The URL can be used to link to this page

Home My WebLink About- - Agenda - 12/16/2014AGENDA CITY OF COSTA MESA ADJOURNED REGULAR CITY COUNCIL MEETING TUESDAY, DECEMBER 16, 2014 CITY COUNCIL CHAMBERS, 77 FAIR DRIVE CLOSED SESSION - NONE REGULAR MEETING - 2:00 P.M. STEPHEN M. MENSINGER Mayor JAMES M. RIGHEIMER SANDRA GENIS Mayor Pro Tem Council Member GARY MONAHAN KATRINA FOLEY Council Member Council Member City Attorney Chief Executive Officer Thomas Duarte Thomas R. Hatch Note regarding agenda -related writings or documents provided to a majority of the City Council after distribution of the City Council agenda packet (GC §54957.5): Any related writings or documents provided to a majority of the City Council after distribution of the City Council Agenda Packets will be made available for public inspection. Binders containing these agenda -related documents are located in the Council Chambers lobby. In addition, such writings and documents may be posted— whenever possible or as part of the agenda—on the city's website at www.costamesaca.gov. Your attendance at this public meeting is valued and appreciated. If you have questions regarding the agenda, public comments or wish to obtain copies of documents please contact the City Clerk office at (714)754-5225 or e-mail Brenda. Green(c).costamesaca.gov. AGENDA —ADJOURNED REGULAR MEETING —December 16,2014— PAGE 1 v.1, 12/10/2014 WELCOME TO THE CITY COUNCIL MEETING PUBLIC COMMENTS — MATTER NOT LISTED ON THE AGENDA: If you wish to address the City Council on a matter not on the agenda, please complete and submit a yellow speaker card to the City Clerk. Speaker cards must be submitted to the City Clerk either prior to the first Public Comment period or prior to the Continued Public Comment period. Up to ten speakers will be given time to address the City Council during the first Public Comment period following Presentations. The Continued Public Comment period will be held at the end of the agenda after Items Removed from Consent Calendar. Members of the public shall only address the City Council one time at any given meeting under either Public Comment period. Speakers may only complete one card per person. Each speaker is limited to three minutes. PUBLIC COMMENTS — MATTER LISTED ON THE AGENDA: If you wish to address the City Council on a matter listed on the agenda, please complete and submit a green speaker card to the City Clerk. Speaker cards must be submitted prior to the start of Public Comments on the item. Please identify which item on the agenda you would like to address. Each speaker is limited to three minutes. The speaker cards are located on the table at the entrance to the City Council Chamber. Please take notice that the order of scheduled agenda items may be modified by the Mayor or the City Council during the course of the meeting, so please stay alert. 1. Any written communications, photos, or other material for distribution to the City Council must be submitted to the City Clerk NO LATER THAN 15 MINUTES PRIOR TO THE START OF THE MEETING. Any materials to be displayed on the overhead projector at the Council meeting must be submitted to the City Clerk NO LATER THAN 15 MINUTES PRIOR TO THE START OF THE MEETING. 2. In accordance with Costa Mesa Municipal Code, Sec. 2-64 (1): No person in the audience shall engage in disorderly, disruptive, disturbing, delaying or boisterous conduct. 3. All cell phones and other electronic devices are to be turned off or set to vibrate. Members of the audience are requested to step outside the Council Chambers to conduct a phone conversation. 4. In accordance with City Council Policy 000-11, and among other requirements, any video submitted for display at a public meeting must have been previously reviewed by staff to verify appropriateness for general audiences. A copy of this policy is available at City Hall during normal office hours. 5. Free Wi-Fi is available in the Council Chamber during the meetings. Two networks are available: council1 and counci12. The password for either network is: cmcouncil. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk at (714) 754-5225. Notification of 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. [28 CFR 35.102.35.104 ADA Title II]. AGENDA —ADJOURNED REGULAR MEETING — December 16, 2014 — PAGE 2 v.1, 12/10/2014 CALL TO ORDER PLEDGE OF ALLEGIANCE Council Member Foley ROLL CALL PUBLIC COMMENTS — MATTER NOT LISTED ON THE AGENDA: If you wish to address the City Council on a matter not on the agenda, please complete and submit a yellow speaker card to the City Clerk. Speaker cards must be submitted to the City Clerk either prior to the first Public Comment period or prior to the Continued Public Comment period. Up to ten speakers will be given time to address the City Council during the first Public Comment period following Presentations. The Continued Public Comment period will be held at the end of the agenda after Items Removed from Consent Calendar. Members of the public shall only address the City Council one time at any given meeting under either Public Comment period. Speakers may only complete one card per person. Each speaker is limited to three minutes. The three minute per speaker time limit may be extended for good cause by the Mayor or by a majority vote of City Council. Questions and comments made by public speakers may be addressed by the City Council during Council Comments or by the Chief Executive Officer during the CEO's Report. COUNCIL MEMBERS' REPORTS, COMMENTS, AND SUGGESTIONS 1. Council Member Foley 2. Council Member Genis 3. Council Member Monahan 4. Mayor Pro Tem Righeimer 5. Mayor Mensinger REPORT — CHIEF EXECUTIVE OFFICER (CEO) CONSENT CALENDAR: None PUBLIC HEARINGS: None OLD BUSINESS: None AGENDA —ADJOURNED REGULAR MEETING — December 16, 2014 — PAGE 3 v.1, 12/10/2014 NEW BUSINESS 1. REVIEW OF AGENCY REPORT ON MEDICAL MARIJUANA; TWO MEDICAL MARIJUANA INITIATIVE PETITIONS QUALIFYING FOR BALLOT; CONSIDERATION OF ADOPTING A NEW ORDINANCE OR ORDERING ELECTION; CONSIDERATION OF CITY MEDICAL MARIJUNA MEASURE(S) At the November 18, 2014 City Council meeting, City Council ordered a report pursuant to Election Code § 9212 for two qualifying medical marijuana ballot initiatives, a report for a proposed City's Medical Marijuana Ordinance, and a report on the City of Santa Ana's recently passed Medical Marijuana Ordinance. The reports are attached for City Council consideration. RECOMMENDATION: 1. Staff recommends that the City Council approve (for each qualifying ballot initiative) one of the following options: a. Adopt the ordinance (for either initiative), without alteration (yet not recommended due to "Taxation Issues," see attached 11/18/14 Report); or b. Order a special election (for either initiative), to be held pursuant to subdivision (a) of Election Code § 1405 [which states that the election for a municipal initiative that qualifies shall be held not less than 88 nor more than 103 days after the date of the order of election], at which the ordinance, without alteration, shall be submitted to a vote of the voters of the city; or c. Order a regular election (for either initiative), to be consolidated with the next "regularly scheduled general election for members of the governing body of the local government," pursuant to Art XIII C § 2(b) of the California Constitution, which would be November 8, 2016; and 2. The City Council may consider taking action on the City Measure to Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation as proposed on August 5, 2014, or an amended version of that prior Measure. CONTINUED PUBLIC COMMENTS COUNCIL MEMBER COMMENTS ON CONTINUED PUBLIC COMMENTS REPORT — CITY ATTORNEY ADJOURNMENT — To Regular Meeting — January 6, 2015 at 5:00 p.m. AGENDA —ADJOURNED REGULAR MEETING — December 16, 2014 — PAGE 4 v.1, 12/10/2014 Cl T Y COUNCIL AGENDA REPORT MEETING DATE: DECEMBER 9, 2014 ITEM NUMBER: NB -1 SUBJECT: REVIEW OF AGENCY REPORT ON MEDICAL MARIJUANA; TWO MEDICAL MARIJUANA INITIATIVE PETITIONS QUALIFYING FOR BALLOT; CONSIDERATION OF ADOPTING A NEW ORDINANCE, OR ORDERING ELECTION; CONSIDERATION OF CITY MEDICAL MARIJUANA MEASURE(S) DATE: DECEMBER 4, 2014 FROM: CITY ATTORNEY'S OFFICE; CITY CLERK'S OFFICE PRESENTATION CHRIS F. NEUMEYER, DEPUTY CITY ATTORNEY; BY: RICHARD L. FRANCIS, ASSISTANT CEO FOR FURTHER INFORMATION RICK FRANCIS, ASSISTANT CEO, 714-754-5688 CONTACT: At the November 18, 2014 City Council meeting, City Council ordered a report pursuant to Election Code § 9212 for two qualifying medical marijuana ballot initiatives, a report for a proposed City's Medical Marijuana Ordinance, and a report on the City of Santa Ana's recently passed Medical Marijuana Ordinance. The reports are attached for City Council consideration. RECOMMENDATION: 1. Staff recommends that the City Council approve (for each qualifying ballot initiative) one of the following options: a. Adopt the ordinance (for either initiative), without alteration (yet not recommended due to "Taxation Issues," see attached 11/18/14 Report); or b. Order a special election (for either initiative), to be held pursuant to subdivision (a) of Election Code § 1405 [which states that the election for a municipal initiative that qualifies shall be held not less than 88 nor more than 103 days after the date of the order of election], at which the ordinance, without alteration, shall be submitted to a vote of the voters of the city; or c. Order a regular election (for either initiative), to be consolidated with the next "regularly scheduled general election for members of the governing body of the local government," pursuant to Art XIII C § 2(b) of the California Constitution, which would be November 8, 2016; and 1 2. The City Council may consider taking action on the City Measure to Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation as proposed on August 5, 2014, or an amended version of that prior Measure. BACKGROUND: Refer to City Council Agenda Report dated November 18, 2014 (Attachment 2). FISCAL REVIEW: The fiscal impact of placing the two medical marijuana initiatives on the ballot is multifold. There are the costs of a special election (or consolidation with a general election, see "Taxation Issues" in the attached 11/18/14 Report) as well as the cost of implementing the proposed ordinances. Furthermore, there is the potential revenue generated by the taxes in each ordinance. 1. Estimated special election costs to the City of Costa Mesa are as follows: a. Stand Alone Special Election for One Ballot Measure: $234,067 - $261,790. b. Stand Alone Special Election for Up to Four Ballot Measures: $252,980 - $280,703. c. Consolidated General Election for One Ballot Measure: $15,000. d. Consolidated General Election for Up to Four Ballot Measures: $15,000 - $60,000. 2. The estimated costs of implementing any of the ordinances is provided in the attached report (Attachment 1). ELECTION DATES Elections Code § 1405, pursuant to Election Code § 9214, provides that the election for a municipal initiative that qualifies for a special election shall be held not less than 88 nor more than 103 days after the date of the order of election. If the City Council orders a special election at the December 9, 2014 meeting, then the window during which a special election would need to be held is between March 7, 2015 and March 21, 2015 If the City Council orders pursuant to the California Constitution in Art XIII C § 2(b), as amended by Proposition 218 in 1996, that the initiative petitions be sent to the voters at the next "regularly scheduled general election for members of the governing body of the local government," then the election would be held on November 8, 2016. LEGAL REVIEW: The City Attorney's office has prepared this report with its legal analysis, and the City Attorney's Office has reviewed the attached resolutions. THOMAS P. DUARTE City Attorney RICHARD L. FRANCIS Assistant CEO ATTACHMENTS: BRENDA GREEN City Clerk 1. Report pursuant to Election Code 9212 and Report as requested by City Council on further matters (includes Finance Dept. Attachments 1, 2, 3 & 4 and Fire Dept. Attachments 1, 2, & 3.) 2. City Council Agenda Report dated November 18, 2014. 3. Text of Ordinance No. 1 - Entitled "Allow Operation of UD to Eight Medical Mariivana Cannabis) Businesses in the City of Costa Mesa" by the City Attorney's Office (and ._—_�I 'IRA_ J: --I !I_. -.--I-:_ I' ---1__I A_1>> L.. :l_ -.__.__-_-1_\ _ I _..I-.-_:11_-1 L.. proponents Robert Taft, Jr. and Kevin Gardner (with the counsel of attorney Randall T. Longwith). 4. Text of Ordinance No. 2 - Entitled "Allow Operation of Up to Four Licensed Medical nA_..::.._-_ M.._:------ :- 1L_ I-:1.. _L 1---1- ^A - - -" L. . , 1L_ -:L.. ALi_._-_."_ lltt:__ /-.ter named "An Initiative to Provide Revenue to Costa Mesa Citizens" by its DroDonents counsel of attorney David Welch) 5. Matrix Comparison Chart for Four Ordinances 6. Text of Ordinance No. 3 - Entitled "Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation" and proposed by the City. 7. Outline of Ordinance No. 3 - Entitled "Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation" and proposed by the City. 8. City of Santa Ana's Measure BB, including City Attorney Impartial Analysis, Direct Arguments and Rebuttals 9. — 18. Resolutions pertaining to a Special Election. 19. — 28. Resolutions pertaining to a General Election November 8, 2016. 29. Initiative 1 Map 30. Initiative 2 Map 31. City Draft Measure Map A 32. City Draft Measure Map B 33. Citv Draft Measure MaD C 3 ATTACHMENT 1 � I � ON 11114111 BALLOT INITIATIVES FOR TWO SEPARATE MEDICAL MARIJUANA ORDINANCES CITY OF COSTA MESA PROPOSED MEDICAL MARIJUANA ORDINANCE CITY OF SANTA ANA MEDICAL MARIJUANA ORDINANCE Prepared by City Departments Pursuant to Election Code § 9212 and at Request of City Council Assistant CEO Richard L. Francis Deputy City Attorney Chris F. Neumeyer December 4, 2014 TABLE OF CONTENTS CHAPTER 1 INTRODUCTION (PAGE 1) SECTION 1.1 SUBSECTION 1.1.A SUBSECTION 1.1.B INTRODUCTION 1. (ORDINANCE N0. 1) 1. (ORDINANCE N0. 2) 2. CHAPTER 2 CITY ATTORNEY REPORT (PAGE 4) SUBSECTION 2.2.A INTRODUCTION 4. SUBSECTION 2.2.13 SUMMARY OF FOUR ORDINANCES 4. SUBSECTION 2.2.0 APPLICATION OF FEDERAL AND STATE LAW 6. SUBSECTION 2.2.0 1. (FEDERAL LAW) 6. SUBSECTION 2.2 C-2 (CALIFORNIA LAW) 7. SUBSECTION 2.2 C-3 (FEDERAL LAW/MUNICIPAL REGULATION) 7. SUBSECTION 2.2 D CONSTITUTIONAL ISSUES CONCERNING "PRIORITY REGISTRATION" 9. SUBSECTION 2.2 E - LOCAL SALES TAXES AND CALIFORNIA LAW 9. SUBSECTION 2.2 F ELECTION DATE: PROPOSITION 218 & ELECTION CODE 9214 10. CHAPTER 3 POLICE DEPARTMENT REPORT (PAGE 12) SUBSECTION 3.3.A INTRODUCTION 12. SUBSECTION 3.3.B BACKGROUND 12. SUBSECTION 3.3.0 (ORDINANCE N0.1) 13. SUBSECTION 3.3. D (ORDINANCE NO. 2) 14. SUBSECTION 3.3. E (ORDINANCE N0. 3) 14. SUBSECTION 3.3. F (OTHER CITIES) 14. SUBSECTION 3.3. G COLORADO & WASHINGTON 15. SUBSECTION 3.3. H IMPACT ON THE POLICE DEPARTMENT 15. SUBSECTION 3.3. 1 CONCLUSION 16. CHAPTER 4 FINANCE DEPARTMENT REPORT (PAGE 18) SUBSECTION 4.4.A INTRODUCTION 18. SUBSECTION 4.4.13 POTENTIAL FISCAL IMPACT 18. SUBSECTION 4.4.0 BRIEF SUMMARIES OF POTENTIAL FISCAL IMPACTS - EACH DOCUMENT 19. SUBSECTION 4.4. C-1 (ORDINANCE NO. 1) 19. SUBSECTION 4.4. C-2 (ORDINANCE NO. 2) 20. SUBSECTION 4.4. C-3 (ORDINANCE NO.3 "CITY DRAFT") 21. SUBSECTION 4.4.D CONCLUSION 22. (FINANCE DEPT. -ATTACHMENT #1)23(PG.1-3) (FINANCE DEPT. - ATTACHMENT #2)23(PG.4-7) (FINANCE DEPT. -ATTACHMENT#3)23(PG.8-11 (FINANCE DEPT. - ATTACH MENT #4)23(PG.12-14) CHAPTER 5 HUMAN RESOURCES/RISK MANAGEMENT REPORT PAGE 24) SUBSECTION 5.5.A SUBSECTION 5.5.13 SUBSECTION 5.5.0 INTRODUCTION 24. ANALYSIS/IMPACT ON HR/RISK MANAGEMENT DIVISION 24. CONCLUSION 25. CHAPTER 6 FIRE DEPARTMENT REPORT (PAGE 26) SUBSECTION 6.6 A. INTRODUCTION 26. SUBSECTION 6.6.B IMPACT ON THE FIRE DEPARTMENT 26. SUBSECTION 6.6.0 PROLIFERATION OF ILLEGAL OR NON -APPROVED MARIJUANA SITES/LOCATIONS 27. SUBSECTION 6.6.D CONCLUSION 27. (FIRE DEPT. -ATTACHMENT #1) 27(PG.1-4) (FIRE DEPT. - ATTACHMENT #2) 27(PG.5) (FIRE DEPT. -ATTACHMENT#3) 27(PG.6-7) CHAPTER 7 DEVELOPMENT SERVICES DEPARTMENT (PAGE 28) SUBSECTION 7.7.A SUBSECTION 7.7.13 SUBSECTION 7.7.0 INTRODUCTION 28. IMPACT ON THE DEVELOPMENT SERVICES DEPARTMENT 28. CONCLUSION 29. CHAPTER 8 INFORMATION TECHNOLOGY DEPARTMENT REPORT (PAGE 30) SUBSECTION 8.8 A SUBSECTION 8.8.13 SUBSECTION 8.8.0 INTRODUCTION 30. IMPACT ON THE I.T. DEPARTMENT 30. CONCLUSION 30. CHAPTER 9 PUBLIC SERVICES DEPARTMENT REPORT (PAGE 31) SUBSECTION 9.9.A SUBSECTION 9.9.B SUBSECTION 9.9.C. INTRODUCTION 31. IMPACT ON THE PUBLIC SERVICES DEPARTMENT 31, CONCLUSION 31. CHAPTER 1 INTRODUCTION BY RICK FRANCIS, ASSISTANT CEO Two separate and competing initiative proposals seeking a special election and adoption of new ordinances have been filed with the Costa Mesa City Clerk's Office. They both seek to modify the Costa Mesa Municipal Code (CMMC) and allow medical marijuana businesses to "legally" operate within the city limits. Both initiatives have been certified as having been signed by fifteen percent of City of Costa Mesa registered voters. Council Member Gary Monahan also presented an initiative proposal ("City Draft") which failed to pass due to lack of support at the August 5, 2014 City Council meeting. By City Council action on November 18, 2014, each department has been asked to submit an impact report of the two citizen -backed initiatives prior to the December 9, 2014 City Council meeting. Staff was also asked to review the "City Draft" submitted on August 5, 2014 and include that review in the impact reports. In addition, staff was asked to prepare an analysis of the ordinance adopted by the City of Santa Ana on November 4, 2014 that allows medical marijuana businesses to exist in that city under certain guidelines. The Finance Department, Police Department, Development Services Department, Human Resources Division and the City Attorney's Office will provide the analyses for the "City Draft". The Finance Department and the City Attorney will provide the analyses for the Santa Ana Ordinance. The City Attorney was also asked to respond to concerns related to potential staff liability for issuing permits for medical marijuana businesses for use that is in conflict with federal law, as well as other significant legal issues. Below are key provisions of each citizen -sponsored initiative proposing a new City ordinance. A. Ordinance No. 1- "Allow Operation of Up to Eight Medical Marijuana (Cannabis) Businesses_ in the City of Costa Mesa" The first proposal was submitted by proponents Robert Taft, Jr. and Kevin Gardner (with the counsel of attorney Randall T. Longwith), and they named their ordinance the "Medical Cannabis Control Act." The key features of this proposal are as follows: 1. The city shall issue no more than eight business licenses. The City Council has the discretion to increase, but not decrease the number of business licenses. 2. Priority registration for the limited number of licenses is provided to entities which performed certain "preliminary steps" on or before May 30, 2014. 3. Only a business license shall be required to operate a collective/cooperative. The City shall issue licenses if application meets minimum requirements in new law; valid fortwo years regardless of whether or not to operate business; automatic renewal upon application if meets same minimum requirements. 4. Failure of City to act on application for license within 45 days results in automatic issuance. 5. Under this proposal, businesses may engage in all aspects of marijuana production, packaging and sales, provided that these activities are not in conflict with state and federal law. 6. Medical marijuana businesses are exempt from the need to obtain special use permits, conditional use permits, or any other permits. They will not require any special site plans, variances or any other permits outside this Initiative. 7. Application fees for cost recovery are capped at $500. 8. Medical marijuana businesses can cultivate a reasonable amount of marijuana consistent with patient needs (no specific quantity is mentioned). 9. They must not operate within 600 feet of a public school; they may not operate within 1000 feet of another medical marijuana business. 10. The proposal calls for a 6% business tax, and a 1% sales tax on the sale of all other tangible personal property at retail. 11. Medical marijuana businesses may only operate in certain commercial and industrial areas, but not in residential areas. 12. The provisions of the CMMC created by this proposal cannot be repealed or changed except by another majority vote of the electorate. 13. Regulation as to where the businesses can and cannot operate, as well as hours they can operate. 14. Other regulations include insurance requirement, employee background checks, security provisions, child proof containers and odor restrictions. B. Ordinance No. 2 — "Allow Operation of Up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa" The second initiative proposal was submitted by proponents Taylor Webster and Michael Levesque (with the counsel of attorney David Welch), and they named their ordinance "An Initiative to Provide Revenue to Costa Mesa Citizens." The key features of this proposal are as follows: 1. Up to four medical cooperative permits are to be issued. The city can increase, but not decrease the number of permits issued. 2. Medical marijuana businesses will require a city business license as well as a city -issued medical cooperative permit that is to be renewed annually; operators will require separate individual operator permits. 2 3. Priority registration for the limited number of permits is provided to entities which performed certain "preliminary steps" prior to May 22, 2014. 4. Police Chief shall issue permits if applications meets minimum requirements in new law; valid for one year; automatic renewal upon application if meet same minimum requirements. 