle to rebuild their life,"" Some of"the collateral sanctions [that] attach at arrest ... include: loss of professional licenses, barriers to employment opportunities, `loss of educational aid, driver's license suspension, and bars on adoption, voting, and jury service"" And, when it comes to the charge, the quantity of marijuana is somewhat irrelevant because "those individuals convicted of low-level possession are subject to many of the same collateral sanctions as those convicted for dealing in large quantities."" This is why "fifty percent of felons are rearrested [and] twenty -rive percent are re -incarcerated within eight years of their initial release from prison." "Access to education could lower these high recidivism rates," but more importantly, the main takeaway here should be that this country needs to build equity in its citizens --each and every one of them.,,, Losing these opportunities and other public benefits are already a present fear for people of color without the added pressure of marijuana prohibition. Unfortunately, in today's society, it is almost inherent that minorities will have a more difficult time making ends meet because their starting point is many steps behind their white counterparts. Minority communities are keeping afloat from food stamps and public housing, and "[the] loss of public assistance, or any sanction that interferes with the ability to work or to drive, can have a more burdensome impact on low-income and minority families."" Every aspect of a family's sense of well-being is negatively affected, but "removing barriers to employment, housing and education is not only necessary for individuals with criminal records to get a fair shot in life, it's also critical to ensuring that a parent's criminal record does not determine their child's life chances -I The lasting *110 effects of marijuana prohibition make it even more difficult for the poor and minority population to have a fair chance in society. Even when marijuana is finally legalized, the resulting tax revenue will not come close to matching the amount lost over the "War on Drugs," and that revenue should be going to the communities that the failed war disenfranchised for the past century. Marijuana prohibition has caused too much hann--completely out of proportion to the purported harm it set out to prevent, and it is time to put an end to this marijuana witch hunt." B. Economic Impact of Crinrinalization on Minority Communities The "War on Drugs" narrative has variously reinforced or worsened structural problems in the related spheres of employment and criminalization. When the Nixon administration declared the War on Drugs in 1971, the unemployment rate had jumped three percent from two years prior,"a For the next decade, the unemployment rate fluctuated between 4.9 percent and 8.5 percent, and remained in that volatile state until 1982 when it reached 103 percent.- "Unemployment [swings mirror] the business cycle"; moreover, "slow growth causes high unemployment."- Consequently, jobless workers are more likely and willing to commit crimes to sustain their financial needs"' High unemployment is often linked to drug use and high crime rates, but it is important to note that causality is working in all directions.,, Communities with poverty, high arrest rates, and distrust of those outside the community are associated with a history of alcohol and drug abuse." These communities are more often than not communities of color. Furthermore, "up until the early 1980's, an annual minimum -wage income --after adjusting for inflation --was enough to keep a family of two above the poverty line""' "The falling minimum wage is also a major *111 contributor to poverty and inequality," and that paired with high unemployment creates the breeding ground for nefarious activity: drug dealing.' And, consequently, the choice between barely getting by and making money hand over fist is a no-brainer. However, while drug dealing can be profitable, it is not in the way that the media portrays it," The drug dealers in these communities are typically the entrepreneurial leaders of their neighborhoods, Often the drug dealers on the corner are part of a larger enterprise that mimics the corporate structure that of a McDonald's fi-anchise." As drug markets become increasingly concentrated in these poorer areas, this has led to a rise in both drug use and drug arrests, which has only perpetuates poverty in minority communities. It's a cyclical oppression. WUSTLAW D 2021 Thonnson Reuters. No claim to original U.S. Government Works 7 REEFER BLUES; BUILDING SOCIAL FOUITY IN THE..., 24 U.C. Davis Soc.... C The Need for Marijuana Justice Reform Legalization will allow the criminal justice system to use its already scarce resources in a more effective manner, Merely decriminalizing marijuana is not enough to "ensure the end of racially biased searches and arrests, and more importantly it "does not address restitution toward the [8]lack and brown corrununitles disproportionately hanned by the [W]ar on [D]rugs."11 For police to make a drug arrest, they need only to conduct a search of a person, which can happen either incident to a valid arrest or merely because the officer fears that he is "in danger" pursuant to Terry v. Ohio." Terry v. Ohio established that an officer may stop someone and ask them questions about what they are doing; if this happens in a rough area, that gives the officer enough cause to search the person so that the officer ensures his safety and the safety of the community." If the officer finds drugs, they have a prima facie case to make a drug arrest, and people of color are more at risk to be taken advantage of in this way since communities of color tend to live in high crime areas as a result of being pushed out due to the gentrification of cities across the country." And now, * 112 for many for whom that risk was actualized, their conduct is no longer a crime under new state laws.'" Although it is a move in the right direction, new state laws decriminalizing or legalizing marijuana often do not d❑ anything for those convicted under the old regime. This raises the issue of what can be done for those that were convicted under the old law.- This is important because often no one explained to these individuals the ripple effect a conviction will have on them now and in the future; their conviction will follow them to every job interview, school application, and aid program request that they attempt. 5o, "as the government spent more money sending Black men to prison, it devoted fewer resources to programs that would have helped the formerly incarcerated reenter society after they were released," and that inadequacy is felt even more so now as state and local governments choose to decriminalize or legalize marijuana," Moreover, a "law decriminalizing a crime cannot be used to decrease or end a conviction that occurred prior to the now law's passage unless the law has retroactive amelioration clause."" Currently, California is one of the first states with real ameliorative relief for past offenders "= California's Proposition 36 "amends the throe strikes law to impose life sentences only when a third felony conviction is serious or violent," and it "also allows courts to re -sentence offenders currently serving life sentences for non-violent third strike convictions."I" Also, California's Proposition 64 decriminalized marijuana and allotted for ameliorative relief for some conviction.," New on the scene is Illinois where the newly elected Governor Pritzker passed legislation to wipe out "low-level convictions and arrest for marijuana possession." k5 The law "provides for automatic expungement of arrest records for marijuana *113 possession'under 34 grams."w' This legislation will absolve the records of "hundreds of thousands of people" and give them back the freedom to live their lives."' The hope is that more states will follow suit. Without ameliorative relief, the only way for those with current conviction to seek relief is by applying for a pardon from their state's governor, but "applying for and receiving a pardon is a very hard process with a rare success. — Even though states are decriminalizing marijuana, that does nothing for the thousands of American citizens of color that have been marked by a marijuana conviction, and the relief that does exist is not really relief since it is not accessible to most. It may seem that decriminalization is the easy way out, but if the goal is to truly help and support the disenfranchised communities of color, then retroactive legalization is the answer. D. Attempting Restorative Justice Marijuana reform should not just be about ensuring that the "War on Drugs" is finally stopped, but directing the legislature and justice system to assist those previously convicted. "blow laws decriminalizing or legalizing marijuana cannot, in themselves, help those burdened by prior convictions."" "New provisions for sealing prior criminal records or expunging convictions will not prove meaningful without mechanisms to ensure they are regularly used." Given the troubled history of violence and discrimination between law enforcement and people of color, minorities communities "will likely not take full advantage of current reforms and thus got limited benefits and relief.""' The criminal justice system has conditioned communities of color to fear police and distrust the validity of the system. Any reform that may come down the line needs to be easily accessible and be, based in the communities that it is meant to support because the government has to somehow get people of color to buy into this new system. "Reforms should offer robust retroactive relief to people convicted for prior marijuana offenses." Glen, cxpungement and record,sealing laws are "unduly limited, require long waiting periods, or limit relief to the lowest level of offenders and offenses,"O Regardless of their * 114 experience with the criminal justice system, people of color do not have a full understanding of how the system operates, nor do they have the financial means to seek out these types of relief_" Even in jurisdictions undertaking significant marijuana reform, it is not surprising that the efforts to ameliorate the burden of WESTLAW 0 2021 Thomson Neuters_ No claim to original U.S. Government Works 8 REEFER BLUES; BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... past marijuana charges are inadequate for the population they are meant to serve." And, "even when states enact special status or modified expungement rules to address past marijuana offenses, emerging data suggests that only a small fraction of those who are eligible for relief seek to have their records sealed or set aside .... [ex -offenders] should not have to continue to bear a scarlet letter for engaging in what citizens have now decided is socially acceptable."" They should not be the ones righting this wrong; this should be done for them. It is really the least that their government can do for them at this point in history. The future of marijuana reform needs to be crafting expungement laws that reflect present-day norms for the group of people that the laws are written for. There seems to be a disconnect between those that are trying to write these laws and the group of the people they are Ineant to help. Just because we are }raving the right conversations, this does not mean the right actions are coining of them. Here is where we can see our nation again trying to play the white man savior card as we have so many times in the past. The white world feels guilty about what they have done and now are attempting to put on band aids where there should be stiches to promote real healing. The old adage that "something is better than nothing" really has no place here. IV. Part IV A. No Legalization Willi our Social Equity Some of those in power like Cory Booker and Bernie Sanders are now using their privilege for good to speak out about how marijuana legalization should be about communities of color being put right. Social equity is shaping the face of marijuana legalization. "Social equity programs serve to ensure that a percentage of the local permits that are required to operate in the cannabis industry are allocated to individual who have been disproportionately impacted by the War on Drugs."'". The *115 programs are well intentioned, but may not be meeting the needs of those they're meant to help. S❑ far there have been "staffing and funding shortfalls for the programs," but more importantly, "there is a growing concern about provisions in the regulations related to outside investors,"" There is a fear that "investors with big pockets can potentially partner with minority applicants as a way into the industry, then take advantage via bad contracts or financial pressure,"" This is the concern when creating diversity legislation within marijuana legalization. Limits or oversight nuist be given great deference, because so far in the legalized marijuana industry, the key players have been white wealthy men. Recently, "representative Alexandria Ocasio-Cortez attacked what she called the racial `injustice' that allowed companies operating private prisons, which she said profited from mass incarceration under the War on Drugs, to theoretically be among the first to profit from the legalization of marijuana."',, Ocesio-Cortez made these remarks during a subcommittee hearing on "banking services for America's burgeoning cannabis industry" where slit, questioned cannabis business owner Corey Barnette about the racial disparity associated with movement to legalize marijuana. "I" She "asked if the marijuana industry was `compounding the racial wealth gap right now' by allowing wealthy white -dominated companies, including those that profited from mass incarceration, to gain an early advantage over others," as this is contrary to the point of creating social equity programs in the states that are legalizing marijuana."" She additionally questioned whether "this industry is representative of the communities that [built it and] have historically borne the greatest brunt of injustice based on the prohibition of marijuana," to which Barnette answered, "absolutely not."',, Opportunities need to be created, "including affirmative licensing laws, `that prioritize frontline communities and communities that are most impacted"' so they "become [the] first movers in the industry, which could help them to `reap the benefits or recoup some segment of costs that they *116 bore ... during the [W]ar on @]rugs."�{" B. The Barriers to Enter the Legal Cannabis Market far Minority Communities As of 2017, "73 percent of cannabis executives were men and 91 percent were white.""° The cannabis industry is projected to be "worth more than S20 billion nationally by 2020."'°' Without adequate and effective social equity programming "the very people who built the cannabis industry in America may miss out on its now -legal profits."',' As it is, the marijuana industry is struggling to attract employees and entrepreneurs of color to join in the legal marketplace; furthermore, the diversity statutes put in place to help these communities are beginning to stunt the industry's growth because the qualifications are not being meant. "' Communities of color have the leverage here, but the wounds of the War on Drugs are still fresh, The minority community is afraid. People of color do not feel that they can trust the government, but are no more at ease in the private sphere. Since the key players in the marijuana industry thus far are white, people of color do not see familiar faces in what WESt'LAYY 0 2021 Thomson Reuters. No claim to original U.S. Government Works. 9 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Sac.... has always been their industry. Once this hurdle is overcome, there is still a danger that the narrative of the stoned Black gangster will undercut the success of Slack -owned legal marijuana businesses. The stigma surrounding cannabis and people of color make it more difficult for them to make headway in the industry, which creates even more obstacles for people of color as they try to enter the business world. When trying to build a business, people of color "lack access to capital, advisers, and networks, as well as discrimination from hanks while applying for small business loans" and in the end it all "boils down to finances.""' The fear is that even if marijuana is legalized, because these social equity programs are lackluster and diversity statutes make the barriers to entry unattainable to the majority, the marijuana industry will operate both in the legal marketplace and the "black" market."" "None of *117 the 10 states or Washington ensured that minority communities would share in any economic windfall of legalization.""" We cannot have ethical marijuana without having social equity, and the two are becoming mutually exclusive on the national landscape, which is why the country needs to figure out what the best way to both allow the marijuana industry to grow and prosper and bring, people of color into the fold. C. The Evecutive "Gateway" to Legalization As clichd as it sounds, timing truly is everything, which is especially relevant when trying to understand the game of chicken the federal government has been playing with the state governments around Iegalizing marijuana. Since the president's job is setting the nation's agenda, when Barack Obama was elected President in 2008, the idea of legalizing marijuana on a federal level became something more than just a pipe dream. Unlike Bill Clinton, "it was no secret that" Obama had a history of past marijuana use."' Clinton was President at a time when marijuana was still viewed as something that would tarnish one's public image, but during Obama's campaign, it came out that he had smoked marijuana as a teen with a group of his peers called the "Choom Gang" and "had even thanked his drug dealer Ray in his yearbook.""' Obama was open and honest with the nation about his past marijuana use, and this was likely a product of the times, as marijuana use was hardly the political death sentence that it had been for Clinton. Obarna, of course, was held to a stricter standard than Clinton, but at the same time he was able to be more relatable because of who he was --a Black man, The stereotypical juxtaposition of Black men and marijuana allowed Obama "to get real" with nation, in a way that Bill Clinton never could. Obama's greatest fear during his campaign was not his past marijuana use, but the 'Fact that he was the first Black man running for president in a country where racism was still alive and well in many pockets of the nation, which is something Bill Clinton never bad to race as a white man from Arkansas. Obama got the ball rolling for the nonnalization of recreational marijuana use, This is important for the situation at hand, because beyond being the first president to be honest about his marijuana use, he is also the *118 first Black president. And, what's even more significant is the fact that in his presidency, Obama was more comfortable with his discussing his relationship with marijuana than he was talking about his relationship with his racial identity."' The Age of Obama marks a time of historic breakthroughs, but for the purposes of this discussion the attention must be shifted away from "the racial symbol of America's achievement to the actual substance of America's shame: the massive use of state power to incarcerate hundreds of thousands of precious poor, Black, male (and increasingly female) young people in the name of the bogus 'War on Drugs.°{ Going into his presidency, the nation expected Obama to be able to fix the racial divide in America, but when things got worse rather than better, many thought that the messages of "hope" and "change" were mere false promises to get him into office."' Honestly, Obama never had a chance. No matter what he did or did not do, he would have been scrutinized to the highest degree. This is not unlike his predecessors to office, but Obarna was different in one significant way, he was the first Black president.",' As such, every Black president post-Obama will be compared to him.'' Obama was very much aware of this legacy, and it played a significant role in his administration's approach to marijuana policy. D. Weed and the Future of 'the White House Obama set the stage for diversity in government."' It is something the country benefits from today with the most diverse House of Representatives in history."' That would not have happened without Obama, but everyone knows that with light comes darkness; it is the dark side of Obama's presidency that continued to allow the "War on Drugs" to take the lives of WESTLAYV C 2021 Thomson Reuters. No claim to origirial U.S. Government Works. '10 Rr=EFFR Ell-UFS., BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... young Black men and women. However, it is not his entirely his fault. The nation may have been ready to elect its first Black *119 president, but he would have "to be twice as good and half as Black."",, And, what does this mean? Well, "the irony of Barack Obama is this: he has become the most successful Black politician in American history by avoiding the radioactive racial issues of yesteryear, by being `clean' (as Joe Biden once labeled him) --and yet his indelible Blackness irradiates everything he touches.""' Again, this is not his fault --"this irony is rooted in the greater ironies of the country he leads;" democracy is to represent all citizens, but people of color are always the last invited to the party.- Obama "[peppered] his specches with nods to ideas originally held by conservatives," and this was most evident "in the very sphere where he holds singular gravity --race"'" Obama was a symbol of "hope" and "change" for people of color. The government that once refused to count them as citizens or allow them the right to vote had elected one of their own to lead the nation. Our nation's government has not given communities of color a reason to trust it, but seeing a familiar face in the White House was a start. Arguably, Obama's greatest triumphs while in office "has been the expansion of the Black imagination to encompass this: the idea that a man can be culturally Black and many other things also--... iintellectual, cosmopolitan, temperamentally conservative, [and] presidential"17' And, it is this idea that makes Cory Booker passible. Unfortunately for Obaina, during his tirnc in office, "a Black president signing a bill into law might as well sign his own death certificate," and his presidency is a historical moment for the Black community that will reap more benefits in the future than legalizing weed would have done.I" So, if Obarna is the model, then Booker is his prodigy. Booker is able to do the things that Obama always wanted to do but could not. E. The Politics of Legalization Marijuana has found its way into the 2020 election by way of the democratic candidates running for office. Cory Booker announced his presidential bid on February 1, 2019, which was just weeks before he moved to re -introduce his bill to legalize marijuana nationwide."' Kamala Harris, Bernie Sanders, and Elizabeth Warren, Booker's fellow Democrats running for office in 2020, joined him in sponsoring the bill, which tells the nation *120 that decriminalizing marijuana is part of Democratic ticket's agenda for the upcoming election."- in 2019, the united States has a Black man and Black woman running for president who are also trying to legalize weed --what a time to be an American, is it not? The Marijuana Justice Act of 2019, if passed, would remove marijuana from the schedule of controlled substance, remove the prohibition on import and export of marijuana, withhold funding from states that have yet to legalize marijuana that have a disproportionate arrest rate or a disproportionate incarceration rate for marijuana offenses, and expunge marijuana offense convictions, among other things."' The bill also puts aside funds to invest in creating equity programming in the spheres of job training and social service to assist the underrepresented minorities negatively affected by the "War on Drugs!"?` The bill comes as increasing numbers of states are legalizing marijuana on the local level and public opinion has shifted in favor of legalization. The Marijuana Justice Act is somewhat revolutionary not only in its contents, but also in its sponsors. Now is a time where Black people are experiencing a kind of privilege previously unimaginable. Not only are Black cultural practices and tropes being validated on the national stage, but social equity for the Black community in terms of marijuana legalization is becoming an issue for the 2020 election.'"' Obaina's presidency was too polarizing politically for him to touch marijuana policy because he would have only been remembered as "the Black guy that legalized weed," which is why lie was likely so evasive on the topic, "The myth of `twice as good' that [made] Obama possible also [smothered] him," and that is exactly what happened when it came to marijuana legalization."' Obama thought as lie was leaving office at the end of his presidency that one of his last moves was going to be decriminalizing marijuana on the federal level; but then Trump got elected."' Since Trump has entered the Oval Office, the only clear agenda he seems to stick to is reversing the programs and initiatives that are reminiscent of the Obama administration."' If Obama had moved to decriminalize marijuana, it is *121 likely that Trump would have quickly shut it down."' Obama punted the issue of decriminalizing marijuana and left it for the next guy (or gal). Cory Booker does not have to distance himself from his racial identity as Obama did in the past. Obama laid down the groundwork for candidates like Cory Booker and Karmala Harris to be able to be authentically Black. Barack opened the door, and now it is up to today's political mgimo to do the rest. F. Making Room far Social Juslice in the Legalization Conversation It has been seven years since Colorado and Washington legalized recreational marijuana, and in that time the industry has WE5TLAW 0 2021 Thomson Reuters. No claim to original U.S. Gavernriient Works. 11 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... been "controlled largely by white men.""S With marijuana legalization around the corner for many states in tine coming year, the "`growing emphasis on the economic aspect of marijuana legalization' [has] replaced an `overemphasis on social justice."" As New York weighs whether or not to move to legalize marijuana, "the question of economic return for those communities has emerged as a defining issue""' Black lawmakers have threatened to block the legislation if their communities don't benefit."" The fear is that if it is "not requited in thu statute then it won't happen,""" These lawmakers have no reason "to trust that at the end of the day, these communities would be invested in," and based on history they are not wrong.''" Governor Cuomo of New York has stated that the provisions involving social equity would be written after legalization has passed, but that seems a little backwards."' It shows the communities of color in New York that they continue to be an afterthought in the saga of the War on Drugs, New Jersey is also in the same boat in terms of legalization, and advocates there are also "pushing for legalization only if tied to community reinvestment "111 In Colorado, Where marijuana has been recreationally legal for the past seven years, "Black entrepreneurs said they were banned *122 from winning licenses because of marijuana -related convictions."", Black entrepreneurs hold a handful of the thousands of cultivation and dispensary licenses there, and "continue to be arrested on marijuana -related charges at almost three times the rate orwhite people."1'1 The emerging social equity programs need to not only account for changes to the criminal justice system, but also economic ones. Pennsylvania is another state poised to legalize marijuana, but like New York, the concern is that when marijuana is finally legalized that "people of color will get to legally smoke marijuana, but the hulk of the estimated $581 million in annual state marijuana revenue would go to white organizations instead of the entrepreneurs of color who made marijuana a multibillion -dollar enterprise.""' The legalization of marijuana could likely be a part of some sort of economic bait and switch where "Slacks create an industry that bas value --whether through legal or illegal means --and white folks change the rules, change the language, and change the perception in order to bring about a change in ownership.""' There is a case for the bait and switch theory, for the companies that have jumped on marijuana legalization are the medical companies, and as a result medical marijuana is being legalized rust.", In the grand scheme of legalization, numerous interest groups stand to benefit from the tax revenue windfall of marijuana legalization, but "revenue might not materialize without a robust economic equity plan.""x G. Solving the Equity Problem The first place the marijuana revenue should go is to community investment to keep paying off the debt of the War on Drugs, since it was not just those charged or convicted that were impacted, but the whole minority community at large, California has made the best effort thus far where equity programs have been introduced retroactively, the most notable of them being Hood Incubator out of Oakland. Oakland "requires at least half of licenses to go to people with a cannabis -related conviction Marijuana legalization brings with it not only opportunities for investment, but for employment. Hood incubator is a project that "provides a free crash- *123 course in business and networking to people of color aspiring to cannabis entrepreneurship,""" Often, the people involved in the marijuana industry prior to legalization have the experience needed to be successful in the now legal market, but they do not know how to translate their skills to the legal landscape, so Hood Incubator works to bring the green rush back to people of color. It focuses on "three main areas: economic development, policy and advocacy work, and community organizing."131 The program's first cohort began in January of 2017, and ten businesses were able to launch."' Mood Incubator is able to partner new ventures with local companies to grow the venture for a designated amount of time in return for getting priority access for their own permits."' It is a way for people of color to get the first bite at the apple with the help of their community members. In doing this, the 'incubator in building equity in the community where it likely did not exist before, As of September 2018, six of those ton businesses are still in operation."' The marijuana industry is likely to bring a lot more jobs than business owners, and as a result, Hood Incubator is piloting a program to "place people of color in apprenticeship programs to jump-start their careers in cannabis.""' The Incubator also played a role in advocating for the Catutabis Fquity Program, "which prioritizes Oakland residents with prior convictions for marijuana crimes for business permits.""' The Hood Incubator model "will need to go viral to spread its impact nationally."," What is most important here is that social equity programs prioritize the communities around them and the socio-economic status of the people within them. Social equity is about giving people of color and the poor the opportunity to become financially empowered through owning their own business, and what it means to be an owner rather than _just an employee. The time for equity to shape the marijuana industry has never been greater. 1 1 nW © 2021 Thoimon Reuters. No claim to original U.S. Government Works- '12 REEFER BLUES: BUILDING SOCIAL FQUITY IN THE..., 24 U.C. Davis Soc.... Conclusion Marijuana legalization will allow people of color to "smoke fear away ... roll that mother****er up ... and ... take two puffs" as Kendrick Lamar put it in his song "Fear". "They will get to forget --if even for a few *124 hours at a time --that we live in an age where racism is on the rise, where racial inequality is widely accepted, and where Black lives remain in danger." And, for these reasons, we have to change the narrative of the Slack man in America. The first step has been making social equity what marijuana legalization is truly about, but the next step is actually acting on it. Beyond California, states for the most part thus far have not effectively developed policies or procedures that alleviate the burden of the War on Drugs or prioritize the communities of color in allowing them to become equal stakeholders in the nation's legal marketplace. To ensure that this happens, it is my recommendation to remove marijuana from the Schedule .l controlled substance list as proposed in Senator Booker's Marijuana Justice Act of 2019 as a first step. The federal government should then decriminalize marijuana an a national level in order to prepare the country for legalized marijuana. During the decriminalization period, the country will be able to work on the retroactive relief for those with marijuana crimes on their record. Once expungement or a program of the like wipes those records clean and those people are able to access public assistance again, the country can then take a look at legalizing marijuana. Furthermore, the proportion of money that was going to enforcement, education, and prevention should be redistributed into educating and supporting people of color to access what they need to participate in the marijuana industry. Minority communities need more than just opportunity; they need guidance and assistance to get them to where they want to be. Each state should require a minimum of25 percent of license holders be a person of color. It is also my recommendation that in each state, a portion of tax revenue made off of marijuana he set aside for 1) zero -interest loans for minority owned ventures and 2) a state -sponsored venture accelerator for minority owned marijuana businesses, The state -sponsored venture accelerator should mirror the Hood Incubator out of Oakland. And, as each state creates their accelerator, it will build a national network. The Hood htcubator serves as the model example for what to do when considering legalization in a new place. And, with each state having their own incubator like program, the reversal of the effects of the War on Drugs is likely to happen sooner than expected since the whole nation would be on the same page. These accelerators across the country would be in place not only to assist in the marijuana industry For the communities of color, but also serve as a genuine community building entity. And, building community means IiSing up every individual regardless of where they come from or what they have. It is on us now to make a difference in the equity conversation. Footnotes "j I would like to thank n-ofessor Stephen Wilks for all his guidance and support in the writing of the piece. He believed in me even when I did not, and look at us now_ And, to my Ioving partner, Eli Rogatz, for always being there for me whether it was checking for grammar mistakes or making sure I ate dinner. 1 truly could not have produced this without you, my love. r MARTIN A. LEE, SMOKE SIGNALS 37 (2012), 1 Id. at 39. ' Id at 42. A Jolene Forman & Suchitra Rajagopalan, The new 4120: Beyond legalizing It, CNN NEWS (Apr. 20, 2018, 11:09 AM), https://www.cnn.coin/2018/04/19/opin ions/marijuana-black-and-brown-communities-opinion-forman-rajagopa lanlind ex. htm 1. WESTEAYY Q 2021 Thomson Reuters_ No claim to originaf U.S, Government Works, 1' REEFER BLUES: BUILDING SOCIAL EQUITY IN THE.— 24 U.C. Davis Sac.... See Cydney Adams, The Marc Behind the Mar#zeana Ban for All the Wrong Reasons, CBS NEWS (Nov. 17, 2016, 5:45 PM), https://www.cbsnrws,com/nows/harty-arLslirLger-the-man-behind-the-iarijuana-loan/, Gene Johnson, The Time Nancy Reago Invented `Just Say No' And Other Great Moments In Pot I7lstory, BUSINESS INSIDER (Dec. 9, 2012, 1:56PM), https://www.businessinsider,coin/the-history-of-marijuana-2012-12. " Id " Etelka Lehoccky, Beyond Reefer Madness Box Brown's Graphic History Tells Story Of Maligned Plain, NPR (Apr. 3, 2019), https://www.np r.arg/2019/04tO3/709482030/beyond-reefer-madness-box-browns-graphic-iiistory-tells-story-of-a-mali geed -plant. 141 American Civil Liberties Union, The War on MarUuana in Black and White: Billions of Dollars Wasted on Racially Biased Arrests, 4, (last updated Sept. 11, 2013), https://www,aclu.org/files/assets/aclu-thewaronmarijuana-rel2.pdf. The War on Marijuana in Black and White: Billions of Dollars Wasted on Racially Biased Arrests, AM. CIV LIBEkTILS UNION (Sept. 11, 2013), https;/Iwww,aclu.org/fileslassets/aclu-thewaronmarijuana-re]2,pdf, John Burnett, Timeline: America's War on Drugs, NPR (Apr. 2, 2007), https:/Iwww.npr,orgitemp lates/story/story.php?storyld=9252490. 0 NICOLE HORNING, DRUG TRAFFICKING: A GLOBAL CRIMINAL TRADE 14 (2017). '.1 Id 'R Her causes, rHE RONALD REAGAN PRESIDENTIAL FOUNDATION AND INSTITUTE, l,ttps;//www.reaganl'oundation.org/ronald-reagan/nancy-reaganlher-causes/ (last visited April 1, 2020). Olivia 13_ Waxman, Bill Clinton Said He 'Didn't Inhale' 25 Years Ago —But the History of U.S. President and Drugs is Much Older, TIME (Mar. 29, 2017), https://time.com/4711887/bill-clititun-didnt-inhale-marijuana-anniversary/. WESTLAW 02021 Thomson Reuters. No carol to original U.S. Government Works. 14 REEFER BLUES: BUILDING S00IAL EQUITY IN THE..., 24 U.G. Davis Sac.... `° Betsy Pearl, Ending the War on Drugs; By the Numbers, CENIER FOR AMERICANPROGRESS (Jun. 27, 2019), https:/fwww.ainericanprogress.orgtissues/criminal justice/reports/2018/06/27/452819lending-war-drugs-numbers/. 2' ld. 22 Id. =� Brian Geddes, Cannabis Social Equity Programs are Imperfect but Critically Important, GREENWJCH TIME (Feb. 27, 2019), htLps://www. greenwichtime. com/news/art icletCannabis-Social-Equity-Programs-Are-I mperfect-but-13 6465 92.php, '' Pearl, supra note 20. Ta-Nehisf Coates, Fear of a Black president, THE ATLANTIC (Sept. IS, 2012), https://w WW,theatiantic. co,ii/magazine/archive/2012/09/fear-of-a-black-presi dent/309064/. ?6 Cynthia S. Duncan, The Need for Change: An Economic Analvsis of Uar#uana Policy, 41 CONN. L. REV. 1701, 1721 (2009). 27 See ` Washington v. Davis, 426 U,S, 229, 242 (1976) (" f We] have not held that a law, neutral on its face and serving ends otherwise within the power of government to pursue, is invalid under the Equal Protection Clause simply because it may affect a greater proportion of one race than of another,"), 21 MICHELLE ALEXANDER,THE NEW JIM CROW;MASS INCARCERATION IN THE AGE OF COLORBLINDNESS 3 (2d ed. 2011). 29 Id. at 2, 71 Id, at1. Richard Branson, War on Drugs a Trillion -Dollar Failure, CNN (Dec. 7, 2012), https:/lwww.cnn.com12012/ l2/06/opin ion/bransan-end-war,nn-drugs/index.html. 33 See Coates, supra note 26, at 1713, 34 Id at 1714. 35 WESTI.AW 0) 2021 Thomson Reuters, No claim to original U.S. Government Works. 