5. Failure of Police Chief to act on business permits within 30 days, and operator permits within 15 days, results in automatic issuance. 6. Procedure for revocation of permits with gradually increasing penalties after administrative hearings, beginning with warning, six month suspension, then revocation of permit. 7. Medical marijuana businesses can cultivate, distribute or transfer medical marijuana. 8. Authorizes City Council to pass a fee resolution for cost recovery through license application fees. 9. No operations abutting a residential area (although there is an exception in Section 9-495 (i) that states this subsection shall not prohibit a cooperative from locating across a street from any land zoned residential if the residential zone and the cooperative are separated by a public roadway that is at least 80 feet wide). 10. No operations within 1000 feet of a school or another medical marijuana business; no operations within 600 feet of public park, library or licensed child-care facility. 11. This proposal calls for a 6% tax on gross receipts of the business. 12. This proposal exempts medical cooperative from City's 1% sales tax. 13. The City Council may amend Initiative provisions to further its purpose. However, any repeal of an Initiative provision must be approved by a majority of voters in a city-wide election. 14. Regulation as to where the businesses can and cannot operate, as well as hours they can operate. K CHAPTER 2 CITY ATTORNEY REPORT BY CHRIS F. NEUMEYER, DEPUTY CITY ATTORNEY A. Introduction Pursuant to request by the City Council, the City Attorney's Office has prepared the following report on legal issues concerning four medical marijuana ordinances. The four ordinances consist of the following: the two citizen sponsored initiative measures which were certified to the City Council on November 18, 2014 as qualifying for an election (being Ordinance No. 1 from proponents Robert Taft Jr. and Kevin Gardner, and Ordinance No. 2 from proponents Taylor Webster and Michael Levesque); the previously considered City drafted ordinance which was reviewed by the City Council on August 8, 2014 (Ordinance No. 3); and the Santa Ana ordinance drafted by the City of Santa Ana which was recently approved by Santa Ana's voters at the November 4, 2014 general election and which will now become local law in Santa Ana (Ordinance No 4). Below, please find a brief summary of the four ordinances through a comparison matrix, and then a discussion of federal law, constitutional issues regarding "priority registration," local sales tax issues and election dates. B. Summary of Four Ordinances REGULATION Ordinance No. 1 Ordinance No. 2 Ordinance No. 3 Ordinance No. 4 Taft & Gardner (Atty Longwith) Webster & Levesque (Atty Welch) Proposed City's Ordinance New Santa Ana Ordinance Alarm system Yes No Yes Yes Security guard Yes No Yes Yes Security cameras No No Yes Yes Priorityto old stores Yes Yes No No Number of stores Eight (minimum) Four (minimum) No limit Twenty City Council may amend (not repeal) No Yes Yes Yes (and may repeal) Inspections Authorized No No Yes Yes Tax Yes Yes No Yes 4 Limit sales to medical marijuana and related items No No Yes No Business indemnify City if legal problems Yes No Yes No Childproof containers Yes No Yes No Pesticide testing No No Yes No Active ingredients testing No No Yes No On-site prescriptions Yes Yes No No Business license Yes Yes Yes Yes Business permit No Yes Yes Yes Operator permit No Yes No No Cultivation permit No No Yes No Lawful zones Commercial / industrial Commercial / industrial Commercial / industrial Industrial Location restrictions Yes Yes Yes Yes Non -concentration of stores Yes Yes Yes "mistakenly said "No" in 11/18 report" Yes Hours 9am to 10pm 8am to 10pm lam to 10pm 10 to 8 Mon -Sat 11 to 7 Sun Quality control No No Yes No Cultivation standards No No Yes No Background checks Yes Yes Yes Yes Patient confidentiality Yes Yes Yes No Business records No No Yes Yes Transaction records No No Yes Yes Delivery records No No Yes No Employee records No No Yes Yes Employee training No No Yes No General insurance Yes No Yes No Delivery insurance Yes No Yes No No Minors Yes Yes Yes Yes Labeling Yes No Yes No Outdoor lighting No Yes Yes No Signage restrictions Yes No Yes Yes Odor restrictions Yes No Yes Yes Edible regulations Yes No Yes Yes C. Application of Federal and State Law All four of the medical marijuana ordinances under review are similarly subject to both federal and state law. Under federal law the use of marijuana (both medical and recreational) remains illegal. However, at present the U.S. Department of Justice has advised federal prosecutors that enforcement of federal marijuana law is a low priority in states where marijuana is allowed for medical or recreational use. California law has decriminalized the medical cultivation and medical use of marijuana, while the general use of marijuana remains illegal. 1. Federal Law Pursuant to the Controlled Substances Act of 1970 ("CSA"), federal law generally prohibits the manufacture, distribution or possession of marijuana. 21 U.S.C. §§ 801 et seq. "The CSA designates marijuana as contraband for any purpose; in fact, by characterizing marijuana as a Schedule I drug, Congress expressly found that the drug has no acceptable medical uses." Gonzales v. Raich 545 U.S. 1, 27 (U.S. 2005). In 2013, the United States Department of Justice, through the Office of the Deputy Attorney General, issued a memorandum to all U.S. Attorneys entitled "Guidance Regarding Marijuana Enforcement." These guidelines provide that in states which have relaxed their marijuana laws through the implementation of "strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale and possession of marijuana," federal prosecutors are advised not to consider enforcement of the CSA to be a priority. Rather, the regulation and/or criminal prosecution of marijuana (whether medical or recreational) is for now to be left to the discretion of those states which have either decriminalized or legalized marijuana. 6 However, the CSA remains the law of the land, this prioritization of federal resources remains subject to change, and the manufacture, distribution or possession of medical marijuana in California remains illegal under federal law. California's medical marijuana laws "have no effect on the federal enforceability of the CSA in California. The CSA's prohibitions on the possession, distribution, or manufacture of marijuana remain fully enforceable in [California]." City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc., 56 Cal. 4th 729, 740 (2013). 2. California Law In 1996 California voters passed Proposition 215, known as the Compassionate Use Act ("CUA"). The CUA decriminalized the cultivation of and use of marijuana by seriously ill Californians who received a recommendation from a physician for such medical use. However, the CUA did not legalize marijuana. Under California Health & Safety Code §§ 11357 et seq., the possession, sale, cultivation or transportation of marijuana remains illegal. Instead, the CUA provides an affirmative defense to criminal prosecution under state law for individuals who cultivate or use marijuana for medical purposes. In 2004, Senate Bill 420, known as the Medical Marijuana Program Act ("MMP"), became state law. The MMP added some regulatory details to the CUA, including the establishment of voluntary identification cards for qualifying medical marijuana users, and recognition of a qualified right to collective and cooperative cultivation of medical marijuana. In 2008, the California Attorney General's Office recommended in light of the removal of "the use and cultivation of physician recommended marijuana from the scope of the state's drug laws" by the CUA and MMP "that state and local law enforcement officers not arrest individuals or seize marijuana under federal law when the officer determines from the facts available that the cultivation, possession, or transportation is permitted under California's medical marijuana laws." In 2013, the California Supreme Court in City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc., 56 Cal. 4th 729, 752 (2013) affirmed the authority of a local government to prohibit the operation of medical marijuana dispensaries within its jurisdiction through land use laws. 3. Federal Law Might be Violated by the Issuance of Medical Marijuana Dispensary Licenses and Permits and/or Municipal Regulation of Medical Marijuana Dispensaries At present there is an unsettled issue of law as to whether a local government's issuance of licenses and/or permits to medical marijuana dispensaries along with regulation of the shops constitutes a violation of federal law. The issue is whether the local government and/or the government employee issuing such a license or permit, and/or regulatingthe distribution of medical marijuana, are affirmatively "aiding and abetting" a violation of federal law. The decision in Conant v. Walters, 309 F.3d 629, 635 (9th Cir. 2002) is illustrative. In Conant the Ninth Circuit Court of Appeals held that simply recommending (but not prescribing) the use of medical marijuana was not prohibited by federal law. The court held that the "conviction of aiding and abetting requires proof that the defendant 'associated himself with the venture, that he participated in it as something that he wished to bring about, that he [sought] by his actions to make it succeed'." Conant, rJ 309 F.3d at 635. These elements are not present when a doctor recommends (as opposed to prescribes) medical marijuana. Likewise, other courts have found no violation of federal law in this context when a police officer has to return seized medical marijuana to a qualified patient, or when a county issues a medical marijuana identification card as required by the MMP. See City of Garden Grove v. Superior Court 157 Cal. App. 4th 355 (2007); County of San Diego v. San Diego NORML, 165 Cal. App. 4th 798 (2008). (Significantly, these are state - as opposed to federal - court decisions) However, in the depublished decision of Pack v. Superior Court, 199 Cal. App. 4th 1070 (2011), a court held that a medical marijuana ordinance in the City of Long Beach which "goes beyond simply decriminalization" by enacting "a comprehensive regulatory scheme by which medical marijuana collectives within the City are governed" was preempted by federal law. Under that ordinance, Long Beach "charges application fees ... holds a lottery, and issues a limited number of permits. Permitted collectives, which must then pay an annual fee, are highly regulated, and subject to numerous restrictions on their operation [including restrictions on] the location of medical marijuana collectives..." Pack, 199 Cal. App. 411 at 1076-1082. The Pack court further stated in a footnote that "[t]here may also be an issue of whether the ordinance requires certain City officials to violate federal law by aiding and abetting (or facilitating (21 U.S.C. § 843(b))) a violation of the federal CSA. For example, the ordinance requires the City's director of financial management to approve and issue a permit if certain facts are demonstrated." Pack, 199 Cal. App. 4th 1070, 1091 fn. 27. Although the Pack decision has been depublished, the reasoning behind that court's decision could be applied in a similar challenge to any of the numerous local ordinances throughout California which permit and/or license medical marijuana dispensaries, including any such prospective Costa Mesa ordinance. Likely any municipal law that affirmatively authorizes (i.e., "aids and abets") the possession, distribution and manufacture of marijuana is in conflict with the federal Controlled Substances Act. California Government Code section 37100 ["Ordinances"] authorizes cities to "pass ordinances not in conflict with the Constitution and laws of the State or the United States." (Emphasis added). When cities do not comply with federal law, the consequences can be dire - local governmental agencies and their officers, and employees, can be subject to liability for violations of federal law. See 42 U.S.C. § 1983 et seq. Nevertheless, the CSA has neither expressly preempted state law, nor does it indicate that Congress intended to occupy the entire field of regulation. The question remains as to whether California's medical marijuana laws definitively create a positive conflict with the CSA and are therefore preempted by the CSA. A City ordinance which authorizes medical marijuana businesses potentially places City employees in the untenable position of having to choose between a state law, authorizing certain conduct, and federal law, prohibiting the same conduct. "[A]n employer's authority over its employee does not include the right to demand that the employee commit a criminal act..." Tameny v. Atlantic Richfield Co 27 Cal. 3d 167, 178 (Cal. 1980). California Labor Code section 2856 also provides in full that "An employee shall substantially comply with all the 0 directions of his employer concern ingthe service on which he is engaged, except where such obedience is impossible or unlawful, or would impose new and unreasonable burdens upon the employee." Federal law may prohibit the issuance of municipal medical marijuana permits and licenses, as well as the local authorization and regulation of medical marijuana businesses. If so, the City cannot require its employees to issue permits and licenses, or otherwise comply with the proposed ordinances, without running afoul of federal law. D. Constitutional Issues Concerning "Priority Registration" The Fourteenth Amendment to the U.S. Constitution provides for the equal protection of the laws. Similarly situated parties must be treated the same under the law. Both Ordinance No. 1 and Ordinance No. 2 establish priority registration, for operational licenses, to certain specified medical marijuana businesses that meet certain criteria. Each of these ordinances provide for a maximum number of businesses (with authority provided to the City Council to increase, but not decrease, the number of dispensaries in the City). Ordinance No. 1 allows for eight businesses and Ordinance No. 2 allows for four businesses. Thus, reasonably the only businesses which would be permitted under either of these ordinances would be the ones which qualify for "priority registration." The priority registration clauses in Ordinance No. 1 and Ordinance No. 2 may be subject to being stricken from those ordinances on the basis of denial of equal protection. Because the preferential clauses in the two ordinances impact neither fundamental rights nor suspect classes, the "priority registration" provisions "must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification." FCC v. Beach Communications, 508 U.S. 307, 313 (U.S. 1993) (overruled on other grounds). The discrimination need only be "rationally related to a reasonably conceivable legitimate public purpose" to be upheld vis-a-vis the right of equal protection. Warden v. State Bar, 21 Cal. 4th 628, 650 (Cal. 1999). However, this relatively light burden is arguably not met by the two ordinances. Both of the proposed ordinances provide preferential treatment to entities which completed specified actions within the City before June, 2014 related to prospectively opening a medical marijuana business in the City. At that time, the operation of medical marijuana businesses in the City was prohibited in all zones of the City. To prefer businesses - which took initial steps to establish (then) unlawful businesses - likely has no legitimate public purpose. The priority registration clauses arguably reward entities which took preliminary steps to open up medical marijuana businesses when those businesses were unlawful. Elevating the rights of illegal businesses above legal ones violates public policy. Prioritizing illegal activity, over and above legal activity, undermines local government's police power, depriving local government of the ability to determine whether allowing dispensaries would or would not benefit the public health, safety and welfare. E. Local Sales Taxes and California Law 9 Ordinance No. 1 proposes a sales tax of one percent "on the sale of all other tangible personal property at retail." Presently the City already has a one percent local sales tax. According to the California Attorney General, the Bradley -Burns Uniform Local Sales and Use Tax Law "prevents cities from imposing additional sales and use taxes in excess of the 1 percent rate permitted by the Bradley -Burns Law... [and] general law cities do not have the authority to impose separately administered local sales and use taxes which do not conform to the Bradley -Burns Uniform Local Sales and Use Tax Law." 53 Ops. Cal. Atty. Gen. 292, 296-297(Cal. AG 1970). State law appears to preempt a City from raising its local sales tax above one percent. However, if a municipal government ignores the Bradley -Burns law and increases its local sales tax above one percent, the State Board of Equalization ("BOE") will terminate its contract to collect such a local sales tax with a city. Cal Revenue & Taxation Code § 7203.5 ["Termination of state administration"]. The consequence to the City of raising a local sales tax above one percent was addressed on November 4, 2014 by a BOE representative, who advised in writing that raising the local sales tax above Bradley - Burns limits means "cities have the risk of jeopardizing the 1% sales tax that they currently receive." F. Election Date: Proposition 218 and Election Code § 9214 Three of the four ordinances under review contain new taxes: 1. Ordinance No. 1: proposes a sales tax of one percent "on the sale of all other tangible personal property at retail." 2. Ordinance No. 1 and Ordinance No. 2: both propose a six percent business tax on medical marijuana businesses. 3. Ordinance No. 3: does not propose any new taxes. 4. Ordinance No. 4: proposes a maximum ten percent tax on "gross receipts" of medical marijuana businesses, to be set initially at five percent. The California Constitution in Art XIII C § 2(b), as amended by Proposition 218 in 1996, provides in full that "No local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body." Therefore, according to the California Constitution the three ordinances which impose taxes can only be sent to the City's voters at "a regularly scheduled general election for members of the governing body of the local government." The next such election which meets those conditions is November 8, 2016. 10 However, two of the ordinances (being the citizen sponsored measures which prompted this report, i.e., Ordinances Nos. 1 & 2) have simultaneously qualified under Election Code § 9214 for a special election, which would need to be held 88 to 103 days from the date of the City Council meeting when such election is ordered. As to what election date the two citizen -sponsored medical marijuana ballot measures should be sent to'the voters, there is a conflict between the California Constitution, and the California Election Codes which have been passed by the California legislature. The "California Constitution is a limitation or restriction on the powers of the Legislature..." California State Personnel Bd. v. California State Employees Assn., Local 1000, SEIU, AFL-CIO, 36 Cal. 4th 758, 769 (Cal. 2005). CHAPTER 3 POLICE DEPARTMENT REPORT BY MATHEW SELINSKI, OFFICER/FIELD TRAINING OFFICER A. Introduction This preliminary report briefly summarizes the potential impacts on the Police Department related services and resources that may be associated with the addition of medical marijuana businesses in Costa Mesa, including but not limited to impacts on crime rates, enforcement challenges, complaints from the community, the role of known criminal offenders in this enterprise, minimal regulatory restrictions, and potential legal issues concerning the collection of taxes. The proposals are very similar in nature in many respects, but differ significantly in others. The purpose of this memorandum is to update and explore the possible impacts on the community from a law enforcement perspective should one of the ballot measures be approved by Costa Mesa voters. B. Background Proposition 215, commonly referred to as the Compassionate Use Act (CUA), was passed by California voters in 1996. The act allowed a defense to state charges of possession of marijuana or cultivation of marijuana by qualified patients and primary caregivers. The act did not address distribution to these persons. Further, there have been no legislative or initiative amendments to the CUA, or case law decisions affecting the legality of medical marijuana distribution. In August 2008, then California Attorney General Jerry Brown issued "Guidelines for the Security and Non -diversion of Marijuana Grown for Medical Use." Among other provisions cited by Attorney General Brown was the idea that nothing allows individuals, collectives, or cooperatives to profit from the sale or distribution of marijuana. Attorney General Brown further stated nothing in the CUA, nor Senate Bill 420 (commonly known as the "Medical Marijuana Program"), expressly allows for the storefront sales of marijuana. In other words, any exchange of marijuana for any form of compensation is still illegal under state and federal laws. The only possible legal manner in which to distribute marijuana is under a "cooperative" similar to communal living of the Hippie era in the 1960's. This involves every member contributing something to the arrangement relatively equally. One may plant the seeds, another may water, and yet another may harvest. Anything beyond this is considered illegal. In 2012, a group attempted to qualify a ballot proposal in Costa Mesa to allow medical marijuana dispensaries to operate under the CMMC. At that time, dispensaries had already operated illegally in Costa Mesa and other cities, which experienced an increase in crime. In Los Angeles for example, Part I crime increased 17% in the areas immediately surrounding dispensaries. Increases in Part II crime and nuisance complaints were also noted. 