15 REEFER EWES: BUILDING SOCIAL FQU1TY IN THE..., 24 U.C. Davis Sac.... #6 Id at 1715. 3-1 Id. at 1716. '& See Peter Andreas, U.S. Drug Control and ,policy, INSTITUTE FOR POLICY STUDIES (Nov. 1, 1996), https:(lips-dc.orglus_drug_control_policyl. 19 Duncan, supra note 26, at 1716. 110 Carmin Chappell, Cory Booker Introduces Bill to Legalize MarUecana Nationwide, with Support from 2020 Candidates, CBS (Feb. 28, 2019), https://www, onbc.com/2019/02/28/cory-booker-introduces-b ill -to -legal ize-marijuana-n Ettionwide.litml. .11 Steven S. Duke, The Future of Marijuana in the United States 91 OR. L. REV. 1301, 1305 (2013). 42 Id.; ' Gonzales V. Raich, 545 U.S. 1, 29-33 (2005). J' Coates, supra note 26. 44 Id. 45 Id 46 Tom Angell, These States Are Most Likely to Legalize .Marjuana in 2019, FORBES (Dec. 26, 2018), https://www.forbes.coralsites/tomange11/2018/12/26/tliese states-are-most-likely-to-legalize-marijuana-in-20191#6221 1035adda. a7 Torn Angell, Maryuana in The Governor's Mansion: liecord.Number of Candidates Say Legalize It, FORBES (Nov. 1, 2018), https:ltwww.forbes.coif,/sites/tomangell/2018111101/marijuana-in-the-governors-mansion-record-nutnber-of oandidat es say legalize-it/9 459cce5fie93. AM See Id. (noting the likelihood of Connecticut, Illinois, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, and Vermont passing legislation to legalize Cannabis) 49 Id. 10 Id, WESTLAW 02021 Tharnson Rauters. No claim to crigittal U S. Government Works. 16 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... 5? Id 13 See Angell, supra note 46. Lottie Joiner & National Journal, How Families Pay the Never -Ending Price of a Criminal Record, THE ATLANTIC (Dec, 15, 2015) (quoting Carmel Martin of the Center for American Progress), https://www.tiieat[antic.coirdpolitics/archive/2015/12/how-fainilies-pay tlie-never-ending-price-of-a-criminal-record/ 433641 /. `S Tamara G. Sorr, How the War on Drugs Kept ,Black Men Out of College, THE ATLANTIC (May 15, 2019), https://www.theatiantic.com/education/archivo/2019/05/war-drugs-made-it-harder-b lack-men-attend-college/5 88724/. 5r, Id S7 Id 53 Coates, supra note 26, at 1723. S4 Id. at 1724. W Angell, supra note 46, 0 Id. Q Joiner, supra note 54. °' Shaleen Title, Letter to the Editor, Is Legalizing Marijuana Too Risky?, N.Y. TIMES (Jan. 13, 2019), https://www.nytimes.com/2019/01/ 13/opinion/letters/mai-ijuana-legal i7,ationhtml. 10 Kimberly Amadeo, Unemployment Rate by Year Since 1929 Compared to Inflation and GDP, THE BALANCE (Feb, 28, 2019), https://www,thebalance.com/unemployment-rate-by-year-3305506. "' Id rn Id. Suhaib Kebhaj et al., Collateral Damage & The War on Drugs: Estimating the Effect of'Zero Tolerance Policies on Drug/Irresl Rates, 1975-2002, 11 The Public Purpose 1, 8-9 (2013). WESrLAVV 0 2021 Thomson Reuters. No claim to original U.S. Government Works. 17 REEFER BLUES: BUILDING SOCIAL. FOUITY IN THE..., 24 U.C. Davis Soc.... t'8 Id.. at 2. 69 7d. 70 David Cooper, The Minimum Wage Used to be Enough to .Beep Workers out of Poverty --It 's Not Anymore, ECONOMIC POLICY INSTITUTE (Dec. 4, 2013), https://www. epi. org/publ icati on/mini mum -wage -workers -poverty -anymore -raising/. 71 Id. 72 STEPHEN D, LEVITT & STEPHEN J. DUBNER, FREAKONOMICS: A ROGUE ECONOMIST EXPLORES THE HIDDEN SIDE OF EVERYTHFNG 83 (William Morrow eds., 1st ed. 2005) 73 Id. at 89. 74 Angell, supra note 46. 7s ferry v. Ohio, 392 U.S. 1, 30-31 (1968) 76 Id. at 30. 77 See Christopher Coble, Legal Options for Marjjuana Users Convicted Before Decrindnalization, FindL.,aw Blotter (Jul, 17, 2015, 3:58PM), https://blogs.findlaw.com/bIoUer/2015/07/legal-options-for-mari.juana users-convicted-before-decriminalization-l.ht ml. 78 Id. 79 Id @0 I d. s� Id. Eileen L. Morrison, Resurrecting the Amelioration Doctrine: A Call To Action Por Courts And Legislatures, 95 BU L.R. 335 (2015); see also littp;//ccresoureccenter, org/2019103/28/updated-report-on-2018-fair-chance-and-expungement-reforms/. WESTLAW * 2021 Thomson Rectors- No claim to original U.S. Goverriment Works. 1 a REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... The Control, Regulate and Tax Adult Use of MarUuana Act, Proposition 64 (Nov_ 8, 2016), https://post. ca.gov/propos iti on-64-the-control-regulate-an d-tax-adul t-use-of-marijuana-act. xs Robert lViccoppin, Getting Marijuana Convictions Expunged in Illinois: What You Need to Know About the Process, Chicago Tribune (Aug. 30, 2019), https:/lwww.chicagotTibune. com/marij uana/illinoWct-cb-weed-conviction-expunged-il l inols-20190917-o2 jrwf43 treth nb54efandmwz u-story.html. "" Id. R7 Id, Rs Kebhaj, supra at note 67. No Douglas A. Berman, How States Can Ensure That Toddy's Marijuana Reforms Also Ameliorate Harms Inflicted on Past Offenders, SCHOLARS (Aug. 30, 2018), https:/Ischolars.orebrief/how-states-can-ensure-todays-marijuana-reforrns-a lso-ameliorate-harms-inflicted-past-offen ders, 911 Id. "' ,See id. Id. 03 See id, 94 Id. u5 Id a{, 'Lack Ruskin, How Cannabis Tquity Programs Are Shaping the Industry's Future, 420 INTEL (Jan. 3, 2019), https,/1420 inWi.coin/arLicles/2019/01 /03/how-cannabis-equity-programs-are-shaping-industry°/aE2%C 80%99s-future. 97 Brian Geddes, Cannabis Social Equity Programs Are Imperfect But Critically Important, GREEN ENTREPRENEUR (Feb. 27, 20t9), htips:/Iwww.greenentrepreneur,com/article/329024. 99 Id WESTLAW C 2021 Thornson Reuters. No claim to original US, Government Works. 1� REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U,G, Davis 50c.... 99 Shane Croucher, Alexandria Ocasio-Cortez: Marijuana Prohibition Hit Black and Latina People Hardest sa They Should Profit from Legalization First, NEWSWEEK (Feb. 14, 2019, 6:27 AM), bttps://www.newsweek. comlane-marijuana-cannabis-profit-war-drugs- l3 31214. 10 Id Inl Id I o: Id. 103 Id. 104 Jones, infra note 1.39. Ins Id. tun Id. i0l Aaron Schachter, Growing Maryuana Industry Struggles to Attract Employees of Color, NPR (Feb, 21, 2019), https://www.npr.org/2019/02/21/695999248/growing-marijuana-industry-stTuggles-to-attract-employces�of color. 108 Jones, infra note 139. 109 Vince Beiscr, Building a Legal Marluana Industry from the Oround Up, PAC. STANDARD (Jun. 14, 2017), https:/Ipsmag.cn►nlsocial justice/washington-state-building-legal-marijuana-industry-58996. 110 Jones, infra note 139. 11 i Olivia B. Waxman, ,Bill Clinton Said He 'Didn't Inhale' a5 Years Ago --Bid the History of US. Presidents and Drugs is Much Older, TIME (Mar. 29, 2017), http:/Mime.com/47118871bill-clinton-didnt-inhale-marijuana-anniversary/. 113 Coates, supra note 25. 114 Comel West, Foreword to MICHELLE ALEXANDER, THE NEW JIM CROW: MASS rNCARC12RATION IN THE AGE OF COLORBLINDNESS, xlviii (2d. ed. 2011) 115 Charles Krauthammer, Barack Obama's State of the Union was as spent as his presidency, TELEGRAPH (Jan. 15, 2016), https://www.telegraph.co.uk/newslworldT ews/iiortiamerica/1210127]/Obamas-terrible-legacy.httnl. vUESrLAYV C 2021 Thomson Reuters. No cla'Im to anginal 0,S. Government Works. 20 REEFER BLUES: BUILDING SOCIAL EQUITY IN THI=..., 24 U,C. Davis Soc.... 116 Coates, supra note 25. 117 Id Julian Zelizer, Cary Booker, the 2020 Pace and Obama's Legacy, CNN (Feb. 1, 2019), https://www-m. onn.com/2019/02/01 /opinionslcory-booker-obama-1 egacy-zel izer/index_htm 1. 10 Id. 120 Coates, supra note 25, $26 Chappeii, saapra note 40. 127 Id. 129 gee Marijuana Justice Act of 2019, H.A. 1456. 11611, Cong. (11, Sess. 2019). 129 Chappell, supra note 40. 130 Id 132 Kyle Jaeger, New Book.- Obama Considered Decriminalizing Marjuana, Bur Then Trump Darr, MARIJIJANA, MOMENT, (Sept. 12, 2018), https://www.m arij uanamoinenLnet/new-book-obama-considered-decri mina li zing-marij uan abut-then-tru rnp-won/. WESTLAW C 2021 Thomson Reuters No claim to original U-S. Government Works. 21 REEFER BLUES: RUiLDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Sac.... 133 Id, 135 Liz Posner, The Green Rush is Too White, PACIFIC STANDARD, (Dec. 10, 2018), https://p smag. coin /economics/the-green-rush-is-too-white-h ood-i ncubator-race-weed. 136 Vivian Wang & Jeffery C. Mays, Black Lmmakers to Block Legalized Marijuana to N. Y. if Their Communftfes Don't Benefit, THE NEW YORK T1ML5, (Mar. 11, 2019), (quoting Representative Makeem Jeffries), https://www.nytimes.com/2019/03/1 I./nyrogion/inarijuana-legalization-african-ainericans,html. 137 la! 13R ld 139 Id, 141) Id 10 Id, Id_ ICI. 143 Id. H4 Id. 145 Solomon Jones, Legalizing Marijuana Won't Benefit Feopla of Color, PI1ILA. INQUIRFR, Jan. 1, 2019, littps://www.philly.com/opinion/coimnentary/marijuana-sales-black-brown-dollars-wealth-column-soloinon ,Zones-20 190102,htm1, 146 Id. 1.97 !d. 00 Id WESTLAY11 02021 Thomson Relitars_ No clAim to original U.S. Government Work:. 22 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... 150 Id 151 !d 152 Id. 15' Id. 1511 Id. 155 Id. 15e Id, 157 Id. 24 UCDSJLR 95 End uI' nucwncid 0 2021 'Thomson Reuters. No claim to original U.S. Government Works. WESTLAW O 2021 Thomson Reuters. No claim to original U.S. Government Works. 23 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 50 U.C, Davis L. Rev. 689 U.C. Davis Law Review December, 2016 Symposium Disjointed Regulation: State Efforts to Legalize Marijuana Steven W. Bender,' Copyright 0 2016 by Steven W. Bender THE COLORS QE CANNABIS: RACE AND MARIJUANA TABLE OF CONTENTS 1lr 111RIIPTO e1111Ti1129 6s9 'REEFER MADNESS: THE HISTORY OF RACIAf,IZED PROHIBrriON AND ENFORCEMENT fi40 " CAMPAIGN COLORS 692 "',THE NEW WHITE MAKKE`C: EXAMINING THE COLOR OF THE LEGAL MARIJUANA 69.1 INDUSTRY 'v- THE RESILIENT "BLACK MARKET" 499 v- LIFE AFTER LEGALIZATION: BLUNT REALITIES FOR MINORITY USERS 700 v'-NEXT STEPS: REFORM TOWARD RACIAL JUSTICE INTRODUCTION 705 The campaign to legalize small quantities of recreational marijuana drew attention fi•❑ni media and law reviews with its successes in Colorado (2012), Washington (2012), Oregon (2014), Alaska (2014), and the District of Columbia (2014).' Both media and law reviews concentrated their analysis on the interplay between the continued federal prohibition of marijuana, whether for medical or recreational use, and the onset of legalization or decriminalization of marijuana at state and local levels., (laving addressed that legal collision myself,'*690 here I take a broader focus and look at the life cycle of U.S. marijuana prohibition, concentrating on the impact of recent legalization and the user consequences that remain. Evident in that timeline is racializstion at each stage examined below --in the initial criminalization of marijuana rooted in racial stereotypes, the enforcement of that prohibition throughout the twentieth century to the present day by means of racial profiling, and the recent legalization of recreational (or medical) marijuana in some states. Despite that legalization, marijuana usage continues to disproportionately impose serious consequences on racial minorities, while white entrepreneurs and white users enjoy the early fruits of Icgalization.' WEST -LAW 0 2021 Thomson Reuters. No claim to original U,S. Government Works. THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 I. REEFER MADNESS: THE HISTORY OF IiACIALIZED PROHMITION AND ENFORCEMENT Marijuana crimuialization, as with cocaine and opiates, stemmed from racialized perceptions of users of color as threatening public safety and weltarc.' in the case of marijuana, racial prejudice against both African Americans and Mexicans merged to prompt states and local goverrunents to outlaw usage. In states with significant Mexican populations, such as Texas, Mexican prejudice was the catalyst for prohibition. As contended on the floor of the Texas Senate in the early 19003, "ja]ll Mexicans are crazy, and this [marijuana] is what makes them crazy."" In Southern states with large black populations, fears of violent black smokers led to marijuana laws.' As I summarized elsewhere, fueled by prejudice, "marijuana was scapegoated as prompting murder, rape, and mayhem among blacks in the South, Mexican Americans in the Southwest, and disfavored white immigrants from laboring classes-- with marijuana blamed for the seduction of white girls by black men and for violent crimes *691 committed by these groups,"" By the time of the exploitative 1936 film Reejrer Madness, most states had outlawed marijuana," and the federal government soon followed with the Marihuana Tax Act of 1937 banning nonmedical uses_ This act was a precursor to later federal laws designating marijuana as a Schedule I dangerous drug with no safe uses, effectively banning even medical marijuana."' Marijuana use by youth of color has been the focal point of the War on Drugs from its inception." Most U.S. drug arrests stem from unlawful possession rather than trafficking in drugs, and most of those possession arrests are for marijuana, amounting to near a million arrests annually." Evidencing the racial inequity of the War on Drugs, African Americans and Latinos account for most of those arrests despite their smaller population numbers than whites and studies confirming that white youths use marijuana in the same percentage as African American and Latino youth," *692 Although reports of disparities in marijuana enforcement have tended to focus on blacks," the drug war also disproportionately impacts Latinos. Latinos are profiled For possible trafficking given the supply routes connecting Latin American production of illicit drugs to U.S. consumers." Latinos also face detrimental immigration consequences for martjuana possession and other drug offenses, aggravated by racial profiling and the significant number of Latino immigrants." II. CAMPAIGN COLORS Launching the trend of iegalization, California (1996) was the first state to legalize medical marijuana, and Colorado (2012) and *693 Washington (2012) first legalized recreational marijuana," Noticeably absent in most political campaigns to legalize marijuana at the state level --whether for medical or recreational use --is the racialized inception and enforcement of marijuana laws. Proponents for medical marijuana legalization have pointed to permissible medical uses for other illicit drugs such as opiates, and also to the compelling narratives of easing chronic pain, relieving nausea or cancer patients, and preventing seizures in epileptic children." Recreational legalization campaigns have emphasized the potential revenue gains of taxing marijuana sales, as well as honoring the individual liberty to use marijuana instead of the more dangerous alcohol.'" Rarely mentioned was die disproportionate burden of marijuana enforcement on racial minorities. Anecdotally, a Washington advocate for marijuana legalization told ice that racial profiling arguments won't win legalization campaigns and instead will alienate voters."' Rather than a desire to dismantle laws with disproportionate impact on users of color, more evident in the campaigns for legalizing recreational marijuana was disdain for feathering the nest of the illicit drug cartels," widely assumed to be operatives of color." Frustration *694 with cartels of color controlling drug production acid distribution was evident not just in the upset over their profiteering from illicit drugs, but in the perception that cartels pay no attention to product safety and that government is better situated to ensure an unadulterated product." As reinforced by the next section that discusses how white entrepreneurs dominate the legal marijuana market, voters may have been making the choice between their perception of shady cartels of color controlling the illicit market, and of more trusted white business owners and local government profiting from marijuana consumption. A notable exception to the whitewashed arguments elsewhere for legalizing medical and recreational marijuana was Washington D.C.'s campaign for recreational legalization. As Georgetown law professor Paul Butler observed, Washington D,C_ "is really the first place whare the racial justice arguments were the main reasons behind the [legalization] campaign."" Butler opined that in other jurisdictions, advocates for legalization may "be scared to talk about race, because they think it WESTLAW 02021 Thomson Routers, No claim to original U.S. Government Works_ 2 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U,C, Davis L. Nov. 689 would turn people off, or make people more willing to lock up marijuana users if they know it has a disparate impact on African Americans."" Yet in Washington D,C,, he concluded, "[w]e heard an argument about racial justice and we responded .... We said we're not going to accept Jim Crow law enforcement ut our town."' The legalization of recreational and medical marijuana through whitewashed campaigns mirrored the dynamic of marijuana decriminalization that swept federal and state government in the late 1960s and early 1970s," As "Reefer Madness" views of axe -wielding black and Mexican smokers were replaced by the reality of widespread white usage, especially on college campuses, campaigns mounted to *695 reduce penalties for marijuana possession by these more trusted users," ]n 1970, Congress lowered the penalty for possession of small amounts from a felony to a misdemeanor in what one commentator labeled the "whitening of [the] marijuana use dilemma."'' Several states did the same; In 1973, Oregon, the site of a predominantly white population, became the first state to take the bigger step towards reducing punishment for small quantity marijuana possession from a jailab.le offense to a mere fine."' Similar to the whitening and lightening of marijuana penalties that preceded out fight legalization is the current softening of enforcement response to the epidemic of opiate use among whites. Rather than confronting that widespread use with criminal penalties, increasingly police and politicians are turning their focus to saving young lives from overdose." Indeed, the irony of drug stereotypes is that while opiate deaths have spiraled, the overdose rate for young blacks has risen only slightly --likely due to the reluctance of doctors to prescribe painkillers to minority patients for fear they will sell them or be more susceptible to addiction." III. THE NEW WHITE MARKET: EXAMINING THE COLOR OF THE LEGAL MARIJUANA INDUSTRY Michelle Alexander best described the painful irony of the post -legalization experience in which white maLe entrepreneurs now dominate the legal marijuana industry: Here are white men poised to run big marijuana businesses, dreaming of cashing in big —big money, big businesses selling weed --after 40 years of impoverished black kids getting prison time for selling weed, and their families and futures destroyed. Now, white men are planning to get rich doing precisely the same thing" *695 Several factors appear responsible for the lack of diversity in the legal marijuana business. Among them is the reluctance of banks to supply credit to marijuana entrepreneurs for fear of being seen as enabling a business still illegal under federal law. Instead, marijuana entrepreneurs must use their own financial resources or those of their circle of friends and business associates." Given the vast disparities in wealth between whites and blacks/Latinos, and the high start-up costs of a marijuana business," white entrepreneurs have an advantage that *697 minority borrowers unable to obtain balik credit cannot overcome. in this way, the wealthy parents who might have grounded their child years ago if he smoked pot instead have no hesitation to back his now legitimate and profitable agricultural or retail marijuana business. Another Factor of disparity is the typical regulatory requirement that legal marijuana retailers have a clean criminal record," which disproportionately disqualifies racial minorities given the disparities in enforcement of marijuana prohibitions, other drug crimes, and nondrug criminal offenses." With the exception of Oregon, the legalization laws fall to erase prior convictions of those prosecuted for what became lawful conduct." Additionally, the legal uncertainty of marijuana sales conducted pursuant to state law given the ongoing federal prohibition likely makes racial minorities, already subject to undue law enforcement scrutiny, especially nervous. As the director of the Drug Policy Alliance opined: African Americans know that whenever something is in a gray area of the law they will feel morn vulnerable, and for good reason since statistically minorities are more likely to be targeted or seen as suspects .... It may be that the general element of racism and racial disproportionalety in law enforcement around drugs can make minorities queasy about entering an area which is not fully legal,s" *698 Finally, the first four states of recreational legalization --Alaska, Washington, Oregon, and Colorado --have smaller minority populations than many other states, lowering the pool of minority entrepreneurs in those states.'" Effectively excluded as sellers of legal marijuana, minorities are ofton excluded from the legal market as buyers too, as the next section reveals. WFSTLANI O2021 Thomson Reuters. No claim to original U.S. Government Works. 3 THE COLORS OF CANNABIS' RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 1V. THE RESILIENT "SLACK MARKET"" Elsewhere I addressed the possible impact of marijuana legalization an Mexican drug cartels," suggesting the cartels might respond by redoubling their efforts to export other illicit drugs." As predicted, the cartels reacted to falling U.S. demand for illicit marijuana in the wake of broadening legalization of localized production by ramping up *699 opium poppy production and licroinlopiate exports, along with methamphetamine, at the same time that cannabis exports decreased," Increasingly, U.S. buyers have opportunities to buy U.S. grown marijuana produced lawfully under state law for medical or recreational uses, even if purchased for use outside that state, or for impermissible nonmedical uses, or by minors ineligible to purchase marijuana_ Accordingly, reliance on Mexican marijuana, and other marijuana grown outside (lie local legal allowances, has decreased, Still, the black market for marijuana appears to have survived even for recreational users of age in States where recreational usage has been legalized. Because recreational marijuana is taxed heavily (in Washington, for example, recreational marijuana is taxed at 37 porcent, with an additional 9.5 percent sales tax)," oftentimes black market marijuana is cheaper. Although griddle class or wealthy buyers might prefer a legal purchase from a regulated store, many poor buyers, who are disproportionately buyers of color, are effectively *700 priced out of the legal market and must purchase under the black market that remains criminalbmd. Ironically, then, due to their disproportionately precarious Financial position, racial minorities might be excluded from both ends of the legal marijuana transaction as sellers and buyers." V. LIFE AFTER LEGALIZATION: BLUNT REALITIES FOR MINORITY USERS Detailed above were some of the disproportionate consequences of marijuana use for racial minorities in local and federal regimes of criminalization, particularly evident in racial profiling and inequities in arrests despite equal usage with whites, and in the deleterious cansequences for noncitizens of drug convictions.;,, Additional consequences exist not addressed in any detail here, ranging from those in higher education of student loan denials"' and NCAA drug testing suspensions", to denials of federally subsidized housing" and state -supplied welfare and food stamps to poor users." Although these consequences, at least for federal benefits such as student loans, in theory survive state legalization given the ongoing federal prohibition of recreational and medicinal marijuana, as a practical matter arrests for marijuana possession (as opposed to trafficking) occur at the state *701 and not the federal level." Therefore, these consequences, for the most part, should ease in state legalization regimes.„ The discussion below identifies the areas of continued vulnerability for arrest or other detrimental consequences that survive in state legalization regimes. It assumes that racial minorities, as under drug criminalization regimes, will suffer the brunt of the enforcement emphasis through racial profiling, "broken window" policing," and saturation enforcement placing emphasis in neighborhoods of color. It further assumes the disproportionately low income and wealth of racial minorities and the obvious consequences for employment and housing that flow from that financial predicament. Three vestiges of racial profiling in a legalization regime attach to offenses that survive legalization --driving under the influence of marijuana, possession of marijuana by youths, and public consumption of marijuana."' State DUI laws potentially ensnare drivers in traffic stops suspected of having used otherwise legal marijuana, even those whose legal use was days or weeks past, as T14C can be detected through blood tests far several months after use by frequent marijuana smokers." Reflected in the familiar phrases Driving While Black and Driving While Hispanic is the reality that *702 minority drivers are frequent targets of traffic stops seeking contraband or evidence of other crimes.'" In legalization regimes, then, minority drivers might nonetheless steer a path toward criminalization, or at least be subjected to continued harassment. Because legalization protocols exclude underage users, generally defined as those under age 21,11 the prevailing enforcement regime survives for those most vulnerable to marijuana as a gateway drug --here as a gateway to the educational, employment, income, and other negative consequences of a criminal record. For the youngest users, the so-called school to prison pipeline'"' of enforcement and disciplinary prerogatives in schools is alive and well whether in Alaska or Arkansas. Public consumption of marijuana remains a crime in legalization regimes,' Legal uncertainties abound, and minorities have fared poorly when unclear laws, such as loitering, are applied to target them {z Obviously, consumption in a public park would be unlawful, but what about on a private residence porch, or when a vehicle passenger consumes marijuana while on a WUSTLAVC 2021 Thomson Reuters No claim to original U.S. Government Works_ 4 THE COLONS OF CANNABIS: RACE AND MARIJUANA, 50 U.C, Davis L. Rev. 689 public street?" Even if smoked indoors in a sufficiently private place, might later visible intoxication outdoors result in a public intoxication charge? Might poor residents, disproportionately racial minorities, be forced into *703 public spaces for much of their day due to overcrowding in the home, causing them to engage in otherwise legal behavior if within the home but made illegal by its visibility in public?" Evidencing the continuance of racialized enforcement in Colorado was the recent post -legalization study of marijuana arrests that found blacks there more than twice as likely as whites to be arrested for public use of marijuana°° and a separate study finding post -legalization arrest rates of Colorado schoolchildren were even more racially disproportionate than before." Related to the trap for public consumption of marijuana is consumption within a rental unit. Because racial minorities are more likely to be renters than whites, they are vulnerable to the typical residential lease provision outlawing smoking or other consumption of drugs, including legalized marijuana.°' To escape the rental restrictions enforced by watchful property managers or neighbors, residents might consume marijuana outside the complex in public spaces, rendering them vulnerable to a different enforcer-- police. *7041mployment drug testing also survives in legalization regimes, likely even for employees using marijuana for medicinal purposes and thus claiming protection under disability antidiscrimination laws, but denied that protection given the continued illegality of marijuana under federal law.^' Because most low -wage employers require drug testing, encompassing fast food restaurants, retail stores, hotels, and public transportation, racial minorities may bear the brunt of these requirements that control their behavior by private contract, as with residential leases - *705 'VI. NEXT STEPS: REFORM TOWARD RACIAL JUSTICE Some of the consequences mentioned above, such as federal immigration law impacts, will ease as more states embrace the legalization model for recreational marijuana. And inequities such as the reluctance of banks to extend credit to marijuana enterprises will disappear once federal law is reformed to, at minimum, respect the right of states to .regulate marijuana as they choose, and further to remove federal criminal penalties for marijuana use. But more may be needed. Michelle Alexander argues that merely legalizing marijuana is inadequate relief for embattled racial minorities ravaged by the War on Drugs: After waging a brutal war on poor communities of color, a drug war that has decimated families, spread despair and hopelessness through entire communities, and a war that has fanned the flames of the very violence it was supposedly intended to address and control; after pouring billions of dollars into prisons and allowing schools to fail; we're gonna simply say, we're done now? I think we have to be willing, as we're talking about legalization, to also start talking about reparations for the war on drugs, how to repair the harm caused.", Financial reparations are rarely granted to communities of color, and the fear of reparations even stymied an official apology by Congress to African Americans for the brutalities of slavery." The Oregon experience, however, suggests a costless olive branch that should be extended to racial minorities, and anyone convicted of a marijuana possession offense in a regime that eventually legalizes the same conduct. After its recreational legalization, Oregon's legislature allowed the expungement of the criminal records of those convicted only of marijuana crimes." Relatedly but more narrowly, the Colorado *706 Court of Appeals has applied that state's legalization law retroactively to overturn marijuana possession convictions that had not become final on appeal before the new law took effect," The racial consequences described above are no reason to resist legalization in remaining states and at the federal level, even if the benefit of legalization may fall primarily to white entrepreneurs and white users. Rather, the racial consequences that remain despite legalization are a reminder of the broader ills of our criminal justice system that is fixated on enforcement against minorities. Marijuana and other drug laws have served as the centerpiece of the decades -long mass incarceration of minorities," and a shift to treat use and addiction as a health issue rather than a crime is a needed step in the long road toward racial justice. Footnotes YVESTLAW 02021 Thomson Neuters. No claim to original US. Government Works. THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 Al Copyright 0 2016 Steven W. Bender. Associate Dean for Research and Faculty Development, Seattle University School of Law. I am grateful to the UC Davis Law Review for organizing the Disjointed Regulation Symposium, especially the hard work of Senior Symposium Editor Kate Wittlake, and to conference participants for helpful comments and suggestions, particularly Carrie Rosenbaum and Janet Vining. I See, e.g., COLO. CONST, art. XVIII, § 16, � NrASH. REV. CODE ANN. § 69.50.41313 (2016), a For discussion of the many states decriminalizing marijuana to eliminate jail time, see Carrie Rosenbaum, What (and Whom) State MarUuana Reformers Forgot: C'rimmigration Law and Noncitizens, 9 DEPAUL 1. FOR SOC. JUST., 1, 1-2 & nn. 1-4 (2016). 3 See generally Steven W. Bender, Janet Reform?: The Interplay of State, Federal, and Hemispheric Regulation of Recreational Nlaryuana and the Failed War on Drags, 6 ALB, GOV'T L. REV. 359 (2013) [hereinafter Joint Reform]. 4 See infra Parts 111, V. s SeeSTEVEN W. BENDER, RUN FOR THE BORDER: VICE AND VIRTUE IN U.S.-MEXICO BORDER CROSSINGSS 97 (2012) [hereinafter RUN FOR THE BORDER]. ' PAUL BUTLER, LET'S GET FREE: A HIP -HOP THEORY OF JUSTICE 45 (2009); see alsoJOHANN HAM, CHASING THE SCREAM 15 (2015) (mentioning 1927 New York Times headline "Mexican Family Go Insane" to describe the consequences of a family ingesting marijuana). For Mexico's role in instigating the "Reefer Madness" hysteria, see ISAAC CAMPOS, HOME GROWN (2012). I Bender, Joint Reform, mipra note 3, at 362. at Id 9 See id. la Id, at 364-65; see Erwin Chemerinsky et a]., Cooperative Federalism and Marijuana Regulation, 62 UCLA L. REV. 74, 82-83 (2015). As recently as summer 2016, the federal Drug Enforcement Agency refused to downgrade marijuana to a Schedule II drug in the same category as cocaine. See Emily Willingham, DEtrrt x Hypocritical Maryuana Decislon Ignores the Evidence, FORBES (Aug. 13, 2016, 8:42 AM), htip-Hwww. forbes. comis ites/em ilyw i l l in.gham/2016/0 8/ 13/deas-marijuana-decision-ishypocrisy/423 fOe7ca4e44. See Bender, Joint Reform, supra note 3, at 367. 12 See id. (supplying statistic of 872,721 state and local marijuana possession arrests .in 2007). More recent statistics arc WESTLAw C 2021 Thomson Reuters_ No Claim to original U.S, Government Works. 6 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 the estimated 700,993 arrests in 2014, with 88% of those for possession, See FBI Reports Annual Marijuana Arrests in U.S. Increased Last Year for the First Time Since 2009, MARIJUANA .POL'Y PROJECT (Sept. 28, 2015), https://www.inpp.org/newsipress/tbi-reports-annual-marijuana-arrests-in-u-s-increased-last-year-for-the-first-time-sin ce-2009/. Sec Bender, Joint Reform, supra note 3, at 367, For harder drugs such as cocaine and heroin, a recent study found much higher abuse rates among delinquent white (non -Hispanic) teens than for black delinquent youth, See Kristin Samuelson, Among Delinquent Teens, Whites More Likely Than Blacks to Abuse Hard Drags, NORTHWESTERN (Mar. 17, 2016), http://www.northwestern.edu/newscenter/storics/2016/03/race-del inquent-youth-substance-use-disorder. htm I (discussing study published in 2016 in the American .Journal of Public Health). Before Colorado's legalization of recreational marijuana, African Americans, comprising only 4% of the state's population, accounted for 22% of the state's marijuana arrests. See Nekima Levy -Pounds, Going up in Smoke: The Impacts of & Drug War on Young Black Men, 6 ALB. GOV'T L. REV. 560, 576 (2014). In Washington D.C., African Americans were eight times more likely to be arrested for possession than white marijuana users. SeeACLU, THE WAR ON MARIJUANA IN BLACK AND WHITE 17-18 (2013), https71/www.aclu.org/sites/default/files/field_ document/] 1144I3-mj-report-rfs-rcll.pdf (also revealing nationally that blacks are 33 times more likely than whites to be arrested for possession); see also Jesse Wegman, The Injustice of MarUuana Arrests, N.Y. TIMES (July 28, 2014), http://www.nytimes.com/2014/07129/opinion/high-time-the-injustice-of-marijuana-arrests.html. Once arrested, these defendants were less likely than whites to be released on bail, and more likely to face mandatory minimum charges, See Abby Haglage, When White Girls Deal Drugs, They Walk, DAILY BEAST (Nov. 30, 2015, 10,00 PM ET), htip:/1www.thedailybeast.com/articles/2015/12101/when-white-girls-deal-drugs-they-walk,htm] (addressing the arrest and prompt release on bail of the white daughter of a DEA official found with large amounts of a variety of illicit drugs for sale)_ SeeM1CHELLE ALEXANDER, THE NEW JIM CROW: MASS fNCARCERATION IN THE AGE OF COLORBLINDNESS IS-16 (2010) (inviting scholars and advocates to engage the mass incarceration and drug war experiences of women, Latinos, and immigrants as she does for African American men). See generallyBENDER, RUN FOR THE BORDER, supra note 5, at 114-38 (reviewing the history of Latin American irrunigration as it relates to United States drag policy). Simple possession offenses are grounds for deportation of noncitizens under the Immigration and Nationality Act unless they fall under the exception for single offense possession of small amounts of marijuana. See Jordan Cunnings, Nonserious lllarpana Offenses and Noncitizens: Uncounseled Pleas and Disproportionate Consequences, 62 UCLA L. REV. 510, 531-35 (2015) (discussing how this personal use exception can be lost by more than one marijuana offense, or by a conviction for social sharing of marijuana; also noting that there is no personal use exception when noncitizens who travel abroad attempt to return to the United States, and concluding that low-level marijuana offenses create serious consequences for noncitizen offenders); Rosenbaum, supra note 2, at 45-46 (discussing how Latino noncitizens will continue to suffer disproportionate criminal and immigration impacts despite state decriminalization of marijuana). See generally Kevin R. Johnson, Racial Profiling in the War on Drugs Meets the Immigration Removal Process: The Case of Moncrieffe v. Holder, 48 U. MICH, J.L. REFORM 967 (2015) (addressing how racial proFling of the minority noncitizen adds to the treacherous immigration law impact of drug offenses); Grace Meng, A Price Too High: US Families Torn Apart by Deportations for Drug Offenses, HUM. RTS. WATCH (June 16, 2015), https://www.hrw.org/report/2015/06/16/pricertoo-high/us-families-torn-apart-deportations-drug-offenses (discussing the rise in drug deportations and the consequent impact on families). WESTLAW 02021 Thomson Reuters. No claim to original U.S. Government Works. L 7 l'HE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 " Bender, Joini Reform, supra note 3, at 371-73. Is See Sarah Breitcnbach, Many Stares Still Grapple wilh Regulating Medical Marijuana, HUFFINGTON POST (last updated Oct_ 19, 2015), htV://www.lruffingtonpost.comlentry/medical-marijuana-state-laws_5625054ee4hObee3470156fc (detailing arguments for and against legalizing marijuana for medical uses). IV SeeLEGIS. COUNCIL OF THE COLO. GEN. ASSEMBLY, 2012 STATE BALLOT INFORMATION BOOKLET AND RECOMMENDATIONS ON RETENTIONS OF 7UDOE5 12,14 (2012) (summarizing arguments for adoption of Colorado legalization measure to include the statement that "[a]dults should have the choice to use marijuana, just as they have that choice with other substances such as alcohol and tobacco"). I" Conversation with Conridential Source, Washington Advocate of Marijuana Legalization (Feb. 7, 2013) E,g„ KATE BROWN, OR. SEC'Y OF STATE, VOTERS' PAMPHLET: OREGON GENERAL ELECTION 125 (2014) (Former chief federal prosecutor for Oregon Kris Olson arguing "[m]oney spent on legal marijuana will be diverted from the black market and drug cartels. Instead, it will go into legitimate businesses, and the taxes generated will go to essential public services like police, mental health and drug prevention."); see, e.g., STATE OF A.LASKA OFFICIAL ELECTION PAMPHLET 79 (2014), https:llwww.electi❑ns.alaska.gov/doc/oep/2014iAlG-Region-l-book,pdf (argument of Political Director/Treasurer of Campaign to Regulate Marijuana Like Alcohol Christopher Rempert) (advocating moving marijuana fi•om the underground criminal market to one that generates tax revenue); see alsoHAR1, supra note 6, at 282 ("The Washington campaign argued that drugs should be legalized not because they are safe, but because they are dangerous. It's precisely because tboy are risky that we need to take them back from the gangsters and cartels, and hand them to regulated stares ...."). }- For some drugs such as cocaine this is a reasonable assumption given supply chains that now travel through Mexico and Central America to production sites in Colombia, Bolivia, and other South Americau counties. SeeSTEVEN W. BENDER, MEA CULPA: LESSONS ON LAW AND REGRET FROM U.S. HISTORY 1.40-41 (2015) [hereinafter MEA CULPA]. For marijuana this assumption is more questionable given the significant production of illicit marijuana within the United States, particularly in the so-called Fincrald Triangle ofNorthem California's Humboldt, Mendocino, and Trinity counties, by operatives of all backgrounds. See, e.g., Marijuana Legalization and Regulation, DRUG POLY ALL., hitp;l{www.drugpolicy.org/marijuana-legalisation-and-regulation (last visited Aug. 23, 2016) (discussing how marijuana product testing is becoming a standard feature in legalized marijuana regimes). ' .Rebecca Sheir, An Uncomfortable Link Between Race and Marjuana Arrests in I.C., WAMU 88.5 AM. UNIV_ RADIO (May I, 2015), http:llwaniu.org/programslnietro_connection/ 15104l30/aa—uncomfortable_link_between_t ace_ and rnarijuana_arrests in dc. 16 Id. WCSrI-AW @ 2021 Thomson Reuters_ No claim to original. U.S. Government Works. THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 27 See Bender, Joini Reform, supra note 3, .at 369. i$ See id. 19 See Thomas J. Moran, Note, Just a Little Bit of Histo)y Repenting. The California Model of kfar�uana Legalization and flow It Might Affect Racial and Ethnic Minorities, 17 WASH. & LEE J.C.R. & SOC. JUST. 557, 568 (2011). .w Bender, Joint Reform, supra note 3, at 369. Ekow N. Yankah, Opinion, When Addiction Flas a While Face, N.Y. THVIES, Feb. 9, 2016, at A23. 