12 In Costa Mesa from 2009 to 2011, the Special Enforcement Detail (SED) received numerous complaints from residents and business owners regarding the presence of dispensaries. Business owners were concerned for the safety of their valuable inventory, which forced Fed Ex and UPS drivers to park away from their delivery destinations out of fear of persons associated with dispensaries stealing their deliveries. Another business owner lost a tenant and had difficulty leasing a suite at his property because of the heavy odor of marijuana and dispensary clientele. Several dispensary employees were discovered to be convicted felons with criminal histories which included armed robbery, criminal threats while armed with a loaded firearm, and illegal marijuana trafficking. The supply source was determined to not be any form of cooperative. Rather, the supply source was determined to be highly organized marijuana cultivation operations in Northern California and Canada. The Los Angeles Police Department (LAPD) and the Orange County Sheriff's Department (OCSD) discovered many dispensaries were diverting their supply of marijuana for more profitable, illicit markets outside California. This was also discovered in Costa Mesa when a local dispensary owner was arrested and convicted for illegal marijuana trafficking in Pennsylvania with marijuana from his dispensary. Each submitted initiative proposal is quite lengthy. The following is a brief synopsis of each initiative from a law enforcement perspective. C. Ordinance No. 1- "Allow Operation of Up to Eight Medical Mariivana (Cannabis) Businesses in the City of Costa Mesa" The initiative begins with a statement that the operation of a medical marijuana business is not a detriment to the health, safety, welfare, or moral standards of the city and the city shall not require a special permit to operate one. The city shall issue no more than eight business licenses. The City Council has the discretion to increase, but not decrease the number of business licenses. Under this proposal, businesses are allowed to possess and cultivate a reasonable quantity of marijuana, but no definition of a reasonable amount is given. Persons with felony convictions can work at medical marijuana businesses if their conviction(s) were somehow dismissed or set aside. The proposal calls for a 6% tax on gross receipts. Finally, the provisions of the CMMC created by this proposal cannot be repealed or changed except by another majority vote of the electorate. There is also some regulation as to where the businesses can and cannot operate, hours they can operate, etc. 13 D. Ordinance No. 2 — "Allow Operation of Up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa" This proposal allows up to four medical cooperative licenses to be issued. The city can increase, but not decrease the number of licenses issued. Administration of licensing for the collective and collective operators is by the Chief of Police and sets strict guidelines and timeframes for license review. This includes an annual renewal for all collectives and collective operators. The licensing and renewal function is dependent upon dedicated personnel to handle this ongoing task. A licensee may be subject to suspension or revocation by the Chief of Police if they have engaged in any unlawful act of marijuana while on the premises of a medical collective. The provisions of the initiative can only be repealed by petition and a majority vote of the electorate. There is also some regulation as to where the businesses can and cannot operate, hours they can operate, etc. E. Ordinance No. 3 — "City Draft" In early 2014, Council Member Monahan worked with the City Attorney's Office to draft his own proposal to allow medical marijuana businesses to operate in Costa Mesa. The proposal was presented at the August 5, 2014 city council meeting and it failed to garner support for passage. Monahan stated during the October 21, 2014 city council meeting that he intended to revise his previous proposal and bring it back to council for consideration at a later date. At the time of this report, the status of the revised proposal is unknown. F. Other Cities Currently, in Orange County only the community of Laguna Woods expressly allows dispensaries to operate. The overwhelming majority of Orange County cities and the County of Orange itself, prohibit the operation of dispensaries either directly through municipal codes or through zoning regulations. Three cities (Los Alamitos, La Palma, and Westminster) have nothing in their municipal codes or zoning regulations allowing or disallowing dispensaries to operate. The Santa Ana City Council recently approved, via a 4-3 vote, to put its own city sponsored initiative proposal on the November 2014 ballot. This was to compete with a separate ballot measure already submitted and qualified for the ballot. The city sponsored proposal has a 500 foot separation regulation similar to the Costa Mesa proposals and allows dispensaries in only two industrial zones within the city. The city sponsored measure calls for a 5% tax that can be raised to 10%. The city sponsored measure also allows the city to make future changes without voter approval. The city sponsored measure (Measure BB) passed with the most votes. Measure BB employs a lottery system for the ability to run a collective under the new law. Interested parties must submit an application to be placed on the qualified 14 list. A lottery will be held on February 5t", 2015 in a public location to select locations from the qualified registration list. The City of San Bernardino recently formed a city committee to study the possibility of regulating medical marijuana dispensaries within its jurisdiction. San Bernardino believes they may be able to charge up to $60,000 a year in fees alone, along with collecting tax revenue over and above the standard sales tax. The CityofAnaheim has recently begun to shut down the known dispensaries operating there in violation of Anaheim Municipal Codes (AMC) by shutting off their city utility services. Several dispensaries responded by operating off industrial generators in further violation of the AMC. This has led Anaheim Code Enforcement Officers to issue citations and impound generators. Nine of the known twenty dispensaries have been completely shut down thus far. G. Colorado & Washington Voters in Colorado and Washington passed laws allowingthe recreational use and retail sale of marijuana and marijuana products in their states. The State of Colorado developed 144 pages of regulations for retail marijuana cultivation operations and retail marijuana stores. The regulations cover everything from licensing of the facilities, business records, labeling/packaging, and product safety. Additionally, it addresses inspections by fire department officials, local health department officers, and code enforcement officers. The regulations also established sanitary conditions for each facility, training requirements for owners and employees, an extensive disciplinary process covering suspension and revocation of licenses, and an appeal process. Since the passage of their law, Colorado has seen a surge in their homeless population and many believe it is due to the legalization of marijuana. One homeless shelter spotlighted in a news report has seen an increase of 50-75 persons per night seeking their services. The shelter operator believes it is due directly to marijuana legalization. The same report detailed a 19 -year-old homeless man who relocated from Arizona to Colorado in order to legally use marijuana. The man is now utilizing public and private homeless services in Colorado. The State of Washington implemented tight regulation in response to the citizen approved initiative of 2012. The initiative placed the burden of developing the tight regulations into the hands of the Washington State Liquor Control Board. The first retail stores as a result of this initiative were to begin in July 2014. The rules developed are listed as "fluid" on the Washington State Legislature website and were updated as recently as April 30, 2014. H. Impact on the Police Department The available evidence in Southern California is quite clear that dispensaries have had a negative impact on the communities where they operate. The relative low amount of regulation contained in the citizen sponsored proposals would almost guarantee these negative impacts would occur in Costa Mesa as well. The four to eight business licenses called for in the citizen backed proposals for such facilities equates to approximately one per two square miles. When the scant regulatory guidelines are factored in, it would appear some areas will end up with more per square mile than other areas of the city. The ability of the 15 city council to reduce that number is prohibited by the proposal even if the city determines the number is too high or some areas are more adversely affected than others. The concept of a reasonable quantity of marijuana is too vague to define and accurately track. As already witnessed in Costa Mesa, the temptation of the profits contained in the illicit market would likely cause some to store marijuana over and above what would be a reasonable amount. This, along with the storage of large sums of cash at the dispensaries, would make them prime targets for burglaries and robberies. Prior convicted felons can work in the dispensaries if their convictions have been somehow set aside by a court. The temptation for illicit profits could prove too much to ignore. The tax revenue could be in jeopardy at this point due to a lawsuit filed in Colorado, where recreational sales and use of marijuana is legal. The lawsuit states marijuana sales are still illegal under federal law and requiring those involved to pay taxes to local governments incriminates them in federal drug trafficking. If successful, the lawsuit would seem to preclude Costa Mesa from collecting the taxes contained in the citizen sponsored proposal. At the very least, it would provide guidance for a similar lawsuit in California should a Colorado legal holding not have precedence in California. The US House of Representatives recently passed legislation allowing banks to conduct financial transactions with state legal marijuana dispensaries and stores. The US Senate has yet to take up the issue. This would appear to eliminate the need to store large sums of cash in the dispensaries, which has been the custom to date. The elimination of the need to pay local taxes could reverse this development and once again cause dispensaries to store large sums of cash making them prime targets of robberies and burglaries. The second proposal states that employees can only be suspended or removed from employment if they engage in illegal marijuana sales on the premises. Involvement in a 1,000 pound marijuana deal at Costa Mesa High School (CMHS) is not grounds for removal. Again, given the tremendous incentive to divert marijuana from the business for more profitable markets would not be grounds for removal. The business owner convicted in Pennsylvania for marijuana trafficking with marijuana from his Costa Mesa medical marijuana would be free to run his business in Costa Mesa under this proposal. I. Conclusion The collective experience in Southern California with medical marijuana dispensaries thus far has been mixed at best. Los Angeles is the best example of city sponsored regulation to deal with the proliferation in their jurisdiction. The dispensaries there are still associated with negative consequences for the surrounding communities including robberies and murder. Since the "black market" for marijuana still exists, no amount of regulation appears sufficient at this point to eliminate or seriously reduce these issues. The increase in Colorado's homeless population directly attributed to marijuana legalization should be a red flag for Costa Mesa due to its current homeless issues and established homeless services. As the City of Anaheim moves to shut down their known dispensaries, marijuana using clientele and negative impacts may transfer to Costa Mesa. The possibility of an increase in the homeless population appears to be a reasonable inference to make against the backdrop of the news report in Colorado. 16 The City of San Bernardino appears to have the best approach to this issue. By forming a committee to study it, they should be able to devise an approach that should suit their community. Costa Mesa is a unique community that is different from San Bernardino, Los Angeles, Colorado, and Washington. Since regulation is currently left to each municipality in California, Costa Mesa should consider following a similar model. A committee could be formed bringing together all interested parties, including but not limited to residents, business owners and medical marijuana supporters. The collective experience already seen in Costa Mesa, Orange County, and Los Angeles should be used as a basis from which to develop an approach to address the major concerns of each group. Guidance could also be found in the legal recreational marijuana use states of Colorado and Washington. Until California passes legislation regulating medical marijuana distribution statewide, Costa Mesa should consider forming a committee of interested parties to take a step-by-step approach to this complex, fluid, and ever changing issue. 17 CHAPTER 4 FINANCE DEPARTMENT REPORT BY STEPHEN DUNIVENT, INTERIM FINANCE DIRECTOR A. Introduction This preliminary report briefly summarizes the potential impacts on citywide operations, costs, impacts to related services and resources that may be associated with the addition of medical marijuana businesses in Costa Mesa, including but not limited to election expenses, and costs for staff time and ongoing revenue audits. The purpose of this memorandum is to update and explore the possible impacts to the city's elections expenses, staff costs and costs for ongoing revenue audits should one of the measures be approved by Costa Mesa voters. A more detailed analysis of the provisions of each initiative is contained in Attachments 1 - 4. B. Potential Fiscal Impact 1. Direct Costs and Staff Time Direct costs associated with the adoption of any of the proposed ordinance will revolve around the need to: Place the measures on the ballot ii. Fulfill functional administrative and ministerial duties to implement programs, set fees by resolution, approve new taxes by election, and issue licenses and permits, etc. iii. Coordinate enforcement efforts and maintain an adequate program to mitigate secondary effects in connection with approved medical marijuana businesses ("businesses') iv. Administer, audit, and collect taxes At this time, it is difficult to predict operational costs to implement and maintain programs to address all elements in the proposed ordinances. Significant staff time will be required, especially during the first year, and additional resources may be needed to comply with requirements setforth. Some other direct costs are: i. Costs to place measures on the ballot are estimated to range from $234,000 to $280,000 for stand-alone special elections and from $15,000 to $60,000 for general elections, depending on the number of measures placed on the ballot. The City bears the cost of all measures placed on the ballot, including those brought forward by citizens and those approved by City Council. is ii. Since medical marijuana businesses are by their nature primarily cash businesses, tax revenues should be audited at least bi-annually by an external auditing firm to ensure that the City is receiving appropriate funds. Costs of these audits could be in the range from $5,000 to $15,000 per audit. 2. Revenues Each of the ordinances being analyzed will result in additional tax, license, and permit revenues. Per Proposition 218, new taxes must be approved in elections in which Council Members are also on the ballot. Any new license and permit fees would require resolutions approved by City Council. In order to be able to estimate additional tax revenues, it is necessary to calculate a reasonable citywide gross medical marijuana sales figure. Since the City has no reliable source for providing this figure directly, staff has utilized information from two sources (1) information obtained from City of Santa Ana staff based on recent estimates; (2) an analysis from the City's sales tax consultant. On November 4, 2014, a ballot measure presented by the City of Santa Ana was approved by the voters. Analysis has been performed by staff to attempt to estimate potential gross receipts per business. This analysis estimates annual gross receipts per business ranging from $1 million to $2.8 million with an average of $1.9 million. The City's sales tax consultant, HdL Companies ("HdL"), performed an analysis based on their statewide client database, estimating annual gross sales per medical marijuana business ranging from $10,000 to $2 million with an average of $100,000. HdL noted that the State Board of Equalization does not categorize medical marijuana businesses separately and that these businesses typically end up in several different categories. HdL has endeavored to add a category into their database for known medical marijuana businesses, which is obviously not a complete sample as many of these establishments operate outside of regulations and registration with the State Board of Equalization. As is noted above, estimates vary widely as there is little reliable information available. Over time as historical revenue data accumulates, better estimates will be able to be made. C. Brief summaries of the potential fiscal impacts of each document are provided below. 1. Ordinance No. 1 This measure allows a maximum of eight medical marijuana businesses unless more are approved by City Council. Direct costs in addition to those noted above are primarily related to expansion of the business license process and includes completion of a lengthy list of requirements. Under the current municipal code, business licenses renew annually, while this measure sets a two-year renewal period. If a business license is not approved within 45 days, it will be considered to be automatically approved. Staff estimates the following costs relating to the issuance of all licenses and permits for a medical marijuana business: I. Business license issuance costs from $1,000 to $2,000 19 ii. Permitting software update costs a minimum of $1,700 iii. Standard permit fees from $1,500 depending on a variety of factors Since eight medical marijuana businesses will be allowed, annual audit costs per year could be from $20,000 to $60,000 if each business is audited every other year. In addition, there are many operational requirements that will need to be monitored and verified on an ongoing basis. More information in regard to detailed requirements of this measure can be found in Finance Department Attachment 1. This measure allows fora 6%taxon marijuana businesses and a 1%sales tax for non -marijuana related sales. The 1% sales tax is problematic since it conflicts with State sales tax law. It has been reported that the City could potentially be at risk to lose all sales taxes due to this conflict with State law. Regardless, assuming all sales being subject to the 6% rate, rough estimates could range from $6,000 to $114,000 per medical marijuana business, using HdL and Santa Ana estimated average gross sales, respectively. With eight medical marijuana businesses, annual tax revenues could be from $48,000 to $912,000. License and permit revenues are not expected to be significant as this measure exempts medical marijuana businesses from any special use permits, conditional use permits, special site plans, variances, etc. In addition, any changes to the current business license ordinance to allow for the stated maximum of $500 would require separate voter approval in an election in which City Council Members are on the ballot. Finance staff believes that the $500 fee would be significantly below actual costs incurred. 2. Ordinance No. 2 This measure allows a maximum of four medical marijuana businesses unless more are approved by City Council. Direct costs in addition to those noted above are primarily related to a new medical cooperative license and operator permits for each medical marijuana business manager. Both the license and the permit require completion of lengthy lists of requirements. If a license is not approved within 30 days, it is considered to be automatically approved. Staff estimates the following costs relating to the issuance of all licenses and permits for a medical marijuana business: Medical cooperative license issuance costs from $2,000 to $5,000 ii. Operator permit issuance costs from $300 to $1,000 iii. Permitting software update costs a minimum of $3,400 iv. Standard permit fees from $1,500 depending on a variety of factors 20 Since four medical marijuana businesses will be allowed, annual audit costs per year could be from $10,000 to $30,000 if each business is audited every other year. In addition, there is a list of operational requirements that will need to be monitored and verified on an ongoing basis. More information in regard to detailed requirements of this measure can be found in Finance Department Attachment 2. This measure allows for a 6% gross receipts tax and exemption from the 1% sales tax. The 1% exemption from sales tax is problematic since it conflicts with State sales tax law. As noted in the analysis of the first ballot measure, it has been reported that the City could potentially be at risk to lose all sales taxes due to this conflict with State law. Regardless, assuming all sales being subject to the 6% rate, rough estimates could range from $6,000 to $114,000 per medical marijuana business, using HdL and the Santa Ana survey average gross sales, respectively. With four medical marijuana businesses, annual sales tax revenues could be from $24,000 to $456,000. License and permit revenues are not expected to be significant and any fees for new medical cooperative license and operator permits would require resolutions approved by the City Council. 3. Ordinance No. 3 — "City Draft" This proposed ordinance does not set a maximum number of medical marijuana businesses, although indirect limitations will exist related to eligible locations within the City. Information Technology and Development Services staff have estimated that under the initially imposed constraints in the City Draft, there could be approximately 83 business locations. Direct costs in addition to those noted above are primarily related to the optional establishment of a new City Office of Cultivation Standards and Quality Control ("City Office") and medical marijuana business and medical marijuana cultivation permits. The City Office would be authorized by this proposed ordinance but not required and the new permits require applicants to complete lengthy lists of requirements. If a license is not approved within 60 days, it will be presented for City Council review at the next regularly scheduled meeting. Staff estimates the following costs relating to the issuance of all licenses and permits for a medical marijuana business: Medical marijuana business permit issuance costs from $2,000 to $5,000 ii. Medical marijuana cultivation permit issuance costs from $1,000 to $5,000 ill. Permitting software update costs a minimum of $13,000 (one-time cost regardless of the number of businesses) iv. Standard permit fees from $1,500 depending on a variety of factors Since there is not a specific limitation on the number of medical marijuana businesses allowed, audit costs per year cannot be estimated at this time. As noted above, individual business audits could cost 21 from $5,000 to $15,000. In addition, there is a list of operational requirements that will need to be monitored and verified on an ongoing basis. More information in regard to detailed requirements of this measure can be found in Finance Department Attachment 3. This measure creates no new taxes in addition to the existing 1% sales tax allocated to the City. Consistent with information above, rough sales tax estimates could range from $1,OOOto $19,000 per business, using HdL and the Santa Ana survey average gross sales, respectively. With no formal limitation on medical marijuana businesses, annual sales tax revenues cannot be estimated at this time. License and permit revenues could be sizable but not significant depending on the number of businesses receiving permits and new permit fees set by resolution by the City Council to recover costs. 4. Ordinance No. 4 - City of Santa Ana Ordinance This ordinance was approved by the voters on November 4, 2014 and it allows a maximum of twenty collectives/cooperatives permits, although Santa Ana staff believes the actual number could be less due to limitations related to eligible locations within the City. Santa Ana staff is currently assuming a minimum of 12 successfully permitted collectives/cooperatives. Direct costs in addition to those noted above are primarily related to a new cooperative/collective regulatory safety permit for each site and expansion of the business license tax program. These permits require completion of sizable lists of requirements and approval of each cooperative/collective regulatory safety permit is required within 60 days. In addition, there is a list of operational requirements that will need to be monitored and verified on an ongoing basis. More information in regard to detailed requirements of this measure can be found in Finance Department Attachment 4. Santa Ana plans to budget $175,000 for a forensic auditor to monitor/audit tax receipts. This ordinance allows for a maximum 10% gross receipts business license tax assessment (initially imposed at a 5% rate and adjustable thereafter by simple ordinance as needed) with a minimum of $2,000 per year basic tax amount in addition to the 1% allocation of sales taxes collected by the State. Assuming the business license tax assessment of 5% and the sales tax allocation of 1%, Santa Ana estimates that additional annual tax revenues could be approximately $116,000 per collective/cooperative. Assuming twelve collectives/cooperatives, annual tax revenues could be as much as $1.39 million. Permit revenues are expected to be approximately $14,000 per business for combined estimated General Fund revenues of over $1.5 million. D. Conclusion Regardless of the outcome of the two ballot measures allowing medical marijuana businesses, which were recently certified by the Orange County Registrar of Voters, there are many issues that will need to be addressed by the City. Some of the more notable issues are as follows: 22 1. Significant citywide staff time will be required and costs will be incurred for implementation, ongoing operations, and enforcement efforts resulting in potentially high one-time and startup costs 2. Legal issues and conflicts with Federal law and State Board of Equalization requirements exist in each of the ballot measures 3. Insufficient historical revenue and cost information exist to reasonably estimate revenue generation and costs to be incurred and thus, it is too early to know with so much uncertainty and too little experience to be able to determine net fiscal impact As requested, Finance Department staff has provided very preliminary information to the City Council to attempt to address potential citywide financial/staff impacts and issues relating to the two certified ballot measures, the City Draft measure, and the City of Santa Ana's approved ordinance. At this time, much uncertainty exists in regard to allowing and regulating medical marijuana businesses as this is an evolving industry. FINANCE DEPT Attachment #1: Taft/Gardner Ballot Measure Analysis FINANCE DEPT Attachment #2: Webster/Levesque Ballot Measure Analysis FINANCE DEPT Attachment #3: Proposed Ordinance in City Draft Analysis FINANCE DEPT Attachment #4: City of Santa Ana Ordinance Analysis 23 Finance Dept. -Attachment 1 TAFT/GARDNER BALLOT MEASURE ANALYSIS OPERATIONAL IMPACT, INCONSISTENCIES, AND LEGAL ISSUES General: Maximum of eight medical cannabis businesses allowed City Council can increase but not decrease the maximum medical cannabis businesses allowed Amendment/repeal only through citywide election Amendment of municipal code Allows cultivation of marijuana on premises Plan nine/Building Safety (required services prior to opening of business): Exempt from special use permits, conditional use permits, any other permits as a condition to obtaining a business license Exempt from special site plans, variances or any other permit or certificate as a condition to obtaining a business license Determination that proposed business/location meets requirements: • Exempt entities: residences cultivating marijuana, clinics, health care facilities, residential care facilities, hospice, and home health agencies • 600 foot radius from public schools • 1,000 foot radius from other licensed medical cannabis businesses Permitted in use districts or zones AP, CL, C2, C1 -S, MG, MP, PDC, PDI, C1, and TC • Outdoor signs in accordance with City restrictions with no pictorial representations of cannabis • Legal notice posted inside • Air treatment filtration or ventilation system to control odors • Alarm system Operational Requirements (ongoing monitoring and verification): Live Scan criminal background checks prior to employment for all employees/volunteers Annual Live Scan criminal background checks by December 31st for all employees/volunteers Managers must be registered members of the dispensary Employees/volunteers must have no felonies in the last seven years Employees/volunteers must not be on probation or parole for drug sales/distribution Reasonable compensation of employees comparable to IRS qualified non-profit organizations No minors allowed to be employees or to be on the premises during business hours 23-1 Commercial general liability insurance including coverage for medical cannabis Maintains insurance for all who deliver marijuana within the City and has location in City with a business license Business hours allowed from 9am to 10pm seven days a week Seller's permit valid and current Licensed and uniformed security guard patrols during business hours Alarm system must be functioning and in use Warning labels and packaging requirements Legal notice posted inside Packaging/warning label requirements Signs in accordance with City rules and no pictures related to cannabis allowed No cannabis can be visible from the exterior of the business No alcohol and use of cannabis in business, parking area, or within 50 feet Cultivation concealed from public view with no exterior evidence or odors/other impacts Cultivating, manufacturing, and processing cannabis from California only and has not left the state Cultivation by and provided to verified members in a closed circuit of production and consumption Inventory reasonable to meet needs of members only No manufacturing of concentrated cannabis Edible cannabis products must comply with State and local laws Air treatment filtration or ventilation system to control odors must be functioning and in use Taxes: 6% sales tax on marijuana related items 1% sales tax on non -marijuana related items Business licenses (initial setup, processing, monitoring, tracking, verification, user fee creation, permit issuance): If not approved/denied in 45 days, permit is automatically approved License is valid for two years and renewals are due 30 days before expiration and not prior to sixty days License transfers require that new owners must meet all requirements License fee can't exceed $500 Managers must be registered members of the dispensary 23-2 First eight medical cannabis businesses approved get licenses Priority registration status (first eight applicants): • Begins thirty days after ordinance effective date plus ten days • Requirements: • Has never operated a medical cannabis business within the City • Has not been convicted of operating a medical cannabis business within the City • Has never been civilly adjudicated for operating a medical cannabis business without a business license • Has applied, has been issued a business license, or received a denial letter • Has filed proper documents with the State for as a non-profit incorporation • Has or has applied for a seller's permit • Has or has applied for a license to sell nursery stock from the Department of Food & Agriculture • Has applied for a Live Scan background check • Has a physician's recommendation • Has or has applied for a medical marijuana identification card • Has or has applied for general liability insurance with coverage for medical cannabis or medical marijuana • Has notarized, signed, and dated authorization for fingerprinting, photographing, and release of information for a background check • Has notarized, signed, and dated statement to hold the City harmless Non-priority registration status has same requirements as for priority registration (for all applicants after the first eight) Ballot Measure Inconsistencies: Summary states that activities should not be in conflict with State and Federal law Section 2 states that activities should not be in conflict with State and local law Section 9-487(A) (4) states maximums of eight and nine medical cannabis businesses Section 9-487(A) (5) states a maximum of nine medical cannabis businesses Section 9-487.1 (25) states that sales and use taxes are imposed Section 9-487.1 (25i) states that a 6% business tax is imposed Ballot Measure Legal Issues: 6% sales tax on marijuana related items conflicts with State Board of Equalization ("SBOE") regulations 1% sales tax on non -marijuana related items is not in conflict with SBOE regulations Current business license ordinance does not accommodate requirements of this ballot measure 23-3 Finance Dept. - Attachment 2 WEBSTER/LEVESQUE BALLOT MEASURE ANALYSIS OPERATIONAL IMPACT, INCONSISTENCIES, AND LEGAL ISSUES General: Maximum of four medical marijuana businesses allowed City Council can increase but not decrease the maximum medical marijuana businesses allowed Amendment with City Council approval/repeal only by citywide election Amendment of municipal code Allows cultivation of marijuana on the premises Planning/Building Safety (required services prior to opening of business): Determination that proposed business/location meets requirements: • Exempt entities: health care facilities, residential care facilities, hospice, and home health agencies • 1,000 foot radius from any schools • 600 foot radius from public parks • 600 foot radius from public libraries • 600 foot radius from child care facilities • 1,000 foot radius from other licensed medical marijuana businesses • Not allowed in, abutting, or across the street from residential areas • Permitted in use districts or zones AP, CL, C2, C1 -S, MG, MP, PDC, PDI, C1, and TC • Parking lot lighting required Operational Requirements (ongoing monitoring and verification): At least one person with an operator permit must be on the premises during business hours Managers must have valid Operator Permits Must provide information to the City on changes in managers within 30 days Seller's permit must be valid and current Business hours allowed from 8am to 10pm seven days a week No cannabis can be visible from the exterior of the business No alcohol use or purchases in business and parking area No one under age 18 allowed on the premises Any violations are misdemeanors with maximum fines of $1,000 and six months in jail 23- dl Taxes: 6% gross receipts tax Medical cooperatives exempt from the 1% sales tax Medical Cooperative License: (initial setup, processing, monitoring tracking, verification user fee creation, permit issuance) Limited to four licenses unless City Council approves a higher limit License is valid until revoked Allows a non-refundable fee approved by resolution by the City Council to cover costs If not approved/denied in 30 days, permit is automatically approved Application form provided by the Chief of Police requires: • Entity must be incorporated in California and be either a non-profit mutual benefit corporation or a statutory agricultural or consumer cooperative • Name, date of incorporation, and evidence that corporation is in good standing • Name and capacity of all officers and directors • Registered corporate agent and address for service process • Type of cooperative, proposed site address, property owner/lessor information • Names of managers who will require Individual Operator Permits and successful Live Scan background checks • Must provide information to the City on changes in managers within 30 days • Certificate or drawing to be provided within 30 days of proposed property lines, showing if within limits of other cooperatives, schools, public parks, and residential areas • If Police Chief determines that the application is not completed correctly, a 10 day extension will be granted by the Finance Director • Application must be stamped upon receipt and investigation should be concluded within 30 days by either granting or denying the license Priority review status: • 30 days after ordinance effective date through 45 days applications submitted • Requirements: • Must be an active non-profit mutual benefit corporation or statutory agricultural or consumer cooperative incorporated in California prior to 5/22/14 • Has listed proper documents with State for location in the City • Has applied for or been issued a business license prior to 5/22/14 • Has a lease/rental agreement prior to 5/22/14 • Has seller's permit prior to 5/22/14 • Reasons for denial: • Building/equipment/location do not comply with requirements • False statements 23-,6- • Revocation of a dispensary license within the last 2 years • Director/officer convicted of felony within 10 years prior to filing application • No responsible adult on premises to as manager during business hours • License fees not paid Business licenses: Suspended or revoked for unlawful distribution, and not following initiative provisions/City disciplinary actions Annual Individual Operator Permits• (initial setup processing monitoring tracking verification user fee creation, permit issuance) Required for each manager No false statements Must be at least 18 years old or if at least 21 years old Live Scan background check No felonies within the last 10 years If not approved/denied within 30 days, automatic approval of permit Suspended or revoked for unlawful distribution, and not following initiative provisions/City disciplinary actions. Chief of Police provides form, stamps as received, grants, denies, and renews permits Applicant must fill out all required information Non-refundable fee for permit If Police Chief determines that the application is not completed correctly, a 10 day extension will be granted for City Manager to act on the application Chief of Police must grant or deny within 15 days, if not, the Finance Department will issue the permit Permit is valid for 1 year and renewal is due 30 days before expiration Suspension/Revocation of Cooperative Licenses and Operator Permits: Chief of Police provides written notice and hearing information at least 10 days before the hearing Chief of Police decision can be appealed within 7 days to City Council pursuant to the Municipal Code If appeal is lost, applicant can request a judicial review Chief of Police can issue warnings, suspensions, or revocations for: • False statements • Failure to make reasonable effort to prevent illegal distribution/prohibited conduct/failure to abide by previous disciplinary actions 23-6 • Subject to closure as a public nuisance if violate initiative provisions Ballot Measure Inconsistencies: Summary states that medical marijuana businesses are subject to a 6% sales tax The first part of the measure states that medical marijuana businesses are subject to a 6% gross receipts tax Section 9-490 (f) states applicant for Operator Permit must be at least 18 years old Section 9-491 (a) (f) states applicant for Operator Permit can be denied if under 21 years old Ballot Measure Legal Issues: Medical cooperative exemption from the 1% sales tax is in conflict with State sales tax law Priority review status requirements state that items need to be accomplished by 5/22/14 23-7 Finance Dept. —Attachment 3 PROPOSED ORDINANCE IN CITY DRAFT ANALYSIS OPERATIONAL IMPACT, INCONSISTENCIES, AND LEGAL ISSUES General: No maximum number of marijuana businesses stated Amendment by an ordinance approved by the City Council Amendment of municipal code Cultivation allowed or not allowed on premises? Planning/Building Safety (required services prior to opening of business): Exempt entities: clinics, health care facilities, residential care facilities, hospice, and home health agencies Determination that proposed business/location meets requirements: • 1,000 feet from public and private schools • 1,000 feet from public libraries • 1,000 feet from youth centers Y 200 feet from residential zone unless issued a minor conditional use permit • Permitted in use districts or zones C1, C2, C1 -S, MG, MP, PDC, PDI, C1, and TC • 1,000 feet from other medical marijuana businesses • Odor control (air treatment system/no off-site smell) • Air treatment filtration or ventilation system to control odors • Alarm system • Outdoor signs in accordance with State and City restrictions Operational Requirements (ongoing monitoring and verification): Allow reasonable inspections by City Maintenance of required insurance Seller's permit must be valid and current Security guard No use of marijuana or smoking allowed on-site or within 20 feet No loitering allowed outside business Any unlawful sales outside business should be reported to City within 24 hours No allowance of breach of peace, disturbance of public order, or disorderly conduct 23- 9 Finance Dept. —Attachment 3 Security cameras used continuously with at least 30 days of recorded documentation maintained Centrally monitored fire and burglar alarm system Secure entrances with entry controlled by employees Records to be maintained on site for 3 years: • Owner and/or lessee information • Employee information • Results Live Scans for all employees • Member information for those who participate in cultivation • State identification cards and information for all members receiving medical marijuana • Dates medical marijuana provided to members • Delivery information • Documentation of finances • Insurance policy • Inventory documentation • Valid permits displayed • Employee records (certain felony restrictions/results of annual Live Scans/valid identification cards for employees, owners, and managers) Volume limited to member needs Only sell medical marijuana and related products No recommendations by on-site physicians Required signs must be posted/shall not obstruct entrance or security system/business identification sign to be single window or wall sign No alcohol license from State is allowed Business shall not operate as a lounge or cafe with consumption on site Quality control to disclose percentage level of certain compounds Labeling requirements (warning labels/date of manufacture/weight/no packaging attractive to minors) Edibles must comply with State law/no products requiring refrigeration or heat/must be prepared by a member Employees must receive appropriate training Medical marijuana supply can only be from members Business hours allowed from 7am to 10pm seven days a week 23- 9 Finance Dept. — Attachment 3 No minors allowed on-site unless they are qualified patients, primary caregivers, or with parents/legal guardians Odor control required (air treatment system/no off-site smell) Site management (business to monitor nuisance activities/written rules to