32 See Gina Kolata & Sarah Cohen, Drug Overdoses Propel Rise in Mortality Rates of Young Whites, N.Y. "LIMES, Jan. 17, 2016, at Al. See April M. Short, Michelle Alexander: White Men Get Rich from Legal Pot, Black Men Stay in Prison, ALTERNET (Mar. 16, 2014), http://www.alternet.org/drugs/michelle-alexander-white-men-get-rich-legal-pot-black-men-stay-prison; see also Ted Hesson, DC's Mack Residents Want a Piece of the Legal Maryuana Market, FUSION (Feb, 28, 2015), http.'//fusion.net/story/56325/black-residents-want-a-piece-of dcs-marijuana-market/ ("The legal marijuana industry is very white .... [Inndustry insiders widely acknowledge a lack of diversity in the emerging [legal marijuana] field."), Karen Mawdsley, Rilwan Balogun & Montinique Monroe, Experts: Minorities Struggle far Fboting in Lucrative Cannabis Industry, WEEDRUSH (Aug. 15, 2015), http://weedrush.news2l.com/experts-minorities-struggle-for-footing-in-lucrative-cannabis-industry/ (noting the legal cannabis industry is dominated by white men). An example of the controversy of white businessmen profiting from what imprisoned so many men of color is the gentrifying neighborhood in Seattle's Central District where African American groups have criticized a white -owned marijuana outlet near a local church's teen center. The church's pastor suggested that if a marijuana outlet is allowed an the same intersection where police traditionally arrested African Americans selling marijuana, then the Seattle mayor "needs to let all the brothers and sisters go who are incarcerated for marijuana" Bob Young, Protesters March on Seattle's Uncle Ike's Pot Shop, SEATTLE TIMES (Apr. 20, 2016), http://www.se,attletimes.com/seattle-news/m arij tiana/protesters-march-on,seattl es-uncle-ikes-pot-shop/. See Chemerinsky et al., supra note 10, at 91-93 (addressing the unavailability of banking services for the, legal marijuana industry); Andrew l^olkerth & J. Marcus Painter, Legalized Maryuana and the Real Estate Finance Dilemma, COLORADOBIZ (Aug. 19, 2013, 5.35 AM), http://www.cobizmag.com/articles/legalized-iarijuana-and-the-real-ostate-finance-dilemma (addressing an additional factor of the potential federal forfeiture of assets involved in the marijuana business, as well as the reluctance of landlords to rent to a marijuana business given the similar risk of federal forfeiture of the real estate). The recalcitrance of landlords may compel a marijuana business to own the real estate itself, without the benefit of a real estate loan, thereby increasing capital needs. In the omnibus spending bill approved in late 2015, Congress agreed to prevent federal authorities from interfering with state medical marijuana laws but, despite Senate approval, Congress refused an amendment to allow hanks to deliver financial services to marijuana businesses. 31 See Jana Kasperkevic, Medical Marauana: As Profitable as .fipple Stores, but Only for Nigh Rollers, GUARDIAN (Oct. 29, 2014, 8:00 AM), http://www.theguardian.com/business/2014/oct/29/medical-marijuana-business-new-york (discussing the start-up costs and impecliments for New York medical marijuana businesses); Mawdsley, et al., supra WESTt.AW C 2021 Thomson Routers. No claim to original U.S. Government Works. w 9 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Pev. 689 note 33 (citing wealth disparities and high start-up costs as impeding minority entry into medical marijuana operations, noting recommended start-up funds of between $3 million and $5 million in Connecticut); Dan Weissmann, The Legal Business of Marijuana IT Growing but the Industry Lacks Diversity, NPR (July 3, 2015, 5:06 AM), http://www.npr.org/2015/07103/419692413/the-legal-bus i nes s-of-maxi jean a -is -growing -but -the -in dustry-lacks-diversi ty ("You can't even submit La marijuana business] application .in most states for under $100,000,"). '^ See rracy Jarrett, Six Reasons African Americans Aren't Breaking into Cannabis Industry, NBC NEWS (Apr. 19, 2015, 8.29 PM), http://www.nbcnews.conL/news/nbebUd6-reasons-african-americans-cant-break-cannabis-industry-n344486 (reporting most states will deny a cannabis retail license to individuals with a misdemeanor or arrest for possession of marijuana or any drug). 'rho state of Washington, for example, has a scoring System for licensees, with those convicted of two misdemeanors unlikely to obtain a license. Id. Ironically, Colorado's first A&ican American woman to own a marijuana dispensary was inspired to start her business by her brother's experience as a youth who spent several years of forced labor picking cotton in Texas while imprisoned on a petty marijuana charge. See Amy Goodman, Colorado's Firs! Black Wonsan Pot Entrepreneur on 9dihies, Incarceration, & the lndustry's Whiteness, DEMOCRACY NOW! (Apr. 22, 2016), http://www.deinocracyrinw.arg/2016/4122/as—black—youth—are locked —up. 37 See Shaleen Title, How Insidious Laws Are Keeping .Adany from Participating in the Promising Legal Marijuana Economy, ALTE,RNET (July 14, 2016), http://www. a lternot. erg/d rugs/inost�law8-barring-people-felonies-marijuana-business-pure-hypocrisy. " See discussion infra Part VI of the different approaches to past convictions taken in Oregon and Colorado. '9 Jarrett, supra note 36; see discussion infra Part VL au See Russ Belville, In Defense of White Gzrys and Marijuana Legalization, MARIJUANA POL. (Apr. 30, 2015, 11:56 AM), http://marijuanapolitics,corn/in-defense of--white-guys-and-marijuana-legalization) (objecting to the notion of racism in legal marijuana operations given that the (at the time) four states of legalization are among the 20 least black populated states). Other state -specific factors holding back minorities include the experience under the Florida medical marijuana law which allows nurseries registered for 30 years to grow medical marijuana, thus excluding black farmers who suffered discrimination in the past at the hands of the U.S, Department of Agriculture. See Carolyn M.. Brown, Black Furmers Shut out of $10 fltilion Legal MarUvana Business, BLACK ENTERPRISE CNov. 10, 2015), http:/Iwww.blackenterprise.com/small-business/black-farmers-shut-out-of legal -marijuana -business/. Another factor is the residency requirements for licensod sellers in these legalization states with few minorities. See, e.g., Daniel Shortt, Marijuana Industry Residency Requirements, CANNA L. BLOG (Apr. 29, 2015), http://www.oannalawblog.coin/marijuana-industry-residency-requirements/ (discussing Colorado's two year residency requirement). Oregon, however, repeated its two-year residency requirement in 2016. Vince Sliwoski, Oregon Opens 11s Cannabis Industry to Non -Residents, CANNA L. 13LOG (Mar. 8, 2016), http://www.cannalawblog.com/hb-4014-opens-oregons-cannabis-industry-to-non-residents/, As discussed in the next part, in states where recreational marijuana is not legal, the black market continues to thrive, free of the entry constraints of the legal market. As one writer observed, the illicit drug industry is the only "factory" still open in some cities, employing "children, old people, people who've been shooting drugs for 20 years, it doesn't matter." Yana Kunichoff, Do Now Mar Juana Legalization Laws Only Benefit White People?, CHI. MUCKRAKERS (June 7, 2013, 1:05 PM), http://www, ch icagonow. coin/chicago-mucluakers/2015/06/do-new-marijuana-1 egaLizati on-laws-only-benefit-white-pe OPIU. WfSTLA►'Y @ 2021 Thomson Reuters, No claim to original U.S. Government Works 10 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. G89 to In using this familiar phrasing I am aware of the negative connotation often associated with black -descriptors such as black market and blackmail, in contrast to white -phrases such as white collar. See generallyRlCHAKD LEDEREF, THE MIRACLE OF LANGUAGE 53.55 (1991) (explaining how more black expressions have unsavory connotations than white ones). '' See Bender, .loins Rgform, supra note 3, at 383-91. kl. at 388. 14 See Nick Miroff, Losing Marjuana Business, Mexican Cartels Push Heroin and Meth, WASH. POST (Jan. 11, 2015), https:Ilwww,washingtonpost.cam/world/the americas/losing-marijuana-business-mexican-cartels-push-heroin-and-m eth/2015101/l1/9lfe44ce-8532-I1e4-abcf-5e3d7b3b20b8_story.htrnl; see alsoliEROIN: CAPE COD, USA (HBO 2015) (attributing surge of heroin to Mexican drug cartels replacing lost marijuana revenue). See generally Olga Khazan, The New Heroin Epidemic, ATLANTIC (Oct. 30, 2014), hitp://www.theatiantic.com/health/arcbive/2014/10/the-new-heroinepidernic/382020/ (describing the surge in illicit use of prescription opiates in the early 2000's and a resulting rise in demand for heroin). Some synthetic drugs classified as opiates, such as fentan.yl, can be produced in laboratories in Mexico and elsewhere without need for the opium poppy. See Azam Ahmed, 40 Times Stronger than Heroin, Fentanyl Enriches Drug Cartels, N,X, TIMES, .tune 10, 2016, at A]. See Bryan Adamson, Washington's Mar#uana Laws and Social Justice-- Our Clinical Work at Seattle University School of Law, LAW PROFESSOR BLOGS NETWORK (Oct. 29, 2015), fttp:lllawprofessors.typepad.com/clinic_prof/2015/10/washingtons-marijuana-caws-and-social justiceour-clinical-war k-at-seattle-university-school-of law,html; see also Sarah Aitchison, The Year That Wend to Pot: 3250M in MarJuana Soles-- Yet Some Merchants Feel It's Been a Bummer, PUGET SOUND BUS. J. (July 10, 2015, 3:00 AM), http://Yvww.bi7joumals.com/seattle/print-odition/2015/07/1 0/the-year-that-went-to-pot-250m-in-marijuana-sales.htm I (discussing the still active black market in Washington despite recreational legalization, prompting the legislature to replace the former three tiers of 25 percent tax at the stages of growing, packaging, and selling, with a single layer of 37 percent tax); Dylan Pctrohilos, Weed Is Now Legal in DC. Here's Why Drug Dealers Aren't Worried, THINKPROGRESS (Feb. 26, 2015), http:llthinkprogress.org/justicet2Ol5/02/26/3626608/pot,comes-to-dc/ (reporting that the unregulated market is still thriving in Colorado because it is cheaper to purchase unregulated marijuana). A Washington lawmaker has proposed a bill reducing state excise taxation further, down to 25 percent, in order to reduce the competitive advantage enjoyed by the black market. H,B. 2347, House Reg. Sess. 2015-2016 (Wash_ 2016). In addition to taxation, the costs of licensing and regulation are substantial, with the added cost of a brick and mortar store as compared to the illicit drug dealer's home or automobile. .16 Charing Ball, Will Black People Miss out on the Benefits of Marijuana Legalization?, MADAM NOIRE (Jan, 6, 2014), http:/Imadamenoire.com/337897/will-black-people-miss-benefits-marijuana-legalization/, y' Gf infra Part V (explaining that racial minorities are also excluded disproportionately from lawful use, or at least consumption without economic and other deleterious consequences). 46 See supra Part 1. JN Introduced as an amendment to the federal Higher Education Act in 1998, and signed by President Clinton, was a denial of federal financial aid to students convicted of minor drug offenses, suspending first offenders from benefits vVESTI AVV C 2021 Thornson Neuters. No claim to original U,S, Governrrment Wvrics. 11 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 for a year. See Clinton Signs L.aiv Denying Student Aid to Marijuana Smokers, NORML (Oct. 8, 1998), http://nonnl, org/news/ l 998/10/08/cl inton-signs-law-denying-student-aid-to-marij uana-smokers. 50 But cf Schools Easing Athlete Penalties for Mar uana, Report Says, ESPN (Dec. 28, 2015), http://sports.espn.go. coin/college-football/sto.ry/_/id/ 14449159/many-power-five-schools-step-pot-easement-trend (discussing results of Associated Press study finding major conference schools were treating athlete marijuana use less harshly than 10 years ago, including at the University of Oregon whore athletes don't lose playing time until the third failed test). si See generally Adamson, supra note 45 (detailing fcderai housing consequences of marijuana use). 12 SeeMICHAEL A. HARWIN, Phe New Deal for Drug Defendants: Lose .Your Federal Benefits and Privileges, inDEFENSE STRATEGIES FOR DRUG CRIMES: LEADING LAWYERS ON INTERPRETING TODAY'S DRUG CASES, DEVELOPING A THOROUGH DEFENSE, AND PROTECTING A CLIENT'S RIGHTS 3 (2015), Westlaw 6157371. See Chemerinsky et al., supra note 10, at 84 (citing statistics that nearly all marijuana arrests occur at the state level, with a 109 to I ratio in 2012). For example, NCAA drug testing will survive in legalization regimes, in part because most athletes are younger than the minimum legal age for consumption in those states, 21. The possibility exists too of federal possession charges for using marijuana in a federal park or other federal. place. 55 See generally Raven Rakia, When People Are Property: How Strategically Choreographed, Racialized !Fear Built Prisons Out of Broken Windows, MEDIUM (July 22, 2014), littps:/imedium.coi-n/ rt aiiitacrow/when-people-are-property-296dfc5lO5b i #,2y4xijeia (detailing the history of broken windows policing and situating marijuana arrests within this enforcement strategy). `d Other surviving offenses include possession of amounts in excess of the legal limit, which for marijuana and its various product permutations such as edibles can be challenging for the user to determine. Another potential offense is purchasing marijuana fi-om a black market seller in a regime where purchases from registered sellers (with the exception of social sharing) are required. 37 See Katy Hall & Jan Dichm, Here's Where Yoze Can Fret Arrested for DU! Weeks After Smoking Marijuana, HUP'FINGTON POST (Dec, 31, 2013, 12:28 12M ET), http://www.huffingtonpost.com12013/12/31/marijuana-dui_n_4520129.html (discussing how exceeding the legal THC limit in Washington can result in a DUI offense regardless of a showing of actuai impairment, while in Colorado oxceeding the limit is only a permissive inference of intoxication). See generally Andrea Roth, The Uneasy Case for Marijuana us Chemical Impairment Under a Science -Based Jarisprudence af'Dangeruusness, 103 CALIF_ L. REV. 841 (2015) (attacking the assumptions and junk science of marijuana driving impairment laws). 59 See Rosenbaum, supra note 2, at 3. ' SeeCOLO. CONST. art. 18, § 16, But ,see Control, Regulate and Tax Adult Use of Marijuana Act, Proposition 64, § 3(y) (Cal. 2016) (proposing reduced penalties by providing drug education and community service for minors in WEST LAVv Q 2021 Thomson Reuters_ No claim to original U.S. Government Works 12 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 possession). Many medical marijuana states such as Washington, however, do not exclude otherwise eligible minors from their permitted users of inedical marijuana. 14 See generally School -to -Prison Pipeline, ACLU, https://www.aclu.org/issues/juvenile justice/school-prison-pipeline?rcdirect✓fact-sheat/what-school-prison-pipeline (last visited Oct. 15, 2016) (explaining that the school to prison pipeline is a disturbing national trend wherein children are funneled out of public schools and into the criminal justice system). WASH. REV. CODE ANN- § 69.50.445 (2016) (criminalizing use of marijuana "in view of the general ,public"). 62 STEVEN W. BENDER, GREASERS AND CrRINCOS: LATINOS, LAW, AND THE AMERICAN IMAGINATION 55 (2003) (discussing vague loitering and gang membership laws used to target Latinos and African Americans), See generally David Blake & lack I±inlaw, Marijuana Legalization in Colorado: Learned Les.50n& 8 HARV. L. & POL'Y REV. 359, 374 (2014) (discussing how the Denver City Council narrowly rejected an ordinance that would have prohibited recreational marijuana smoking on a front porch); Vince 5liwoski, Oregon's Hazy Law on Smoking Marijuana in "Public Places, "CANNA L. RLOG (Aug. 5, 2015), http://www,cannalawbiog.com/oregons-hazy-law on -smoking -marijuana -in -public/ (discussing uncertainties under Oregon law, including whether consumption in a vehicle is considered a public place and looking to analogous Oregon authority to conclude affirmatively). IN Another group uniquely susceptible to public use laws is our homeless population, whose presence in public spaces is criminalized in an increasing variety of ways that cover most aspects of their lives. Essential life functions that are lawful when done in the privacy of one's home, such as urinating and sleeping, are ci&n criminalized when they take place in public spaces. See generally Sara Rankin, The influence of Exile, 76 MD. L. REV. (forthcoming 2016), GS Kristen Wyatt, Report: Racial Disparities in Drug Arrests ,persist After Colorado Legalizes Marijuana, U.S. NEWS & WORLD REP. (Mar. 25, 2015, 1:57 PM), http://www.usnr,ws.com/news/us/articles/2015/03125/report-racial-disparities-in-arrests-persist-with-legal-pot (Finding against a backdrop of post -legalization plummeting of marijuana arrests that blacks were also much more likely than whites to face arrest in Colorado for illegal cultivation of marijuana or possession beyond the legal limit). "0 Amanda Chicago Lewis, Marijuana Arrests dawn in Colorado for While Teens, up far Black and Larino Teems, BU7, ZFEED NEVUS (May 10, 2016, 3:09 PM), haps://www.buzzfeed.comjaniaiidachicagolewis/marijuana-arrests-d❑wn-in-colorado-for-white-teens-up-for-bl?utm t erm=.hw375zMOR#,ke2o48VR2 (discussing report fmding that between 2012 and 2014, marijuana arrests of Colorado youth aged 10-17 were down for whites and up significantly for blacks and Latinos). At the same time, a post-Iegalization survey :Found Colorado teen recreational use of marijuana declined from pre -legalization results in 2009 (25 percent) to 2015 (21 percent), See Kylie Cheung, Surprise, Surprise: Legal Pot Does Not Increase the Number Of Teens Smoking, ALTERNET (July 1, 2016), htip://www.alternet.org/drugs/how-marijuana-legal ization-real ly-affer,ts-number-teens-smoking-pot. ai See generally Dirk VanderHart, Xpartment #420: For Some Portland Aparlmew Dwellers, Weed's Only Sort pj Legal, PORTLAND MERCURY (Apr. 29, 2015), http://www,portiandmr.rcury.com/poriland/apartment-420/Content?oid=15520508 (reporting that Portland apartment managers reminded tenants of their lease obligations after passage of the Oregon recreational legalization measure). WESTt-AW 02021 Thornson Reuters. No claim to original U.S, Government Warks. -- — - - 13 THE COLORS OF CANNABIS' RACE AND MARIJUANA, 54 U.C. Davis L. Rev. 689 68 In the medical marijuana context, see I, Coals v. DISH Network, LL.C, 350 P.3d 849, 852-53 (Colo. 2015) (ruling similarly that Colorado medical marijuana law did not insulate an employee from discharge for medical marijuana use outside of work, as that activity, violating federal law, was not a protected "lawful activity"); Roe v. TeleTech Customer Care Mgmt. (Colo.) LIX, 257 P.3d 586, 597 (Wash. 2011) (holding Washington's Medical. Use of Marijuana Act does not protect employee from discharge based on lawful medical marijuana use outside the workplace that is illegal under federal law); see also G. M. f ilisko, Gmplayer,s and Workers Grapple with Laws Allowing MarUuana U.se, A.S.A. .I. (Dec. 1, 2015 5:30 AM CST), http://ww w.abaj oumal . com/magazine/atticle/emp loyers_and_workers_grapple_with_laws_al lowinginarij uana_use (discussing inconsistencies in state law protections or prohibitions of employee medical marijuana use); Thomas Mitchell, Legal Marjuana States Aren't That Safe for Pot -Smoking Employees, Survey Finds, WESTWORD (Dec. is, 2015, 9:50 AM), http://www.westword.coin/news/legal-in arij uana-states-arent-that-safe-for-pot-smok ing-einp loyees-survey-f rods-7426 384 (discussing Coats case and survey results that most employers in legalization regimes still prohibit employee marijuana use, whether medical or recroational). Colorado's recreational marijuana Iaw, unlike Washington's, specifically refers to employment and denies protection to the employee for marijuana use: Nothing in this section is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees. COLD. CONST. all, 18, § 16(6)(a); ef.ARIZ. RSV, STAT. ANN. § 36-2813(13)(2) (2016) (Arizona employers prohibited from terminating registered medical marijuana user unless use, possession, or impairment took place on the job). In contrast to the lack of protection in private employment settings, the Colorado courts deferred to legalized marijuana use in the family law setting. Whether raised protectively or opportunistically, the potential exists in ftunily law disputes, particularly dissolution, for the marijuana use of a parent to be used against them. See 1. /n re Marriage of Pan-, 240 P.3d 509, 512-13 (Colo. Ct. App. 2010) (holding a father's use of medical marijuana cannot support a restriction on parenting time absent an evidentiary hearing to demonstrate some threat to the health or safety of the child); cf, David Malleis, Note and Continent, The Nigh Price of Parenting High; Medical Mar�taana and Its Effects on Child Custody Matters, 33 U. LA VERNE L. REV. 357 (2012) (discussing cases where courts employed lawful marijuana use as negative evidence in child custody decisions). 69 Moreover, past drug offenses can haunt the applicant, as more than 90 percent of employers undertake background Checks on prospective employees that encompass Criminal records. See Levy -Pounds, supra note 13, at 595. "' Short, supra note 33. Equally, reformers for racial justice might urge legalization of other illicit drugs such as cocaine, or at minimum an equalization of penalties for crack, used more often by racial minorities, and powdered cocaine. rl See Darryl Fears, Home Issues an Apology for Slavery, WASH. POST (July 30, 2008), http://www,washingtonpost.corn/wp.dyn/content/article/2008/07/291AR2008072902279.litm] (noting prior efforts to give an apology For slavery were hampered by fears of a call for reparations). 72 OR. REV. STAT. § 137.225 (2016) (uncodifcd provision § 129); cf. Noelle Crombie, Some Felony Pot Convictions Can Be Sealed Under New Oregon .Law, OREGONIAN (Nov. 10, 2015, 5:00 AM), http://www,oregonlive.com/marijuana/index.ssf/2015/11/most old_ marijuana_ convictions.html (explaining that under Oregon's expungement law felony convictions for growing or selling marijuana within 1,000 feet if a school, or for selling marijuana to a minor, cannot be expunged; the impetus for the law came from constituents, especially African Americans, whose marijuana convictions made it difficult for them with employers, landlords, and even as chaperone volunteers for then' children's field trips). WCSTLAW 0 2021 Thomson Renters. No claim to original U.S. Government Works. 14 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rov. 689 7,1 See, e.g., People v. Boyd, No. 12CA2607, 2015 WL 4760414 (Colo. Ct. App. Aug. 13, 2015) (holding that Colorado's legalization law retroactively overturns marijuana possession convictions that had not become final on appeal before the new law tank effect). '4 SeeSENDER, MEA CULPA, supra note 22, at 140-42. 50 UCDLR 689 11111i of Docowcnt C 2021 Thomson Reuters, No claim to original U.S. Government Works. WESTLAW @ 2021 Thomson Reuters No claim to original U.S. Government Works, '15 CITY COUNCIL AGENDA REPORT Supplemental Memo MEETING DATE: APRIL 20, 2021 ITEM NUMBER: PH-1 SUBJECT: GIVE FIRST READING TO AN ORDINANCE TO ADOPT CODE AMENDMENT CO-2021-01 TO AMEND TITLE 13 (PLANNING, ZONING, AND DEVELOPMENT) AND AN ORDINANCE TO AMEND TITLE 9 (LICENSES AND BUSINESS REGULATIONS) OF THE COSTA MESA MUNICIPAL CODE REGARDING THE TAXATION, REGULATION, OPERATING REQUIREMENTS AND STANDARDS FOR CANNABIS USES INCLUDING RETAIL CANNABIS STOREFRONT AND NON - STOREFRONT USES TO IMPLEMENT THE CITY OF COSTA MESA RETAIL CANNABIS TAX AND REGULATION MEASURE (MEASURE Q) DATE: APRIL 20, 2021 FROM: DEVELOPMENT SERVICES DEPARTMENT/ PLANNING DIVISION PRESENTATION BY: NANCY HUYNH, ASSOCIATE PLANNER FOR FURTHER INFORMATION NANCY HUYNH, (714) 754-5609 CONTACT: Nancy.Huynh@costamesaca.gov Attached is a list of recommendations from the City Council's Cannabis Ad Hoc Committee, pertaining to the retail cannabis Ordinance, Item PH-1. Ad Hoc Committee Recommendations 1. No distance buffers shall be required between Measure Q businesses. 2. Youth Centers shall be defined as "any public or private facility that is primarily used to host recreation or social activities for minors, specifically private youth membership organizations or clubs, social service teenage club facilities, video arcades where 10 or more video games or game machines or devices are operated, or similar amusement park facilities". [Potential additional language would be inserted here.] Buffer distance shall be 600 feet. 3. Social equity. Adopt staff's recommendation to eliminate felonies convictions that have been downgraded to misdemeanors or decriminalized under Proposition 64 or future Federal law. Direct City Manager to develop a robust social equity program with reference to the Minority Cannabis Business Association's publications. Direct staff to pursue all available grant funding to implement social equity program. 4. There should be no exception to the distance measurement methodology due to "impenetrable barriers" such as the 405 Freeway. 5. "Premises" as defined in Business & Professions Code section 26001(ap), shall define the property line for purposes of measuring the required distance from retail storefronts to sensitive uses as defined in the ordinance. 6. For Playgrounds, a 30 foot radius as measured from the physical boundaries of the playground equipment area shall be treated as the property line of the playground for purposes of measuring the required distance from retail storefronts. 7. "Playgrounds" shall be defined as public playgrounds located in city parks. 8. Set tax rate at 7% with 0.5% directed toward implementation of the Arts Master Plan and 0.5% directed toward the implementation of a first-time homebuyer program for Costa Mesa residents and/or students who graduate from NMUSD high schools. In other words, 1/7 of all revenue will go to these expenses. 9. All cannabis business permits will require a CUP except home delivery permits for existing Measure X permittees, which will require an MCUP. 10. If an illicit cannabis dispensary has existed on a property, no Measure Q business shall be permitted on the property until 180 days have elapsed since the illicit dispensary has vacated the property and the owner of the property has compensated the City for all expenses incurred regarding enforcement related to the illicit cannabis business, provided however, that if the owner of the property is required to evict the illicit dispensary, the 180-day period shall run from the filing of an Unlawful Detainer complaint and a permit may be issued after that 180 day period has run if the illicit dispensary is no longer occupying the premises. Im From: Alisha Diaz <alisha@kannabisworks.com> Sent: Friday, April 16, 2021 3:15 PM To: CITY CLERK Subject: Cannabis City Tax Mayor Foley, Hello, I work for a dispensary in Santa Ana called Kannabis Works. I work specifically with the 60+ community. The hardships that this community deals with are many but one I see becoming more common is doctors getting to the end of their rope for treatment options dealing with chronic pain, insomnia or mood disorders. Many people have come to cannabis because they don't have any other options. When they find something that actually works, they can't believe this has been an ignored option while they have suffered, but they are also very relieved to finally find relief from their ailments. Another challenge they face is that they are used to insurance paying for the main cost of their meds. Most are on fixed incomes and now they have to pay a high retail cost as well as an additional 31 % in taxes on top of it. Lastly, they find themselves unable to leave the house due to the pain they are experiencing and/or find themselves at high risk during a world wide pandemic. In order to get product delivered there is yet another fee on top of the already highly priced and heavily taxed cannabios medicines. Most of my clients are Seniors, Veterans, and people with terminal illnesses. I have clients that didn't want to exist before they tried cannabis and then cannabis gave them a life worth living. I know not all cannabis consumers are medicinal but they exist, but I ask that you please do not ignore the people who will be affected negatively by excessive taxes and extra charges. I have put in place systems to help those in need have access to legal, convenient, affordable cannabis. I would be happy to take the time to share with you the perspective I have from my position in the cannabis space. Thank you for your time, Alisha Diaz Head of Senior Relations alisha@wellnessworksca.com 949-662-3960 Ext. 4 WELLNESS WORKS 2106 S. Susan St, Santa Ana, CA 92704 (949)662.3960 License: C10-0000606-LIC Q� Privileged/Confidential Information may be contained in this message. If you are not the addressee indicated in this message (or responsible for delivery of the message to such person) you may not copy or deliver this message to anyone. In such case, you should destroy this message (and attachments) and kindly notify the sender by reply mail. Please advise immediately if you or your employer do not consent to Internet email for messages of this kind. Opinions, conclusions, and other information in this message that do not relate to the official business of this firm shall be understood as neither given nor endorsed by it. From: Sent: To: Subject: To Whom It May Concern: Diane McConahay <dimcconahay@yahoo.com> Saturday, April 17, 2021 7:32 AM CITY CLERK cannabis tax - upcoming council meeting I am a medical cannabis consumer. I use cannabis as a cancer patient. I am so very excited for the ability of cannabis being in our city. It isn't always easy for travel to other cities for my medicine. Thank you for bringing this to the people here in Costa Mesa. However, I am concerned of the tax being at the height of the range at 7%. With Covid, I lost my jobs and it has been a struggle to find jobs to replace the income I was making. Please help by keeping the tax at the lower range of 4, even 5%. Thank you for your time and consideration! Eat your fruits & veggies :) Diane McConahay Personal Chef Personal Trainer "Let life flow through you!" From: Joseph Leibrandt <josephleibrandt@gmail.com> Sent: Saturday, April 17, 2021 2:11 PM To: CITY CLERK Subject: 420 on 4/20 Please lower the extra taxation level for cannabis businesses to 4%, rather than the maximum 7%, and do not add a "double tax" on delivery services operating outside the city. These measures will enable the legal cannabis market to compete against illicit operators. Also, please consider a reduced tax rate for medical marijuana patients, who are unduly burdened by taxes. Thank you, Joseph Leibrandt From: Tapferx4 <tapferx4@aol.com> Sent: Monday, April 19, 2021 3:07 PM To: CITY CLERK Subject: Public Comment re: Cannabis Ordinance Attachments: Public Comment Letter Ordinance 2021-X2 April 20, 2021.docx; Exhibit A Path of Travel (1).pdf; Exhibit B Chula Vista Municipal Code 5.19.060.pdf Dear City Clerk, Please find attached a letter of public comment for the April 20, 2021 City of Costa Mesa City Council meeting. Also there are two exhibits attached which are referenced in the attached public comment letter. Thank you, Kim Tapfer April 19, 2021 VIA ELECTRONIC MAIL ONLY Costa Mesa City Council City of Costa Mesa 77 Fair Drive Costa Mesa, CA 92626 E-Mail: cityclerk@costamesaca.gov Re: April, 20, 2021 City Council Meeting- Agenda Item 1 (Retail Cannabis Ordinance) Dear Mayor Stephens, Mayor Pro Tern Marr and City Council members, As businessowners in the City of Costa Mesa ("City"), we appreciate the opportunity to comment on the proposed Ordinance 2021-X2 ("Cannabis Ordinance"). Specifically, our interests and concerns are with; 1) the definition of "intervening structures and other barriers" and 2) the method of measurement from a sensitive use to a cannabis retail storefront use. The Current Draft Ordinance The Cannabis Ordinance requires a cannabis retail storefront use to be located a minimum of 1,000 feet from K-12 schools, child daycares, playgrounds and homeless shelters as measured "in a straight line from the closet property line of the lot where the cannabis retail use is to be located to the closet property line of a school, playground, childcare or day-care center, homeless shelter or youth center." Further, it states "All distances shall be measured without regard to the boundaries of the city and/or intervening structures or other barriers, except only for properties separated by the Interstate 405 freeway, for which the distance set forth" ... "shall be measured as the most direct pedestrian route between properties." Within this context, the current draft Cannabis Ordinance identifies 1-405 as the only intervening structure or other barrier. Fairly and Consistently Defining Intervening Structures and Other Barriers First, we respectfully request the City Council fairly define and consistently recognize what constitutes intervening structures or other barriers, rather than only identifying 1-405. A definition identifying intervening structures or other barriers including major roads and highways within the City that are extraordinarily difficult to cross without the aid of a bridge, tunnel or signalized crosswalk, is appropriate. "Intervening structures and other barriers" should include major roads and highways that are seven (7) or more lanes. It's important to emphasize and remember that the 1000-foot restrictive measurement would still be applicable, however instead of measuring the distance "as the crow flies" over these major roads and highways, measurement would be made by "following the most direct pedestrian route." Please see Exhibit A. To give further assurance that a major road or highway cannot be viably crossed (without the aid of a bridge, tunnel or signalized crosswalk), City Council could consider adding a minimum Average Daily Traffic Count as an additional measure. Thus, we respectfully request that City Council consider revising §13-200.93 (e) (4) as follows: "All distances shall be measured without regard to the boundaries of the city and/or intervening structures and other barriers, except only for properties separated by #-he !.,+,,FState 495 E..,,,,,. a y major roads and highways that are seven (7) or more lanes and have an Average Daily Traffic Count in excess 50,000 automobiles/day for which the distance set forth in subsections (1) and (2) shall be measured as the most direct pedestrian route between properties;" Within Costa Mesa, we believe this definition would only include 1-405, Highway 55, Highway 73 and a limited section of Newport Blvd. Chula Vista adopted a similar measurement method using the shortest pedestrian route which is well detailed in Chula Vista Municipal Code §5.19.060 (E) (2). Please see attached Exhibit B. Refining the Measurement to a Retail Cannabis Storefront Second, as currently drafted, the Resolution states that "All distances shall be measured in a straight line from the closest property line of the lot where the cannabis retail use is to be located to the closest property line of the school, playground childcare or daycare center, homeless shelter or youth center." We respectfully request the Cannabis Ordinance be revised so the measurement is to the "retail storefront entrance" rather than to the closet property line of the retail cannabis storefront use. Retail buildings and shopping centers can have large parking lots and extensive landscape buffers. In addition, retail buildings are often large and long in scale, and/or are subdivided into multiple retail uses. Further, retail buildings can be situated on one side or end of a property's parcel — often several hundred feet away from a property line. To account for these diverse situations and to measure distance consistently to a cannabis retail storefront use, we request the City Council to consider that the measurement be to the retail storefront entrance. Thus, we ask you please consider revising §13-200.93 (e) (3) as follows: "All distances shall be measured in a straight line from the PF9peFty line Af thp Int storefront entrance where the cannabis retail use is to be located to the closest property line of the school, playground childcare or daycare center, homeless shelter or youth center." Both Chula Vista and Cloverdale have adopted this method of measuring. Chula Vista Municipal Code §5.19.06 E (1) (a) provides that the "measuring point shall be the center point of the public entrance closest to a public street." Similarly, Cloverdale Municipal Code §18.15 J (5) provides that the measurement is from "the public entrance to the cannabis public dispensary." Conclusion As currently written, the draft Resolution does not fairly define intervening structures and other barriers. Also, the current draft Resolution does properly account for, nor fairly recognize the various site characteristics and configurations that are common with retail properties. Without clearly defining barriers, and properly recognizing the unique characteristics of retail sites, the Cannabis Ordinance could create a de facto limitation moratorium on cannabis operations by eliminating many potential operating locations. Such a moratorium would be in violation of the spirit and intent of Measure Q, a citizen -approved initiative, the California Elections Code and the California Government Code. We thank you for your consideration of these requests, and trust the City of Costa Mesa will adopt a Cannabis Ordinance that addresses Measure Q and the citizens' intent, and serves to both protect the City's sensitive populations while supporting a new tax source. Please feel free to contact us with any comments, questions or concerns. Respectfully, Kim & Diana Burg Exhibit B 5.19.060 Location requirements for cannabis businesses I Chula Vista Municipal Code Page 1 of 6 5.19.060 Location requirements for cannabis businesses. As set forth above in CVMC 5.19.040, a limited number of City Licenses for Commercial Cannabis Businesses shall be authorized and issued by the City. In locating such businesses, City Licensees shall be further subject to the following requirements: A. In General. The licensed Premises of a Commercial Cannabis Business shall be a contiguous, fully enclosed area and shall be occupied only by one Licensee. B. Storefront Retailers. 