members) Non-profit (monetary reimbursements only to cover overhead and operating costs) • Reasonable proof to be provided to City annually Delivery of medical marijuana to members only (employees delivering must have identification card) City is authorized but not required to create City Office of Cultivation Standards and Quality Control to perform the following: • Conduct regular inspections of cultivation practices and procedures • Test medical marijuana at cultivation sites • Establish model guidelines • To determine adherence to guidelines and make results available to the public • Establish quality control testing standards • Test standards and make results available to the public • Establish labeling standards • Sample testing for pesticides and contaminants by business or independent laboratory with destruction required if positive results Taxes and Fees: 1% sales tax Application fees set by resolution Cost recovery of all fees and costs incurred for implementation set by resolution Medical Mariivana Dispensary and Medical Mariivana Cultivation Permits (initial setup processing monitoring, tracking, verification, user fee creation, permit issuance): Issued by Chief Executive Officer or designee Applications: • Address • Site and floor plan • Security plan (cameras/fire and burglar alarm system/locked entrances/interior and exterior lighting/secured windows) • Names and addresses of managers, owner, and lessor • Authorization to City to seek verification on application • Proof of non-profit status • Statement that information provided is true and correct • Further information deemed necessary by City CEO • No false statements 23-/0 Finance Dept. — Attachment 3 • Appropriate location that meets all requirements • Applicant must be primary caregiver, qualified patient or legal representative • No history of unlawful, fraudulent, unfair, or deceptive business acts or practices by applicant or any manager • Decision in 60 days — if not, application will go to City Council at the next regularly scheduled meeting • Notice of incomplete application within 30 days • Granted if meet all requirements of Chapter State Board of Equalization Seller's Permit required Written agreement with the City in regard to the following: • Allow reasonable inspections by City • Indemnification of City from all liability • Maintenance of required insurance • Defend City if legal action and reimburse any court costs • Provide updated application annually Conditions to maintain valid permits: • Strict adherence to requirements • Allow reasonable inspections by City • Maintain current and valid contact information with City • Transferable if transferee meets requirements Suspension/Revocation of Permits: • Failure to follow requirements • Operations ceased for 180 days • Change in ownership without issuance of new permits • Failure to maintain security camera recordings • Fails to allow inspections • Subject to closure as a public nuisance if violate ordinance provisions Appeals pursuant to Municipal Code Violations and Penalties: • Any person who violates requirements of this ordinance • Misdemeanor 23- // Finance Dept. —Attachment 4 City of Santa Ana Measure BB — November 4, 2014 Election General: 20 selected from lottery of qualified applicants Prohibits on-site growing or cultivating, restrictions for cuttings Amended municipal code Within 30 days of adoption, registration forms to be prepared by City Co-op/Collectives to apply within 60 days, with non-refundable processing fee Planning/BuildingSafety Exterior signage limited to one wall sign, non -illuminated, not to exceed ten square feet Sufficient odor absorbing ventilation and exhaust system Patron notification — loitering, forgery, impairment Web -based closed-circuit tv for security, maintain for 90 days Fire and burglar alarm Property owner's consent Permitted in M-1, M-2 Industrial zones Not within 500 feet of another collective or cooperative Not within 1,000 feet of any school, park, residential Operational Requirements Unarmed security guard at all times to monitor site and immediate vicinity Prohibits on-site doctor recommendations Prohibits on-site alcohol or tobacco sales Prohibits on-site food/alcohol/tobacco/marijuana consumption Hours of operation -Monday to Saturday 10 a.m.-8 p.m. Sunday 11 a.m.-7 p.m. Dispense to qualified patients, only prescribed amount Max $200 kept on-site overnight, at least one daily bank drop No patients under 21 unless accompanied by caregiver, etc 23- /,A Finance Dept. —Attachment 4 Provide name and number of on-site staff person to PD Criminal background check, employees free of felony or misdemeanor with past four years Food distribution — adhere to state laws and city ordinances Prohibits concentrated cannabis Records at the location - Names, addresses of landlord, members, caregivers - Receipts - Proof of compliance with Attorney General guidelines - Maintain for five years - Annual audits, no later than February 15, completed by CPA - May be inspected by PD and other departments, unlawful to refuse, obstruct - Non-compliance must cease operation Taxes— Business License Tax Revenue purpose only Annual business license Not considered religious or charitable If claiming exemption, must prove status Tax rates - Business tax up to ten percent of gross receipts. Initial five percent, ten percent max - City Council may lower rate - Minimum $2,000 per location - City Council may repeal or amend ordinance as long as tax isn't increased - Tax collector may implement rules, regulations, and guidelines on the collection and the methodology Exemptions - No fixed place of business, but comes to City as requested by patient, no more than five days within the year - If transaction is for collective/co-op activities, business tax is payable Monthly remittance $2,000 minimum basic rate due before April 1 If new licensee, prorated quarterly Late payment subject to penalty and interest 23-/3 Finance Dept. —Attachment 4 Payment of tax does not authorize unlawful business State or Federal law changes do not require changes to tax collection Cooperative/Collective Regulatory Safety Permit. Regulatory Safety Permit from PD, to be displayed at all times visible to public, valid for a year unless revoked. Regulatory Safety Permit to contain: - Address - Site plan - Photos - Lease or rental contract, written landlord consent - Staff information, photo ID - Articles and Bylaws if corporation, Articles of Association if unincorporated association - Name of agent for Service of Process - BOE Seller's Permit - Copy of Medical Marijuana Collective Operating Standards Chief of Police to review within 60 days, other City and County departments to make recommendations to Chief. Chief of Police or designee to grant if: - Fee's paid - Conforms to provisions - No material misrepresentation by applicant - Full cooperation by applicant - No permit denied or revoke within the last S years within the U.S. - Collective to comply with all laws - Compliant with Federal agencies and guidelines Written application to renew 60 days before expiration to Chief of Police 23- /Y CHAPTER 5 HUMAN RESOURCES / RISK MANAGEMENT DEPARTMENT REPORT BY TAMARA S. LETOURNEAU, ASSISTANT CEO; AND LANCE M. NAKAMOTO, HUMAN RESOURCES MANAGER A. Introduction This preliminary report briefly summarizes the potential impacts on the Human Resources/Risk Management Division related services and resources that may be associated with the addition of medical marijuana businesses in Costa Mesa, including but not limited to impacts to staffing and job classifications, capital expenses for vehicles, staff training, and records management. B. Analysis/Impact on Human Resources/Risk Management Division Based upon the two citizen sponsored initiatives, there would be a maximum of either eight (8) or four (4) dispensaries within the City. One option is to have the regulation of medical businesses incorporated into the Development Services Department. There are three major functions of the "City Draft": 1. Licensing, 2. Enforcement, and 3. Ongoing Oversight. The August 5, 2014 and November 18, 2014 City Council Reports mention a City Office of Cultivation Standards and Quality Control with the November 18th report indicating this Office could be optional and "...created to conduct regular inspection of cultivation practices and procedures, as well as to test medical marijuana." In the event the City created such an "office," the City's initial focus would appear to be concentrated on these major functions. In order to ensure that the City addresses quality control and adherence to policies and procedures, one option is to utilize existing Code Enforcement Officers (as other cities have done) and/or add to the current staffing to address this issue. If the "City Draft" proposal moves forward, there would be a component for "testing" marijuana. The City's Crime Scene Specialist classification already performs basic "presumptive tests" for drugs in collecting, processing and preserving evidence. One option is for the incumbent Crime Scene Specialists to perform the testing component with appropriate training. In addition to the Code Enforcement Officer and Crime Scene Specialist classifications, the City outsources its former Tax Auditing Specialist classification. As such, the vendor may be required to monitor sales for business taxation purposes under the terms of both citizen -backed initiatives. The city -backed proposal did not call for an additional tax. The approximate total compensation cost for a Code Enforcement Officer is $100,000 and approximately $115,000 for a Crime Scene Specialist. If new positions are approved there may be additional capital outlay for vehicles, equipment, etc. 24 Additionally, there would be costs borne for training and continuing education for these employee(s); possible certification and recertification programs; license/records management; and acting as the City's liaison with regard to other County and State agencies interfacing with medical marijuana col lectives/cooperatives. If any of the proposed ordinances are approved, they may impact the wages, terms and conditions of employment for employees represented by Costa Mesa City Employee's Association (CMCEA). There is also a concern, from a risk management viewpoint, that City employees performing these responsibilities are at potential risk for administering and regulating businesses, which may be in violation of federal law. C. Conclusion Depending on which, if any, of the initiatives is approved by voters, there will be impacts relative to staffing, training, records management and monitoring of sales. Should the city -backed proposal be selected, the same impacts will exist in addition to determining appropriate job classifications for the "City Office of Cultivation Standards and Quality Control". There is also potential for a capital outlay for vehicles, equipment and additional training. At this time, we do not know how the CMCEA will react to these issues and the potential conflict with federal law. 25 CHAPTER 6 FIRE DEPARTMENT REPORT BY DAN STEFANO, FIRE CHIEF A. Introduction This preliminary report briefly summarizes the potential impacts on Fire Department related services and resources that may be associated with the addition of medical marijuana businesses in Costa Mesa, including but not limited to fire and life safety and community risk reduction. B. Impact on the Fire Department From a fire prevention and community risk reduction perspective, the introduction of marijuana businesses with on-site cultivation will increase the risk of electrical hazards including fire due to the additional interior illumination (e.g., electric) and heating needs that will be required. This includes potential electrical systems/conditions and heating element hazards as covered in the California Fire Code and Building Codes (e.g., CFC Chapter 6 — Building Services and Systems; Section 605 — Electrical Equipment, Wiring, and Hazards, etc.). To this end, the need for enhanced and specialized collaborative inspections with the building, fire, and police departments will require additional resources for initial and regular site inspections, in addition to increased code enforcement resources to address code compliance (see Fire Department Attachment #1 for a draft copy for an indoor cultivation site). In addition, the utilization of pesticides, insecticides, herbicides, and chemicals required for indoor cultivation will increase the likelihood of a hazardous material type exposure and exacerbate the nature and extent of any indoor fire or incident (e.g., reactivity), as well as nuisance complaints from nearby businesses and residents. From an operational and emergency response perspective, timely and direct access for emergency responders will be impacted. Specifically, response times will impacted by high risk premise entry, due to security and blocked or modified entry and egress areas, which does not exclude the potential of hazardous defense devices (e.g., booby trap devices) after hours. This risk is expanded considerably without quantity limits clearly specified for on-site cultivation sites (see Fire Department Attachment #2). The Fire Department also identifies risk without specific information required relative to on-site cultivation (e.g., the inclusion of a site safety plan, in-line with the security plan measures; electrical safety requirements, emergency access, emergency preplan, etc.). C. Proliferation of Illegal or Non -Approved Marijuana Cultivation Sites/Locations 26 The potential of illegal or non -approved marijuana cultivation sites/locations has been documented throughout California, in particular in Northern California and is a very real concern as was evidenced by a recent incident in Costa Mesa, where an illegal operation was discovered after a Fire Department response to an electrical fire (see Fire Department Attachment #3). D. Conclusion There will be an impact to fire department resources and services with the implementation of medical marijuana businesses in the City of Costa Mesa, in particular as it relates to on-site cultivation. FIRE DEPT Attachment #1: Draft Fire & Building Department Indoor Cultivation Inspection Report FIRE DEPT Attachment #2: Limits on marijuana quantities — Kelly decision FIRE DEPT Attachment #3: Illegal indoor cultivation site in Costa Mesa; Daily Pilot article 27 FIRE DEPT. –ATTACHMENT #1 INDOOR CULTIVATION INSPECTION REPORT ADDRESS: INCIDENT#: CITY/COUNTY BUILDING OFFICIAL NAME: — — — — ELECTRICAL SYSTEMS/CONDITIONS D METER BYPASSED (CFC 605.6) D EXPOSED WIRING INCLUDING SPLICES (CFC 605.6) D ELECTRICAL ALTERATIONS (CFC605.6) D ELECTRICAL DEVICES EXPOSED TO WATER (605.1) D TEMPORARY WIRING USED IN PLACE OF PERMANENT (CFC 605.9) D TEMPORARY WIRING NOTATIACHED TO STRUCTURE (CFC 605.9. 1) D EXTENSION CORDS USED IN PLACE OF PERMANENT WIRING (CFC 605.5) D COVER PLATES MISSING (CFC 605.6) D MULTI -PLUG ADAPTERS SUBJECTTO ENVIRONMENTAL OR PHYSICAL DAMAGE (CFC 605.4.31 STRUCTURAL CONDITIONS D SEPARATION BETWEEN GARAGE/LIVING SPACES PENETRATED (CFC 703.1) D SELF-CLOSING DOORAT GARAGE/LIVING SPACES (CFC 703.2.3) D SHEET ROCK OPENED TO ATIIC/CRAWLSPACE (CFC 703.1) D WINDOWS BLOCKED OR INACCESSIBLE (CFC 1026.4) D COMBUSTIBLE FLOOR/WALLCOVERING (CFC 803.1) D SMOKE ALARMS DISABLED/MISSING (CFC 907.2.10.1.2) D INDICATIONS OF NON-PERMITIED ALTERATIONS (ROOMS ADDED, ETc.) (CFC 102.3) GENERAL SAFETY D PRESSURE VESSELS (PROPANE, CO2, ETc.) WITHOUT VALVE PROTECTION (CFC 3003.6) D PRESSURE VESSELS (PROPANE, CO2, ETC.) UNSECURED (CFC 3003.5.3) D STORAGE OF COMBUSTIBLE MATERIALS (CFC304.1) D PITFALLS, BOOBYTRAPS, ETC. (CFC507.3) D STORAGE INATIIC SPACES PROHIBITED IN RI/R2 (CFC315.2.4) D FUMIGATION DEVICES REQUIRE NOTIFICATION/PERMIT (CFC 1703.3) Firehouse© Coding: INCIDENT TYPE: 551 (ASSIST POLICE OR OTHER GOV'TAGENCY) ACTIONS TAKEN: 002 (MARIJUANA GROW DISCOVERED) 27-1 605.6 Unapproved conditions. Openjunction boxes and open -wiring splices shall be prohibited. Approved covers shall be provided for all switch and electrical outlet boxes. 605.1 Abatement of electrical hazards. Identified electrical hazards shall be abated. Identified hazardous electrical conditions in permanent wiring shall be brought to the attention of the code official responsible for enforcement of the California Electrical Code. Electrical wiring, devices, appliances and other equipment that is modified or damaged and constitutes an electrical shock or fire hazard shall not be used. 605.9 Temporary wiring. Temporary wiring for electrical power and lighting installations is allowed for a period not to exceed 90 days. Temporary wiring methods shall meet the applicable provisions of the California Electrical Code. Exception: Temporary wiring for electrical power and lighting installations is allowed during periods of construction, remodeling, repair or demolition of buildings, structures, equipment or similar activities. 605.9.1 Attachment to structures. Temporary wiring attached to a structure shall be attached in an approved manner. 605.5 Extension cords. Extension cords and flexible cords shall not be a substitute for permanent wiring. Extension cords and flexible cords shall not be affixed to structures, extended through walls, ceilings or floors, or under doors or floor coverings, nor shall such cords be subject to environmental damage or physical impact. Extension cords shall be used only with portable appliances. 605.4.3 Installation. Relocatable power tap cords shall not extend through walls, ceilings, floors, under doors or floor coverings, or be subject to environmental or physical damage. 703.1 Maintenance. The required fire -resistance rating of fire -resistance -rated construction (including walls, fire stops, shaft enclosures, partitions, smoke barriers, floors, fire -resistive coatings and sprayed fire-resistant materials applied to structural members and fire-resistant joint systems) shall be maintained. Such elements shall be properly repaired, restored or replaced when damaged, altered, breached or penetrated. Openings made therein for the passage of pipes, electrical conduit, wires, ducts, air transfer openings and holes made for any reason shall be protected with approved methods capable of resisting the passage of smoke and fire. Openings through fire -resistance -rated assemblies shall be protected by self- or automatic -closing doors of approved construction meeting the fire protection requirements for the assembly. 703.2.3 Door operation. Swinging fire doors shall close from the full -open position and latch automatically. The door closer shall exert enough force to close and latch the door from any partially open position. 27-2 803.1 General. The provisions of this section shall limit the allowable flame spread and smoke development of interior wall and ceiling finishes and interior wall and ceiling trim in existing buildings based on location and occupancy classification. Interior wall and ceiling finishes shall be classified in accordance with Section 803 of the California Building Code. Such materials shall be grouped in accordance with ASTM E 84, as indicated in Section 803.1.1, or in accordance with NFPA 286, as indicated in Section 803.1.2. 907.2.10.1.2 Groups R-2, R-2, R-3.1, R-4 and 1-1. Single- or multiple -station smoke alarms shall be installed and maintained in Groups R-2, R-3, R-3.1, R-4 and 1- Iregardless of occupant load at all of the following locations: 1. On the ceiling or wall outside of each separate sleeping area in the immediate vicinity of bedrooms. 1026.4 Operational constraints. Emergency escape and rescue openings and any exit doors shall be maintained free ofany obstructions other than those allowed by this section and shall be operational from the inside of the room. 102.3 Change of use or occupancy. No change shall be made in the use or occupancy of any structure that would place the structure in a different division of the same group or occupancy or in a different group of occupancies, unless such structure is made to comply with the requirements of this code and the California Building Code. Subject to the approval of the fire code official, the use or occupancy of an existing structure shall be allowed to be changed and the structure is allowed to be occupied for purposes in other groups without conforming to all the requirements of this code and the California Building Code for those groups, provided the new or proposed use is less hazardous, based on life and fire risk, than the existing use. 3003.6 Valve protection. Compressed gas container, cylinder and tank valves shall be protected from physical damage by means of protective caps, collars or similar devices in accordance with Sections 3003.6.1 and 3003.6.2. Securing compressed gas containers, cylinders and tanks. Compressed gas containers, cylinders and tanks shall be secured to prevent falling caused by contact, vibration or seismic activity. Securing of compressed gas containers, cylinders and tanks shall be by one of the following methods: 1. Securing containers, cylinders and tanks to a fixed object with one or more restraints. 2. Securing containers, cylinders and tanks on a cart or other mobile device designed for the movement of compressed gas containers, cylinders or tanks. 3. Nesting of compressed gas containers, cylinders and tanks at container filling or servicing facilities or in seller's warehouses not accessible to the public. Nesting shall be allowed provided the nested containers, cylinders or tanks, if dislodged, do not obstruct the required means of egress. 27-3 NEWS RELEASE October 1, 2014 Costa Mesa Fire Department r Dan Stefano, Fire Chief Contact: Kevin Diamond, Battalion Chief Telephone: (714) 754-5204 4. Securing of compressed gas containers, cylinders and tanks to or within a rack, framework, cabinet or similar assembly designed for such use. Exception: Compressed gas containers, cylinders and tanks in the process of examination, filling, transport or servicing. 304.1 Waste accumulation prohibited. Combustible waste material creating a fire hazard shall not be allowed to accumulate in buildings or structures or upon premises. 304.1.1 Waste material. Accumulations of wastepaper, wood, hay, straw, weeds, litter or combustible or flammable waste or rubbish of any type shall not be permitted to remain on a roof or in any court, yard, vacant lot, alley, parking lot, open space, or beneath a grandstand, bleacher, pier, wharf, manufactured home, recreational vehicle or other similar structure. 315.2.4 Attic, under -floor and concealed spaces. Attic, under -floor and concealed spaces used for storage of combustible materials shall be protected on the storage side as required for !-hour fire -resistance -rated construction. Openings shall be protected by assemblies that are self-closing and are of noncombustible construction or solid wood core not less than 1.75 inches (44.5 mm) in thickness. Storage shall not be placed on exposed joists. Exceptions: 1. Areas protected by approved automatic sprinkler systems. 2. Group R-3 and Group U occupancies. 507.3 Pitfalls. The intentional design or alteration of buildings to disable, injure, maim or kill intruders is prohibited. No person shall install and use firearms, sharp or pointed objects, razor wire, explosives, flammable or combustible liquid containers, or dispensers containing highly toxic, toxic, irritant or other hazardous materials in a manner which may passively or actively disable, injure, maim or kill a fire fighter who forcibly enters a building for the purpose of controlling or extinguishing a fire, rescuing trapped occupants or rendering other emergency assistance. 1703.3 Notification. The fire code official and fire chief shall be notified in writing at least 24 hours before the structure is to be closed in connection with the utilization of any toxic or fiammable fumigant. Notification shall give the location of the enclosed space to be fumigated or fogged, the occupancy, the fumigants or insecticides to be utilized, the person or persons responsible for the operation, and the date and time at which the operation will begin. Notice of any fumigation or thermal insecticidal fogging shall be served with sufficient advance notice to the occupants of the enclosed space involved to enable the occupants to evacuate the premises. 27-4 Fire Dept. - Attachment 2 Court Strikes Down SB420 Limits Los Angeles, May 22, 2008: Tile Second District of California Court of Appeals ruled that the ,state limits on medical marijuana possession and cultivation established under still(,, law SB 420 are unconstitutional. In the case People v. Patrick Kelly, the court overturned defendant's conviction for possessing 12 Ounces of dried marijuana plants on the grounds that the prosecutor had improperly argued that the defendant was guilty because he Possessed more than the 8 -ounce limit established in Health & Safety Code Sec. 11362.77 and did not have a doctor's recommendation authorizing more. (Text of Kelly decision}. Tile Court validated the long-standing view of California NO ML and other Prop 215 advocates that the SB 420 limits are unconstitutional. Cal NORML attorneys have successfully argued the point in several lower court cases, but this is the first time it has been addressed by an appellate Court, in a 3-0 decision, tile Court ruled: "The prosecutor's argument was improper. It was improper because the CUA [Compassionate Use Act] can only be amended with voters' approval. Voters, however, did not approve the eight -ounce limit and other caps in section 11362.77 [of SB420]; hence, section 11362.77 Unconstitutionally amends the CUA." The decision is certified for partial publication, pending possible appeal to the Supreme Court. The fall implications of the Kelly decision remain unclear. In particular, it is not clear whether it rules out the use of SB 420 numbers as guidelines to protect patients with state [D cards from arrest, The court's reasoning would seem to apply only when the SB 420 numbers are used to limit patients' lights, not when they are used to protect them. However, the court's sweeping pronouncement that this section of SB 420 is "unconstitutional" might be interpreted otherwise by police who would prerer to ignore it. Further litigation therefore seems likely, Ironically, the Court noted that the constitutional problems in SB 420 could have been avoided by enactment of Sen. Vasconcellos' proposed "SB 4120 Clean -Up" bill SB 1494 in 2004. That bill made it clear that qualified patients could legally possess whatever amount of marijuana was consistent with their needs. However, SB 1494 was vetoed by Gov. Sellwanzenegger on the grounds it removed "reasonable and established quantity guidelines." One incidental casualty of the Kelly decision was Mendoeino's.MeaSUre B anti -pot initiative, aimed at rolling back the County's limits for medical Marijuana cultivation front 2i to 6 plants. Measure B specifically cites the clause in SB 420 that was struck down in the Kelly decision, H&SC 11362.77. Measure B therefore appears to rest on invalid law, making it vulnerable to legal and political challenge, Tile Attorney General's office announced that it would appeal the Kelly ruling LLxt �ofthc Kelly decision, 27-5 250 marijuana plants f0LII1d in Costa Mesa building - Daily Pilot Page I of 3 Fire Dept. -Attachment 3 Sign In or Sign Up Urs 3e5 s i,xrfla; spa ih ra:vw JrA� (71110 T jA' d C.lat1 'LIn it "I fil e J j %' _ DP11 1Uursfltil, NolCfJ.20bV %� Ci 9N a.m. PST HOME NEWS SDORS'S COA S91AryrY Vi U 110,@u UVK&ARIN PiltyrUti OF"110N CALVNIIAR AAV I RASH hLAlf 1(f{rCL{Cli iawaw& RRral Gillis 11towarion Politic, nfli Y b"aimy flhounriv,' I'r, I'll, Rceurd Site Inde" Is'11MNEWS; tRV1NL"WA7WCId11FERVFS I U RRATPAPUCCOMPTAMT a NDN1AiJJVANAENYrIA't'IVK 131FOLICERWRUITS ;5emah Today's Travel Dears Uy )#W.4# - - 1110114 $49`dup—Natev,wda Rune... Fara, On Atard•We,,,q ia.osR up — Reold Person OW Wslslhn UnOd. ti1oSa - Utes la Canoaaan Cara '[)Cl xNtd tON hl Callon oaf RUT St.les cliolsis, 10,41ghl 'Seve Unae. we, „dflftl fl NOOt„ s .tl2,[[ 260 inarijuana plants found in Costa Mesa StayCnnuee(a(I V rollowusoil [acEbaok„ buildingc� rgrTheDailyPdot `„ ds'"1"hebndS'Pllot f'A Enud &hart 31Z Twoet I. U" ,t,107 SO -' ` nda�rtlaammW RPLATP,D 5� (Neta ylesa Vallcaealfl a,e Lrund mom Ih:m a,5o maryllmm Plante In a ebhIn nvXgaerads from whinier alemnnhtva;choal au'rnoxfdy. ((`,miring. tosn Poaza Unpntunaal huovuobar e, aotgl By'Je enliah-0nbluck V,,, , M;i, aura I-nehR p+, Pnllcc.sairl thce foetid hu I lrO. i" tr r<n nfnuu'ijuana planix luesrlay aRuvonn when a fi e It d them to on illegal indoor not local atmos tram Whittier I tcanonot, Setoo) in Costa M,,j. UVIIAGINE HOW G7 �7t�.1`..C%aLli 800.748.8377 *Aaron.; 1 .I t ; Commenting Policy Ficebook manienu are not regular{vmonitarotl by Daily Pilot sniff. HWU bellevc a conunout violates allyal tlm below rules, plcusecolail Fdltar JohnCantllis at iohn.canalisGPlalimes.domand Web lidltorAnn Raley it ann.haley(cdari nimcota. Staff will revieeaod remove offending cmnments during working hours. 8 ilato to 6 p.m, Monday through Friday. The Daily POnErewives the dghttn roumis, binok or refusa any unulxmt for ally tTason. Mai n posting to ClailyPiloCemn, you agree to not provide Comments than `ave posted psina falte ur lake nanaxs `contain vulgar, prolhou, immna, racist oc annol l 91lega m' oeprassimis apldla ., orsiurs, tris pdologlapllsarillwllatlons in pe,taste, intlammntolyaltackv is la ,Wool, racial arroligene, atm Indmndnaf.rely, 1nlse,Inun stelenondi &n&dihs Paautddu9lle Rlfg nr ss ly Inaa.w nvp wifnh wenIleaienor rsl:mtiatad, lams, tiobon ha pi,,cy rig ius of any, third enr offmute innny indbidunlorcammaniN. 27-6 http://tnlww.dailypilot, com/news/tn-dpt-me-1106-marijuana-fire-20141105,0,7012268.story 11/6/2014 250 marijuana plants found in Costa Mesa building- Daily pilot Page 2 of3 Around4:qup.m., firefighters arrived ata Complex of "ddscrimineb,ov the8rouadn of mee, mlfgiaa, eoinnlerciet hullddngs at 1835 Whistler Ave,, wile reall oatdond of iguf geodrq age, a)aritalsnaus, sexual orientation of dixabllhy, or deports such matte:, in aloGtricd lws wasablaze, policesnld any master, prohibiter) by law, �- I"Iredghtera doused IIIc fill false bnfare )'hay sit and to ,"flafan'any fndilldufil or chose(e.g.,sends ri1w (Imvnrt planta Poe°1{ all 11ding. 8 tit as they Investigated the entice of t he rive,dray repeated menaigoa related to anotheruserXn1d/or ,TOPICS discoveaed that the eleddral panel had been altered so a unit make derogatory as offensive pelmllenta about ,,nicer Crin)e p,oassa. Ind(vlAua)aw ropaneprtur pastagaf Phe some message under nmlfiple threads ormfhleas. I>nig'['ea[dektlaa Fire crewsan),RIAs of naalloula pluntsineide that unit, "viaiRrom oncnumgatho vinlationn[arty numicilmk NIAPS police saleL atote,fademl or atarnatlonal law, role, nopealt,iou or tlntinaoco. The Five 001NI want called Costal Mesa police datactives, who aadvard.ve, promote or offer to arldc anygooda or Coate Alma, CA, Pallid States waited at the scala until they had a wou olm to search the art pu, except in sense sl>CcPRed(y deslgnatad for building, pnlirc L(. Ihyan. <ClnRasaid. such pafpasa. Tarhusterms wave found to can aide plants ht-cnninincriget gIa.d orathcr pmpriatnry neatedal of vnriouk.ategto ofdewlnpmenh, aquipmeatand anpphaa to alrykiful Maims the express retaliation office »sorrier,file grow Operation, as well as finished and partially ownerofdmr nmos finished nforjjuaoapropared.fordhoit»thel aodxdas,'Costi Miro polho said in a fewarel,tel, "vslate,nny rtinofdnillRihn.crnn Arany third IYntact{ves sacred move fdwu 2,5oo p�nLs, several bags oP fnarljuann and ulntut;f o grounds of the dnrg party. ready to ha sold for an estdfnoted mina of more than 82,,0000, Lt. IMN Um)dorosdid. `,flood or hanamitvtruses mother buttrul, diemptive or deatnmBve Flies, seat. lot or code, Polices declined to rud case mor¢ data 1 I because they ata acrid hrvr„stigating the operation. t_�p_y..__yp!pV C �p/p,f� C_ No armsts alvebeannlnde, Glass Rind, WIY 88+9+,��tl,;ppif�ayyi 1,}82atq./pRt.—i Collow :; a¢ Ix„dobmCk rens)iah.dobnfeksta}'Itttimee.eom -_..._ N Email 5nary eft Twegt _f. C{N¢ .I I I{+i p AM ftmllm n. <tirnt)- Mm f ,4ulM v14..1c1(Iiaar) so11, ,.,,.n,vl� Its )r( rv,aakrE, d , L,tn),.. MAN CREATES BRAIN-DEAD Around Towle f I -.�,- w fl hog cadre umhfoiht nk rob \L sn hank robbeay SIMPLE SYSTEM THAT CUTS YOUR R t t CFREE H The Drrily Ailot is not using Pueehookmnvne,amen WAT atnnes.'Cn pears comment, into VIDENOW Fac to all and than acid your comment. To report spun of abase, clichthe %' in the upper right Cos nm' of the comment box, bn n¢etltn A¢uRPi lRtlynrl. tlki091rt sur bre 5 I Irlo cote BN,Mina 1N5 `tt(M pttalin, —-� Camn,ent na[ewS It T a f',ommpni S 4# e [ It -6; nferr9linalnM of Pe Sarla Ana MM IXua aua l(!mw oamplafer.mlNenk fa Jril Ca(ii _ nxaiwimmr as l9 nam! RIPI 18r. Isit,�;s ni"• littp://WWW.dailypilot,com/news/tii-cipt-me-1106-marijuana-fire-20141105,0,701326&story 11/6/2014 CHAPTER 7 DEVELOPMENT SERVICES DEPARTMENT REPORT BY WILLA BOUWENS-KILLEEN, PRINCIPAL PLANNER -ZONING ADMINISTRATOR A. Introduction This preliminary report briefly summarizes the potential impacts on Development Services Department related services and resources that may be associated with the addition of medical marijuana businesses in Costa Mesa, including but not limited to zoning restrictions, permit requirements and adherence to Costa Mesa Municipal Codes. B. Impact on the Development Services Department In reviewing both citizen -sponsored medical marijuana ballot measures, it appears the Development Services Department would be involved as follows: 1. Compliance with "safety radius restrictions": Proposal number 1 might require the Planning Division to verify that the proposed business complies with the "safety radius restrictions" as part of the review of the business license. (This will depend on how the business license is submitted.) 2. Violation of operational requirements: Under proposal number 1, only a Business License is required. Consequently, if the business does not comply with State and Local law, Code Enforcement would be required to enforce those Code violations -- via Notice of Violations, citations, and/or criminal prosecution. (Under proposal number 2, since the Police Department would review and issue dispensary and operator permits, one would assume that they would be responsible for ensuring compliance with State and Local requirements.) 3. Signage: Under proposal number 1, Planning would need to confirm that proposed signage does not contain pictorial representations of the marijuana plant and/or of marijuana usage. Many aspects of Medical Marijuana Collectives being permitted to operate in Costa Mesa would be the same as any business proposing to establish in the City: 1. Business license: The Planning Division would be required to review the business license for compliance with zoning and parking requirements. 2. Parking deviations: A medical marijuana business proposed for an industrial zone may be initially rejected due to a lack of parking, necessitating the processing of a minor Conditional Use Permit (CUP) to deviate from parking standards before approval of the license can be given (assuming the minor CUP can be justified and approved). 28 3. Building permits: A building permit would be required for any changes proposed to the building. This is especially critical for businesses that will cultivate the marijuana because those type of uses draw a greater than normal amount of power and have interior irrigation systems. 4. Enforcement: If compliance cannot be gained, a public nuisance action, as delineated in Title 20 (proposal number 1) or Title 13 (proposal number 2) would probably fall to this department to spearhead and/or process. 5. Illegal businesses: Perhaps the greatest impact could be that, without an outright prohibition, other Medical Marijuana businesses may believe they can establish in the City. Enforcement (lack of a business license/removal of a business that cannot be established) can be lengthy. C. Conclusion Consequently, in our opinion, with a few exceptions, allowance of medical marijuana businesses appears to be much the same as any new business that proposes to establish in the City. 29 CHAPTER 8 INFORMATION TECHNOLOGY DEPARTMENT REPORT BY STEVE ELY, INFORMATION TECHNOLOGY DIRECTOR A. Introduction This preliminary report briefly summarizes the potential impacts on the Information Technology Department (I.T.) related services and resources that may be associated with the addition of medical marijuana businesses in Costa Mesa, including but not limited to impacts to the City's permitting system, and changes to the geographical information systems spatial layer maps. B. Impact on the I.T. Department We have reviewed the proposed measures to establish regulations for medical marijuana businesses. The impacts to the I.T. Department associated with the proposed measures are minimal and are similar for all measures. At a minimum, permitting software requirements will need to be changed/added to accommodate the proposed measure. As needed, I.T. will make changes to the City's geographical information systems maps as Medical Marijuana Businesses relocate or change locations. C. Conclusion The Information Technology Department will work with the permitting vendor to establish the needed changes in the application for any approved medical marijuana businesses measure. Otherwise, it appears that impacts to our department will be minimal. 30 CHAPTER 9 PUBLIC SERVICES DEPARTMENT REPORT BY ERNESTO MUNOZ, PUBLIC SERVICES DIRECTOR A. Introduction This preliminary report briefly summarizes potential impacts on the Public Services Department related services and resources that may be associated with the addition of medical marijuana dispensaries in Costa Mesa, including but not limited to impacts to public infrastructure. B. Impact on the Public Services Department We have reviewed the proposed measures to establish regulations for medical marijuana dispensaries and cultivation. The impacts to public infrastructure associated with the proposed measures are minimal and are similar for all measures. As established by the applicable codes, the City will retain its ability to adopt and enforce local ordinances to regulate facilities housing these businesses, including permitting requirements for new or modified existing sites. C. Conclusion Permitting requirements and conditioning of new and remodeled sites will follow existing local codes. No impacts are anticipated to the public right-of-way other than those typical of any new or remodeled development. 31 Cl T Y COUNCIL AGENDA REPORT MEETING DATE: November 18, 2014 ITEM NUMBER: NB -2 SUBJECT: TWO MEDICAL MARIJUANA INITIATIVE PETITIONS QUALIFYING FOR BALLOT; CONSIDERATION OF ADOPTING NEW ORDINANCE, ORDERING ELECTION OR ORDERING REPORT; CONSIDERATION OF CITY MEDICAL MARIJUANA MEASURE(S) DATE: NOVEMBER 11, 2014 FROM: CITY ATTORNEY'S OFFICE; CITY CLERK'S OFFICE PRESENTATION BY: CHRIS F. NEUMEYER, DEPUTY CITY ATTORNEY; BRENDA GREEN, CITY CLERK FOR FURTHER INFORMATION CONTACT: RICK FRANCIS, ASSISTANT CEO, 714-754-5688 RECOMMENDATION: A. It is recommended that the City Council: 1. Accept the Certificate of Sufficiency issued by the County of Orange Registrar of Voters regarding: An Initiative to Allow Operation of Up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa; and 2. Accept the Certificate of Sufficiency issued by the County of Orange Registrar of Voters regarding: An Initiative to Allow Operation of up to Four Licensed Medical Marijuana Businesses in City of Costa Mesa. B. Further, it is recommended that the City Council approve (for each initiative) one of the following options: 1. Adopt the ordinance (for either initiative), without alteration, at the regular meeting at which the certification of the petition is presented, or within 10 days after it is presented (authorized by the Election Code, yet not recommended, see "Taxation Issues" below); or 2. Order a special election (for either initiative), to be held pursuant to subdivision (a) of Election Code § 1405 [which states that the election for a municipal initiative that qualifies shall be held not less than 88 nor more than 103 days after the date of the order of election], at which the ordinance, without alteration, shall be submitted to a vote of the voters of the city; or 3. Order a regular election (for either initiative), to be consolidated with the next "regularly scheduled general election for members of the governing body of the local government," pursuant to Art XIII C § 2(b) of the California Constitution, which would be November 8, 2016; or 4. Order a report pursuant to Election Code § 9212 (for either initiative) at the regular meeting at which the certification of the petition is presented. 