1. Allowed Zones. Subject to the separation requirements set forth below, Storefront Retailers shall only be allowed in the following zones: (a) C-O administrative and professional office; (b) C-N neighborhood commercial; (c) C-C central commercial; (d) C-V visitor commercial; (e) C-T thoroughfare commercial; (f) other commercial zones in specific plans or sectional planning area plans that allow retail sales uses (including such zones that allow mixed commercial and residential uses); and (g) with a Conditional Use Permit, in the following industrial zones: I-L limited industrial; I-R research industrial; I general industrial; and equivalent industrial zones in specific plans or sectional planning area plans that allow industrial uses. 2. Special Rules for Storefront Retailers in Industrial Zones. In addition to any and all other applicable Code requirements, Storefront Retailers proposed to be located in industrial zones (a) must be located in buildings with entrances that face, and are within 100 feet of, a Public Street; and (b) must comply with parking and sign regulations applicable to retail sales businesses in commercial zones. 3. Separation Requirements. a. Storefront Retailers shall not locate within 1,000 feet of any Day Care Center or any public or private school providing instruction for kindergarten or any grades one through 12. b. Storefront Retailers shall not locate within 600 feet of any Treatment Facility, Youth Center, Youth - Oriented Business, Public Park, or Private Park. c. Storefront Retailers shall not locate within 150 feet of any Residential Zone. 4. Retail Sales Requirements Apply. Storefront Retailers are retail sales uses for the purpose of the Code. Except as otherwise provided in this chapter, all retail sales use requirements for the allowed zone in which the business is located shall apply. C. Non -Storefront Retailers. 1. Allowed Zones. Subject to the separation requirements set forth below, Non -Storefront Retailers shall only be allowed in the following industrial zones: I-L limited industrial; I-R research industrial; I general industrial; and equivalent industrial zones in specific plans or sectional planning area plans that allow industrial uses. 2. Separation Requirements. Non -Storefront Retailers shall not locate within 150 feet of any Residential Zone. The Chula Vista Municipal Code is current through Ordinance 3496, passed December 3, 2020. 5.19.060 Location requirements for cannabis businesses I Chula Vista Municipal Code Page 2 of 6 3. Industrial Use Requirements Apply. Non -Storefront Retailers are industrial uses for the purpose of the Code. Except as otherwise provided in this chapter, all industrial use requirements for the allowed zone in which the business is located shall apply. D. Manufacturers, Distributors, Testing Laboratories, and Cultivators. 1. Allowed Zones. Subject to the separation requirements set forth hereinbelow, Manufacturers, Distributors, Testing Laboratories, and Cultivators shall be allowed in the following industrial zones: I-L limited industrial; I- R research industrial; I general industrial; and equivalent industrial zones in specific plans or sectional planning area plans that allow industrial uses. 2. Separation Requirements. No Manufacturer, Distributor, Testing Laboratory or Cultivator shall be located within 150 feet of any zone allowing residential uses. 3. Industrial Use Requirements Apply. Manufacturers, Distributors, Testing Laboratories, and Cultivators are industrial uses for the purpose of the Code. Except as otherwise provided in this chapter, all industrial use requirements for the allowed zone in which the business is located shall apply. E. Standards for Measurement of Separation Distances. For purposes of this section, separation distances between uses shall be measured as follows: 1. Measuring Points Established. Separation distance between uses shall be measured horizontally in a continuous series of straight lines that connect the two closest "measuring points" of each business or use as set forth hereinbelow. a. For a Commercial Cannabis Business, the "measuring point' shall be the center point of the public entrance closest to a Public Street. b. For a Day Care Center, Youth Center, Youth -Oriented Business, or Treatment Facility, the "measuring point' shall be the center point of the public entrance closest to a Public Street. c. For a public or private school, Public Park, Private Park, or Residential Zone, the "measuring point' shall be the point located on the legal parcel boundary line abutting a Public Street or zone line, as applicable, that is closest to the "measuring point' of the Commercial Cannabis Business at issue. 2. Measurement Paths -Examples. Measurements between public entrances shall start at the "measuring point' of the Commercial Cannabis Business and proceed in a continuous line to the closest property line of the Public Street, measured perpendicular to the Public Street. The measurement shall then continue along the property lines of the Public Street fronts, and in a direct line across intersections along the shortest pedestrian route toward the "measuring point' of the separated use until it reaches such "measuring point." See illustrations below. The Chula Vista Municipal Code is current through Ordinance 3496, passed December 3, 2020. 5.19.060 Location requirements for cannabis businesses I Chula Vista Municipal Code Public ' Entrance Existing or New Building with 1: Cannabis Business F1 Public Street Separation Public Street paration Public Street Distance Line CrosswalkLJ7 Distance Line (TYPlcal) I Curb Line Property Line 1 Mplcal) Existing Building with Other Business/Use Public Entrance 3of6 Measurements between public entrances and legal parcel boundary lines shall start at "measuring point" of the Commercial Cannabis Business and proceed in a continuous line to the closest property line of the Public Street, measured perpendicular to the Public Street. The measurement shall then continue along the property lines of the public street front(s), and in a direct line across intersections along the shortest pedestrian route towards the "measuring point" of the separated use until it reaches such "measuring point" See illustration below. The Chula Vista Municipal Code is current through Ordinance 3496, passed December 3, 2020. 5.19.060 Location requirements for cannabis businesses I Chula Vista Municipal Code Page 4 of 6 Public Street I I Public/Private Park Property Line i i or School (Typical) Separation / Measure to Nearest Distance Line Property Line Public Street Crosswalks �' Public Street (Typical) Curb Line Existing or New Building with I I I Public Cannabis Business Entrance I I I I I I Public Street Crosswalks (Typical) iProperty Line (Typical) ♦— Crosswalks—i (Typical) Public Street Separation Distance Line Public Entrance Existing or New Building with Cannabis Retailer Separation Distance Line Measure to Nearest Property/Zone Line Residential Zoned Property Public Street Where a public or private school, Public Park, Private Park, or residential use or Residential Zone are directly adjacent to or across a Public Street from a Storefront Retailer or Non -Storefront Retailer, the separation distance shall be measured between the respective "measuring points" without regard to a Public Street or intersections. See illustration below. The Chula Vista Municipal Code is current through Ordinance 3496, passed December 3, 2020. 5.19.060 Location requirements for cannabis businesses I Chula Vista Municipal Code Page 5 of 6 I I Public I Existing or New Building with Entrance Cannabis Retailer I I Public Street Separation ; Distance Line Public Street Crosswalks Cannabis Retailer (Typical) Directly Across Street Measure to Nearest Measureto Property Line /Nearest Property Lin Fri. r Property Line Public/Private I I Park or School Use Residential (Typical) : Where a Commercial Cannabis Business and a Day Care Center, Youth Center, Treatment Facility, Youth - Oriented Business or existing residential use are on the same parcel, or contiguous parcels, the separation distance shall be measured in a straight line connecting their "measuring points." See illustration below. Existing or New Building with Cannabis Business I Public Street Property Line I (Typical) Public Entrance I Separation Distance Line Existing Building with Other Business Public Street 3. Interpretations, Determinations Made by Development Services Director. Interpretations and determinations of compliance with the requirements of this section and the calculation of separation distances shall be made by the Development Services Director. Exhibits from a Licensed Land Surveyor may be required by the City to The Chula Vista Municipal Code is current through Ordinance 3496, passed December 3, 2020. 5.19.060 Location requirements for cannabis businesses I Chula Vista Municipal Code Page 6 of 6 make a final decision on compliance with the separation requirements of this subsection. (Ord. 3446 § 2, 2018; Ord. 3418 § 2, 2018). The Chula Vista Municipal Code is current through Ordinance 3496, passed December 3, 2020. Disclaimer: The City Clerk's Office has the official version of the Chula Vista Municipal Code. Users should contact the City Clerk's office for ordinances passed subsequent to the ordinance cited above. To be notified when additions, amendments, or revisions are made to the code, send your e-mail address to CPCOcodepublishing.com. Note: This site does not support Internet Explorer. To view this site, Code Publishing Company recommends using one of the following browsers: Google Chrome, Firefox, or Safari. •• . �, _•us,� ffit -="9� The Chula Vista Municipal Code is current through Ordinance 3496, passed December 3, 2020. From: TORRES, IVIS Sent: Sunday, April 18, 2021 8:12 PM To: GREEN, BRENDA; BENNETT, STACY Cc: GONZALEZ, ALEXANDER; REYES, ALMA Subject: FW: Retail Cannabis Agenda Item Hi Ladies! FYI... The constituent sent it to all the council members. Best, Ivis From: Ocnorml Task Force[mailto:ocnormltaskforce@gmail.com] Sent: Saturday, April 17, 20217:17 PM To: MARR, ANDREA <ANDREA.MAR R@costamesaca.gov>; CHAVEZ, MANUEL<MANUEL.CHAVEZ@costa mesa ca.gov>; GAMEROS, LOREN <LGAMEROS@costamesaca.gov>; HARLAN, JEFFREY <JEFFREY.HARLAN@costamesaca.gov>; HARPER, DON <DON.HARPER@costamesaca.gov>; REYNOLDS, ARLIS <ARLIS.REYNOLDS @costamesaca.gov>; STEPHENS, JOHN <JOHN.STEPHENS@costamesaca.gov>; CONSTITUENT SERVICES <constituentservices@costa mesaca.gov> Cc: Jakki Hernandez <jakkiocnorml@gmail.com>; Kandice Hawes <kandiceocnorml@aol.com> Subject: Retail Cannabis Agenda Item Hello Honorable Mayor and Costa Mesa City Council, As a patient, I know firsthand how hard it is to obtain medicine that is trusted and consistent to treat my chronic pain. I was fortunate to have found a plant that allowed me to get off of every opiate the doctors prescribed me for a better part of a decade. It also removed the need for a lot of the other prescriptions those opiates caused me to need to help with my digestive tract issues from years of prescribed opiate use. I was born with a condition called Neurofibromatosis. This condition is where tumors grow on and around your nervous system. Like many with an autoimmune disorder, once you have one you are prone to more. After a fall, I broke my foot and later developed another pain condition called Complex Regional Pain Syndrome that also affects the nervous system and is often described as the most painful chronic pain condition to have. Today, I have more tumors on my body than I can count, I have had 8 surgeries to remove 100s of tumors growing from my head to my feet. Before my first surgery, I was hospitalized for 2 months because the pain had grown so intense, and the tumor was growing internally and externally affecting the way I walked and even sat. As I was hospitalized and pumped full of morphine it occurred to me, why are they giving me synthetic heroin (morphine) when they could easily give me a natural plant, cannabis? Fast forward to when they released me from the hospital with a medication list of painkillers, stool softeners, and methadone along with instructions that they were too scared to remove any tumors because they were connected to important nerves. I knew this diagnosis was far too bleak for a 22-year-old to hear. They were hoping I would find relief through their cocktail of medications, but of course, it did not help. It actually affected me way more than any joint ever did. Needless to say, this led me back to the emergency room to get catheterized since all my muscles were so overly doped up. I couldn't go to the bathroom on my own. After a brief candid discussion with my doctor led me to the realization I had been severely over medicated and these medicines were not even helping relieve the pain. I cried to myself, "there has to be a better way." At that moment I told my loved ones, even if I scream do not give me these pills. The next few days led me to a terrible 6 day withdrawal that made me promise myself I would never take another pill again. I was hallucinating, vomiting, shivering, sweating, and even had to stay in a bath of hot water for most of the day to deal with the debilitating pain my body experienced. Over 15 years later, I can now say I am completely off of the drugs the doctors prescribed me. As a consumer/ patient of cannabis for over 15 years I can with 100 percent certainty say there is no withdrawal when omitting the medicine from my life, and I have not developed an addiction. I have gone without, but why would I when this plant is what gives me the ability to be, "pain - less" enough to be a functional member of society. I am able to consume an edible or a cannabis tincture multiple times a day just as I would use a Vicodin or a Norco given by a doctor, to help me with my internal tumor pain and apply cannabis topicals to help with the pain on top of my skin. Cannabis is now the only type of medication I consume. To think, my very own doctors told me that nothing could help me. Actually, the last thing I heard from a pain management doctor was, "I would have to live with a morphine pump in my spine for the rest of my life, in order to find relief and function." Morphine would be like my insulin if I were a diabetic. This should never be someone's way of life if a plant can give a person better relief with no harmful side effects. I am so glad, I did not listen and I did my own research. "Plants over pills is now a slogan I use daily." The licensed stores not only bring safe and consistent medicine to those that need it most. They also improve the city they are placed in, by following the guidelines in place and bringing security to a neighborhood that normally doesn't have it. Although this is true, the patients should not have to be overly taxed for their purchases in order to feel safe. Unfortuantely, if they are, they will be forced to go to the traditional/unlicensed market. It is for this reason, I ask you to pay close attention to these three issues within the writing of your current ordinance. We are thankful for the work the City Council and staff have put into the ordinance and wish it to pass but there are three concerns from the perspective of cannabis patients and consumers which in turn affects the success of cannabis operators in the City. 1. Starting at the top of the taxing tier at 7%, the window passed by the voters is 4-7%. 2.Reducing taxes for medical patients. 3. Eliminating the proposed delivery tax that would be placed on out -of -city and in -city delivery orders. All three of the above issues are important to cannabis consumers and especially those on a fixed income and using cannabis daily as a medicine. The more money consumers spend on tax the less legal product they buy from licensed dispensaries. Please do not forget the patients of Prop 215 and the people currently seeking access to licensed and regulated cannabis medicine. I appreciate your time and attention to this issue, Jakki Hernansdez Deputy Director of Orange County NORML From: Jakki Hernandez <jakkiocnorml@gmail.com> Sent: Saturday, April 17, 2021 1:04 PM To: CITY CLERK Subject: Measure Q - Don't Forget About The Patients Hello Honorable Mayor and Costa Mesa City Council, Please read my personal message and consider modifying Measure Q. As a patient, I know firsthand how hard it is to obtain medicine that is trusted and consistent to treat my chronic pain. I was fortunate to have found a plant that allowed me to get off of every opiate the doctors prescribed me for a better part of a decade. It also removed the need for a lot of the other prescriptions those opiates caused me to need to help with my digestive tract issues from years of prescribed opiate use. I was born with a condition called Neurofibromatosis. This condition is where tumors grow on and around your nervous system. Like many with an autoimmune disorder, once you have one you are prone to more. After a fall, I broke my foot and later developed another pain condition called Complex Regional Pain Syndrome that also affects the nervous system and is often described as the most painful chronic pain condition to have. Today, I have more tumors on my body than I can count, I have had 8 surgeries to remove 100s of tumors growing from my head to my feet. Before my first surgery, I was hospitalized for 2 months because the pain had grown so intense, and the tumor was growing internally and externally affecting the way I walked and even sat. As I was hospitalized and pumped full of morphine it occurred to me, why are they giving me synthetic heroin (morphine) when they could easily give me a natural plant, cannabis? Fast forward to when they released me from the hospital with a medication list of painkillers, stool softeners, and methadone along with instructions that they were too scared to remove any tumors because they were connected to important nerves. I knew this diagnosis was far too bleak for a 22-year-old to hear. They were hoping I would find relief through their cocktail of medications, but of course, it did not help. It actually affected me way more than any joint ever did. Needless to say, this led me back to the emergency room to get catheterized since all my muscles were so overly doped up. I couldn't go to the bathroom on my own. After a brief candid discussion with my doctor led me to the realization I had been severely over medicated and these medicines were not even helping relieve the pain. I cried to myself, "there has to be a better way." At that moment I told my loved ones, even if I scream do not give me these pills. The next few days led me to a terrible 6 day withdrawal that made me promise myself I would never take another pill again. I was hallucinating, vomiting, shivering, sweating, and even had to stay in a bath of hot water for most of the day to deal with the debilitating pain my body experienced. Over 15 years later, I can now say I am completely off of the drugs the doctors prescribed me. As a consumer/ patient of cannabis for over 15 years I can with 100 percent certainty say there is no withdrawal when omitting the medicine from my life, and I have not developed an addiction. I have gone without, but why would I when this plant is what gives me the ability to be, "pain - less" enough to be a functional member of society. I am able to consume an edible or a cannabis tincture as well as topicals multiple times a day just as I would use a Vicodin or a Norco given by a doctor, to help me with my internal tumor pain and apply cannabis topicals to help with the pain on top of my skin. Cannabis is now the only type of medication I consume. To think, my very own doctors told me that nothing could help me. Actually, the last thing I heard from a pain management doctor was, "I would have to live with a morphine pump in my spine for the rest of my life, in order to find relief and function." Morphine would be like my insulin if I were a diabetic. This should never be someone's way of life if a plant can give a person better relief with no harmful side effects. I am so glad, I did not listen and I did my own research. "Plants over pills is now a slogan I use daily." The licensed stores not only bring safe and consistent medicine to those that need it most. As it is cannabis is already over -taxed resulting in a very hard -to -access and affordable medicine for people like me. If you do not lower the tax for this population of people and reconsider the double delivery tax, you will be forcing us to shop in the traditional/unlicensed market or to redeem medicine from their "neighbor" that grows in their backyard. It is for this reason, I ask you to pay close attention to these three issues within the writing of your current ordinance. We are thankful for the work the City Council and staff have put into the ordinance and wish it to pass but there are three concerns from the perspective of cannabis patients and consumers which in turn affects the success of cannabis operators in the City. 1. At the Cannabis Ad Hoc meeting the Mayor stated the City Council was planning on starting at the top of the taxing tier at 7%, the window passed by the voters is 4-7%. 2.Orange County Norml has previously asked, then -Mayor Foley, to consider a reduced tax rate for medical cannabis patients. When asked about this at the Ad Hoc meeting the Mayor stated the City does not plan on reducing taxes for medical patients and accessing the same 7% tax to qualified medical patients. 3. At the Ad Hoc meeting the Mayor said that the City Council was considering an additional delivery tax to be placed on out -of -city and in -city delivery orders. All three of the above issues are important to cannabis consumers and especially those on a fixed income and using cannabis daily as a medicine. The more money consumers spend on tax the less legal product they buy from licensed dispensaries. Please do not forget the patients of Prop 215 and the people currently seeking access to licensed and regulated cannabis medicine. I appreciate your time and attention to this issue, Jakki Hernandez Orange County Norml Deputy Director (949) 350-4320 OcNorml NORML Education and Support to Legalization Privileged/Confidential Information may be contained in this message. If you are not the addressee indicated in this message (or responsible for delivery of the message to such person) you may not copy or deliver this message to anyone. In such a case, you should destroy this message (and attachments) and kindly notify the sender by reply mail. Please advise immediately if you or your employer do not consent to Internet email for messages of this kind. Opinions, conclusions, and other information in this message that do not relate to the official business of this firm shall be understood as neither given nor endorsed by it. From: Alexandra Cannarella <aexandra@edmondgroupllc.com> Sent: Monday, April 19, 2021 4:57 PM To: LE, JENNIFER; FARRELL HARRISON, LORI ANN; CITY CLERK Subject: Public Comment: Item # PH-1 Ordinances 2021-Xl and 2021-X2 Hello City Manager, Deputy City Manager and City Clerk Please accept the below comments into the record for tomorrow's first reading of items 2021-X 1 and 2021-X2, to adopt code amendment CO-2021-01 for cannabis uses in Costa Mesa. We are concerned about the potential legal pushback in the future from enforcement of a 500 foot buffer in between retail establishments. Here below are some questions that could come up and that we are unsure of answers for; • Uncertainty of who to prioritize if multiple retail stores apply in the same 500 ft area. • Limiting properties in certain high traffic areas that might warrant more establishments. • Underqualified operators might not be selected to be in the 500 ft zone, pushing those who are more qualified away and undeserving the area as a whole, causing less taxable income for the city. Thank you for your consideration and time - we appreciate your undoubtedly hard work on this issue. Alexandra Cannarella Vice President Edmond Group LLC 503-961-4783 KEEP CANNABIS TAXES LOW AT LAUNCH BOTH Residents AND Costa Mesa Business support Low Tax Rates for Cannabis NOTE: FIPAC has opposition to City Proposal of High Tax Rate ### PROOF: Residents want a low Cannabis Tax Rate July 21, 2020 Staff Presentation of Community Survey HIGHER SUPPORT AT S% RESULTS OF COMMUNITY SURVEY Key findings of the survey: Low awareness among respondents that it is currently illegal to operate a dispensary in the City Roughly two-thirds of respondents were in general support allowing the sales of cannabis products in the City Majority supported both retail storefront and delivery of cannabis in the City and tax rate of up to 5% and 7% (higher support at 5% rate) After hearing both supportive and critical statements on retail cannabis, majority of respondents continued to indicate support for the potential ballot measure PROOF VOTERS SUPPORT Cannabis in a Range of 4-7% O Q-City of Costa Mesa, Retail Cannabis Tax and Regulation Measure (VOTE FOR 1) t , Yes ,I No 33,291 65.17% 17,793 34.83% 1- ] ��� PROOF: Ad Hoc Committee discussed, and introduced a range of tax, from low to high Much Discussion over the value of keeping taxes low, with a commitment to come out at the lower range, providing flexibility to raise the tax in the Future: • Compounding Impact of taxes in the Cannabis Supply Chain is a leading factor of why Illegal Dispensaries continue to thrive • Ad Hoc Committee discussed the necessity to remain regionally competitive, to win against Cities with higher tax rates and establish customer relationships prior to other local and regional Municipalities that will begin to allow similar uses. PROOF: City's previous action to reduce Measure X Supply Chain Tax from 6% to 1% • City recognized that for Operators to establish Industry Supply Chain relationships, they must be competitive on City Tax Rates • Cities with lower Tax Rates were winning • Costa Mesa operators were struggling to remain competitive on price as a result of high City Taxes PROOF: CITY Finance and Pension Advisory Committee (FiPAC) has opposition http://ftp.costamesaca.gov/costamesaca/council/agenda/202l/2O21-04-20/PH-1-Attach-4. pdf Recommendation: FiPAC recommended a 7% tax rate. The vote was 4 to 3. The "no" votes were primarily due to the lack of information available at the time. Costa Mesa Chamber of Commerce — letter of Support — Low Cannabis Tax Rates: IL. c, 1 p H 5 S r4'q" y rrrr� aglow, � COSTA MESA (Itumber of Commerce April 16, 2021 Dear Mayor Stephens and Members of the City Council, The Costa Mesa Chamber of Commerce has historically advocated for keeping fees and taxes low for our business partners. When voters passed The Costa Mesa Retail Cannabis Tax & Regulation Measure (Measure Q) it included a tax ranging from 4% to 7% on retail marijuana businesses. The Chamber strongly encourages the City of Costa Mesa to launch this program at the lower end of that range and then evaluate, over time, when an increase is appropriate. As you know, the Costa Mesa Chamber of Commerce is in the process of working with the Cannabis companies to support their business applications and are offering our services to help facilitate local hiring of employees and partnering to raise funds for community benefits. Please let us know if there are other ways we can engage on behalf of our members. Respectfully, Jim Fitzpatrick Chairman, Cannabis Taskforce ADMINISTRATIVE RECOMMENDATION: Adopt Tax by Resolution not by Ordinance Adopt the Tax by Resolution and Not by Ordinance • By Adopting by Resolution, it will be a more improved process for future City Council's launch with a low tax rate and consider increasing in the future. • Once Council Vote occurs, Tax Change is effective immediately. Adopting a Tax Rate by Ordinance: • Adopting the Cannabis Tax Rate by Ordinance requires a more lengthy and cumbersome process. • Staff to Develop a more complex Staff Report to Include a formal Ordinance to change the Cannabis Tax Rate • City Council must Vote by 2/3's majority • Then have 2"d Reading • Then wait 30 Days • Then repeat should an additional change be considered 0%S START � F COSTA MESA Chamber of Commerce April 16, 2021 Dear Mayor Stephens and Members of the City Council, The Costa Mesa Chamber of Commerce has historically advocated for keeping fees and taxes low for our business partners. When voters passed The Costa Mesa Retail Cannabis Tax & Regulation Measure (Measure Q) it included a tax ranging from 4% to 7% on retail marijuana businesses. The Chamber strongly encourages the City of Costa Mesa to launch this program at the lower end of that range and then evaluate, over time, when an increase is appropriate. As you know, the Costa Mesa Chamber of Commerce is in the process of working with the Cannabis companies to support their business applications and are offering our services to help facilitate local hiring of employees and partnering to raise funds for community benefits. Please let us know if there are other ways we can engage on behalf of our members. Respectfully, qa4� A-J-o� Jim Fitzpatrick Chairman, Cannabis Taskforce City Council April 20, 2021— Written Comments — Cannabis Ordinance Executive Summary — Necessary Changes to Ordinance as Proposed after Planning Commission 1. Consequences of Dispensary Separation — 500 ft • Discussed in Ad Hoc, and extensively at July 21, 2020 City Council. No buffer separation was decided. • Established Council's Intent not to have numeric limits. Voter's Intent was established Nov 3 • Stephen's Comments: "No Caps, Markey will limit". Preferring Zoning and Market Forces over limits. • Suggested Action: Move to strike 2. Modify definition of Youth Center • Youth Centers was NOT included in Measure Q. State has allowed a Local Authority (City) to eliminate the requirement, change the definition or change the distance. (Staff Report is not accurate. State does allow changes) • City Council Intent was not to place numeric limits, or limits, and to allow Zoning and Market Forces to determine how many Dispensaries. Santa Ana allows 50 Dispensaries and currently has 19 operating, in a larger City. • Youth Center definition was established in 1990, when parents would drop off kids for hours. Currently the City has broadened the definition. • Suggested Action: Move to define Youth Centers by eliminating classes of Martial Arts, Yoga, Dance, Music, Art and Tutoring. See Page #5 for Staff Report Language to introduce. 3. Measure Distance to and from Rentable Space of Multi Tenant Commercial Property (Sensitive Use to Impact) • The spirit and intent is to keep Cannabis away from children. However, multi tenant commercial spaces can be large. To measure distance from a property line, when the Sensitive Use is a small portion of that larger space, far exceeds City Council and Voter's intent to place reasonable buffers. • Suggested Action: Measure Distance to and from Rentable Space of Multi Tenant Commercial Property 4. Newport Blvd at Triangle Square is an Intervening Structure • Studies show, Newport Blvd at 19`h Street is Costa Mesa's most dangerous intersection. o @ Harbor Blvd is also dangerous. Caltrans manages Newport Blvd as State Road 55, a highway. • Triangle Square has long documented they lack pedestrian and bicycle customer access. Suggested Action: Introduce language to define a Boulevard as having more than 6 lanes and treat a Boulevard with 6+ Lanes the same as the 405, as an impenetrable barrier or intervening structure. 5. Playground is not a Park • If City Council wanted to measure distance from a Park, that option was available. Intent for Playground was established and Park as a definition was never discussed. City Council intent clearly establishes that Zoning and Market Forces will drive the number of Dispensaries. Santa Ana has 22 operating or the 50 possible. • Suggested Action: Define Playground as a Playground and move to strike the broader Park definition. Page 1 of 15 �SHRYNE GROUP INC. April 19, 2021 Costa Mesa City Council & Staff, As the city goes into the first reading for Measure Q, there are a few aspects of consideration that I wanted to bring to you r attention. Youth Center & Day Care Definition The current "Youth Center" definition is vague, which allows for a broader application. This results in real estate volatility due to the uncertainty of trying to identify compliant properties. It is recommended that the city apply the following definition in its place. • "Youth Center means any public or private facility that is primarily used to host recreation or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades where 10 or more video games or game machines or devices are operated. It shall also include a park, playground or recreational area specifically designed to be used by children which has play equipment installed, including public grounds designed for athletic activities such as baseball, softball, soccer, or basketball or any similar facility located on a public or private school grounds, or on city, county or state parks. This definition shall not include any private martial arts, yoga, ballet, music, art or similar studio of this nature nor shall it include any private gym, athletic training facility, pizza parlor, dentist office, doctor's office primarily serving children or a location which is primarily utilized as an administrative office or facility serving youth organizations:' There is currently a conflict of definitions regarding a "Child Day Care Facility" and a "Day Care Center". • Staff Report definition: "Child day care facility" means a facility that provides nonmedical care to children under 18 years of age in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual on less than a 24-hour basis. Child day care facilities include day care centers, employer - sponsored child care centers, and family day care homes. (Section 1596.750 of HSC). • Other State Day Care definition: "Day care center" has the same meaning as in Section 1596.76 of the Health and Safety Code. Section 1596.76. "Day care center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and school age child care centers. It seems that Measure Q uses the term "Child Day Care Facility", and that "Home Day Cares" were not referenced in the sensitive use maps provided by the city. "Home Day Cares" are also very difficult to identify for property evaluations. • It is recommended that the city define not include "Home Day Cares", which create an artificial residential buffer, as well as only include "Child Day Care Facilities & Centers" that are licensed with the state of California. s s �SHRYNE GROUP INC. Buffer Distance Measurement While maps may show a plethora of available property, the reality is that property available after vetting is extremely tight. In order to allow for more options, and thus prevent a real estate spike as well as maximize the potential to the city, please consider the following. • When property is in a multi -tenant commercial property, the buffer distance should be measured to the actual store within the overall property. • When measuring buffers, "pathway of travel' offers a more realistic and practical method than other options currently under consideration. Retail Separation Buffer(500 ft) A retail separation buffer is very difficult to implement, and results in both a longer process and exposure to the city for increased litigation. Experience in the Costa Mesa real estate market has shown that it will create a natural cap in the range of 25 - 30 possible operators on the high end. • It is recommended that the city implement the suggestions above regarding "Youth Center & Day Care Definition" & 'Buffer Distance Measurement', and allow the natural market dictate the cap. Tax Rate The compounding tax impact in the cannabis supply chain is a leading factor why illegal operators and street dealers continue to sell in the community. Additionally, results from a community survey, which were presented on July 21, 2020, indicated that Costa Mesa citizens were more supportive of a 5% tax rate. Lastly, the City previously started Measure X at a higher rate and needed to lower it for local operators to remain competitive. • In order to establish Costa Mesa operators in the region and build longterm consumer loyalty, it is recommended that the city start at a 5% tax, and reevaluate after licensed businesses have been operational for at least one year. Thank you for your time and consideration. Sincerely, Matthew Nathaniel Director of Retail Expansion Shryne Group Matthew@ShryneGroup.com 323.420.1091 From: Matt Harrison <matt@procivlaw.com> Sent: Tuesday, April 20, 2021 11:37 AM To: CITY CLERK Subject: Comments on Public Hearing Agenda Item PH-1 Attachments: CMradiuscouncil.pdf Dear Council: This Public Comment is submitted in reference to the proposed Costa Mesa Municipal Code amendments under consideration as Public Hearing Agenda Item #Pll-1 on the City Council meeting of April 20th. For background, I am an attorney and co-author of Proposition 64 (2016), including the specific statutory source of the provision(s) at issue. I advise both private and public entities with respect to local cannabis policy, including local governments as well as current and prospective licensees across the county and state. Accordingly, I write the Council with urgent concern regarding two issues requiring your immediate attention, relating to land use measurement and taxation. 