1 OPTIONAL ADDITIONAL ACTION: The City Council may consider taking action on the City Measure to Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation as proposed on August 5, 2014, or an amended version of that prior Measure. BACKGROUND: Two initiative petitions, each with the intent of authorizing the operation of medical marijuana businesses within the City of Costa Mesa, have been recently gathering signatures for placement on the local ballot. Pursuant to the Election Code, both of these initiatives have now qualified for placement on the local ballot at a special election. Elections Code § 9215 provides that an initiative petition qualifies for placement on the local ballot at a regular election if not less than 10% of the registered voters of the City have signed the petition. Elections Code § 9214 provides that an initiative petition qualifies for placement on the local ballot at a special election if not less than 15% of the registered voters of the City have signed the petition and the initiative petition itself asks for a special election. Both of the medical marijuana initiative petitions requested a special election. The number of registered voters in the City of Costa Mesa last reported by the County of Orange election official to the Secretary of State was 49,237 registered voters. Fifteen percent of this total number of registered voters is 7,385, thus being the number of verified signatures required for one of these initiative petitions to qualify for a special election. The first initiative, "Allow Operation of Up to Eight Medical Marijuana (Cannabis) Businesses in the City of Costa Mesa", was entitled by the City Attorney's Office (and named "Medical Cannabis Control Act" by its proponents) was submitted by proponents Robert Taft, Jr. and Kevin Gardner (with the counsel of attorney Randall T. Longwith) to the City Clerk's Office on September 16, 2014 with 11,080 signatures (hereinafter referred to as "Ordinance No. 1"). This initiative was promptly delivered to the Orange County Registrar of Voters for verification of the signatures. Refer to Attachment No. 1 for the full text of the proposed Ordinance No. 1. The second initiative, "Allow Operation of Up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa", was entitled by the City Attorney's Office (and named "An Initiative to Provide Revenue to Costa Mesa Citizens" by its proponents) was submitted by proponents Taylor Webster and Michael Levesque (with the counsel of attorney David Welch) to the City Clerk's Office on October 9, 2014 with 10,904 signatures (hereinafter referred to as "Ordinance No. 2"). This initiative was promptly delivered to the Orange County Registrar of Voters for verification of the signatures. Refer to Attachment No. 2 for the full text of the proposed Ordinance No. 2. The Orange County Registrar of Voters has examined the records of voter registration for the City of Costa Mesa and has determined that both of the initiative petitions have been signed by no less than fifteen percent of City of Costa Mesa registered voters. Therefore both of the initiative petitions are sufficient to be certified to the City Council. The Election Code requires the City Clerk to certify to the City Council any initiative petition which qualifies for an election. (Elections Code §§ 9211, 9114). Refer to Attachments Nos. 3 & 4 for Certifications. ANALYSIS: Pursuant to Elections Code § 9214, ["Duty of legislative body regarding initiative petition signed by certain percent of voters with request to submit ordinance to vote at special election"] if an initiative petition is signed by not less than 15 percent of the registered voters of a city, and contains a request that the ordinance be submitted immediately to a vote of the people at a special election, the legislative body shall do one of the following: a) Adopt the ordinance, without alteration, at the regular meeting at which the certification of the petition is presented, or within 10 days after it is presented; or b) Immediately order a special election, to be held pursuant to subdivision (a) of Section1405 [which states that the election for a municipal initiative that qualifies shall be held not less than 88 nor more than 103 days after the date of the order of election], at which the ordinance, without alteration, shall be submitted to a vote of the voters of the city; or c) Order a report pursuant to Section 9212 at the regular meeting at which the certification of the petition is presented. When the report is presented to the legislative body, the legislative body shall either adopt the ordinance within 10 days or order an election pursuant to subdivision (b). Elections Code § 9212 ["Referral of proposed initiative measure to city agency for report"] provides that the City Council may refer the proposed initiative measure to any city agency or agencies for a report on any matter the City Council requests to be in the report, including but not limited to: 1. Its fiscal impact; and/or 2. Its effect on the internal consistency of the city's general and specific plans, including the housing element, the consistency between planning and zoning, and the limitations on city actions under Section 65008 of the Government Code and Chapters 4.2 (commencing with Section 65913) and 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code; and/or 3. Its effect on the use of land, the impact on the availability and location of housing, and the ability of the city to meet its regional housing needs; and/or 4. Its impact on funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, and open space. The report may also discuss whether the measure would be likely to result in increased infrastructure costs or savings, including the costs of infrastructure maintenance, to current residents and businesses; and/or 5. Its impact on the community's ability to attract and retain business and employment; and/or 6. Its impact on the uses of vacant parcels of land; and/or 7. Its impact on agricultural lands, open space, traffic congestion, existing business districts, and developed areas designated for revitalization. The report(s) shall be presented to the City Council no later than 30 days after the elections official certifies to the legislative body the sufficiency of the initiative petitions. Because the November 18, 2014 meeting is when certification of the initiative petitions will occur, any reports requested shall be returned to the City Council no later than December 18, 2014. 3 Given the upcoming schedule of regular City Council meetings, the reports would need to be returned at the December 2, 2014 meeting. At the subsequent City Council meeting when the report(s) are presented, the City Council shall then pursuant to Elections Code § 9214 either, as previously stated, adopt the ordinances or order a special election. BRIEF SUMMARY OF TWO PROPOSED ORDINANCES The two initiative petitions differ in the details on how they each propose to authorize and regulate medical marijuana businesses within the City of Costa Mesa. Some key differences to note include: 1. Amendment — Although both measures cannot be repealed except by another vote of the electorate, Ordinance No. 1 furthermore cannot be amended at all except by a vote of the electorate, whereas Ordinance No. 2 allows amendment by the City Council to further the purposes of the ordinance. 2. Application Fees — Ordinance No. 1 caps application fees for cost recovery at $500, whereas Ordinance No. 2 allows the City Council to pass a fee resolution for cost recovery. 3. Permits — Ordinance No. 1 requires only a business license, whereas Ordinance No. 2 requires in addition to a business license both a separate dispensary permit as well as operator permits. 4. Minimum Number of Dispensaries — Ordinance No. 1 authorizes a minimum of eight dispensaries, whereas Ordinance No. 2 authorizes a minimum of four dispensaries. 5. See attached matrix (Attachment No. 5) that further compares Ordinances No. 1 and 2 along with a proposed City Medical Marijuana Ordinance, previously considered by the City Council on August 5, 2014. TAXATION ISSUES Both of the initiative petitions include new taxes. Ordinance No. 1 and Ordinance No. 2 each propose a six percent tax on medical marijuana businesses. Ordinance No. 1 proposes a sales tax of one percent "on the sale of all other tangible personal property at retail." Presently the City already has a one percent local sales tax. Raising the local sales tax above one percent likely will lead to sales tax collection issues with the Board of Equalization, which will not collect a locally mandated sales tax above one percent. Other issues may present themselves with collection of these taxes. Significant and atypical election issues also present themselves because of the proposed tax increases. The California Constitution in Art XIII C § 2(b), as amended by Proposition 218 in 1996, provides in full that "No local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body." (Emphasis added). 12 1. Voter Approval for New General Taxes As required by the California Constitution in Art XIII C § 2(b), new general taxes imposed by a local government must be approved by the voters. (The tax measures in the two initiatives are general taxes and are not special taxes.) Even if the City Council were to adopt one of the ordinances (which normally is an option under Elections Code § 9214 when an initiative petition qualifies for a special election), there would remain the matter of voter approval of the new general taxes being imposed. California law in Elections Code § 9214 also prohibits the City Council from altering an ordinance proposed by initiative petition. Thus, the City Council may not split up the proposed ordinances by adopting the non -tax provisions and then separately sending just the tax provisions to the voters. Government Code section 53723 (added by Proposition 62 in 1986) further provides in full that "No local government, or district, whether or not authorized to levy a property tax, may impose any general tax unless and until such general tax is submitted to the electorate of the local government, or district and approved by a majority vote of the voters voting in an election on the issue." 2. Regular Election (Not Special Election) for Voter Approval for New General Taxes As referenced above, Art XIII C § 2(b) of the California Constitution provides that an election on general tax increases "shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body." Thus, new general taxes imposed by a local government which are to be sent to the voters, should not be presented at a special election, unless the City Council unanimously declares a fiscal emergency. Rather, new general taxes imposed by a local government should be presented to the voters at "a regularly scheduled general election for members of the governing body of the local government." The next such election which meets those conditions is November 8, 2016. ELECTION DATES Elections Code § 1405, pursuant to Election Code § 9214, provides that the election for a municipal initiative that qualifies for a special election shall be held not less than 88 nor more than 103 days after the date of the order of election. Thus, if the City Council orders a special election at the November 18, 2014 meeting, then the window during which a special election would need to be held is between February 14, 2015 and March 1, 2015. If the City Council requests reports from City agencies/departments on the ordinances, the reports would need to be returned at the only regularly scheduled City Council meeting for the month of December, being December 2, 2014. If the City Council orders a special election at the December 2, 2014 meeting, then the window during which a special election would need to be held is between February 28, 2015 and March 14, 2015 5 If the City Council orders pursuant to the California Constitution in Art XIII C § 2(b), as amended by Proposition 218 in 1996, that the initiative petitions be sent to the voters at the next "regularly scheduled general election for members of the governing body of the local government," then the election would be held on November 8, 2016. OPTIONAL ADDITIONAL ACTION TO CONSIDER: At the August 5, 2014 City Council meeting consideration was given to submitting to the voters a Measure to Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation ("Measure") which would add a new Chapter VI to Title 9. At the October 21, 2014 City Council meeting the City Attorney's Office received direction to bring back the proposed City's Medical Marijuana Ordinance for the City Council to address for review and possible revisions. Please refer to attachments for the language of the proposed Chapter VI (Attachment No. 6), an outline of the proposed Chapter VI (Attachment No. 7), and a chart (Attachment No. 5) which compares the proposed City's Ordinance (also referred to as Ordinance No. 3) with the two citizen -backed ordinances. Election Code section 9222 ["Proposition for repeal, amendment, or enactment of ordinance; Time of election"] provides that the City Council may submit to the voters without a petition, a proposition for the enactment of any ordinance, to be voted upon at any succeeding regular or special city election; and, that the election shall be held not less than 88 days after the date of the order of election. The City Council by resolution may thus place a competing medical marijuana ballot measure before the voters at the same election when the two citizen initiative measures are to be considered by the voters. Election Code section 9221 ["Conflicting provisions in two or more ordinances"] provides in full that "[i]f the provisions of two or more ordinances adopted at the same election conflict, the ordinance receiving the highest number of affirmative votes shall control." Both of the citizen initiative petitions also provide that if two or more competing medical marijuana measures are approved by the voters, then only the measure with the greatest number of affirmative votes shall become the new law. Thus, if the City places its own medical marijuana measure on the ballot with the two citizen backed measures, the one receiving the most votes (if more than one passes) shall become the local law (the City should also place a similar "only one measure wins" section in any City backed measure). At the outset, it must be noted that the anticipated passage of SB 1262 (which would have imposed statewide regulations related to health and safety, oversight, security and local control) has failed to materialize. On August 14, 2014 the Assembly Appropriations Committee failed to pass SB 1262, effectively killing the bill for this year. In January there may or may not be a resurrection of SB 1262. Significant differences between the proposed City's Ordinance and the two citizen -backed ordinances include the following requirements in the proposed City's Ordinance not contained in the other two: A 1. Security. Requires 24/7 security camera tapes which are accessible to law enforcement and the City. 2. Record keeping. Requires maintenance of a substantially greater amount of records detailing the operation (business, transaction, delivery, employee, etc.) 3. Priority to Old Businesses. Does not provide priority registration to old businesses. 4. Inspections. City CEO authorized to conduct reasonable inspections. 5. Taxes. Does not propose new taxes. 6. On -Site Recommendations. Does not allow on-site recommendations. 7. Employee Training. Required. 8. Limit Sales to Medical Marijuana Related Items. Yes. 9. Non -Concentration of Stores. No. The following are significant issues that may warrant further discussion concerning details in the City Medical Marijuana Ordinance based upon comments at the August 5, 2014 City Council meeting: 1. Number of dispensaries. No limit to the number of dispensaries. 2. Hours/Days of Operations. 7:00 am to 10:00 p.m. any day of the week. Section 9-500(q) 3. City Office of Cultivation Standards and Qualify Control. New optional City department created to conduct regular inspection of cultivation practices and procedures, as well as to test medical marijuana. Section 9-501 4. Sunset Clause. Does not contain one (though allows amendment by Council to further purposes). 5. Background checks. Felonies substantially related to qualifications, functions or duties of an employee of a medical marijuana business (such as felony conviction for distribution of controlled substances, money laundering, racketeering, etc.). Section 9- 500(d) (ii) 6. Security Guards. Prohibited from carrying firearms. Section 9-500(a)(i) 7. Non -Concentration of Stores. No restrictions on locating near other dispensaries. 8. Labeling. Does not require warning about not operating heavy machinery. 9. Smoking restrictions. Prohibited within 20 feet of dispensary. Section 9-500(r) 10. Liability Insurance. $1 million general policy minimum. Section 9-500(u) 11. Fire Sprinklers. Does not have requirements specific to medical marijuana industry. 12. Edibles. Products requiring refrigeration or hot -holding shall not be manufactured for sale or distribution at dispensary. Section 9-500(m)(i) 7 FISCAL REVIEW: The fiscal impact of placing the two medical marijuana initiatives on the ballot is multifold. There are the costs of a special election (or consolidation with a general election, see "Taxation Issues" in this Report) as well as the cost of implementing the proposed ordinances. Furthermore, there is the potential revenue generated by the taxes in each ordinance. 1. Estimated special election costs to the City of Costa Mesa are as follows: a. Stand Alone Special Election for One Ballot Measure: $234,067 - $261,790. b. Stand Alone Special Election for Up to Four Ballot Measures: $252,980 - $280,703. c. Consolidated General Election for One Ballot Measure: $15,000. d. Consolidated General Election for Up to Four Ballot Measures: $15,000 - $60,000. 2. At present the estimated costs of implementing either of the ordinances is indeterminate. LEGAL REVIEW: The City Attorney's office has prepared this report with its legal analysis, and the City Attorney's Office has reviewed the attached resolutions. RECOMMENDATIONS FOR OPTIONAL ADDITIONAL ACTION: It is recommended in regards to the proposed City Medical Marijuana Ordinance previously considered by the City Council: 1. Order the City Medical Marijuana Ordinance be sent to the voters at the same election at which the two initiative petitions are sent to the voters, with accompanying resolutions calling for written arguments, rebuttals and the drafting by the City Attorney's Office of an impartial analysis; or 2. Provide direction to the City Attorney's Office for revisions to the proposed City Medical Marijuana Ordinance to be brought back to the City Council; or 3. Take no action on the proposed City Medical Marijuana Ordinance. THOMAS P. DUARTE BRENDA GREEN City Attorney City Clerk RICK FRANCIS Assistant CEO ATTACHMENTS: refer to List ATTACHMENT Q INITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS Committee of proponents, who are residents of the City of Costa Mesa., sponsoring the petition: Robert Taft, Jr. Kevin Gardner TEXT OF THE PROPOSED MEASURE: MEDICAL CANNABIS CONTROL ACT. Section 1 —Title This initiative shall be known and may be cited as the Medical Cannabis Control Act. Section 2 —Findings and Declarations Pursuant to, and consistent with the current California law concerning nnedieal cannabis, the City of Costa Mesa, shall enact an ordinance creating Title 9, Chapter VI of the Costa Mesa Municipal Code, and amend in its entirety Title 13, Chapter 1, Article 2, Section 13-6, and amending Row 31(a) of Title 13, Chapter 4, section 13-30, and c -unending Title 9, Chapter 1, Article 5, Section 9-32 of the Costa Mesa Municipal Code, in order to authorize the establishment of medical cannabis btnsinesses, to restrict and limit such medical cannabis businesses by ffiaposing strict regulations on such businesses to protect the health, safety, and - - ,- we are o c commumty; --- WHERE-AS, WHEREAS, the Compassionate Use Act ("CUA"), adopted by California voters in 1996, and the Medical Marijuana Program Act {"IvLbIPA"), enacted by the State Legislature in, 2003, decri.ixninalized the cultivation and use of marijuana by seriously ill individuals upon a physician's recommendation mid provided California's qualified patients and their primary caregivers with specified inrmuai-ities under state law, thereby helping to ensure that qualified patients and their primary caregivers, who possess and use marijuana for medical ptaposes, are not subject to criminal prosecution and/or sanction; WHEREAS, the Costa Mesa Police Department ("CMPD") has reported that the ntunber of marijuaim dispensaries and commercial growing operations proliferated though out the City in the past without sufficient .legal oversight, the City and its neighborhoods have experienced negative secondary effects, including an. increase in crime at certain locations associated with unregulatcd medical cannabis businesses; WR REAS, there presently are no ordinances in the City of Costa Mesa specifically regulating or monitoring the location, zoning standards, or other aspects of the locations and facilities where medical cannabis will be dispensed to eligible persons under state law; •�5� MEDICAL, CANNABIS CONTOL ACT WHEREAS, medical cannabis businesses must. operate with reasonable regulation, to ensure that those seriously ill residents of the City benefit from the palliative effects of medical cannabis have access they are provided under state law; WHEREAS, by implementing a fair and reasonable registration process for medical cannabis businesses, the City will be able to maintain order while avoiding undue burdens on its already strained financial resources; WHEREAS, the City has a substantial and clear interest in ensuring that medical cannabis is distributed in an orderly manner, and in protecting the public health, safety and welfare of its residents, its businesses, the neighborhoods in which medical cannabis businesses operate, while ensuring compassionate access to seriously ill residents to medical cannabis in accordance with the CUA and the MMPA; WHEREAS, the regulations in this initiative do not interfere with a qualified patient's right to use medical cannabis as authorized under California law, nor do they criminalize the possession or cultivation of medical cannabis by specifically defined classifications of persons, as authorized under California law; WHEREAS, medical cannabis busuiesses shall comply with all provisions of the Costa Mesa Municipal Code ("Code"), California law, and all other applicable local Laws; nothing in this initiative purports to permit activities that are otherwise illegal under state or local law; WHEREAS, this initiative is not intended to conflict with federal or state law, nor is it intended to respond to or invite litigation over any unresolved legal questions posed by the California Attorney General or by case law regarding the scope and application of state law; it is intended that this initiative be interpreted to be compatible with federal and state enactments and in furtherance of the public purposes that those enactments encompass; WHEREAS, the People of the City of f Costa Mesa_ find that nonprofit medical cannabis businesses which operate in buil compliance with the Sime Compassionate Use Act, the Medical marijuana program act, and the Attorney General Guidelines demonstrate a willingness to engage in lawful activity which benefits economic costs associated with the City of Costa Mesa's local regulation and enforcement efforts; WHEREAS, to that end, the People of Costa Mesa further find that those nonprofit medial marijuana businesses, as set forth in the above paragraph, have been precluded from operation in the City of Costa Mesa due to the inability to obtain a business license tinder the City of Costa Mesa's Municipal Code. Those inedical cannabis businesses who never operated in in Costa Mesa without a business license yet have or Have attempted to comply with the Compassionate Use Act, the Medical marijuana program act, the Attorney General's Guidelines, and the Costa Mesa Municipal Code by applying for a business license and when denied did not violate the law and commence operation of a medical cannabis business illegally should be given a preference for obtaining "Priority Registration" status as that term is herein defined, to operate under Title 9, Chapter VI. WHEREAS, the People of the City of Costa Mesa recognize that an ordinance proposed by a voter initiative and adopted by a vote of the People cannot be repealed or amended, except by a vote of the People pursuant to the California Constitution, Article 2, Section 10; G - MEDICAL CANNABIS CONTOL ACT WHEREAS, the People of the City of Costa Mesa further find and declare that this initiative is enacted pursuant to the powers reserved to the State of California, the City of Costa Mesa, and its People under the Tenth Amendment of the United States Constitution, Article 2 of the California Constitution, and the California Health and Safety Code Sections 11362.5 and 11362.7 etseq. . NOW, THEREFORE, the People of the City of Costa Mesa ordain as follows. SIECTION 3 — Amendment to the Costa Mesa Municipal Code to Add Title 9, Chapter VI. The People of the City of Costa Mesa do hereby enact and ordain that Title 9 of the Costa Mesa Municipal Code, entitled Licenses and Business Regulations, is hereby amended to add Chapter VI to read as follows: (Any underlined language is new and shall be inserted into the Chapter) C14APTER VI. -- MEDICAL CANNABIS D3USINES ES 9-481 Authority and title 9-482 Release of liability and hold harmless 9-483 Purpose and intent 9-484 Physicians/patient con&denl ality 9-485 Definitions 9-486 Medical cannabis businesses prohibited 9-487 Limited immunity ---------------------9-4S7a—Olier°�tiaaal�rey�:irezineiuts------._..