1) "Direct pedestrian route" radius As part of its "recommended" ordinance, staff added a provision to measure sensitive use proximity using "the most direct pedestrian route," but inexplicably, only for radii crossing the 405 freeway. Sensitive uses in all other locations (and freeways) are measured with a standard radius. As stated in prior comments to the Planning Commission when first proposed by the City on February 22, these proposed measurement methods for the radius setback requirements are legally deficient as a matter of law. Moreover, it is also my legal opinion, based on the resolution passed by the Planning Commission, that their continued inclusion - let alone as a "recommended" staff action - is plainly ultra vires as a matter of law, under any conceivable standard. In the February 22 staff report, Associate Planner Nancy liuynh first justified the measurement deviation, incredibly, because the "sensitive use population of concern, mainly children, walk and do not drive." As explained in our comments, this putative justification was so plainly inadequate, arbitrary, unreasonable, and without relation to public health, safety, morals and welfare as to shock the conscience of all Costa Mesa residents - and especially its families. In any event, the Planning Commission eventually passed a resolution specifically "deferring to state law" with respect to the "measurement" of sensitive uses and definitions. Across the state of California, no local government uses a "direct pedestrian route" radius except as applied to walkable and/or residential zones as codified in the annlicable local General Plans. Based on statewide research, I found no example of a municipality using it for a measurement crossing a freeway, nor other vehicular infrastructure, let alone regarding cannabis operations. Under well -settled law, a zoning provision or ordinance may be invalidated if it is clearly arbitrary and unreasonable. havine "no substantial relation to the public health, safety, morals or general welfare." . While the state law provision at issue indeed authorizes local governments to specify a "different radius", it never (nor could it) authorize such an unjustified deviation. However, the latest version, Associate Planner Huynh, in keeping the infamous measurement as the "recommended action", has now proffered a new justification, that "[fJreeways configured like the I-405 are impenetrable barriers which the straight-line measurement does not take into consideration." However, Huynh's newly fashioned nonsensical and irrelevant statement fares no better, as it neither justifies a "direct pedestrian route" measurement at all, nor does it offer any rational basis to explain why the alleged intrinsic nature of "impenetrable barriers" would then support the use of a "direct pedestrian route" anywhere on any freeway, let alone the 405 and not the 55 (or 73), nor any major boulevard in the city. Furthermore, it fails to explain why the same logic would not apply across the state as a threshold matter. if there should exist such circumstances that standard land use measurement does "not take into consideration" it would properly lie within the ambit of a variance and other well -established existing land use provisions. Most concerning, based on information and belief, this mysteriously perpetual staff recommendation may operate to exclusively qualify certain properties to the detriment of others, in a manner to provide an impermissible private benefit to persons who may or may not wield significant influence among local officials. While no such formal allegations are being made here against the City, nor certainly the Council in particular, neither would it be necessary, as the per se invalidity of the radius is plainly demonstrated by universally applicable legal principles. 2) Delivery tax Equally deficient as a matter of law, the staff recommendation includes a recommended retail tax of 7%, intended to be applied to uses including those "outside the city that delivers cannabis within the city'. While ostensibly authorized by Measure Q, this attempt is also plainly prohibited by applicable state law. While the City may have, like other municipalities, drawn inspiration from an improper (yet common) misinterpretation of the admittedly vague recent ruling in Fresno County Superior Court regarding cannabis delivery rules, neither that case, nor any other provision of state law, can ultimately support such an attempted unconstitutional local tax grab. For all the reasons mentioned, the staff recommendation is arbitrary, capricious and invalid as a matter of California law. As such, we strongly recommend any eventual decision by the Council include the specific elimination of this provision. [For your convenience, the attached PDF contains the legal citations] Thank you, Matt Harrison Attorney M. Sean Harrison, Esq. Prometheus Civic Law This message (including any attachment to this message) is confidential and may contain information that is privileged or otherwise legally protected from disclosure. If you are not the intended recipient or if this message has been addressed to you in error, please delete it without saving it and separately notify the sender. Thank you. 14 PROMETHEUS Via Electronic Mail Costa Mesa City Council Costa Mesa, CA Monday, April 19, 2021 Re: Comments on Public Hearing Item PH-1 on City Council Agenda, Specifically Regarding Radius Measurement by "Direct Pedestrian Route"; and Delivery Taxation Dear City Council: This Public Comment is submitted in reference to the proposed Costa Mesa Municipal Code amendments under consideration as Public Hearing Agenda Item #PH-1 on the City Council meeting of April 20th.1 For background, I am an attorney and co-author of Proposition 64 (2016), including the specific statutory source of the provision(s) at issue in the proposal.2 I advise both private and public entities with respect to local cannabis policy, including local governments as well as current and prospective licensees across the county and state. While Measure Q vests the Council with significant authority as the primary authority and final arbiter of licensing policy, such authority (and the power of the City generally) is significantly restrained by the ini i tiv itself,3 as well as existing state law. Accordingly, I write the Council with urgent concern regarding two issues requiring your immediate attention, relating to land use measurement and taxation. 1) "Direct pedestrian route" radius As part of its "recommended" ordinance, staff added a provision to measure sensitive use proximity using "the most direct pedestrian route," but inexplicably, only for radii crossing the 405 freeway.4 Sensitive uses in all other locations (and freeways) are measured with a standard radius.5 As stated in prior comments to the Planning Commission when first proposed by the City on February 22, these proposed measurement methods for the radius setback requirements are legally deficient as a matter of law. Moreover, it is also my legal opinion, based on the resolution passed by I No. 2021-X1, Zoning Code Amendment CO-21-01, and No. 2021-X2 to amend Title 9, Chapter I, Article 5, Chapter II, Article 1, and Chapter VI of the Municipal Code 2 e.g., Cal. Bus. & Prof. Code §§ 26054(b); 26200 3 Measure Q, Section 3 4 Proposed C.M.M.C. 13-200.93(e)(4) 5 ibid. Prometheus Civic Law, P.C. 65 Enterprise, Suite 300 1 Aliso Viejo, CA 92656 O. (949) 330-7356 the Planning Commission, that their continued inclusion - let alone as a "recommended" staff action - is plainly ultra vires as a matter of law, under any conceivable standard. In the February 22 staff report, Associate Planner Nancy Huynh first justified the measurement deviation, incredibly, because the "sensitive use population of concern, mainly children, walk and do not drive."6 As explained in our comments, this putative justification was so plainly inadequate, arbitrary, unreasonable, and without relation to public health, safety, morals and welfare as to shock the conscience of all Costa Mesa residents - and especially its families. In any event, the Planning Commission eventually passed a resolution specifically "deferring to state law" with respect to the "measurement" of sensitive uses and definitions. Across the state of California, no local government uses a "direct pedestrian route" radius except as applied to walkable and/or residential zones as codified in the applicable local General Plans.? Based on statewide research, I found no example of a municipality using it for a measurement crossing a freeway, nor other vehicular infrastructure, let alone regarding cannabis operations. Under well -settled law, a zoning provision or ordinance may be invalidated if it is clearly arbitrary and unreasonable, having "no substantial relation to the public health, safety, morals or general welfare." 8 . While the state law provision at issue indeed authorizes local governments to specify a "different radius", it never (nor could it) authorize such an unjustified deviation. However, the latest version, Associate Planner Huynh, in keeping the infamous measurement as the "recommended action", has now proffered a new justification, that "Ifflreeways configured like the 1-405 are impenetrable barriers which the straight-line measurement does not take into consideration."9 However, Huynh's newly fashioned nonsensical and irrelevant statement fares no better, as it neither justifies a "direct pedestrian route" measurement at all, nor does it offer any rational basis to explain why the alleged intrinsic nature of "impenetrable barriers" would then support the use of a "direct pedestrian route" anywhere on any freeway, let alone the 405 and not the 55 (or 73), nor any major boulevard in the city. Furthermore, it fails to explain why the same logic would not apply across the state as a threshold matter. if there should exist such circumstances that standard land use measurement does "not take into consideration" it 8 Staff Report, Feb 22 Planning Commission Meeting Agenda, p 5 7 See, e.g., Jerry Way, Director, City of Sacramento Public Works, "City of Sacramento Pedestrian Crossing Guidelines" Adopted by City Council on December 2, 2014 City Council Resolution Number: 2014-0390 p 34, and City of Porterville, Zoning Code, 206.04 Residential Land Use 8 Village of Euclid v. Ambler Realty Co. (1926), 272 U.S. 365; Assn. Home Builders, Inc. v. City of Livermore, (1976) 18 Cal. 3d 582, 604. California Hotel & Motel Assn v. Indust Welfare Comm'n, (1979) 25 Cal. 3d 200, 211-212 9 Staff Report, April 20 City Council Meeting Agenda, p 8 would properly lie within the ambit of a variance and other well -established existing land use provisions. Most concerning, based on information and belief, this mysteriously perpetual staff recommendation may operate to exclusively qualify certain properties to the detriment of others, in a manner to provide an impermissible private benefit to persons who may or may not wield significant influence among local officials. While no such formal allegations are being made here against the City, nor certainly the Council in particular, neither would it be necessary, as the per se invalidity of the radius is plainly demonstrated by universally applicable legal principles. 2) Delivery tax Equally deficient as a matter of law, the staff recommendation includes a recommended retail tax of 7%, intended to be applied to uses including those "outside the city that delivers cannabis within the city".10 While ostensibly authorized by Measure Q,11 this attempt is also plainly prohibited by applicable state law. While the City may have, like other municipalities, drawn inspiration from an improper (yet common) misinterpretation of the admittedly vague recent ruling in Fresno County Superior Court regarding cannabis delivery rules,12 neither that case, nor any other provision of state law, can ultimately support such an attempted unconstitutional local tax grab.13 For all the reasons mentioned, the staff recommendation is arbitrary, capricious and invalid as a matter of California law. As such, we strongly recommend any eventual decision by the Council include the specific elimination of this provision. Very truly yours, M. Sean Harrison, Esq 10 Proposed C.M.M.C. 9-29.5 11 Measure Q, Section 3 (f) 12 County of Santa Cruz, et al v. Bureau of Cannabis Control (2020), Fresno County Superior Court, case number 19CECGO1224 13 See.e.g., Cal. Comm. Code, §§ 2401, 5104; See also, M. Harrison, "California's Cannabis Delivery Laws Are Clearer Than They Seem", Law360, https://www.law360.com/articles/ 1333643, December 30, 2020, republished by Reason Foundation, https://reason.org/ commentary/californias-marijuana-delivery-law-is-clearer-than-it-seems/ Hello Mayor Stephens, City Council and Staff As a resident of Costa Mesa and someone who works in the cannabis industry, I wanted to address a few items before the April 20`h's city council meeting. As the ordinance stands right now the definition of youth center is deferring to the States definition which is very broad and does not take into account the layout of our City. I believe the state's definition was left broad so jurisdictions could tailor this definition to their communities as no two are alike. I drive my niece and nephews to their jujitsu, art, dance classes and so on. The majority of these types of classes are in strip centers that are on very large parcels. So, when measuring property line to property you are reducing a large number of good compliant properties. If the city wishes to stick with the current definition, then I would suggest reducing the buffers like many other jurisdictions or changed how it is measured from property line to the retail business door. The other item I wanted to mention was the definition of Child Day Care Facility or Day Care Center. The current definition says: "Child day care facility" means a facility that provides nonmedical care to children under 18 years of age in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual on less than a 24-hour basis. Child day care facility includes day care centers, employer -sponsored child care centers, and family day care homes. (Section 1596.750 of HSQ. This makes it very hard to identify these businesses especially Day Cares operating in homes. For example, going to the State Social Services Site it gives a name but no address. (See below) Reauha Page: Family Child CsreMomelLargele 4oirch vulvw CwI.I Fdcv ,W,26 Firgr Q Sutuf N Facility Name CIS"" IIL'JA K SILYR. Itrcic>RAH AVAN WBE 1. CATHY RAPAI RFI Or" .+F RNANr-jF7 YA'd itRA SCOTT NICOLL Addressi TWIS Status? IJndvaM1ebin y'1w;;'o L._ensed New Una:3rliDle WE26 SL nwn NCx IInA`:.'lu L1pIP. 92626 t..eMe l Neal Vna,^LVNe 52626 1Y.ensen view Vnav tawe 52126 1_6:en5ea New Below is a State definition of "Day Care" most often used in other jurisdictions. Other jurisdictions use this State definition: "Day care center" means a child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers, and includes child care centers licensed pursuant to Section 1596.951. I strongly encourage the city to not include Family Home Day Cares in the definition. Sincerely, Amy Gammon Costa Mesa Resident From: Michael Moussalli <michael@se7enleaf.com> Sent: Tuesday, April 20, 2021 12:10 PM To: CITY CLERK Subject: Costa Mesa Coaliton of Cannabis Operators Pulic Comments for Tonights Measure Q Agenda Item Attachments: CM Cannabis Coalition_Measure Q_RequestedChanges.pdf, Youth Centers as Proposed by City.pdf Hello, The Costa Mesa Coaliton of Cannabis Operators would like to submit the attached documents tonight for public comment on Agenda Item # 1- the Measure Q ordinance Thank you Best Michael Moussalli Co-Founcler & Partner Cell: (949) 400-4110 Office: (877) 464-6652 Website: www.se7enleaf.com • EE �L �E /�F� i CONFIDENTIALITY NOTICE: The contents of this email message and any attachments are intended solely for the addressee(s) and may contain confidential and/or privileged information and may be legally protected from disclosure. If you are not the intended recipient of this message or their agent, or if this message has been addressed to you in error, please immediately alert the sender by reply email and then delete this message and any attachments. If you are not the intended recipient, you are hereby notified that any use, dissemination, copying, or storage of this message or its attachments is strictly prohibited. Thank you. The Costa Mesa Measure Q Cannabis Coalition Cannabis Industry Operators and Representatives Request Changes to the proposed Measure Q Ordinance Tuesday, April 20, 2021 Dear Mayor Stephens and City Council Members, The Coalition of Cannabis Industry Operators and Representatives would first like to thank the Cannabis Ad Hoc Committee and City Staff for meeting with us last Monday to discuss several concerns the industry has with the current, proposed Measure Q ordinance. We have had time to perform an in-depth review of the Staff Report that was prepared for the upcoming ordinance vote on Tuesday evening and the Industry is requesting several important changes be made before the ordinance is voted into law. The major concerns from Industry are primarily focused on the current zoning map for retail properties, the distance/separation requirements between Youth Centers, and the separation requirement between retail stores themselves. We believe the following issues are of the utmost importance and ultimately could decide the fate, and the success, of many retail cannabis businesses in Costa Mesa: 1. Modification of the Definition of Youth Center o The State allows a City to eliminate or change Youth Center distance requirements and/or adjust the definition of the requirement to best fit the situational needs of each City. Based off the geography of the City and the layout of zoning, the restricted supply of real estate has caused an extremely excessive increase in real estate costs, to the point where in most cases it no longer makes fiscal sense for an operator to open a retail storefront or delivery. History has shown us in other Cities that many retail stores that do decide to try and open under such prohibitive real estate costs with often fail, and the City will not see any tax dollars from these businesses. The only way to fix this issue and help reduce these costs so that retail shops can operate in a fiscally responsible manner is to allow for more real estate to be zoned in and for the supply to better level out with demand. We highly recommend the City move to better define Youth Centers by eliminating classes of Martial Arts, Yoga, Dance, Music, Dental Offices, Art and Tutoring (See Page #5 for Staff Report for some suggested language to introduce). We believe this definition would be consistent with the Youth Center definition proposed by Staff in the Staff Report for the March 26th Planning Commission meeting and the subsequent map that was provided (The map has been attached to this letter for reference, titled "Youth Centers as Proposed by City"). 2. Eliminate the Separation Requirement between Retail Storefronts o The extremely limited supply of zoned retail properties becomes even further restricted by applying the 500-foot (or any distance for that matter) buffer requirement. o As we have discussed in detail with the Ad Hoc Committee and City Staff, we believe it was the voter's intent to have a free market approach with retail storefronts and history shows us that the market will naturally limit the amount of retail storefronts that actually get licensed and operational (we have seen this in other Cities). o We highly recommend that any and all separation requirements between retail stores be eliminated. 3. Clarification that Playgrounds Are Not Considered Parks o The intent of Measure Q was to consider a playground as a Sensitive Use and therefore include it as part of the 1000-foot barrier requirement. However, parks were never mentioned in the Measure as a Sensitive Use and this is consistent with State law. o We highly recommend that a playground be defined strictly as a playground and we ask to strike the broader definition that considers a park the same as a playground. 4. Measure Distance Requirements to and from Rentable Space of Multi -Tenant Commercial Properties (Sensitive Use to Impact) o Multi -tenant commercial properties are often large, and many are being zoned out entirely from retail cannabis use because of the distance requirement. This is because the distance is currently being measured from property -to -property line, when the fact the Sensitive Use is actually only a small portion of the larger space. o We recommend that the City measure distance to and from the rentable Sensitive Use space withing the multi -tenant commercial property 5. Definition of Day Care Centers including Family Day Care Homes o We believe there appears to be confusion on how to identify some Day Care Centers and based off of the Staff Report's definition, it becomes harder to identify these centers and more restrictive with regards to zoning. o We recommend removing Family Day Care Homes from the definition chosen of a Day Care facility. The importance of addressing the above issues cannot be overstated, and we sincerely hope that the Ad Hoc Committee and City Council Members can make the necessary changes to the ordinance before the first reading takes place. In the event the Ad Hoc and City Council members require any additional information to decide on these important changes, the Industry requests a continuance of this meeting rather than a vote to pass the current ordinance as proposed. We appreciate you taking our requested changes into strong consideration and hope that you grant them. Respectfully, The Costa Mesa Coalition of Cannabis Operators Michael Moussalli Founder & CEO, Se7enLeaf Board of Directors, The Cannabis Chamber of Commerce Email: Michael®Se7enleaf.com Phone: 949.400.4110 CC Costa Mesa Chamber of Commerce Matteo Tabib Founder & COO, Se7enLeaf Jim Fitzpatrick, Board of Directors Consultant, Solutioneer, Costa Mesa Krystal Kitahara CEO, Yummi Karma Dallin Young CEO, Bluewater Government Affairs Board of Directors, The Cannabis Chamber of Commerce Amy Gammon Business Development & Retail Expansion, Shryne Group Matthew Nathaniel Director of Retail Expansion, Shyne Group Amy Mason Peoples Direct, Inc. Bernard Steimann Peoples Direct, Inc. Jennifer Farrell Rutan & Tucker Chris Boudreau Chairman, The Cannabis Chamber of Commerce Preliminary Draft Separation Distance Map SUNF OWERAVE ATTACHMENT 2 P � SOU OA0 k awl W �. �. o �= &AKER ® tceq u 'fFR �I e ADAMS AVE is 9 ■r LL • y VIG rURIA 51' O W 19TH ST ry sr Disclaimer: The City of Costa Mesa makes no guarantee as to the accuracy of any of the inforrmation provided and assumes no liability for any errors, omissions, or inaccuracies Please note that the determination of a sites rysT eligibility will only be determined once a request has been made and the potential eligibility calculated based on current distribution of sensitive uses Potential Sites Outside of MQ Sensitive Uses & Youth Center Areas - 492 Potential Sites Outside of MQ Sensitive Uses Area - 499 Commercially Zoned Sites - 1,195 600 ft Buffer: Youth Centers (Proposed Definition) bt, - Youth Center (Proposed Definition) 0 0.25 0.5 1 Miles L r r r l r r i l ` 1,000 ft Buffer: MQ Sensitive Uses Area Sources: City of Costa Mesa business MQ Sensitive Uses: Parks, Schools, Daycare Facilities, Homeless Shelter license records; Department of Health Care Services (DHCS), Department of Social Services (DSS) From: Jason Piazza <jason@wecann.biz> Sent: Tuesday, April 20, 2021 12:28 PM To: CITY CLERK Subject: Measure Q Hello Costa Mesa I am a lifelong resident of Costa Mesa. I grew up here and I am raising my family of 5 here. It should also be known that I work as a cannabis real estate specialist which gives me a unique perspective on the Measure Q ordinance. While I feel protecting children from cannabis is important, that is not a feeling that is unique to cannabis. I feel we should protect children from alcohol and tobacco as well, but as you know those controlled substances face far less regulatory scrutiny than cannabis, which literally grows out of the ground and needs little to no human aid in order to be consumed. Let's be honest: cannabis is the answer to many of the worlds problems; it is not the problem. Cannabis plants scrub the air of CO2 by consuming exponentially more CO2 from the atmosphere per acre than a forest. Cannabis can replace paper products and many textiles. It can be used to create clothing, fuel, and is also a good food source. I haven't begun to discuss the many medicinal benefits of cannabis which entire books have been written on. Cannabis is not evil. It grows from the ground and no one has ever overdosed from cannabis. No one ever. Never. So let's get to the concept at hand: how to regulate cannabis in Costa Mesa. In my view, we shouldn't attempt to bubble -wrap the city to protect children from this benign plant and it seems that's what the Planning Commission has suggested. We should not include private businesses as sensitive buffers for "Youth Centers". No other City has done so and the state's definition of Youth Centers, although vague, does give specific examples of "arcades", "amusement parks", and "clubs". Those are clearly places where kids hang out in a social atmosphere. What Planning has suggested is that any place where any kid goes on a regular basis must be it's own buffer. In that case all restaurants, grocery stores, hair dressers, barbers, salons, donut shops, and department stores should be considered a Youth Center. I mean, give me a break. Enough is enough. Daycares and pre-k through HS is adequate for buffer zones. I personally don't believe parks should be included, but I can agree to that particular buffer zone on a logical level because kids will socialize away from adult supervision at a park. Regarding Child Day Care Facilities: why is Planning suggesting that Family Day Care Homes be included? That is not represented on any proposed map and will in essence create a residential buffer when the city's intent is to not have a residential buffer zone. Furthermore, these types of facilities can pop up anywhere at any time. Does this loose definition extend to any home that cares for children, licensed or not? The definition for Child Day Care Facilities should not include Family Day Care Domes. I believe the fix to this is using a different definition for Day Care Centers. Lastly, there is no need to put a 500' buffer between dispensaries. I'm not sure what that accomplishes. Let the market speak. We have fast food lined up next to each other for blocks on end, and fast food is actually detrimental to your health. If you're doing this for perception then don't. Take this opportunity to teach the residents of Costa Mesa that cannabis is safe and beneficial to the community. Let the market speak for itself as it is forced to do in so many other industries. While I am happy that the City has taken a market based approach to cannabis, the Planning Commission didn't seem to get the memo. I understand public perception is an issue with cannabis after 100+ years of "Reefer Madness" propaganda against a plant that our nation's 1st flag was made out of, but that's all it is: perception. Don't legislate through fear of perception. Legislate what's right and logical. Peace. Sincerely, Jason Piazza WeCann - Director of Real Estate Jason @WeCann.biz 949-682-5867 From: J. Cooper <jeffcooper2@gmail.com> Sent: Tuesday, April 20, 2021 1:00 PM To: CITY CLERK Subject: 04/20 Meeting Hello, I would like to participate in tonight's meeting. I realize I needed to make my comment known. I am whole heartedly against unilaterally changing the terms of Measure Q to exclude "private playgrounds." That is not what the people voted for, the vote was not within 1000 feet of ANY playground. Thank you, Jeff Cooper REEFER BLUES. BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... 24 U.C. Davis Sac. Just, L. Rev. 95 U.C. Davis Social Justice Law Review Summer, 2020 Article Melissa Perintang$ Copyright 0 2020 by the Regents of the University of California; Melissa Perlman REEFER SLUES: BUILDING SOCIAL EQUITY IN THE ERA OF MARIJUANA LEGALIZATION *96 Abstract This article is inspired by the convergence of entrepreneurship as a way to build social and economic value and the need for the equity conversation. Diversity in the market is what keeps it running, but the barriers to entry for minority entrepreneurs often prevent them from participating in the mainstream economy. With marijuana legalization on the horizon, this is quickly becoming another example of minority business owners being left out of the market. Politically marijuana legalization is a double-edged sword that both past and present Presidents were not willing to wield for differing reasons but the climate is changing. Presently, marijuana legalization has profited those that once claimed it was America's enemy number one, which does not seem right in my eyes and is what led me to write this piece. Importantly, states as well as the federal government need to be mindful of the social impact this will .have on minority communities across the country. Each state that chooses to legalize marijuana should have social equity at the forefront of their decision making because the legalization of marijuana could end up just being another chance for the white majority to bar Black and Brown cormnunilies from getting a fair chance, Not to mention how the War on Drugs has persecuted and locked up so many Black and Brown men for the very substance that the white man now sees to make a profit, hand over fist. The War on Drugs has just been another way for the federal government to police minority communities, and its failed attempts at lowering drug use rates have instead only really been successful in spreading propaganda about marijuana and its users. Michele Alexander refers to effects of the War on Drugs on minority communities as the New Jim Crow in her book, so appropriately titled; The New Jim Crow. To right the wrongs of the War on Drugs and encourage minority entrepreneurs to participate in the new legalized marijuana market, the federal government needs to remove marijuana from the schedule one list, which is noted in Cory Booker's Marijuana Justice Act, and each state that decides to legalize should require certain portion of minority applications for marijuana business licenses before opening the market up to the rest of the community and with the tax revenue from marijuana a percentage should be put towards a fund for zero interest loans to continue to promote minority business ownership, California has legalized marijuana and has created both legislative relief as well as economic support for minority run marijuana businesses through a Venture accelerator that not only provides financial assistance but also business acumen. Ameliorative relief is another important action for the states that decide to legalize to somehow make amends with those that have previous marijuana charges. But, none of this *97 will get done unless equity is part of the legalization conversation from the beginning and it is now on us to ensure we do not let our country's racist tendencies to continue hindering the lives of our minority communities. And, our minority communities deserve better. YWESrI-aw V 2021 Thomson Reuters. No claim to original U.S. Government Works. i REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... Table of Contents 1. PaT( 1 100 A. Historical Basis for Criminalization 100 B. The War on Drugs 101 C. The "Justice " System's Role in Criminalization 102 D. Status Criminalization on the Black Community Today 104 E. Assessing Criminalization 105 II. PAI Il IV(, A. The Stales' Counterculture Uprising 106 B. Federal Implications to Legalization 106 C. Current Legalization Statistics 107 D. What's Coming Next for Legalization 108 111, Rad III 108 A. Societal Barriers Due to Marijuana Prohibition 108 B. Economic Impact of Criminalization on Minority Communities 110 C. The Need for MarUuana Jusdee Reform I H D. Attempting Restorative Justice Ili IV. Pn,r IV 1 W A. No Legalization Without Social Equity 114 8, The Barriers to Enter the Legal Cannabis Markel for Minorily Communities 116 C. They Executive "Gateway" to Legalization 117 D. Weed and the Future of the While House 118 E. The Politics of Legalization 119 F. Making Room for Social Justice in the Legalization Conversation 121 G. Solving the Equity Prohlem 122 Conclusion 123 *99 "The power of the white world is threatened whenever a Black man refuses to accept the white world's definitions. " WESTLAW 02021 Thomson Reuters. No claim to original U.S. Government Works. 2 REEFER BLUES: BUILDING $OCIAL EQUITY IN THE..., 24 U.C. Davis Soc.,,. James Baldwin The criminalization of marijuana has a complex history_ The discussion below looks to portions of this historical record and critiques the current regulatory design that is informing marijuana's inevitable commercialization. It contends that marijuana's licensing regimes will establish market entry requirements that preserve racial inequity, albeit in reconstituted form. Nigh licensing fees, delayed rights of market entry for registrants with criminal histories, and other barriers disfavor African -Americans and Latinos seeking to participate in a newly legalized marketplace with enormous economic potential. The specific combination of these entry requirements warrants inquiry into their true intent. What was the logic behind such requirements and how do they exploit the racially problematic history of American drug enforcement? The penal system is among the most consequential expressions of state power. Criminalizing certain conduct offers an institutional mechanism for sanctioning particular kinds of behavior, uses incarceration to animate particularly invasive expressions of government, and cements into place a set legacy effects on its targets and their families long past the period of criminal involvement. The racially harmful aspects of these institutional practices are reflected in the history of marijuana's criminalization, which facilitated opportunistic policing of African -American communities, The commensurate effects of a drug -related criminal record on prospects for employment, housing, intergenerational transfers of wealth, and other vehicles for upward economic mobility were predictable --even as they reinforced the systemic pressures feeding the drug trade itself. This cyclical system of disenfranchisement has been especially harmful to America's Slack communities, which continue to experience gaps in education, income, employment, access to housing, and criminal justice involvement. As will be discussed further below, legalization of marijuana marks a significant cultural, legal, and commercial shift insofar as it will profoundly alter structural relationships between communities of color and law enforcement. While decriminalization seems to facially change one of law enforcement's gateways into policing Black communities, it will give rise to other problematic arrangements governing access to lawful marijuana. Importantly, as registration and licensing requirements exclude prospective market participants with limited means and criminal histories, the emerging regulatory frameworks will do little to dismantle cyclical systems of disenfranchisement which disproportionately harm communities of color. *100 Ms note is organized as follows; Part I briefly summarizes the history of marijuana. criminalization, which dates back to the early 1900's, Part II discusses the emergence of marijuana's status as a countercultural symbol, juxtaposing state rights and individual sovereignty against the mighty, ail -powerful federal government. Part III discusses the compounding collateral consequences of criminalization for communities of color. Part IV discusses the cultural shift in societal attitudes towards marijuana use and focuses on die necessity of social equity to ensure justice in enacting legislation. The note concludes by calling for a comprehensive restricting of the entire cannabis industry so as to minimize racially harmful practices while supporting fair competition. I. Part 1 A. Historical Basis for Criminalizotion As our nation begins to overcome the rhetoric of the War on Drugs, which demonized marijuana and its users over the last century, the resulting systematic oppression can no longer go unnoticed. Surprisingly enough, marijuana was not stigmatized in the U.S. until it was targeted by prohibitionists during the early 20th century as an "alien scourge.", Marijuana was then often associated with "landless [vagrants,] bandits, bootleggers, prisoners, and [others of the like, which] made marijuana the perfect scapegoat for deep-rooted social inequities.", Moreover, those in power began to blame the problems of the less fortunate on the use of marijuana. And, while most recognize the Nixon and Reagan administrations as when marijuana criminalization began, it can be linked back to as early as 1915 when California outlawed marijuana as pre -textual move to harassing the Mexican community, which is the same tactic state governments have used to disenfranchise minority groups throughout American history.' Prohibiting marijuana has never been about health and safety, but rather marginalizing despised minorities. In 1930, Harry Anslinger, who would eventually be deemed "the Godfather of modern drug prohibition,"; became the first commissioner of the Federal Bureau of Narcotics. After losing the war against prohibition in 1933, Anslinger "was aware of the weakness of his new position," but also * 101 of the potential power that it could offer, As a result, he went on a crusade WESTLAW 02021 Thomson Reuters. No claim to original U.S. Government Works. 3 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis to rid the country of all drugs, starting with marijuana, and it was not a coincidence that marijuana was linked communities of color.' Anslinger provided the foundation for what would later become the War on Drugs. He sensationalized anti -marijuana propaganda as an "assassination of youth" in magazines and films, which led to Congress banning marijuana with the Marihuana Tax Act of 1937.' Anslinger used marijuana to play off the racial tensions in the country to create fear in the American people. As drug use began to rise in the late 40's into the 50's (especially heroin), Anslinger began his second wave of propaganda to hype marijuana as a "gateway drug ... that had to be controlled because it would eventually lead its users to heroin."' The legacy of his 32 year reign as the nation's first Drug Czar includes the popularization of reefer madness films, the gateway drug theory, and the association of cannabis use with psychosis.' Today, prisons are overcrowded with nonviolent cannabis offenders, the cost of which totals into billions of taxpayer dollars.' Anslinger effectively used his position and the country's racial divide to mobilize the War on Drugs to create a way to legally discriminate against people of color, undercutting the effectiveness of The Civil Rights Act of 1964 that would arrive 30 years later. Harry Anslinger planted the first "seed of the marijuana `menace' in the public mind," and each administration that followed him continued to nurture its growth."' B. The War on Drugs The Nixon administration declared the War on Drugs in 1971, making drug abuse public enemy munber one, and the Reagans followed up *102 with an expansion of the drug policy that had previously been enacted by creating a zero tolerance policy for drug use, which created mandatory minimum penalties for drug offenses." The mandatory minimum penalties are "increasingly criticized for promoting significant racial disparities in the prison population because of the differences in sentencing for crack and powder cocaine," and these penalties also heavily influenced the discriminatory policing practices of the Mack community." Due to their low income status, minority groups were targets under these new drugs laws; "possession of crack, which [was] cheaper, [resulted] in a harsher sentence," and marijuana had the same appeal since it was even cheaper than crack," Nancy Reagan's legacy lives on in three simple words: "just say no."" On one of her school visits, Nancy Meagan was asked, "Mrs, Reagan, what do you do if somebody offers you drugs?"" And she simply replied, "Well, you just say no."1" 'Those three little words spread across the nation like wildfire, a movement was horn." According to the Ronald Reagan Presidential Foundation and Library, more than 12,000 ".lust Say No" clubs and school programs had been formed by 1988.1" Marijuana use had become so politically toxic that when Bill Clinton ran for president in 1992, he was so fearful of the political backlash and smear campaigns that could ensue around his past marijuana use that he made the bizarre claim that he "didn't inhale"" C. The "Justice",Syslem's Role in Crinrinrrlizalion People of color are disproportionately targeted ui the criminalization of marijuana. In spite of equivalent usage rates, "Black Americans are nearly four times more likely to be arrested for marijuana than their white *103 peers."," Moreover, "Black Americans make up nearly 30 percent of all drug -related arrests, despite accounting for only 12.5 percent of all substance users."" And, what is even more jarring is that Black Americans are "nearly six times more likely to be incarcerated for drug -related offenses than their white counterparts ..,"u In 2017, 91% of marijuana -related arrests were "for possession alone (as opposed to manufacturing or trafficking) and 47% of those [seized] were Black or Latino."'-' The justice system is additionally riddled with racial disparity and injustice for people of color: Almost 80 percent of people serving time for a federal drug offense are [Bjlack or Latino, In state prisons, people of color make up 60 percent of those serving time for drug charges .... In the federal system, the average [B]lack defendant convicted of a drug offense will serve nearly the same amount of time as a white defendant would for a violent crime .... People of color account for 70 percent of all defendant convicted of charges with a mandatory minimum sentence. Prosecutors are twice as likely to pursue a mandatory minimum sentence for a [Bjlack defendant than a white defendant charged with the same offense, and []hack defendants are less likely to receive relief from mandatory minimums." The racially disproportionate pattern of police searches and arrests breeds fear and mistrust of police and of the society that tolerates or condones such. behavior. All these numbers are hard evidence that the cat is out of the bag; Black America "found out their country don't love them."" The war against marijuana is based on false claims to keep alive a government agency WEStt.AYV Cc] 2021 Thomson Reuters. No claim to erlginal U.S. Government Works. 4 REEFER 13LUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis S❑C.... that has snowballed into a "waste of resources" and that has "[fallen] most harshly and most unfairly on racial minorities and the *104 poor.",, On its face, the prohibition of marijuana is not discriminatory in its purpose, but rather produces racially disparate results." The Supreme Court has ruled "that there is no constitutional right to be free from the disparate impact of facially neutral policies," but enforcement of those drug laws is in no way neutral, unbiased, nonpartisan or indifferent --it is plain unjust. Decriminalizing marijuana means giving Black Americans their freedom back. It is the first step of many to help people of color build equity in today's America. D. Slalus Criminallxallotr on lire Black Community Today History has structured our nation's society to accept the Black community as Iess than, and Black Americans have been trapped by that notion ever since, The War on Drugs perpetuates the racial caste system in the modern era." The whits world is desperate to keep its power and position in society, and consequently conditioned the Black corrununity to expect to be treated as second rate so that moving up in society's standing seems unattainable. The fear of a Black uprising prompted the white world to weaponize. the justice system, Criminalizing marijuana has allowed society to discriminate against people of color, but because it is masked under the cloak of the justice system, it is "the law." Remarkably, a criminal has "scarcely more rights, and arguably Icss respect, than a Black man living in Alabama at the height of Tim Crow."' Simply put, the criminalization of marijuana has resulted in an elimination of access to basic needs for predominately communities of color, Now, "the old forms of discriminatlon—employment discrimination, housing discrimination, denial of the right vote, denial of educational opportunity, denial of food stamps and other public benefits, and exclusion from jury service --are suddenly IegaL'"" "In each generation new tactics have been used for achieving the same goals" --the very same goals shared by the founding fathers." So let's go ahead and call it what it is --legalized racism. * 105 E. Assessing Criminalizarlon Despite the fact that people of color are arrested every day for possession, marijuana has been normalized as part of our culture. This has exacerbated the 'White world's fear that they will someday lose control, which is why the "War on Drugs" has been deemed a failure. The only thing the "War on Drugs" has been successful in is reducing is the number of Black Americans able to walk freely amongst their peers. The United States government spent over $1 trillion on the "War on Drugs" since 197I, but society's attitude towards drugs and how we should treat addiction is changing." The federal government is spending two times more on enforcement than on education and prevention, but education and prevention are how illegal drug use is actually reduced." The Drug Enforcement Administration (DEA) is responsible for upholding the nation's drug laws, but they have obviously been unsuccessful." When assessing the DEA, the Office of Management and Budget found that the DEA has failed to reduce illegal drug use due to "a lack of specificity of targets and timefrarnes for achieving strategic goals and objectives, and DEA managers were not held accountable for achieving results."" And, the National Drug Intelligence Center (NDIC) reported "that there has been a sharp rise in domestic production of marijuana since 2000.", Despite the numerous federal agencies put in place to reduce illegal drug use, "marijuana continues to be the most widely used and readily available drug in the United States."" Enforcement is easier to measure since it produces actual numbers in terms of arrest rates and incarceration rate, And, since education and prevention are much harder to measure, less effort has been put towards these areas.,, Marijuana prohibition has helped support and elevate the authority of the federal drug enforcement agencies, and has almost single handedly kept state and local prisons filled, which feeds the privatization of the prison system. Since prisons are now privatized, the private contracts that states have with their prisons are now informing public policy to keep rnarijuana illegal. But as the national *106 attitude moves towards legalization, the enforcement, education, and prevention programing around marijuana is no longer necessary, and the nation has wasted enough money on this failed endeavor. The effort now should be placed on the development of ameliorative relief in the justice system for those with previous marijuana charges and towards building social equity for minority communities to participate in the legal cannabis industry. 11. Part 11 WfSTLAW t9 2021 Thomson Reuters. No claim to original U.S. Government Works_ REEFER BLUES. BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis A, The States' Counterculture Uprising In light of the growing demand for the decriminalization of marij Liana, more and more states are taking on their own legalized rebellion against the War on Drugs --an exemplary illustration of federalism. Federalism is a magical thing, is it not? The states at the end of the day have the ability to do as they please --within reason of course. Ultimately, the purpose of the Constitution is to ensure states can regulate their citizens, their way. Federal law will almost always preempt state law, but .it is times when states exorcise their power to do as they please that we really see how our nation's governrnent should operate. Marijuana Moment, a well -regarded cannabis news site, notes that "there are currently 1,005 cannabis related bills under review between state and federal government;" furthermore, for state governments, the legalization of marijuana is a pressing issue that will be transformative in the next decade.- Modern day federalism is exemplified by the movement by states for the legalization of marijuana. B. Federal Implications to Legalization Marijuana remains a Schedule 1 drug on the federal government's controlled substance list. Yet, by the handful, states are legalizing marijuana, often, first comes medical marijuana, which is then followed by recreational marijuana. The Supreme Court has not yet ruled that states that have already legalized marijuana in some form or decriminalized it are in violation of the Constitution, but the Department of Justice may attempt to obtain a ruling that federal marijuana laws are peremptory, which would *107 render those state laws void." In Gonzales v. Ralch, the Supreme Court held that "federal prosecution of persons who complied with state medical marijuana laws is lawful under the Commerce and Supremacy Clauses."" Based on this ruling, some experts have noted that as long as federal law criminalizes marijuana possession, "state laws that do not are invalid;" .however, state laws that decriminalize, legalize, or medicalize marijuana are not "[authorizing] anyone to violate federal law nor are they requiring anyone to do anything contrary to federal law.."" No Supremo Court decision holds that the federal government may compel states to criminalize and prosecute people who violate federal criminal law." On the contrary, the Supreme Court has held in several decisions that they are in fact barred from doing so." However, if the federal government suddenly decided to enforce the existing federal laws criminalizing cannabis and prosecute users, growers, and distributors, it would have a chilling effect on the progress being made towards legalization. C. Cut'rent Legalization Statistics The federal government could almost instantaneously nullify the state laws and put an end to marijuana reform as we know it, but this has not prevented the rise of state legalization. Looking at a map of the United States, 11 states have legalized recreational marijuana and 13 states have decriminalized marijuana_", During the 2019 midterm election, at least 21 major party gubernatorial nominees on the U.S ballots supported legalizing marijuana." By the end of 2019, it is estimated that another nine states will move to legalize marijuana.,' The governor -elect of Connecticut said during, his campaign that "the time has come" for marijuana legailzation and that it *108 will be one of his priorities in 2019,11 Incoming Governor J,13. Pritzker of Illinois made legalizing marijuana a ceriterpiece of his campaign and says it will be something he will start working on right away.5' The Governors of Minnesota, New Hampshire, New Jrrsey, New York, New Mexico, and Rhode Island are too joining the legal weed party." Kansas, Wisconsin, Pennsylvania, and Texas are close behind, as they are poised to potentially legalize andlor decriminalize marijuana." D. 10at's Coming Next for Legalization Looking ahead to 2020, states like Arizona, Florida, Ohio, and North Dakota could consider ballot measures to fully legalize marijuana, while Mississippi, Nebraska, and South Dakota could sec medical cannabis go before voters in the current election cycle." Lawmakers across the country are corning out of the woodwork in favor of legalization in its many forms. Every state that moves to deregulate marijuana is putting more and more pressure on the federal government to remove marijuana from the Schedule 1 controlled substances list. 11c states have spoken, and the nation is ready for marijuana reform_ ill. Part It] WESTLAVY 0 2021 Thomson Reuters. No claim to original U.S. Government Works_ 6 REEFER BLUES: BUILDINGS SOCIAL EQUITY IN THE..., 24 U.C. Davis Sac.... A. Societal Barriers Due to Marijuana Prohlbirion One by one, states are realizing that marijuana is not the villain that Nancy and Ronald made it out to be. Misconceptions have been refuted and the attitude towards marijuana is becoming increasingly tolerant as the acknowledgement of marijuana's benefits exponentially outweigh its negative associations. The country is just more educated on the matters of marijuana. Prohibition is too expensive, and the consequences of marijuana prohibition on communities of color go far beyond imprisomnent. "An individual need not have spent time behind bars or even had a conviction in order to face tremendous barriers due to having a criminal record; even a minor criminal record now creates barriers to nearly all the basic building blocks of economic security Consequently, the War on Drugs "locked *109 many [Black men] out of the college classroom."33 "Decreased college enrollment has life-long consequences," not only on the individual, but on society as a whole, The effects of a criminal record have a lifelong ripple effect. "Without a college degree, steady employment, and support services, formerly incarcerated people struggle to rebuild their life,"" Some of"the collateral sanctions [that] attach at arrest ... include: loss of professional licenses, barriers to employment opportunities, `loss of educational aid, driver's license suspension, and bars on adoption, voting, and jury service"" And, when it comes to the charge, the quantity of marijuana is somewhat irrelevant because "those individuals convicted of low-level possession are subject to many of the same collateral sanctions as those convicted for dealing in large quantities."" This is why "fifty percent of felons are rearrested [and] twenty -rive percent are re -incarcerated within eight years of their initial release from prison." "Access to education could lower these high recidivism rates," but more importantly, the main takeaway here should be that this country needs to build equity in its citizens --each and every one of them.,,, Losing these opportunities and other public benefits are already a present fear for people of color without the added pressure of marijuana prohibition. Unfortunately, in today's society, it is almost inherent that minorities will have a more difficult time making ends meet because their starting point is many steps behind their white counterparts. Minority communities are keeping afloat from food stamps and public housing, and "[the] loss of public assistance, or any sanction that interferes with the ability to work or to drive, can have a more burdensome impact on low-income and minority families."" Every aspect of a family's sense of well-being is negatively affected, but "removing barriers to employment, housing and education is not only necessary for individuals with criminal records to get a fair shot in life, it's also critical to ensuring that a parent's criminal record does not determine their child's life chances -I The lasting *110 effects of marijuana prohibition make it even more difficult for the poor and minority population to have a fair chance in society. Even when marijuana is finally legalized, the resulting tax revenue will not come close to matching the amount lost over the "War on Drugs," and that revenue should be going to the communities that the failed war disenfranchised for the past century. Marijuana prohibition has caused too much hann--completely out of proportion to the purported harm it set out to prevent, and it is time to put an end to this marijuana witch hunt." B. Economic Impact of Crinrinalization on Minority Communities The "War on Drugs" narrative has variously reinforced or worsened structural problems in the related spheres of employment and criminalization. When the Nixon administration declared the War on Drugs in 1971, the unemployment rate had jumped three percent from two years prior,"a For the next decade, the unemployment rate fluctuated between 4.9 percent and 8.5 percent, and remained in that volatile state until 1982 when it reached 103 percent.- "Unemployment [swings mirror] the business cycle"; moreover, "slow growth causes high unemployment."- Consequently, jobless workers are more likely and willing to commit crimes to sustain their financial needs °' High unemployment is often linked to drug use and high crime rates, but it is important to note that causality is working in all directions.,, Communities with poverty, high arrest rates, and distrust of those outside the community are associated with a history of alcohol and drug abuse." These communities are more often than not communities of color. Furthermore, "up until the early 1980's, an annual minimum -wage income --after adjusting for inflation --was enough to keep a family of two above the poverty line""' "The falling minimum wage is also a major *111 contributor to poverty and inequality," and that paired with high unemployment creates the breeding ground for nefarious activity: drug dealing.' And, consequently, the choice between barely getting by and making money hand over fist is a no-brainer. However, while drug dealing can be profitable, it is not in the way that the media portrays it," The drug dealers in these communities are typically the entrepreneurial leaders of their neighborhoods, Often the drug dealers on the corner are part of a larger enterprise that mimics the corporate structure that of a McDonald's fi-anchise." As drug markets become increasingly concentrated in these poorer areas, this has led to a rise in both drug use and drug arrests, which has only perpetuates poverty in minority communities. It's a cyclical oppression. WUSTLAW D 2021 Thonnson Reuters. No claim to original U.S. Government Works 7 REEFER BLUES; BUILDING SOCIAL FOUITY IN THE..., 24 U.C. Davis Soc.... C The Need for Marijuana Justice Reform Legalization will allow the criminal justice system to use its already scarce resources in a more effective manner, Merely decriminalizing marijuana is not enough to "ensure the end of racially biased searches and arrests, and more importantly it "does not address restitution toward the [8]lack and brown corrununitles disproportionately hanned by the [W]ar on [D]rugs."11 For police to make a drug arrest, they need only to conduct a search of a person, which can happen either incident to a valid arrest or merely because the officer fears that he is "in danger" pursuant to Terry v. Ohio." Terry v. Ohio established that an officer may stop someone and ask them questions about what they are doing; if this happens in a rough area, that gives the officer enough cause to search the person so that the officer ensures his safety and the safety of the community." If the officer finds drugs, they have a prima facie case to make a drug arrest, and people of color are more at risk to be taken advantage of in this way since communities of color tend to live in high crime areas as a result of being pushed out due to the gentrification of cities across the country." And now, * 112 for many for whom that risk was actualized, their conduct is no longer a crime under new state laws.'" Although it is a move in the right direction, new state laws decriminalizing or legalizing marijuana often do not d❑ anything for those convicted under the old regime. This raises the issue of what can be done for those that were convicted under the old law.- This is important because often no one explained to these individuals the ripple effect a conviction will have on them now and in the future; their conviction will follow them to every job interview, school application, and aid program request that they attempt. 5o, "as the government spent more money sending Black men to prison, it devoted fewer resources to programs that would have helped the formerly incarcerated reenter society after they were released," and that inadequacy is felt even more so now as state and local governments choose to decriminalize or legalize marijuana," Moreover, a "law decriminalizing a crime cannot be used to decrease or end a conviction that occurred prior to the now law's passage unless the law has retroactive amelioration clause."" Currently, California is one of the first states with real ameliorative relief for past offenders "= California's Proposition 36 "amends the throe strikes law to impose life sentences only when a third felony conviction is serious or violent," and it "also allows courts to re -sentence offenders currently serving life sentences for non-violent third strike convictions."I" Also, California's Proposition 64 decriminalized marijuana and allotted for ameliorative relief for some conviction.," New on the scene is Illinois where the newly elected Governor Pritzker passed legislation to wipe out "low-level convictions and arrest for marijuana possession." k5 The law "provides for automatic expungement of arrest records for marijuana *113 possession'under 34 grams."w' This legislation will absolve the records of "hundreds of thousands of people" and give them back the freedom to live their lives."' The hope is that more states will follow suit. Without ameliorative relief, the only way for those with current conviction to seek relief is by applying for a pardon from their state's governor, but "applying for and receiving a pardon is a very hard process with a rare success. — Even though states are decriminalizing marijuana, that does nothing for the thousands of American citizens of color that have been marked by a marijuana conviction, and the relief that does exist is not really relief since it is not accessible to most. It may seem that decriminalization is the easy way out, but if the goal is to truly help and support the disenfranchised communities of color, then retroactive legalization is the answer. D. Attempting Restorative Justice Marijuana reform should not just be about ensuring that the "War on Drugs" is finally stopped, but directing the legislature and justice system to assist those previously convicted. "blow laws decriminalizing or legalizing marijuana cannot, in themselves, help those burdened by prior convictions."" "New provisions for sealing prior criminal records or expunging convictions will not prove meaningful without mechanisms to ensure they are regularly used." Given the troubled history of violence and discrimination between law enforcement and people of color, minorities communities "will likely not take full advantage of current reforms and thus got limited benefits and relief.""' The criminal justice system has conditioned communities of color to fear police and distrust the validity of the system. Any reform that may come down the line needs to be easily accessible and be, based in the communities that it is meant to support because the government has to somehow get people of color to buy into this new system. "Reforms should offer robust retroactive relief to people convicted for prior marijuana offenses." Glen, cxpungement and record,sealing laws are "unduly limited, require long waiting periods, or limit relief to the lowest level of offenders and offenses,"O Regardless of their * 114 experience with the criminal justice system, people of color do not have a full understanding of how the system operates, nor do they have the financial means to seek out these types of relief_" Even in jurisdictions undertaking significant marijuana reform, it is not surprising that the efforts to ameliorate the burden of WESTLAW 0 2021 Thomson Neuters_ No claim to original U.S. Government Works 8 REEFER BLUES; BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... past marijuana charges are inadequate for the population they are meant to serve." And, "even when states enact special status or modified expungement rules to address past marijuana offenses, emerging data suggests that only a small fraction of those who are eligible for relief seek to have their records sealed or set aside .... [ex -offenders] should not have to continue to bear a scarlet letter for engaging in what citizens have now decided is socially acceptable."" They should not be the ones righting this wrong; this should be done for them. It is really the least that their government can do for them at this point in history. The future of marijuana reform needs to be crafting expungement laws that reflect present-day norms for the group of people that the laws are written for. There seems to be a disconnect between those that are trying to write these laws and the group of the people they are Ineant to help. Just because we are }raving the right conversations, this does not mean the right actions are coining of them. Here is where we can see our nation again trying to play the white man savior card as we have so many times in the past. The white world feels guilty about what they have done and now are attempting to put on band aids where there should be stiches to promote real healing. The old adage that "something is better than nothing" really has no place here. IV. Part IV A. No Legalization Willi our Social Equity Some of those in power like Cory Booker and Bernie Sanders are now using their privilege for good to speak out about how marijuana legalization should be about communities of color being put right. Social equity is shaping the face of marijuana legalization. "Social equity programs serve to ensure that a percentage of the local permits that are required to operate in the cannabis industry are allocated to individual who have been disproportionately impacted by the War on Drugs."'". The *115 programs are well intentioned, but may not be meeting the needs of those they're meant to help. S❑ far there have been "staffing and funding shortfalls for the programs," but more importantly, "there is a growing concern about provisions in the regulations related to outside investors,"" There is a fear that "investors with big pockets can potentially partner with minority applicants as a way into the industry, then take advantage via bad contracts or financial pressure,"" This is the concern when creating diversity legislation within marijuana legalization. Limits or oversight nuist be given great deference, because so far in the legalized marijuana industry, the key players have been white wealthy men. Recently, "representative Alexandria Ocasio-Cortez attacked what she called the racial `injustice' that allowed companies operating private prisons, which she said profited from mass incarceration under the War on Drugs, to theoretically be among the first to profit from the legalization of marijuana."',, Ocesio-Cortez made these remarks during a subcommittee hearing on "banking services for America's burgeoning cannabis industry" where slit, questioned cannabis business owner Corey Barnette about the racial disparity associated with movement to legalize marijuana. "I" She "asked if the marijuana industry was `compounding the racial wealth gap right now' by allowing wealthy white -dominated companies, including those that profited from mass incarceration, to gain an early advantage over others," as this is contrary to the point of creating social equity programs in the states that are legalizing marijuana."" She additionally questioned whether "this industry is representative of the communities that [built it and] have historically borne the greatest brunt of injustice based on the prohibition of marijuana," to which Barnette answered, "absolutely not."',, Opportunities need to be created, "including affirmative licensing laws, `that prioritize frontline communities and communities that are most impacted"' so they "become [the] first movers in the industry, which could help them to `reap the benefits or recoup some segment of costs that they *116 bore ... during the [W]ar on @]rugs."�{" B. The Barriers to Enter the Legal Cannabis Market far Minority Communities As of 2017, "73 percent of cannabis executives were men and 91 percent were white.""° The cannabis industry is projected to be "worth more than S20 billion nationally by 2020."'°' Without adequate and effective social equity programming "the very people who built the cannabis industry in America may miss out on its now -legal profits."',' As it is, the marijuana industry is struggling to attract employees and entrepreneurs of color to join in the legal marketplace; furthermore, the diversity statutes put in place to help these communities are beginning to stunt the industry's growth because the qualifications are not being meant. "' Communities of color have the leverage here, but the wounds of the War on Drugs are still fresh, The minority community is afraid. People of color do not feel that they can trust the government, but are no more at ease in the private sphere. Since the key players in the marijuana industry thus far are white, people of color do not see familiar faces in what WESt'LAYY 0 2021 Thomson Reuters. No claim to original U.S. Government Works. 9 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Sac.... has always been their industry. Once this hurdle is overcome, there is still a danger that the narrative of the stoned Black gangster will undercut the success of Slack -owned legal marijuana businesses. The stigma surrounding cannabis and people of color make it more difficult for them to make headway in the industry, which creates even more obstacles for people of color as they try to enter the business world. When trying to build a business, people of color "lack access to capital, advisers, and networks, as well as discrimination from hanks while applying for small business loans" and in the end it all "boils down to finances.""' The fear is that even if marijuana is legalized, because these social equity programs are lackluster and diversity statutes make the barriers to entry unattainable to the majority, the marijuana industry will operate both in the legal marketplace and the "black" market."" "None of *117 the 10 states or Washington ensured that minority communities would share in any economic windfall of legalization.""" We cannot have ethical marijuana without having social equity, and the two are becoming mutually exclusive on the national landscape, which is why the country needs to figure out what the best way to both allow the marijuana industry to grow and prosper and bring, people of color into the fold. C. The Evecutive "Gateway" to Legalization As clichd as it sounds, timing truly is everything, which is especially relevant when trying to understand the game of chicken the federal government has been playing with the state governments around Iegalizing marijuana. Since the president's job is setting the nation's agenda, when Barack Obama was elected President in 2008, the idea of legalizing marijuana on a federal level became something more than just a pipe dream. Unlike Bill Clinton, "it was no secret that" Obama had a history of past marijuana use."' Clinton was President at a time when marijuana was still viewed as something that would tarnish one's public image, but during Obama's campaign, it came out that he had smoked marijuana as a teen with a group of his peers called the "Choom Gang" and "had even thanked his drug dealer Ray in his yearbook.""' Obama was open and honest with the nation about his past marijuana use, and this was likely a product of the times, as marijuana use was hardly the political death sentence that it had been for Clinton. Obarna, of course, was held to a stricter standard than Clinton, but at the same time he was able to be more relatable because of who he was --a Black man, The stereotypical juxtaposition of Black men and marijuana allowed Obama "to get real" with nation, in a way that Bill Clinton never could. Obama's greatest fear during his campaign was not his past marijuana use, but the 'Fact that he was the first Black man running for president in a country where racism was still alive and well in many pockets of the nation, which is something Bill Clinton never bad to race as a white man from Arkansas. Obama got the ball rolling for the nonnalization of recreational marijuana use, This is important for the situation at hand, because beyond being the first president to be honest about his marijuana use, he is also the *118 first Black president. And, what's even more significant is the fact that in his presidency, Obama was more comfortable with his discussing his relationship with marijuana than he was talking about his relationship with his racial identity."' The Age of Obama marks a time of historic breakthroughs, but for the purposes of this discussion the attention must be shifted away from "the racial symbol of America's achievement to the actual substance of America's shame: the massive use of state power to incarcerate hundreds of thousands of precious poor, Black, male (and increasingly female) young people in the name of the bogus 'War on Drugs.°{ Going into his presidency, the nation expected Obama to be able to fix the racial divide in America, but when things got worse rather than better, many thought that the messages of "hope" and "change" were mere false promises to get him into office."' Honestly, Obama never had a chance. No matter what he did or did not do, he would have been scrutinized to the highest degree. This is not unlike his predecessors to office, but Obarna was different in one significant way, he was the first Black president.",' As such, every Black president post-Obama will be compared to him.'' Obama was very much aware of this legacy, and it played a significant role in his administration's approach to marijuana policy. D. Weed and the Future of 'the White House Obama set the stage for diversity in government."' It is something the country benefits from today with the most diverse House of Representatives in history."' That would not have happened without Obama, but everyone knows that with light comes darkness; it is the dark side of Obama's presidency that continued to allow the "War on Drugs" to take the lives of WESTLAYV C 2021 Thomson Reuters. No claim to origirial U.S. Government Works. '10 Rr=EFFR Ell-UFS., BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... young Black men and women. However, it is not his entirely his fault. The nation may have been ready to elect its first Black *119 president, but he would have "to be twice as good and half as Black."",, And, what does this mean? Well, "the irony of Barack Obama is this: he has become the most successful Black politician in American history by avoiding the radioactive racial issues of yesteryear, by being `clean' (as Joe Biden once labeled him) --and yet his indelible Blackness irradiates everything he touches.""' Again, this is not his fault --"this irony is rooted in the greater ironies of the country he leads;" democracy is to represent all citizens, but people of color are always the last invited to the party.- Obama "[peppered] his specches with nods to ideas originally held by conservatives," and this was most evident "in the very sphere where he holds singular gravity --race"'" Obama was a symbol of "hope" and "change" for people of color. The government that once refused to count them as citizens or allow them the right to vote had elected one of their own to lead the nation. Our nation's government has not given communities of color a reason to trust it, but seeing a familiar face in the White House was a start. Arguably, Obama's greatest triumphs while in office "has been the expansion of the Black imagination to encompass this: the idea that a man can be culturally Black and many other things also--... iintellectual, cosmopolitan, temperamentally conservative, [and] presidential"17' And, it is this idea that makes Cory Booker passible. Unfortunately for Obaina, during his tirnc in office, "a Black president signing a bill into law might as well sign his own death certificate," and his presidency is a historical moment for the Black community that will reap more benefits in the future than legalizing weed would have done.I" So, if Obarna is the model, then Booker is his prodigy. Booker is able to do the things that Obama always wanted to do but could not. E. The Politics of Legalization Marijuana has found its way into the 2020 election by way of the democratic candidates running for office. Cory Booker announced his presidential bid on February 1, 2019, which was just weeks before he moved to re -introduce his bill to legalize marijuana nationwide."' Kamala Harris, Bernie Sanders, and Elizabeth Warren, Booker's fellow Democrats running for office in 2020, joined him in sponsoring the bill, which tells the nation *120 that decriminalizing marijuana is part of Democratic ticket's agenda for the upcoming election."- in 2019, the united States has a Black man and Black woman running for president who are also trying to legalize weed --what a time to be an American, is it not? The Marijuana Justice Act of 2019, if passed, would remove marijuana from the schedule of controlled substance, remove the prohibition on import and export of marijuana, withhold funding from states that have yet to legalize marijuana that have a disproportionate arrest rate or a disproportionate incarceration rate for marijuana offenses, and expunge marijuana offense convictions, among other things."' The bill also puts aside funds to invest in creating equity programming in the spheres of job training and social service to assist the underrepresented minorities negatively affected by the "War on Drugs!"?` The bill comes as increasing numbers of states are legalizing marijuana on the local level and public opinion has shifted in favor of legalization. The Marijuana Justice Act is somewhat revolutionary not only in its contents, but also in its sponsors. Now is a time where Black people are experiencing a kind of privilege previously unimaginable. Not only are Black cultural practices and tropes being validated on the national stage, but social equity for the Black community in terms of marijuana legalization is becoming an issue for the 2020 election.'"' Obaina's presidency was too polarizing politically for him to touch marijuana policy because he would have only been remembered as "the Black guy that legalized weed," which is why lie was likely so evasive on the topic, "The myth of `twice as good' that [made] Obama possible also [smothered] him," and that is exactly what happened when it came to marijuana legalization."' Obama thought as lie was leaving office at the end of his presidency that one of his last moves was going to be decriminalizing marijuana on the federal level; but then Trump got elected."' Since Trump has entered the Oval Office, the only clear agenda he seems to stick to is reversing the programs and initiatives that are reminiscent of the Obama administration."' If Obama had moved to decriminalize marijuana, it is *121 likely that Trump would have quickly shut it down."' Obama punted the issue of decriminalizing marijuana and left it for the next guy (or gal). Cory Booker does not have to distance himself from his racial identity as Obama did in the past. Obama laid down the groundwork for candidates like Cory Booker and Karmala Harris to be able to be authentically Black. Barack opened the door, and now it is up to today's political mgimo to do the rest. F. Making Room far Social Juslice in the Legalization Conversation It has been seven years since Colorado and Washington legalized recreational marijuana, and in that time the industry has WE5TLAW 0 2021 Thomson Reuters. No claim to original U.S. Gavernriient Works. 11 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... been "controlled largely by white men.""S With marijuana legalization around the corner for many states in tine coming year, the "`growing emphasis on the economic aspect of marijuana legalization' [has] replaced an `overemphasis on social justice."" As New York weighs whether or not to move to legalize marijuana, "the question of economic return for those communities has emerged as a defining issue""' Black lawmakers have threatened to block the legislation if their communities don't benefit."" The fear is that if it is "not requited in thu statute then it won't happen,""" These lawmakers have no reason "to trust that at the end of the day, these communities would be invested in," and based on history they are not wrong.''" Governor Cuomo of New York has stated that the provisions involving social equity would be written after legalization has passed, but that seems a little backwards."' It shows the communities of color in New York that they continue to be an afterthought in the saga of the War on Drugs, New Jersey is also in the same boat in terms of legalization, and advocates there are also "pushing for legalization only if tied to community reinvestment "111 In Colorado, Where marijuana has been recreationally legal for the past seven years, "Black entrepreneurs said they were banned *122 from winning licenses because of marijuana -related convictions."", Black entrepreneurs hold a handful of the thousands of cultivation and dispensary licenses there, and "continue to be arrested on marijuana -related charges at almost three times the rate orwhite people."1'1 The emerging social equity programs need to not only account for changes to the criminal justice system, but also economic ones. Pennsylvania is another state poised to legalize marijuana, but like New York, the concern is that when marijuana is finally legalized that "people of color will get to legally smoke marijuana, but the hulk of the estimated $581 million in annual state marijuana revenue would go to white organizations instead of the entrepreneurs of color who made marijuana a multibillion -dollar enterprise.""' The legalization of marijuana could likely be a part of some sort of economic bait and switch where "Slacks create an industry that bas value --whether through legal or illegal means --and white folks change the rules, change the language, and change the perception in order to bring about a change in ownership.""' There is a case for the bait and switch theory, for the companies that have jumped on marijuana legalization are the medical companies, and as a result medical marijuana is being legalized rust.", In the grand scheme of legalization, numerous interest groups stand to benefit from the tax revenue windfall of marijuana legalization, but "revenue might not materialize without a robust economic equity plan.""x G. Solving the Equity Problem The first place the marijuana revenue should go is to community investment to keep paying off the debt of the War on Drugs, since it was not just those charged or convicted that were impacted, but the whole minority community at large, California has made the best effort thus far where equity programs have been introduced retroactively, the most notable of them being Hood Incubator out of Oakland. Oakland "requires at least half of licenses to go to people with a cannabis -related conviction Marijuana legalization brings with it not only opportunities for investment, but for employment. Hood incubator is a project that "provides a free crash- *123 course in business and networking to people of color aspiring to cannabis entrepreneurship,""" Often, the people involved in the marijuana industry prior to legalization have the experience needed to be successful in the now legal market, but they do not know how to translate their skills to the legal landscape, so Hood Incubator works to bring the green rush back to people of color. It focuses on "three main areas: economic development, policy and advocacy work, and community organizing."131 The program's first cohort began in January of 2017, and ten businesses were able to launch."' Mood Incubator is able to partner new ventures with local companies to grow the venture for a designated amount of time in return for getting priority access for their own permits."' It is a way for people of color to get the first bite at the apple with the help of their community members. In doing this, the 'incubator in building equity in the community where it likely did not exist before, As of September 2018, six of those ton businesses are still in operation."' The marijuana industry is likely to bring a lot more jobs than business owners, and as a result, Hood Incubator is piloting a program to "place people of color in apprenticeship programs to jump-start their careers in cannabis.""' The Incubator also played a role in advocating for the Catutabis Fquity Program, "which prioritizes Oakland residents with prior convictions for marijuana crimes for business permits.""' The Hood Incubator model "will need to go viral to spread its impact nationally."," What is most important here is that social equity programs prioritize the communities around them and the socio-economic status of the people within them. Social equity is about giving people of color and the poor the opportunity to become financially empowered through owning their own business, and what it means to be an owner rather than _just an employee. The time for equity to shape the marijuana industry has never been greater. 1 1 nW © 2021 Thoimon Reuters. No claim to original U.S. Government Works- '12 REEFER BLUES: BUILDING SOCIAL FQUITY IN THE..., 24 U.C. Davis Soc.... Conclusion Marijuana legalization will allow people of color to "smoke fear away ... roll that mother****er up ... and ... take two puffs" as Kendrick Lamar put it in his song "Fear". "They will get to forget --if even for a few *124 hours at a time --that we live in an age where racism is on the rise, where racial inequality is widely accepted, and where Black lives remain in danger." And, for these reasons, we have to change the narrative of the Slack man in America. The first step has been making social equity what marijuana legalization is truly about, but the next step is actually acting on it. Beyond California, states for the most part thus far have not effectively developed policies or procedures that alleviate the burden of the War on Drugs or prioritize the communities of color in allowing them to become equal stakeholders in the nation's legal marketplace. To ensure that this happens, it is my recommendation to remove marijuana from the Schedule .l controlled substance list as proposed in Senator Booker's Marijuana Justice Act of 2019 as a first step. The federal government should then decriminalize marijuana an a national level in order to prepare the country for legalized marijuana. During the decriminalization period, the country will be able to work on the retroactive relief for those with marijuana crimes on their record. Once expungement or a program of the like wipes those records clean and those people are able to access public assistance again, the country can then take a look at legalizing marijuana. Furthermore, the proportion of money that was going to enforcement, education, and prevention should be redistributed into educating and supporting people of color to access what they need to participate in the marijuana industry. Minority communities need more than just opportunity; they need guidance and assistance to get them to where they want to be. Each state should require a minimum of25 percent of license holders be a person of color. It is also my recommendation that in each state, a portion of tax revenue made off of marijuana he set aside for 1) zero -interest loans for minority owned ventures and 2) a state -sponsored venture accelerator for minority owned marijuana businesses, The state -sponsored venture accelerator should mirror the Hood Incubator out of Oakland. And, as each state creates their accelerator, it will build a national network. The Hood htcubator serves as the model example for what to do when considering legalization in a new place. And, with each state having their own incubator like program, the reversal of the effects of the War on Drugs is likely to happen sooner than expected since the whole nation would be on the same page. These accelerators across the country would be in place not only to assist in the marijuana industry For the communities of color, but also serve as a genuine community building entity. And, building community means IiSing up every individual regardless of where they come from or what they have. It is on us now to make a difference in the equity conversation. Footnotes "j I would like to thank n-ofessor Stephen Wilks for all his guidance and support in the writing of the piece. He believed in me even when I did not, and look at us now_ And, to my Ioving partner, Eli Rogatz, for always being there for me whether it was checking for grammar mistakes or making sure I ate dinner. 1 truly could not have produced this without you, my love. r MARTIN A. LEE, SMOKE SIGNALS 37 (2012), 1 Id. at 39. ' Id at 42. A Jolene Forman & Suchitra Rajagopalan, The new 4120: Beyond legalizing It, CNN NEWS (Apr. 20, 2018, 11:09 AM), https://www.cnn.coin/2018/04/19/opin ions/marijuana-black-and-brown-communities-opinion-forman-rajagopa lanlind ex. htm 1. WESTEAYY Q 2021 Thomson Reuters_ No claim to originaf U.S, Government Works, 1' REEFER BLUES: BUILDING SOCIAL EQUITY IN THE.— 24 U.C. Davis Sac.... See Cydney Adams, The Marc Behind the Mar#zeana Ban for All the Wrong Reasons, CBS NEWS (Nov. 17, 2016, 5:45 PM), https://www.cbsnrws,com/nows/harty-arLslirLger-the-man-behind-the-iarijuana-loan/, Gene Johnson, The Time Nancy Reago Invented `Just Say No' And Other Great Moments In Pot I7lstory, BUSINESS INSIDER (Dec. 9, 2012, 1:56PM), https://www.businessinsider,coin/the-history-of-marijuana-2012-12. " Id " Etelka Lehoccky, Beyond Reefer Madness Box Brown's Graphic History Tells Story Of Maligned Plain, NPR (Apr. 3, 2019), https://www.np r.arg/2019/04tO3/709482030/beyond-reefer-madness-box-browns-graphic-iiistory-tells-story-of-a-mali geed -plant. 141 American Civil Liberties Union, The War on MarUuana in Black and White: Billions of Dollars Wasted on Racially Biased Arrests, 4, (last updated Sept. 11, 2013), https://www,aclu.org/files/assets/aclu-thewaronmarijuana-rel2.pdf. The War on Marijuana in Black and White: Billions of Dollars Wasted on Racially Biased Arrests, AM. CIV LIBEkTILS UNION (Sept. 11, 2013), https;/Iwww,aclu.org/fileslassets/aclu-thewaronmarijuana-re]2,pdf, John Burnett, Timeline: America's War on Drugs, NPR (Apr. 2, 2007), https:/Iwww.npr,orgitemp lates/story/story.php?storyld=9252490. 0 NICOLE HORNING, DRUG TRAFFICKING: A GLOBAL CRIMINAL TRADE 14 (2017). '.1 Id 'R Her causes, rHE RONALD REAGAN PRESIDENTIAL FOUNDATION AND INSTITUTE, l,ttps;//www.reaganl'oundation.org/ronald-reagan/nancy-reaganlher-causes/ (last visited April 1, 2020). Olivia 13_ Waxman, Bill Clinton Said He 'Didn't Inhale' 25 Years Ago —But the History of U.S. President and Drugs is Much Older, TIME (Mar. 29, 2017), https://time.com/4711887/bill-clititun-didnt-inhale-marijuana-anniversary/. WESTLAW 02021 Thomson Reuters. No carol to original U.S. Government Works. 14 REEFER BLUES: BUILDING S00IAL EQUITY IN THE..., 24 U.G. Davis Sac.... `° Betsy Pearl, Ending the War on Drugs; By the Numbers, CENIER FOR AMERICANPROGRESS (Jun. 27, 2019), https:/fwww.ainericanprogress.orgtissues/criminal justice/reports/2018/06/27/452819lending-war-drugs-numbers/. 2' ld. 22 Id. =� Brian Geddes, Cannabis Social Equity Programs are Imperfect but Critically Important, GREENWJCH TIME (Feb. 27, 2019), htLps://www. greenwichtime. com/news/art icletCannabis-Social-Equity-Programs-Are-I mperfect-but-13 6465 92.php, '' Pearl, supra note 20. Ta-Nehisf Coates, Fear of a Black president, THE ATLANTIC (Sept. IS, 2012), https://w WW,theatiantic. co,ii/magazine/archive/2012/09/fear-of-a-black-presi dent/309064/. ?6 Cynthia S. Duncan, The Need for Change: An Economic Analvsis of Uar#uana Policy, 41 CONN. L. REV. 1701, 1721 (2009). 27 See ` Washington v. Davis, 426 U,S, 229, 242 (1976) (" f We] have not held that a law, neutral on its face and serving ends otherwise within the power of government to pursue, is invalid under the Equal Protection Clause simply because it may affect a greater proportion of one race than of another,"), 21 MICHELLE ALEXANDER,THE NEW JIM CROW;MASS INCARCERATION IN THE AGE OF COLORBLINDNESS 3 (2d ed. 2011). 29 Id. at 2, 71 Id, at1. Richard Branson, War on Drugs a Trillion -Dollar Failure, CNN (Dec. 7, 2012), https:/lwww.cnn.com12012/ l2/06/opin ion/bransan-end-war,nn-drugs/index.html. 33 See Coates, supra note 26, at 1713, 34 Id at 1714. 35 WESTI.AW 0) 2021 Thomson Reuters, No claim to original U.S. Government Works. 15 REEFER EWES: BUILDING SOCIAL FQU1TY IN THE..., 24 U.C. Davis Sac.... #6 Id at 1715. 3-1 Id. at 1716. '& See Peter Andreas, U.S. Drug Control and ,policy, INSTITUTE FOR POLICY STUDIES (Nov. 1, 1996), https:(lips-dc.orglus_drug_control_policyl. 19 Duncan, supra note 26, at 1716. 110 Carmin Chappell, Cory Booker Introduces Bill to Legalize MarUecana Nationwide, with Support from 2020 Candidates, CBS (Feb. 28, 2019), https://www, onbc.com/2019/02/28/cory-booker-introduces-b ill -to -legal ize-marijuana-n Ettionwide.litml. .11 Steven S. Duke, The Future of Marijuana in the United States 91 OR. L. REV. 1301, 1305 (2013). 42 Id.; ' Gonzales V. Raich, 545 U.S. 1, 29-33 (2005). J' Coates, supra note 26. 44 Id. 45 Id 46 Tom Angell, These States Are Most Likely to Legalize .Marjuana in 2019, FORBES (Dec. 26, 2018), https://www.forbes.coralsites/tomange11/2018/12/26/tliese states-are-most-likely-to-legalize-marijuana-in-20191#6221 1035adda. a7 Torn Angell, Maryuana in The Governor's Mansion: liecord.Number of Candidates Say Legalize It, FORBES (Nov. 1, 2018), https:ltwww.forbes.coif,/sites/tomangell/2018111101/marijuana-in-the-governors-mansion-record-nutnber-of oandidat es say legalize-it/9 459cce5fie93. AM See Id. (noting the likelihood of Connecticut, Illinois, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, and Vermont passing legislation to legalize Cannabis) 49 Id. 10 Id, WESTLAW 02021 Tharnson Rauters. No claim to crigittal U S. Government Works. 16 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... 5? Id 13 See Angell, supra note 46. Lottie Joiner & National Journal, How Families Pay the Never -Ending Price of a Criminal Record, THE ATLANTIC (Dec, 15, 2015) (quoting Carmel Martin of the Center for American Progress), https://www.tiieat[antic.coirdpolitics/archive/2015/12/how-fainilies-pay tlie-never-ending-price-of-a-criminal-record/ 433641 /. `S Tamara G. Sorr, How the War on Drugs Kept ,Black Men Out of College, THE ATLANTIC (May 15, 2019), https://www.theatiantic.com/education/archivo/2019/05/war-drugs-made-it-harder-b lack-men-attend-college/5 88724/. 5r, Id S7 Id 53 Coates, supra note 26, at 1723. S4 Id. at 1724. W Angell, supra note 46, 0 Id. Q Joiner, supra note 54. °' Shaleen Title, Letter to the Editor, Is Legalizing Marijuana Too Risky?, N.Y. TIMES (Jan. 13, 2019), https://www.nytimes.com/2019/01/ 13/opinion/letters/mai-ijuana-legal i7,ationhtml. 10 Kimberly Amadeo, Unemployment Rate by Year Since 1929 Compared to Inflation and GDP, THE BALANCE (Feb, 28, 2019), https://www,thebalance.com/unemployment-rate-by-year-3305506. "' Id rn Id. Suhaib Kebhaj et al., Collateral Damage & The War on Drugs: Estimating the Effect of'Zero Tolerance Policies on Drug/Irresl Rates, 1975-2002, 11 The Public Purpose 1, 8-9 (2013). WESrLAVV 0 2021 Thomson Reuters. No claim to original U.S. Government Works. 17 REEFER BLUES: BUILDING SOCIAL. FOUITY IN THE..., 24 U.C. Davis Soc.... t'8 Id.. at 2. 69 7d. 70 David Cooper, The Minimum Wage Used to be Enough to .Beep Workers out of Poverty --It 's Not Anymore, ECONOMIC POLICY INSTITUTE (Dec. 4, 2013), https://www. epi. org/publ icati on/mini mum -wage -workers -poverty -anymore -raising/. 71 Id. 72 STEPHEN D, LEVITT & STEPHEN J. DUBNER, FREAKONOMICS: A ROGUE ECONOMIST EXPLORES THE HIDDEN SIDE OF EVERYTHFNG 83 (William Morrow eds., 1st ed. 2005) 73 Id. at 89. 74 Angell, supra note 46. 7s ferry v. Ohio, 392 U.S. 1, 30-31 (1968) 76 Id. at 30. 77 See Christopher Coble, Legal Options for Marjjuana Users Convicted Before Decrindnalization, FindL.,aw Blotter (Jul, 17, 2015, 3:58PM), https://blogs.findlaw.com/bIoUer/2015/07/legal-options-for-mari.juana users-convicted-before-decriminalization-l.ht ml. 78 Id. 79 Id @0 I d. s� Id. Eileen L. Morrison, Resurrecting the Amelioration Doctrine: A Call To Action Por Courts And Legislatures, 95 BU L.R. 335 (2015); see also littp;//ccresoureccenter, org/2019103/28/updated-report-on-2018-fair-chance-and-expungement-reforms/. WESTLAW * 2021 Thomson Rectors- No claim to original U.S. Goverriment Works. 1 a REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... The Control, Regulate and Tax Adult Use of MarUuana Act, Proposition 64 (Nov_ 8, 2016), https://post. ca.gov/propos iti on-64-the-control-regulate-an d-tax-adul t-use-of-marijuana-act. xs Robert lViccoppin, Getting Marijuana Convictions Expunged in Illinois: What You Need to Know About the Process, Chicago Tribune (Aug. 30, 2019), https:/lwww.chicagotTibune. com/marij uana/illinoWct-cb-weed-conviction-expunged-il l inols-20190917-o2 jrwf43 treth nb54efandmwz u-story.html. "" Id. R7 Id, Rs Kebhaj, supra at note 67. No Douglas A. Berman, How States Can Ensure That Toddy's Marijuana Reforms Also Ameliorate Harms Inflicted on Past Offenders, SCHOLARS (Aug. 30, 2018), https:/Ischolars.orebrief/how-states-can-ensure-todays-marijuana-reforrns-a lso-ameliorate-harms-inflicted-past-offen ders, 911 Id. "' ,See id. Id. 03 See id, 94 Id. u5 Id a{, 'Lack Ruskin, How Cannabis Tquity Programs Are Shaping the Industry's Future, 420 INTEL (Jan. 3, 2019), https,/1420 inWi.coin/arLicles/2019/01 /03/how-cannabis-equity-programs-are-shaping-industry°/aE2%C 80%99s-future. 97 Brian Geddes, Cannabis Social Equity Programs Are Imperfect But Critically Important, GREEN ENTREPRENEUR (Feb. 27, 20t9), htips:/Iwww.greenentrepreneur,com/article/329024. 99 Id WESTLAW C 2021 Thornson Reuters. No claim to original US, Government Works. 1� REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U,G, Davis 50c.... 99 Shane Croucher, Alexandria Ocasio-Cortez: Marijuana Prohibition Hit Black and Latina People Hardest sa They Should Profit from Legalization First, NEWSWEEK (Feb. 14, 2019, 6:27 AM), bttps://www.newsweek. comlane-marijuana-cannabis-profit-war-drugs- l3 31214. 10 Id Inl Id I o: Id. 103 Id. 104 Jones, infra note 1.39. Ins Id. tun Id. i0l Aaron Schachter, Growing Maryuana Industry Struggles to Attract Employees of Color, NPR (Feb, 21, 2019), https://www.npr.org/2019/02/21/695999248/growing-marijuana-industry-stTuggles-to-attract-employces�of color. 108 Jones, infra note 139. 109 Vince Beiscr, Building a Legal Marluana Industry from the Oround Up, PAC. STANDARD (Jun. 14, 2017), https:/Ipsmag.cn►nlsocial justice/washington-state-building-legal-marijuana-industry-58996. 110 Jones, infra note 139. 11 i Olivia B. Waxman, ,Bill Clinton Said He 'Didn't Inhale' a5 Years Ago --Bid the History of US. Presidents and Drugs is Much Older, TIME (Mar. 29, 2017), http:/Mime.com/47118871bill-clinton-didnt-inhale-marijuana-anniversary/. 113 Coates, supra note 25. 114 Comel West, Foreword to MICHELLE ALEXANDER, THE NEW JIM CROW: MASS rNCARC12RATION IN THE AGE OF COLORBLINDNESS, xlviii (2d. ed. 2011) 115 Charles Krauthammer, Barack Obama's State of the Union was as spent as his presidency, TELEGRAPH (Jan. 15, 2016), https://www.telegraph.co.uk/newslworldT ews/iiortiamerica/1210127]/Obamas-terrible-legacy.httnl. vUESrLAYV C 2021 Thomson Reuters. No cla'Im to anginal 0,S. Government Works. 20 REEFER BLUES: BUILDING SOCIAL EQUITY IN THI=..., 24 U,C. Davis Soc.... 116 Coates, supra note 25. 117 Id Julian Zelizer, Cary Booker, the 2020 Pace and Obama's Legacy, CNN (Feb. 1, 2019), https://www-m. onn.com/2019/02/01 /opinionslcory-booker-obama-1 egacy-zel izer/index_htm 1. 10 Id. 120 Coates, supra note 25, $26 Chappeii, saapra note 40. 127 Id. 129 gee Marijuana Justice Act of 2019, H.A. 1456. 11611, Cong. (11, Sess. 2019). 129 Chappell, supra note 40. 130 Id 132 Kyle Jaeger, New Book.- Obama Considered Decriminalizing Marjuana, Bur Then Trump Darr, MARIJIJANA, MOMENT, (Sept. 12, 2018), https://www.m arij uanamoinenLnet/new-book-obama-considered-decri mina li zing-marij uan abut-then-tru rnp-won/. WESTLAW C 2021 Thomson Reuters No claim to original U-S. Government Works. 21 REEFER BLUES: RUiLDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Sac.... 133 Id, 135 Liz Posner, The Green Rush is Too White, PACIFIC STANDARD, (Dec. 10, 2018), https://p smag. coin /economics/the-green-rush-is-too-white-h ood-i ncubator-race-weed. 136 Vivian Wang & Jeffery C. Mays, Black Lmmakers to Block Legalized Marijuana to N. Y. if Their Communftfes Don't Benefit, THE NEW YORK T1ML5, (Mar. 11, 2019), (quoting Representative Makeem Jeffries), https://www.nytimes.com/2019/03/1 I./nyrogion/inarijuana-legalization-african-ainericans,html. 137 la! 13R ld 139 Id, 141) Id 10 Id, Id_ ICI. 143 Id. H4 Id. 145 Solomon Jones, Legalizing Marijuana Won't Benefit Feopla of Color, PI1ILA. INQUIRFR, Jan. 1, 2019, littps://www.philly.com/opinion/coimnentary/marijuana-sales-black-brown-dollars-wealth-column-soloinon ,Zones-20 190102,htm1, 146 Id. 1.97 !d. 00 Id WESTLAY11 02021 Thomson Relitars_ No clAim to original U.S. Government Work:. 22 REEFER BLUES: BUILDING SOCIAL EQUITY IN THE..., 24 U.C. Davis Soc.... 150 Id 151 !d 152 Id. 15' Id. 1511 Id. 155 Id. 15e Id, 157 Id. 24 UCDSJLR 95 End uI' nucwncid 0 2021 'Thomson Reuters. No claim to original U.S. Government Works. WESTLAW O 2021 Thomson Reuters. No claim to original U.S. Government Works. 23 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 50 U.C, Davis L. Rev. 689 U.C. Davis Law Review December, 2016 Symposium Disjointed Regulation: State Efforts to Legalize Marijuana Steven W. Bender,' Copyright 0 2016 by Steven W. Bender THE COLORS QE CANNABIS: RACE AND MARIJUANA TABLE OF CONTENTS 1lr 111RIIPTO e1111Ti1129 6s9 'REEFER MADNESS: THE HISTORY OF RACIAf,IZED PROHIBrriON AND ENFORCEMENT fi40 " CAMPAIGN COLORS 692 "',THE NEW WHITE MAKKE`C: EXAMINING THE COLOR OF THE LEGAL MARIJUANA 69.1 INDUSTRY 'v- THE RESILIENT "BLACK MARKET" 499 v- LIFE AFTER LEGALIZATION: BLUNT REALITIES FOR MINORITY USERS 700 v'-NEXT STEPS: REFORM TOWARD RACIAL JUSTICE INTRODUCTION 705 The campaign to legalize small quantities of recreational marijuana drew attention fi•❑ni media and law reviews with its successes in Colorado (2012), Washington (2012), Oregon (2014), Alaska (2014), and the District of Columbia (2014).' Both media and law reviews concentrated their analysis on the interplay between the continued federal prohibition of marijuana, whether for medical or recreational use, and the onset of legalization or decriminalization of marijuana at state and local levels., (laving addressed that legal collision myself,'*690 here I take a broader focus and look at the life cycle of U.S. marijuana prohibition, concentrating on the impact of recent legalization and the user consequences that remain. Evident in that timeline is racializstion at each stage examined below --in the initial criminalization of marijuana rooted in racial stereotypes, the enforcement of that prohibition throughout the twentieth century to the present day by means of racial profiling, and the recent legalization of recreational (or medical) marijuana in some states. Despite that legalization, marijuana usage continues to disproportionately impose serious consequences on racial minorities, while white entrepreneurs and white users enjoy the early fruits of Icgalization.' WEST -LAW 0 2021 Thomson Reuters. No claim to original U,S. Government Works. THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 I. REEFER MADNESS: THE HISTORY OF IiACIALIZED PROHMITION AND ENFORCEMENT Marijuana crimuialization, as with cocaine and opiates, stemmed from racialized perceptions of users of color as threatening public safety and weltarc.' in the case of marijuana, racial prejudice against both African Americans and Mexicans merged to prompt states and local goverrunents to outlaw usage. In states with significant Mexican populations, such as Texas, Mexican prejudice was the catalyst for prohibition. As contended on the floor of the Texas Senate in the early 19003, "ja]ll Mexicans are crazy, and this [marijuana] is what makes them crazy."" In Southern states with large black populations, fears of violent black smokers led to marijuana laws.' As I summarized elsewhere, fueled by prejudice, "marijuana was scapegoated as prompting murder, rape, and mayhem among blacks in the South, Mexican Americans in the Southwest, and disfavored white immigrants from laboring classes-- with marijuana blamed for the seduction of white girls by black men and for violent crimes *691 committed by these groups,"" By the time of the exploitative 1936 film Reejrer Madness, most states had outlawed marijuana," and the federal government soon followed with the Marihuana Tax Act of 1937 banning nonmedical uses_ This act was a precursor to later federal laws designating marijuana as a Schedule I dangerous drug with no safe uses, effectively banning even medical marijuana."' Marijuana use by youth of color has been the focal point of the War on Drugs from its inception." Most U.S. drug arrests stem from unlawful possession rather than trafficking in drugs, and most of those possession arrests are for marijuana, amounting to near a million arrests annually." Evidencing the racial inequity of the War on Drugs, African Americans and Latinos account for most of those arrests despite their smaller population numbers than whites and studies confirming that white youths use marijuana in the same percentage as African American and Latino youth," *692 Although reports of disparities in marijuana enforcement have tended to focus on blacks," the drug war also disproportionately impacts Latinos. Latinos are profiled For possible trafficking given the supply routes connecting Latin American production of illicit drugs to U.S. consumers." Latinos also face detrimental immigration consequences for martjuana possession and other drug offenses, aggravated by racial profiling and the significant number of Latino immigrants." II. CAMPAIGN COLORS Launching the trend of iegalization, California (1996) was the first state to legalize medical marijuana, and Colorado (2012) and *693 Washington (2012) first legalized recreational marijuana," Noticeably absent in most political campaigns to legalize marijuana at the state level --whether for medical or recreational use --is the racialized inception and enforcement of marijuana laws. Proponents for medical marijuana legalization have pointed to permissible medical uses for other illicit drugs such as opiates, and also to the compelling narratives of easing chronic pain, relieving nausea or cancer patients, and preventing seizures in epileptic children." Recreational legalization campaigns have emphasized the potential revenue gains of taxing marijuana sales, as well as honoring the individual liberty to use marijuana instead of the more dangerous alcohol.'" Rarely mentioned was die disproportionate burden of marijuana enforcement on racial minorities. Anecdotally, a Washington advocate for marijuana legalization told ice that racial profiling arguments won't win legalization campaigns and instead will alienate voters."' Rather than a desire to dismantle laws with disproportionate impact on users of color, more evident in the campaigns for legalizing recreational marijuana was disdain for feathering the nest of the illicit drug cartels," widely assumed to be operatives of color." Frustration *694 with cartels of color controlling drug production acid distribution was evident not just in the upset over their profiteering from illicit drugs, but in the perception that cartels pay no attention to product safety and that government is better situated to ensure an unadulterated product." As reinforced by the next section that discusses how white entrepreneurs dominate the legal marijuana market, voters may have been making the choice between their perception of shady cartels of color controlling the illicit market, and of more trusted white business owners and local government profiting from marijuana consumption. A notable exception to the whitewashed arguments elsewhere for legalizing medical and recreational marijuana was Washington D.C.'s campaign for recreational legalization. As Georgetown law professor Paul Butler observed, Washington D,C_ "is really the first place whare the racial justice arguments were the main reasons behind the [legalization] campaign."" Butler opined that in other jurisdictions, advocates for legalization may "be scared to talk about race, because they think it WESTLAW 02021 Thomson Routers, No claim to original U.S. Government Works_ 2 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U,C, Davis L. Nov. 689 would turn people off, or make people more willing to lock up marijuana users if they know it has a disparate impact on African Americans."" Yet in Washington D,C,, he concluded, "[w]e heard an argument about racial justice and we responded .... We said we're not going to accept Jim Crow law enforcement ut our town."' The legalization of recreational and medical marijuana through whitewashed campaigns mirrored the dynamic of marijuana decriminalization that swept federal and state government in the late 1960s and early 1970s," As "Reefer Madness" views of axe -wielding black and Mexican smokers were replaced by the reality of widespread white usage, especially on college campuses, campaigns mounted to *695 reduce penalties for marijuana possession by these more trusted users," ]n 1970, Congress lowered the penalty for possession of small amounts from a felony to a misdemeanor in what one commentator labeled the "whitening of [the] marijuana use dilemma."'' Several states did the same; In 1973, Oregon, the site of a predominantly white population, became the first state to take the bigger step towards reducing punishment for small quantity marijuana possession from a jailab.le offense to a mere fine."' Similar to the whitening and lightening of marijuana penalties that preceded out fight legalization is the current softening of enforcement response to the epidemic of opiate use among whites. Rather than confronting that widespread use with criminal penalties, increasingly police and politicians are turning their focus to saving young lives from overdose." Indeed, the irony of drug stereotypes is that while opiate deaths have spiraled, the overdose rate for young blacks has risen only slightly --likely due to the reluctance of doctors to prescribe painkillers to minority patients for fear they will sell them or be more susceptible to addiction." III. THE NEW WHITE MARKET: EXAMINING THE COLOR OF THE LEGAL MARIJUANA INDUSTRY Michelle Alexander best described the painful irony of the post -legalization experience in which white maLe entrepreneurs now dominate the legal marijuana industry: Here are white men poised to run big marijuana businesses, dreaming of cashing in big —big money, big businesses selling weed --after 40 years of impoverished black kids getting prison time for selling weed, and their families and futures destroyed. Now, white men are planning to get rich doing precisely the same thing" *695 Several factors appear responsible for the lack of diversity in the legal marijuana business. Among them is the reluctance of banks to supply credit to marijuana entrepreneurs for fear of being seen as enabling a business still illegal under federal law. Instead, marijuana entrepreneurs must use their own financial resources or those of their circle of friends and business associates." Given the vast disparities in wealth between whites and blacks/Latinos, and the high start-up costs of a marijuana business," white entrepreneurs have an advantage that *697 minority borrowers unable to obtain balik credit cannot overcome. in this way, the wealthy parents who might have grounded their child years ago if he smoked pot instead have no hesitation to back his now legitimate and profitable agricultural or retail marijuana business. Another Factor of disparity is the typical regulatory requirement that legal marijuana retailers have a clean criminal record," which disproportionately disqualifies racial minorities given the disparities in enforcement of marijuana prohibitions, other drug crimes, and nondrug criminal offenses." With the exception of Oregon, the legalization laws fall to erase prior convictions of those prosecuted for what became lawful conduct." Additionally, the legal uncertainty of marijuana sales conducted pursuant to state law given the ongoing federal prohibition likely makes racial minorities, already subject to undue law enforcement scrutiny, especially nervous. As the director of the Drug Policy Alliance opined: African Americans know that whenever something is in a gray area of the law they will feel morn vulnerable, and for good reason since statistically minorities are more likely to be targeted or seen as suspects .... It may be that the general element of racism and racial disproportionalety in law enforcement around drugs can make minorities queasy about entering an area which is not fully legal,s" *698 Finally, the first four states of recreational legalization --Alaska, Washington, Oregon, and Colorado --have smaller minority populations than many other states, lowering the pool of minority entrepreneurs in those states.'" Effectively excluded as sellers of legal marijuana, minorities are ofton excluded from the legal market as buyers too, as the next section reveals. WFSTLANI O2021 Thomson Reuters. No claim to original U.S. Government Works. 3 THE COLORS OF CANNABIS' RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 1V. THE RESILIENT "SLACK MARKET"" Elsewhere I addressed the possible impact of marijuana legalization an Mexican drug cartels," suggesting the cartels might respond by redoubling their efforts to export other illicit drugs." As predicted, the cartels reacted to falling U.S. demand for illicit marijuana in the wake of broadening legalization of localized production by ramping up *699 opium poppy production and licroinlopiate exports, along with methamphetamine, at the same time that cannabis exports decreased," Increasingly, U.S. buyers have opportunities to buy U.S. grown marijuana produced lawfully under state law for medical or recreational uses, even if purchased for use outside that state, or for impermissible nonmedical uses, or by minors ineligible to purchase marijuana_ Accordingly, reliance on Mexican marijuana, and other marijuana grown outside (lie local legal allowances, has decreased, Still, the black market for marijuana appears to have survived even for recreational users of age in States where recreational usage has been legalized. Because recreational marijuana is taxed heavily (in Washington, for example, recreational marijuana is taxed at 37 porcent, with an additional 9.5 percent sales tax)," oftentimes black market marijuana is cheaper. Although griddle class or wealthy buyers might prefer a legal purchase from a regulated store, many poor buyers, who are disproportionately buyers of color, are effectively *700 priced out of the legal market and must purchase under the black market that remains criminalbmd. Ironically, then, due to their disproportionately precarious Financial position, racial minorities might be excluded from both ends of the legal marijuana transaction as sellers and buyers." V. LIFE AFTER LEGALIZATION: BLUNT REALITIES FOR MINORITY USERS Detailed above were some of the disproportionate consequences of marijuana use for racial minorities in local and federal regimes of criminalization, particularly evident in racial profiling and inequities in arrests despite equal usage with whites, and in the deleterious cansequences for noncitizens of drug convictions.;,, Additional consequences exist not addressed in any detail here, ranging from those in higher education of student loan denials"' and NCAA drug testing suspensions", to denials of federally subsidized housing" and state -supplied welfare and food stamps to poor users." Although these consequences, at least for federal benefits such as student loans, in theory survive state legalization given the ongoing federal prohibition of recreational and medicinal marijuana, as a practical matter arrests for marijuana possession (as opposed to trafficking) occur at the state *701 and not the federal level." Therefore, these consequences, for the most part, should ease in state legalization regimes.„ The discussion below identifies the areas of continued vulnerability for arrest or other detrimental consequences that survive in state legalization regimes. It assumes that racial minorities, as under drug criminalization regimes, will suffer the brunt of the enforcement emphasis through racial profiling, "broken window" policing," and saturation enforcement placing emphasis in neighborhoods of color. It further assumes the disproportionately low income and wealth of racial minorities and the obvious consequences for employment and housing that flow from that financial predicament. Three vestiges of racial profiling in a legalization regime attach to offenses that survive legalization --driving under the influence of marijuana, possession of marijuana by youths, and public consumption of marijuana."' State DUI laws potentially ensnare drivers in traffic stops suspected of having used otherwise legal marijuana, even those whose legal use was days or weeks past, as T14C can be detected through blood tests far several months after use by frequent marijuana smokers." Reflected in the familiar phrases Driving While Black and Driving While Hispanic is the reality that *702 minority drivers are frequent targets of traffic stops seeking contraband or evidence of other crimes.'" In legalization regimes, then, minority drivers might nonetheless steer a path toward criminalization, or at least be subjected to continued harassment. Because legalization protocols exclude underage users, generally defined as those under age 21,11 the prevailing enforcement regime survives for those most vulnerable to marijuana as a gateway drug --here as a gateway to the educational, employment, income, and other negative consequences of a criminal record. For the youngest users, the so-called school to prison pipeline'"' of enforcement and disciplinary prerogatives in schools is alive and well whether in Alaska or Arkansas. Public consumption of marijuana remains a crime in legalization regimes,' Legal uncertainties abound, and minorities have fared poorly when unclear laws, such as loitering, are applied to target them {z Obviously, consumption in a public park would be unlawful, but what about on a private residence porch, or when a vehicle passenger consumes marijuana while on a WUSTLAVC 2021 Thomson Reuters No claim to original U.S. Government Works_ 4 THE COLONS OF CANNABIS: RACE AND MARIJUANA, 50 U.C, Davis L. Rev. 689 public street?" Even if smoked indoors in a sufficiently private place, might later visible intoxication outdoors result in a public intoxication charge? Might poor residents, disproportionately racial minorities, be forced into *703 public spaces for much of their day due to overcrowding in the home, causing them to engage in otherwise legal behavior if within the home but made illegal by its visibility in public?" Evidencing the continuance of racialized enforcement in Colorado was the recent post -legalization study of marijuana arrests that found blacks there more than twice as likely as whites to be arrested for public use of marijuana°° and a separate study finding post -legalization arrest rates of Colorado schoolchildren were even more racially disproportionate than before." Related to the trap for public consumption of marijuana is consumption within a rental unit. Because racial minorities are more likely to be renters than whites, they are vulnerable to the typical residential lease provision outlawing smoking or other consumption of drugs, including legalized marijuana.°' To escape the rental restrictions enforced by watchful property managers or neighbors, residents might consume marijuana outside the complex in public spaces, rendering them vulnerable to a different enforcer-- police. *7041mployment drug testing also survives in legalization regimes, likely even for employees using marijuana for medicinal purposes and thus claiming protection under disability antidiscrimination laws, but denied that protection given the continued illegality of marijuana under federal law.^' Because most low -wage employers require drug testing, encompassing fast food restaurants, retail stores, hotels, and public transportation, racial minorities may bear the brunt of these requirements that control their behavior by private contract, as with residential leases - *705 'VI. NEXT STEPS: REFORM TOWARD RACIAL JUSTICE Some of the consequences mentioned above, such as federal immigration law impacts, will ease as more states embrace the legalization model for recreational marijuana. And inequities such as the reluctance of banks to extend credit to marijuana enterprises will disappear once federal law is reformed to, at minimum, respect the right of states to .regulate marijuana as they choose, and further to remove federal criminal penalties for marijuana use. But more may be needed. Michelle Alexander argues that merely legalizing marijuana is inadequate relief for embattled racial minorities ravaged by the War on Drugs: After waging a brutal war on poor communities of color, a drug war that has decimated families, spread despair and hopelessness through entire communities, and a war that has fanned the flames of the very violence it was supposedly intended to address and control; after pouring billions of dollars into prisons and allowing schools to fail; we're gonna simply say, we're done now? I think we have to be willing, as we're talking about legalization, to also start talking about reparations for the war on drugs, how to repair the harm caused.", Financial reparations are rarely granted to communities of color, and the fear of reparations even stymied an official apology by Congress to African Americans for the brutalities of slavery." The Oregon experience, however, suggests a costless olive branch that should be extended to racial minorities, and anyone convicted of a marijuana possession offense in a regime that eventually legalizes the same conduct. After its recreational legalization, Oregon's legislature allowed the expungement of the criminal records of those convicted only of marijuana crimes." Relatedly but more narrowly, the Colorado *706 Court of Appeals has applied that state's legalization law retroactively to overturn marijuana possession convictions that had not become final on appeal before the new law took effect," The racial consequences described above are no reason to resist legalization in remaining states and at the federal level, even if the benefit of legalization may fall primarily to white entrepreneurs and white users. Rather, the racial consequences that remain despite legalization are a reminder of the broader ills of our criminal justice system that is fixated on enforcement against minorities. Marijuana and other drug laws have served as the centerpiece of the decades -long mass incarceration of minorities," and a shift to treat use and addiction as a health issue rather than a crime is a needed step in the long road toward racial justice. Footnotes YVESTLAW 02021 Thomson Neuters. No claim to original US. Government Works. THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 Al Copyright 0 2016 Steven W. Bender. Associate Dean for Research and Faculty Development, Seattle University School of Law. I am grateful to the UC Davis Law Review for organizing the Disjointed Regulation Symposium, especially the hard work of Senior Symposium Editor Kate Wittlake, and to conference participants for helpful comments and suggestions, particularly Carrie Rosenbaum and Janet Vining. I See, e.g., COLO. CONST, art. XVIII, § 16, � NrASH. REV. CODE ANN. § 69.50.41313 (2016), a For discussion of the many states decriminalizing marijuana to eliminate jail time, see Carrie Rosenbaum, What (and Whom) State MarUuana Reformers Forgot: C'rimmigration Law and Noncitizens, 9 DEPAUL 1. FOR SOC. JUST., 1, 1-2 & nn. 1-4 (2016). 3 See generally Steven W. Bender, Janet Reform?: The Interplay of State, Federal, and Hemispheric Regulation of Recreational Nlaryuana and the Failed War on Drags, 6 ALB, GOV'T L. REV. 359 (2013) [hereinafter Joint Reform]. 4 See infra Parts 111, V. s SeeSTEVEN W. BENDER, RUN FOR THE BORDER: VICE AND VIRTUE IN U.S.-MEXICO BORDER CROSSINGSS 97 (2012) [hereinafter RUN FOR THE BORDER]. ' PAUL BUTLER, LET'S GET FREE: A HIP -HOP THEORY OF JUSTICE 45 (2009); see alsoJOHANN HAM, CHASING THE SCREAM 15 (2015) (mentioning 1927 New York Times headline "Mexican Family Go Insane" to describe the consequences of a family ingesting marijuana). For Mexico's role in instigating the "Reefer Madness" hysteria, see ISAAC CAMPOS, HOME GROWN (2012). I Bender, Joint Reform, mipra note 3, at 362. at Id 9 See id. la Id, at 364-65; see Erwin Chemerinsky et a]., Cooperative Federalism and Marijuana Regulation, 62 UCLA L. REV. 74, 82-83 (2015). As recently as summer 2016, the federal Drug Enforcement Agency refused to downgrade marijuana to a Schedule II drug in the same category as cocaine. See Emily Willingham, DEtrrt x Hypocritical Maryuana Decislon Ignores the Evidence, FORBES (Aug. 13, 2016, 8:42 AM), htip-Hwww. forbes. comis ites/em ilyw i l l in.gham/2016/0 8/ 13/deas-marijuana-decision-ishypocrisy/423 fOe7ca4e44. See Bender, Joint Reform, supra note 3, at 367. 12 See id. (supplying statistic of 872,721 state and local marijuana possession arrests .in 2007). More recent statistics arc WESTLAw C 2021 Thomson Reuters_ No Claim to original U.S, Government Works. 6 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 the estimated 700,993 arrests in 2014, with 88% of those for possession, See FBI Reports Annual Marijuana Arrests in U.S. Increased Last Year for the First Time Since 2009, MARIJUANA .POL'Y PROJECT (Sept. 28, 2015), https://www.inpp.org/newsipress/tbi-reports-annual-marijuana-arrests-in-u-s-increased-last-year-for-the-first-time-sin ce-2009/. Sec Bender, Joint Reform, supra note 3, at 367, For harder drugs such as cocaine and heroin, a recent study found much higher abuse rates among delinquent white (non -Hispanic) teens than for black delinquent youth, See Kristin Samuelson, Among Delinquent Teens, Whites More Likely Than Blacks to Abuse Hard Drags, NORTHWESTERN (Mar. 17, 2016), http://www.northwestern.edu/newscenter/storics/2016/03/race-del inquent-youth-substance-use-disorder. htm I (discussing study published in 2016 in the American .Journal of Public Health). Before Colorado's legalization of recreational marijuana, African Americans, comprising only 4% of the state's population, accounted for 22% of the state's marijuana arrests. See Nekima Levy -Pounds, Going up in Smoke: The Impacts of & Drug War on Young Black Men, 6 ALB. GOV'T L. REV. 560, 576 (2014). In Washington D.C., African Americans were eight times more likely to be arrested for possession than white marijuana users. SeeACLU, THE WAR ON MARIJUANA IN BLACK AND WHITE 17-18 (2013), https71/www.aclu.org/sites/default/files/field_ document/] 1144I3-mj-report-rfs-rcll.pdf (also revealing nationally that blacks are 33 times more likely than whites to be arrested for possession); see also Jesse Wegman, The Injustice of MarUuana Arrests, N.Y. TIMES (July 28, 2014), http://www.nytimes.com/2014/07129/opinion/high-time-the-injustice-of-marijuana-arrests.html. Once arrested, these defendants were less likely than whites to be released on bail, and more likely to face mandatory minimum charges, See Abby Haglage, When White Girls Deal Drugs, They Walk, DAILY BEAST (Nov. 30, 2015, 10,00 PM ET), htip:/1www.thedailybeast.com/articles/2015/12101/when-white-girls-deal-drugs-they-walk,htm] (addressing the arrest and prompt release on bail of the white daughter of a DEA official found with large amounts of a variety of illicit drugs for sale)_ SeeM1CHELLE ALEXANDER, THE NEW JIM CROW: MASS fNCARCERATION IN THE AGE OF COLORBLINDNESS IS-16 (2010) (inviting scholars and advocates to engage the mass incarceration and drug war experiences of women, Latinos, and immigrants as she does for African American men). See generallyBENDER, RUN FOR THE BORDER, supra note 5, at 114-38 (reviewing the history of Latin American irrunigration as it relates to United States drag policy). Simple possession offenses are grounds for deportation of noncitizens under the Immigration and Nationality Act unless they fall under the exception for single offense possession of small amounts of marijuana. See Jordan Cunnings, Nonserious lllarpana Offenses and Noncitizens: Uncounseled Pleas and Disproportionate Consequences, 62 UCLA L. REV. 510, 531-35 (2015) (discussing how this personal use exception can be lost by more than one marijuana offense, or by a conviction for social sharing of marijuana; also noting that there is no personal use exception when noncitizens who travel abroad attempt to return to the United States, and concluding that low-level marijuana offenses create serious consequences for noncitizen offenders); Rosenbaum, supra note 2, at 45-46 (discussing how Latino noncitizens will continue to suffer disproportionate criminal and immigration impacts despite state decriminalization of marijuana). See generally Kevin R. Johnson, Racial Profiling in the War on Drugs Meets the Immigration Removal Process: The Case of Moncrieffe v. Holder, 48 U. MICH, J.L. REFORM 967 (2015) (addressing how racial proFling of the minority noncitizen adds to the treacherous immigration law impact of drug offenses); Grace Meng, A Price Too High: US Families Torn Apart by Deportations for Drug Offenses, HUM. RTS. WATCH (June 16, 2015), https://www.hrw.org/report/2015/06/16/pricertoo-high/us-families-torn-apart-deportations-drug-offenses (discussing the rise in drug deportations and the consequent impact on families). WESTLAW 02021 Thomson Reuters. No claim to original U.S. Government Works. L 7 l'HE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 " Bender, Joini Reform, supra note 3, at 371-73. Is See Sarah Breitcnbach, Many Stares Still Grapple wilh Regulating Medical Marijuana, HUFFINGTON POST (last updated Oct_ 19, 2015), htV://www.lruffingtonpost.comlentry/medical-marijuana-state-laws_5625054ee4hObee3470156fc (detailing arguments for and against legalizing marijuana for medical uses). IV SeeLEGIS. COUNCIL OF THE COLO. GEN. ASSEMBLY, 2012 STATE BALLOT INFORMATION BOOKLET AND RECOMMENDATIONS ON RETENTIONS OF 7UDOE5 12,14 (2012) (summarizing arguments for adoption of Colorado legalization measure to include the statement that "[a]dults should have the choice to use marijuana, just as they have that choice with other substances such as alcohol and tobacco"). I" Conversation with Conridential Source, Washington Advocate of Marijuana Legalization (Feb. 7, 2013) E,g„ KATE BROWN, OR. SEC'Y OF STATE, VOTERS' PAMPHLET: OREGON GENERAL ELECTION 125 (2014) (Former chief federal prosecutor for Oregon Kris Olson arguing "[m]oney spent on legal marijuana will be diverted from the black market and drug cartels. Instead, it will go into legitimate businesses, and the taxes generated will go to essential public services like police, mental health and drug prevention."); see, e.g., STATE OF A.LASKA OFFICIAL ELECTION PAMPHLET 79 (2014), https:llwww.electi❑ns.alaska.gov/doc/oep/2014iAlG-Region-l-book,pdf (argument of Political Director/Treasurer of Campaign to Regulate Marijuana Like Alcohol Christopher Rempert) (advocating moving marijuana fi•om the underground criminal market to one that generates tax revenue); see alsoHAR1, supra note 6, at 282 ("The Washington campaign argued that drugs should be legalized not because they are safe, but because they are dangerous. It's precisely because tboy are risky that we need to take them back from the gangsters and cartels, and hand them to regulated stares ...."). }- For some drugs such as cocaine this is a reasonable assumption given supply chains that now travel through Mexico and Central America to production sites in Colombia, Bolivia, and other South Americau counties. SeeSTEVEN W. BENDER, MEA CULPA: LESSONS ON LAW AND REGRET FROM U.S. HISTORY 1.40-41 (2015) [hereinafter MEA CULPA]. For marijuana this assumption is more questionable given the significant production of illicit marijuana within the United States, particularly in the so-called Fincrald Triangle ofNorthem California's Humboldt, Mendocino, and Trinity counties, by operatives of all backgrounds. See, e.g., Marijuana Legalization and Regulation, DRUG POLY ALL., hitp;l{www.drugpolicy.org/marijuana-legalisation-and-regulation (last visited Aug. 23, 2016) (discussing how marijuana product testing is becoming a standard feature in legalized marijuana regimes). ' .Rebecca Sheir, An Uncomfortable Link Between Race and Marjuana Arrests in I.C., WAMU 88.5 AM. UNIV_ RADIO (May I, 2015), http:llwaniu.org/programslnietro_connection/ 15104l30/aa—uncomfortable_link_between_t ace_ and rnarijuana_arrests in dc. 16 Id. WCSrI-AW @ 2021 Thomson Reuters_ No claim to original. U.S. Government Works. THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 27 See Bender, Joini Reform, supra note 3, .at 369. i$ See id. 19 See Thomas J. Moran, Note, Just a Little Bit of Histo)y Repenting. The California Model of kfar�uana Legalization and flow It Might Affect Racial and Ethnic Minorities, 17 WASH. & LEE J.C.R. & SOC. JUST. 557, 568 (2011). .w Bender, Joint Reform, supra note 3, at 369. Ekow N. Yankah, Opinion, When Addiction Flas a While Face, N.Y. THVIES, Feb. 9, 2016, at A23. 32 See Gina Kolata & Sarah Cohen, Drug Overdoses Propel Rise in Mortality Rates of Young Whites, N.Y. "LIMES, Jan. 17, 2016, at Al. See April M. Short, Michelle Alexander: White Men Get Rich from Legal Pot, Black Men Stay in Prison, ALTERNET (Mar. 16, 2014), http://www.alternet.org/drugs/michelle-alexander-white-men-get-rich-legal-pot-black-men-stay-prison; see also Ted Hesson, DC's Mack Residents Want a Piece of the Legal Maryuana Market, FUSION (Feb, 28, 2015), http.'//fusion.net/story/56325/black-residents-want-a-piece-of dcs-marijuana-market/ ("The legal marijuana industry is very white .... [Inndustry insiders widely acknowledge a lack of diversity in the emerging [legal marijuana] field."), Karen Mawdsley, Rilwan Balogun & Montinique Monroe, Experts: Minorities Struggle far Fboting in Lucrative Cannabis Industry, WEEDRUSH (Aug. 15, 2015), http://weedrush.news2l.com/experts-minorities-struggle-for-footing-in-lucrative-cannabis-industry/ (noting the legal cannabis industry is dominated by white men). An example of the controversy of white businessmen profiting from what imprisoned so many men of color is the gentrifying neighborhood in Seattle's Central District where African American groups have criticized a white -owned marijuana outlet near a local church's teen center. The church's pastor suggested that if a marijuana outlet is allowed an the same intersection where police traditionally arrested African Americans selling marijuana, then the Seattle mayor "needs to let all the brothers and sisters go who are incarcerated for marijuana" Bob Young, Protesters March on Seattle's Uncle Ike's Pot Shop, SEATTLE TIMES (Apr. 20, 2016), http://www.se,attletimes.com/seattle-news/m arij tiana/protesters-march-on,seattl es-uncle-ikes-pot-shop/. See Chemerinsky et al., supra note 10, at 91-93 (addressing the unavailability of banking services for the, legal marijuana industry); Andrew l^olkerth & J. Marcus Painter, Legalized Maryuana and the Real Estate Finance Dilemma, COLORADOBIZ (Aug. 19, 2013, 5.35 AM), http://www.cobizmag.com/articles/legalized-iarijuana-and-the-real-ostate-finance-dilemma (addressing an additional factor of the potential federal forfeiture of assets involved in the marijuana business, as well as the reluctance of landlords to rent to a marijuana business given the similar risk of federal forfeiture of the real estate). The recalcitrance of landlords may compel a marijuana business to own the real estate itself, without the benefit of a real estate loan, thereby increasing capital needs. In the omnibus spending bill approved in late 2015, Congress agreed to prevent federal authorities from interfering with state medical marijuana laws but, despite Senate approval, Congress refused an amendment to allow hanks to deliver financial services to marijuana businesses. 31 See Jana Kasperkevic, Medical Marauana: As Profitable as .fipple Stores, but Only for Nigh Rollers, GUARDIAN (Oct. 29, 2014, 8:00 AM), http://www.theguardian.com/business/2014/oct/29/medical-marijuana-business-new-york (discussing the start-up costs and impecliments for New York medical marijuana businesses); Mawdsley, et al., supra WESTt.AW C 2021 Thomson Routers. No claim to original U.S. Government Works. w 9 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Pev. 689 note 33 (citing wealth disparities and high start-up costs as impeding minority entry into medical marijuana operations, noting recommended start-up funds of between $3 million and $5 million in Connecticut); Dan Weissmann, The Legal Business of Marijuana IT Growing but the Industry Lacks Diversity, NPR (July 3, 2015, 5:06 AM), http://www.npr.org/2015/07103/419692413/the-legal-bus i nes s-of-maxi jean a -is -growing -but -the -in dustry-lacks-diversi ty ("You can't even submit La marijuana business] application .in most states for under $100,000,"). '^ See rracy Jarrett, Six Reasons African Americans Aren't Breaking into Cannabis Industry, NBC NEWS (Apr. 19, 2015, 8.29 PM), http://www.nbcnews.conL/news/nbebUd6-reasons-african-americans-cant-break-cannabis-industry-n344486 (reporting most states will deny a cannabis retail license to individuals with a misdemeanor or arrest for possession of marijuana or any drug). 'rho state of Washington, for example, has a scoring System for licensees, with those convicted of two misdemeanors unlikely to obtain a license. Id. Ironically, Colorado's first A&ican American woman to own a marijuana dispensary was inspired to start her business by her brother's experience as a youth who spent several years of forced labor picking cotton in Texas while imprisoned on a petty marijuana charge. See Amy Goodman, Colorado's Firs! Black Wonsan Pot Entrepreneur on 9dihies, Incarceration, & the lndustry's Whiteness, DEMOCRACY NOW! (Apr. 22, 2016), http://www.deinocracyrinw.arg/2016/4122/as—black—youth—are locked —up. 37 See Shaleen Title, How Insidious Laws Are Keeping .Adany from Participating in the Promising Legal Marijuana Economy, ALTE,RNET (July 14, 2016), http://www. a lternot. erg/d rugs/inost�law8-barring-people-felonies-marijuana-business-pure-hypocrisy. " See discussion infra Part VI of the different approaches to past convictions taken in Oregon and Colorado. '9 Jarrett, supra note 36; see discussion infra Part VL au See Russ Belville, In Defense of White Gzrys and Marijuana Legalization, MARIJUANA POL. (Apr. 30, 2015, 11:56 AM), http://marijuanapolitics,corn/in-defense of--white-guys-and-marijuana-legalization) (objecting to the notion of racism in legal marijuana operations given that the (at the time) four states of legalization are among the 20 least black populated states). Other state -specific factors holding back minorities include the experience under the Florida medical marijuana law which allows nurseries registered for 30 years to grow medical marijuana, thus excluding black farmers who suffered discrimination in the past at the hands of the U.S, Department of Agriculture. See Carolyn M.. Brown, Black Furmers Shut out of $10 fltilion Legal MarUvana Business, BLACK ENTERPRISE CNov. 10, 2015), http:/Iwww.blackenterprise.com/small-business/black-farmers-shut-out-of legal -marijuana -business/. Another factor is the residency requirements for licensod sellers in these legalization states with few minorities. See, e.g., Daniel Shortt, Marijuana Industry Residency Requirements, CANNA L. BLOG (Apr. 29, 2015), http://www.oannalawblog.coin/marijuana-industry-residency-requirements/ (discussing Colorado's two year residency requirement). Oregon, however, repeated its two-year residency requirement in 2016. Vince Sliwoski, Oregon Opens 11s Cannabis Industry to Non -Residents, CANNA L. 13LOG (Mar. 8, 2016), http://www.cannalawblog.com/hb-4014-opens-oregons-cannabis-industry-to-non-residents/, As discussed in the next part, in states where recreational marijuana is not legal, the black market continues to thrive, free of the entry constraints of the legal market. As one writer observed, the illicit drug industry is the only "factory" still open in some cities, employing "children, old people, people who've been shooting drugs for 20 years, it doesn't matter." Yana Kunichoff, Do Now Mar Juana Legalization Laws Only Benefit White People?, CHI. MUCKRAKERS (June 7, 2013, 1:05 PM), http://www, ch icagonow. coin/chicago-mucluakers/2015/06/do-new-marijuana-1 egaLizati on-laws-only-benefit-white-pe OPIU. WfSTLA►'Y @ 2021 Thomson Reuters, No claim to original U.S. Government Works 10 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. G89 to In using this familiar phrasing I am aware of the negative connotation often associated with black -descriptors such as black market and blackmail, in contrast to white -phrases such as white collar. See generallyRlCHAKD LEDEREF, THE MIRACLE OF LANGUAGE 53.55 (1991) (explaining how more black expressions have unsavory connotations than white ones). '' See Bender, .loins Rgform, supra note 3, at 383-91. kl. at 388. 14 See Nick Miroff, Losing Marjuana Business, Mexican Cartels Push Heroin and Meth, WASH. POST (Jan. 11, 2015), https:Ilwww,washingtonpost.cam/world/the americas/losing-marijuana-business-mexican-cartels-push-heroin-and-m eth/2015101/l1/9lfe44ce-8532-I1e4-abcf-5e3d7b3b20b8_story.htrnl; see alsoliEROIN: CAPE COD, USA (HBO 2015) (attributing surge of heroin to Mexican drug cartels replacing lost marijuana revenue). See generally Olga Khazan, The New Heroin Epidemic, ATLANTIC (Oct. 30, 2014), hitp://www.theatiantic.com/health/arcbive/2014/10/the-new-heroinepidernic/382020/ (describing the surge in illicit use of prescription opiates in the early 2000's and a resulting rise in demand for heroin). Some synthetic drugs classified as opiates, such as fentan.yl, can be produced in laboratories in Mexico and elsewhere without need for the opium poppy. See Azam Ahmed, 40 Times Stronger than Heroin, Fentanyl Enriches Drug Cartels, N,X, TIMES, .tune 10, 2016, at A]. See Bryan Adamson, Washington's Mar#uana Laws and Social Justice-- Our Clinical Work at Seattle University School of Law, LAW PROFESSOR BLOGS NETWORK (Oct. 29, 2015), fttp:lllawprofessors.typepad.com/clinic_prof/2015/10/washingtons-marijuana-caws-and-social justiceour-clinical-war k-at-seattle-university-school-of law,html; see also Sarah Aitchison, The Year That Wend to Pot: 3250M in MarJuana Soles-- Yet Some Merchants Feel It's Been a Bummer, PUGET SOUND BUS. J. (July 10, 2015, 3:00 AM), http://Yvww.bi7joumals.com/seattle/print-odition/2015/07/1 0/the-year-that-went-to-pot-250m-in-marijuana-sales.htm I (discussing the still active black market in Washington despite recreational legalization, prompting the legislature to replace the former three tiers of 25 percent tax at the stages of growing, packaging, and selling, with a single layer of 37 percent tax); Dylan Pctrohilos, Weed Is Now Legal in DC. Here's Why Drug Dealers Aren't Worried, THINKPROGRESS (Feb. 26, 2015), http:llthinkprogress.org/justicet2Ol5/02/26/3626608/pot,comes-to-dc/ (reporting that the unregulated market is still thriving in Colorado because it is cheaper to purchase unregulated marijuana). A Washington lawmaker has proposed a bill reducing state excise taxation further, down to 25 percent, in order to reduce the competitive advantage enjoyed by the black market. H,B. 2347, House Reg. Sess. 2015-2016 (Wash_ 2016). In addition to taxation, the costs of licensing and regulation are substantial, with the added cost of a brick and mortar store as compared to the illicit drug dealer's home or automobile. .16 Charing Ball, Will Black People Miss out on the Benefits of Marijuana Legalization?, MADAM NOIRE (Jan, 6, 2014), http:/Imadamenoire.com/337897/will-black-people-miss-benefits-marijuana-legalization/, y' Gf infra Part V (explaining that racial minorities are also excluded disproportionately from lawful use, or at least consumption without economic and other deleterious consequences). 46 See supra Part 1. JN Introduced as an amendment to the federal Higher Education Act in 1998, and signed by President Clinton, was a denial of federal financial aid to students convicted of minor drug offenses, suspending first offenders from benefits vVESTI AVV C 2021 Thornson Neuters. No claim to original U,S, Governrrment Wvrics. 11 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 for a year. See Clinton Signs L.aiv Denying Student Aid to Marijuana Smokers, NORML (Oct. 8, 1998), http://nonnl, org/news/ l 998/10/08/cl inton-signs-law-denying-student-aid-to-marij uana-smokers. 50 But cf Schools Easing Athlete Penalties for Mar uana, Report Says, ESPN (Dec. 28, 2015), http://sports.espn.go. coin/college-football/sto.ry/_/id/ 14449159/many-power-five-schools-step-pot-easement-trend (discussing results of Associated Press study finding major conference schools were treating athlete marijuana use less harshly than 10 years ago, including at the University of Oregon whore athletes don't lose playing time until the third failed test). si See generally Adamson, supra note 45 (detailing fcderai housing consequences of marijuana use). 12 SeeMICHAEL A. HARWIN, Phe New Deal for Drug Defendants: Lose .Your Federal Benefits and Privileges, inDEFENSE STRATEGIES FOR DRUG CRIMES: LEADING LAWYERS ON INTERPRETING TODAY'S DRUG CASES, DEVELOPING A THOROUGH DEFENSE, AND PROTECTING A CLIENT'S RIGHTS 3 (2015), Westlaw 6157371. See Chemerinsky et al., supra note 10, at 84 (citing statistics that nearly all marijuana arrests occur at the state level, with a 109 to I ratio in 2012). For example, NCAA drug testing will survive in legalization regimes, in part because most athletes are younger than the minimum legal age for consumption in those states, 21. The possibility exists too of federal possession charges for using marijuana in a federal park or other federal. place. 55 See generally Raven Rakia, When People Are Property: How Strategically Choreographed, Racialized !Fear Built Prisons Out of Broken Windows, MEDIUM (July 22, 2014), littps:/imedium.coi-n/ rt aiiitacrow/when-people-are-property-296dfc5lO5b i #,2y4xijeia (detailing the history of broken windows policing and situating marijuana arrests within this enforcement strategy). `d Other surviving offenses include possession of amounts in excess of the legal limit, which for marijuana and its various product permutations such as edibles can be challenging for the user to determine. Another potential offense is purchasing marijuana fi-om a black market seller in a regime where purchases from registered sellers (with the exception of social sharing) are required. 37 See Katy Hall & Jan Dichm, Here's Where Yoze Can Fret Arrested for DU! Weeks After Smoking Marijuana, HUP'FINGTON POST (Dec, 31, 2013, 12:28 12M ET), http://www.huffingtonpost.com12013/12/31/marijuana-dui_n_4520129.html (discussing how exceeding the legal THC limit in Washington can result in a DUI offense regardless of a showing of actuai impairment, while in Colorado oxceeding the limit is only a permissive inference of intoxication). See generally Andrea Roth, The Uneasy Case for Marijuana us Chemical Impairment Under a Science -Based Jarisprudence af'Dangeruusness, 103 CALIF_ L. REV. 841 (2015) (attacking the assumptions and junk science of marijuana driving impairment laws). 59 See Rosenbaum, supra note 2, at 3. ' SeeCOLO. CONST. art. 18, § 16, But ,see Control, Regulate and Tax Adult Use of Marijuana Act, Proposition 64, § 3(y) (Cal. 2016) (proposing reduced penalties by providing drug education and community service for minors in WEST LAVv Q 2021 Thomson Reuters_ No claim to original U.S. Government Works 12 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rev. 689 possession). Many medical marijuana states such as Washington, however, do not exclude otherwise eligible minors from their permitted users of inedical marijuana. 14 See generally School -to -Prison Pipeline, ACLU, https://www.aclu.org/issues/juvenile justice/school-prison-pipeline?rcdirect✓fact-sheat/what-school-prison-pipeline (last visited Oct. 15, 2016) (explaining that the school to prison pipeline is a disturbing national trend wherein children are funneled out of public schools and into the criminal justice system). WASH. REV. CODE ANN- § 69.50.445 (2016) (criminalizing use of marijuana "in view of the general ,public"). 62 STEVEN W. BENDER, GREASERS AND CrRINCOS: LATINOS, LAW, AND THE AMERICAN IMAGINATION 55 (2003) (discussing vague loitering and gang membership laws used to target Latinos and African Americans), See generally David Blake & lack I±inlaw, Marijuana Legalization in Colorado: Learned Les.50n& 8 HARV. L. & POL'Y REV. 359, 374 (2014) (discussing how the Denver City Council narrowly rejected an ordinance that would have prohibited recreational marijuana smoking on a front porch); Vince 5liwoski, Oregon's Hazy Law on Smoking Marijuana in "Public Places, "CANNA L. RLOG (Aug. 5, 2015), http://www,cannalawbiog.com/oregons-hazy-law on -smoking -marijuana -in -public/ (discussing uncertainties under Oregon law, including whether consumption in a vehicle is considered a public place and looking to analogous Oregon authority to conclude affirmatively). IN Another group uniquely susceptible to public use laws is our homeless population, whose presence in public spaces is criminalized in an increasing variety of ways that cover most aspects of their lives. Essential life functions that are lawful when done in the privacy of one's home, such as urinating and sleeping, are ci&n criminalized when they take place in public spaces. See generally Sara Rankin, The influence of Exile, 76 MD. L. REV. (forthcoming 2016), GS Kristen Wyatt, Report: Racial Disparities in Drug Arrests ,persist After Colorado Legalizes Marijuana, U.S. NEWS & WORLD REP. (Mar. 25, 2015, 1:57 PM), http://www.usnr,ws.com/news/us/articles/2015/03125/report-racial-disparities-in-arrests-persist-with-legal-pot (Finding against a backdrop of post -legalization plummeting of marijuana arrests that blacks were also much more likely than whites to face arrest in Colorado for illegal cultivation of marijuana or possession beyond the legal limit). "0 Amanda Chicago Lewis, Marijuana Arrests dawn in Colorado for While Teens, up far Black and Larino Teems, BU7, ZFEED NEVUS (May 10, 2016, 3:09 PM), haps://www.buzzfeed.comjaniaiidachicagolewis/marijuana-arrests-d❑wn-in-colorado-for-white-teens-up-for-bl?utm t erm=.hw375zMOR#,ke2o48VR2 (discussing report fmding that between 2012 and 2014, marijuana arrests of Colorado youth aged 10-17 were down for whites and up significantly for blacks and Latinos). At the same time, a post-Iegalization survey :Found Colorado teen recreational use of marijuana declined from pre -legalization results in 2009 (25 percent) to 2015 (21 percent), See Kylie Cheung, Surprise, Surprise: Legal Pot Does Not Increase the Number Of Teens Smoking, ALTERNET (July 1, 2016), htip://www.alternet.org/drugs/how-marijuana-legal ization-real ly-affer,ts-number-teens-smoking-pot. ai See generally Dirk VanderHart, Xpartment #420: For Some Portland Aparlmew Dwellers, Weed's Only Sort pj Legal, PORTLAND MERCURY (Apr. 29, 2015), http://www,portiandmr.rcury.com/poriland/apartment-420/Content?oid=15520508 (reporting that Portland apartment managers reminded tenants of their lease obligations after passage of the Oregon recreational legalization measure). WESTt-AW 02021 Thornson Reuters. No claim to original U.S, Government Warks. -- — - - 13 THE COLORS OF CANNABIS' RACE AND MARIJUANA, 54 U.C. Davis L. Rev. 689 68 In the medical marijuana context, see I, Coals v. DISH Network, LL.C, 350 P.3d 849, 852-53 (Colo. 2015) (ruling similarly that Colorado medical marijuana law did not insulate an employee from discharge for medical marijuana use outside of work, as that activity, violating federal law, was not a protected "lawful activity"); Roe v. TeleTech Customer Care Mgmt. (Colo.) LIX, 257 P.3d 586, 597 (Wash. 2011) (holding Washington's Medical. Use of Marijuana Act does not protect employee from discharge based on lawful medical marijuana use outside the workplace that is illegal under federal law); see also G. M. f ilisko, Gmplayer,s and Workers Grapple with Laws Allowing MarUuana U.se, A.S.A. .I. (Dec. 1, 2015 5:30 AM CST), http://ww w.abaj oumal . com/magazine/atticle/emp loyers_and_workers_grapple_with_laws_al lowinginarij uana_use (discussing inconsistencies in state law protections or prohibitions of employee medical marijuana use); Thomas Mitchell, Legal Marjuana States Aren't That Safe for Pot -Smoking Employees, Survey Finds, WESTWORD (Dec. is, 2015, 9:50 AM), http://www.westword.coin/news/legal-in arij uana-states-arent-that-safe-for-pot-smok ing-einp loyees-survey-f rods-7426 384 (discussing Coats case and survey results that most employers in legalization regimes still prohibit employee marijuana use, whether medical or recroational). Colorado's recreational marijuana Iaw, unlike Washington's, specifically refers to employment and denies protection to the employee for marijuana use: Nothing in this section is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees. COLD. CONST. all, 18, § 16(6)(a); ef.ARIZ. RSV, STAT. ANN. § 36-2813(13)(2) (2016) (Arizona employers prohibited from terminating registered medical marijuana user unless use, possession, or impairment took place on the job). In contrast to the lack of protection in private employment settings, the Colorado courts deferred to legalized marijuana use in the family law setting. Whether raised protectively or opportunistically, the potential exists in ftunily law disputes, particularly dissolution, for the marijuana use of a parent to be used against them. See 1. /n re Marriage of Pan-, 240 P.3d 509, 512-13 (Colo. Ct. App. 2010) (holding a father's use of medical marijuana cannot support a restriction on parenting time absent an evidentiary hearing to demonstrate some threat to the health or safety of the child); cf, David Malleis, Note and Continent, The Nigh Price of Parenting High; Medical Mar�taana and Its Effects on Child Custody Matters, 33 U. LA VERNE L. REV. 357 (2012) (discussing cases where courts employed lawful marijuana use as negative evidence in child custody decisions). 69 Moreover, past drug offenses can haunt the applicant, as more than 90 percent of employers undertake background Checks on prospective employees that encompass Criminal records. See Levy -Pounds, supra note 13, at 595. "' Short, supra note 33. Equally, reformers for racial justice might urge legalization of other illicit drugs such as cocaine, or at minimum an equalization of penalties for crack, used more often by racial minorities, and powdered cocaine. rl See Darryl Fears, Home Issues an Apology for Slavery, WASH. POST (July 30, 2008), http://www,washingtonpost.corn/wp.dyn/content/article/2008/07/291AR2008072902279.litm] (noting prior efforts to give an apology For slavery were hampered by fears of a call for reparations). 72 OR. REV. STAT. § 137.225 (2016) (uncodifcd provision § 129); cf. Noelle Crombie, Some Felony Pot Convictions Can Be Sealed Under New Oregon .Law, OREGONIAN (Nov. 10, 2015, 5:00 AM), http://www,oregonlive.com/marijuana/index.ssf/2015/11/most old_ marijuana_ convictions.html (explaining that under Oregon's expungement law felony convictions for growing or selling marijuana within 1,000 feet if a school, or for selling marijuana to a minor, cannot be expunged; the impetus for the law came from constituents, especially African Americans, whose marijuana convictions made it difficult for them with employers, landlords, and even as chaperone volunteers for then' children's field trips). WCSTLAW 0 2021 Thomson Renters. No claim to original U.S. Government Works. 14 THE COLORS OF CANNABIS: RACE AND MARIJUANA, 50 U.C. Davis L. Rov. 689 7,1 See, e.g., People v. Boyd, No. 12CA2607, 2015 WL 4760414 (Colo. Ct. App. Aug. 13, 2015) (holding that Colorado's legalization law retroactively overturns marijuana possession convictions that had not become final on appeal before the new law tank effect). '4 SeeSENDER, MEA CULPA, supra note 22, at 140-42. 50 UCDLR 689 11111i of Docowcnt C 2021 Thomson Reuters, No claim to original U.S. Government Works. WESTLAW @ 2021 Thomson Reuters No claim to original U.S. Government Works, '15