---.--------..._.........._--------_...--------..._.___..---------------------....---.._.._ 9-488 Cultivation of xnedleal cannabis 9-489 Transportation of medical cannabis 9-490 Violation and enforcement 9-491. Majority aynroval; effective date 9-492 Competing measures. 9-493 Amendment and reveal. 9-494 Severability. 9-495 Statewide regulation. 9-496 S12ecM or °neral election. SEC. 9-481. Authority and title. Pursuant to the authority Granted by the California Constitution. Article 2 and California .Health and Safety Code Sections 11362 and 11362.7 et seg.. the People of the City of Costa Mesa do enact this Chapter, which shall be known and may be cited as the "Medical Cannabis Control Act." —7— MEDICAL CANNABIS CONTOL ACT SEC. 9-482 — Release of habjHty and hold harmless, To the Wes! extent ennitted by lavv, the Ci of Costa Mesa shall assurne no liabili whatsoever,_ and expressly does not waive sovereign immunity, with respect to the medical cannabis business program established herein, or for mthe activities of any medical caimabis business, Each medical cannabis business recognized by the c%ty shall a, Release the city, its agents, officers, elected officials, and employees from any injuries, damages, or liabilities of any bind that result from an) arrest or prosecution of the medical cannabis provider association or its partici ants for a_violatio.n of state or federal law. b. Indemiiify_and_ hold harmless the City, its agents officers, elected officers, and employees for any claims, damages, or inj>_iries hrou_ht by a jacent or nearby property owners or other thud -parties due to the operations at the medical cannabis business and or R irises, and c. Indemnify and hold harmless the City, , its agents, officers, elected officials, and ersloyees for any claims, daanages, or injuries brought by any of its participants for problems, igjuries, damages, or liabilities of any kind that may arise out of the distribution cultivation and/or use of medical cannabis provided at the medical cannabis business and/or premises. ,SEC.-9-483 9-483 - Purpose and intent. It is the _purpose and intent of this Article to limit the inaximiun number end concentration of medical can-nabis businesses in the City, to provide needed tax revenue to the City, and to regulate the operation of medical cannabis businesses in order to ensure the healtlx, ------- the-r-esidents-of-the-Cify---of-Costa-Mesa:-The-regulationsin-this-Clio tet safety-and�yelfar-e-o-f-- - � compliance with the Compassionate Use Act the Medical inari'uana ro ruff act and the California Health and Safe Code do not interfere with a qualified pa_tient's right to use medical cannabis as authorized mider California law, nor do they criminalize the possession or cultivation of medical cannabis by specifically defined classifications of persons, as authorized under Califomia law. Medical cannabis businesses shall comply with all provisions of the Costa Mesa Municipal Code ("Code") and _California laws. Nothing in this Article purports to permit activities that are otherwise illewal under .federal, state, or local law. This Article isnot intended to conflict with federal or state law, nor is this Article intended to respond to or invite litigation over any unresolved legal questimz s posed by the California Attorney General or by case law regarding the scope a> 1ad application of state law. It is intended that this Article be interpreted to be compatible_ with federal and state enactments and in furtherane_e of the ut is proposes that those enactments encompass, -gam. MBDMAL CANNABIS CONTOL ACT SEC.. 9-484 - Phvsician/Patient confidentiali Requirements set forth pursuant to this Chaff shall. preserve to the maximum extent -possible all legal protections andrp„yileges, consistent with reasonably verifying_ the qualifications and status of qualified ,patients and primary caregivers. Disclosure of any patignt i Zform...ation .to ._assert facts in _support ofqualified status shall not be deemed a waiver of confidentiality of that information. SEC. 9-485. Definitions. A. The followin hrases and words when used in this section steal! be construed as defined below. Words and.phrases not defined here shall be construed as defined in Costa Mesa municipal code or state law. `LBuildin " means any structure having a roof su ortod by. coltunns or walls for the hotisin shelter or enclosure of persons, animals, chattels, or propgxly of any kind, "Caimabis" or "marijuana" shall be construed as defined in Califomia Health and Safety Code Section 11418 and further shOl specificall include an roduct that contains mari'uana or a derivative of marijuana and al! pasts of'the plant❑ cannabis, whether growing or not; the seeds thereof, the resin extracted from any ❑part of theplant; and every compound, manufacture, salt derivative, mixture, or L�preparati,on_of the plant, its seeds or resin, It includes mmijualia infitsed in❑foodstuff. It does not include the mature stalls of the plant, fiber produced from❑the stalks oil or cake made from the seeds of the plant, any other compound t1man_u„ facture, salt, derivative, mixture, or preparation of the mature stalks (exgept❑the rosin extracted the�, fiber, oil, or calve, of the sterilized seeds of the plant ❑ are incapable of„germination. ❑ ..._..._......_.._.-._...__-._.-......._..-_-.LL _ Co lectives"-axrd-`_`cooirerat�ycs whenreferri.Ta-tT-c medical-ca�ural1isQor ziiz tioW, �otlI cae ',,.,..., d „ rriirr w associations of five or more aualrfide_patients, persons❑ with identification cards, or caregivers ofucl alified patients and ersons[lwith identification cards who associate,as an incorporated -or unincorporated❑association, to col3ectivel, or cooperatively. cultivate and distribute medical p cannabis For use exclusively by their re stered members in strict accordance with ❑California Health and. Safety Code sections 11362,5 and 11362.7 et seg. "Cultivation." means the planting, growing, harvesting dr3jng, Processing or storage of one or more rnari'uana )ants or air art thereof in au location indoor or outdoor includzn from within a fully enclosed an secum building, "Edibleproducts” means warl'uatia cultivated by medical cannabis businesses and mwticivants thereof, that is made available in an edible form and pre ared in_a certified kitchen meetiwall the apnlarable health requirements to be used and ingested solely, bygug Wifiedpatient participants as part of their medical regime, in strict accordance with state law. "Felony Conviction" Means any conviction whether 'bytg lil1y plea, judicial ruling.or jm verdict, of any felopy offense, A conviction of„ a felony offense that has been dismissed, withdrawn, expunged, or set aside, whether ursuant to California Penal Code section1203.4, -9- MEDICAL CANNABIS CONTOL AC's California Penal Code section 1000 California Penal Code section 1385, the interest of justice or any other judicial ruling „or agreement of the prosecution „shall not be deemed a felony conviction. "Live Scan" meansa system for kless electronic fingez_, ghiting and the automated bacic��und check develo ed by the California Dej2aitnent of Justice "CTOED which involves digitizing ntransmitting— gomri� of a cruninal r �3t11 personal fin er tints an _ g _p- -..c...V epQJ four c�,.,,.pletcon aye data along 1� check; or at descriptor uxformation to , computers such other comparable inkless electronic finge rinting. "Location" means any parcel of land, whether vacant or occupied by a building,_mup of buildings, or accesso1y buildings and includes the buildings, structures axds open s aces lot width, and lot area. "Manager" means -any 2erson with responsibilily responsibilityfor the establishmen organization, registration, supervision, or oversight of a medical cannabis_ business, including, but not limited to any__ person who performs the functions of president, vice resident, board member,_ director, owner, _operating officer, financial „officer, secretary, or treasurer of the medical cannabis businm, "Medical cannabis" and "medical marijuana" means cannabis that is❑grown, used, and distributed pjqsuant. to the provisions of California Health and F1 Rafety Code sections 11362.5 and 11362.711362.83, including all cwmabis[ pVroducts, infusions, and concentrates containing the active ingredients of the 0cannabis 121ant. "Medical camabis businesses" means the following: an unincorporated or incorporated entity or association of qualified patients and/or primary caregivers and/or persons with identification. cards who -,provide rnone and in-kind contributions reimbursements, and reasonable com ensatioti tow uds the aforementioned entity's actual expenses for activities luding, but _ actzvnt�es nuc canna is, A inedical cannabis business ma t3rovide medical cannabis roducts, services and assistance to qualified tieats,�ersons with � medical camiabis, identification card as set forth in the MMPA or the pt7mary_caregiver of such persom. Medical cannabis businesses may assist with the ac uisition of skills necessary to cultivate or provide marijuana for medical purposes in coMpliwice b dinstructure or wbether permanent, or ca or tam Drat where des -..any facility, cannabis business inch marijuana is made available, sold, given away, distributed, or athemise provided in accordance with.Health and Safe Code section 1.1362.5 et slabis collectives coo eratives dispensaries, cultivations and marijuana delivery.services. Medical Cannabis businesses include "inedical marijuana businesses." (1) "Medical cannabis business" shall not include, nor _be i ntezlareted to include at, ny of the following: a. Any location which is a legal dwelling zoned exclusively forresidential„ use and noterznitted for an commercial actlyfty where three 3 or less people who reside ata property cultivate marijuana. -10- MEDICAL CANNABIS CON"I'OL ACT b. The location of ny clinic licensed ursuant to Chapter 1 commencin with Section 1200), a health „care facility licensed pursuantto Chapter 2 (commencing_ with ,Section 1250), a residential care facility,for 12ersons with chronic life-threatening illness licensed pursuant to Chapter 3.01 d, • {(commencing with Section 1568.01), a residential care facili • for the elderly ,,,,••,• licensed 12unuant to Cha ter 3.2_Lo-ommencing with Section 1569 a hospice, ora ligine health agency licensed pursuant to Chapter 8 . (commencing with Section 1725), any_facility specified in Division 2 of the California Health and Safely Code where: (i) a qualified patient or person, with an identification card receives medical care or supportive services or both from the clinic facili hospice or home health agency, and (i.i) the owner or operator,, or one of not more than three gmployces designated by the owner or operator, of the clinic facility" hospice, or home health agency has been designated as a pr3maiy caregiver pjIguant to California Health. and Safety Code Section 11362.7 d by that qualified ;patient or person. with an identification card. "Medical cannabis identification card," "Medical matxjuana identification card," and "identification card" mean a❑document issued by the State Department of Health Services pursuant toDCaliforni.a Health and Safety Code ,sections 11362.7 et ,seg., „that identifies a person❑aitthorized to engage in the medical use of cannabis and the person's designated Oprimmycare�iv_er ii' an or identifies a person as a primary caregiver for a❑medical cannabis patient. "Promises" means the space in any buildings of a medical cannabis business, together with the spaces within any structures, yards, oven spaces, lot width_, and lot area at a location that is occupied or used in the operation of the medical cannabis business. "Reasonable compensation" means cornensation commensurate mensurate with xeasotaable wa es grid benefits aid to em to ees of who have similar job descriptions and duties required level of education and ex erience rior individual eai•m s history, and number of hogs worked. "Structure" means anything constructed or erected ,which is supported directly or indirectly on the ground, but not including M vehicle, "Vehicle" means a conveyance or device by„which ggy person or property inay be propelled, moved, or drawn upon a street, sidewalk or waterway, including but not limited to a device moved excliisiyely. by liuman power. B. The followina words or _hrases when used in this section shall be construed as defined in Calil.ornia health and Safety Code ,Sections 1746, 11362,5, and 11362.7. _"Hospice";. I enti kation card . Person with an identification card;Tirirrmry caregiver",,and "Qualifiedaip •lent.,' Ntl- MVDICAL CANNABIS CONTO'L ACT Lr - Medical bannsb•„is businesses prohibited. A. It shall be ualawfid to own establish operate, use or permit the establishment or operation of a medical cannabis business, or to participate as an employee, contractor, agent, volunteer, or in any manner or capacity other than as provided in this Chapter. B. The general prohibition contained in this section shall include renting leasing.. or otherwise permitting a medical cannabis business to occu or use a location vehicle or other mode of transportation, SEC. 9-487. Limited immunity. A medical cannabis business shall be inumme to the prohibition set out in Section 9-485 and the remedies set forth in Costa Mesa Municipal Code, including—criminal prosecution, so long as that medical cannabis business obtains a Business License for the operation of a medical cannabis business from the City, through,t1�e-�reas�u y Division Mana einent Department and/or Qjtz. Tax Collector, as well as coni lies with all operational requirements p1ovided in this section. A. Business license. 1. The City Tax Collector and/or The City Treasury Division Management Department shall issue a_bsuiess_license for a medical cannabis business that meets Lnorijy re 'stration or non-12norit registration requirements detailed below in this section, a. Priority Registration. i._ Binning on the date that is thirty (30) days after the effective date of this ordinance, and_lastkg for ten (10).business days, as medical camiabis business n2ay,subnit a priority registration a. plication and obta i a business licenso for the purpose of operating a medical cannabis business from the City of Costa Mesa if, on or before May 30, 2014, such applicant: (a) Has never operated a medical cannabis or medical marijuana business in the city of Costa Mesa has never been convicted of operating a medical catmabis business, or never beon civilly adjudicated of operating a medical_ cannabis business or medical marijuana business without a business license in the Cid of Costa Mesa; a. The lacy of any cDtiri record of a citation cmviction 0r civil adjudication � ' tion.by the city shall be sufficient proof to satisfy that applicant has not operated a medical cannabis business in the City of Costa Mesa. (b) Has been issued a business license or has Applied :for a business license from the City of Costa Mesa for a 12 - MEDICAL CANNABIS CONTOL ACT medical cannabis business or medical marijuana business; a, Proof of golication or attempt to apply for a Costa Mesa business .license for the purpose of a medical camiabis business or medical marijuana business shall be satisfied by any competent verifiable documentation including,but not limited to a date stem ed business license applicatx_ on from the City, a filed ap-plication., a copy of a denial letter for a medical cannabis business from City of Costa Mesa or a dated copy of an application for a medical cannabis business license along with some roof that a mailing was sent to the City of Costa Mesa, Treasury Maga ement Division P.O. Box 1200 Costa Mesa CA 92628-1200 within seven days of the sighing of the application, or any doctmentation stamped "Received" by the city including, but not limited to a printout of Cit of Costa Mesa Land Use Matrix Table 1330 or a copy of a received stamped ed copy of a business card of a senior planner for the City of Costa Mesa, (c) Has filed for Incorporation, filed Chapters of Association for a limited liability company, or articles of or anization with the Secretary of State of California for the purpose of operating a non-profit medical cannabis business or medical marijuana business; __.._.._._._.--_—__.._.—..__....._ ___._—.....__._a.._.. Proof.�f_inco . oration -article s_of._ass.o.ciation_or._...._...___._._._..._....._.__.._. limited company status shall be satisfied b a true and correct eppy of the ar Ueles of incorporation filed with the Secretary of State, any Capters of Association oryther co , verifiable documentation; (d) Possesses or has gRR11ed for a Seller's Permit from the StateBoard_of Equalization in the name of the business. (e) Possesses or has gpplied for a License a License to Sell Nursery Stock for the City of Costa Mesa which was implied for or issued by the Department of Food and A iQr culture; (f) Has applied for a Lia Live Scan backgrowid check; (g) Possesses a physician's medical cannabis or medical marijuana recommendation pursuant toCalifornia Health and Safety Code section 11362 et. sec.; (h) Possess ox has op-olied fo;r a medical marijuana identification card pursuant to Iealth and Safety Code Section 11362.7 et sec.; (i) Possesses or has applied for a general Ra.bility insurance policy (bodily injury, propeAy damage, and medical -I3- MEDICAL CANNABIS CONTOL ACT cannabis liability), which specifically includes liability for medical cannabis and/or medical marijuana. a. Proof of a lication fora general liability insurance policy, which specifically includes Lability for medical cannabis _ _ b' and/or medical Iia flit ,zs ,.__ marij Lgia.mgy be shown by aquote from an insurance compgm or any other verifiable documentation. (j} The a licant possesses a notarized signed, and dated authorization to submit to fingeMrinting and photographing and authoriling_the City in writing to obtain information from criminal justice agencies, finaneW institutions, Federal, State and local government agencies, and other Rersons and entities. The written authorization shall include consent to release the information to the City for use in connection with the business license. (lt) The applicant possesses a notarized signed, and dated statement iqdicgf�gg to the Ci1y that the a ,plicant will hold harmless indeimiLfy, au.d defend the Cjjy a ainst all claims and litigation arising from the issuance of a licenses, including any claims and litigation arising from the establishment operation, or ownership of the medical cannabis establishment. b. Non -Priority Registration.: i. Fbeg mien on the date that is thirty (30)ays_after the effective -.date-of this_pzdinance-plus ten (1O) -business days, -any -medical --- cannabis business may submit a non -p iority registration a lication to the Tipasury Division Mma ement Department andlor City Tax Collector for a. business license provided the medical cannabis business meets the followin criteria: (a) Has never operated a medical cannabis „or medical marijuana business..in the city of Costa. Mesa, has never been convicted of operating; a medical cannabis business, or never been civUly adjudicated of operating a medical cannabis business or medical marijuana business without a. business license in the City of Costa Mesa: a. The lack of any court record of a citation conviction or civil 4d-udication by the city shall, be sufficient proof to satisfy that aj�plicant has not operated a medical cannabis business in. the City of Costa Mesa. (b) Has been issued a business license or has applied for a business license from the City of Costa Mesa far a ld— MEDICAL CANNABIS CONTOIL ACT medical cannabis business or medical marijuana business, a. Proof of ggplication or attempt to apply fox a Costa _Mesa business license for the purpose of a medical_ cannabis business or medical marijuana business shall be satisfied by atay competent verifiable documentation, including, but not limited to a date stay,. ed business license application from the City, a filed application, a copy, of a denial letter for a medical cannabis business from City of Costa Mesa or a dated coa_ofan_application for a medical cannabis business_ license along with some_proof that a mailing was sent to the City of Costa Mesa, Treasury Management Division, P.O. Box 1200 Costa Mesa CA 92628-1200 within seven 7 days of the signi—ng of the application, or any documentation stamped "Received" by the city including, but not limited to, a printout of City, of Costa Mesa Land Use Matrix Table 1 -3 0 or a copy of a received statnyed copy_of.a business card of.a senior plannor for the City of Costa Mesa. (c) Inas filed for lncolMoration, filed Chapters of Association for a limited liability compmv, or articles of organization with the Scentary of 5tate. of California for the purpose of o ep ratinga non- refit medical e maabis business or medical marl Lu-ma„business; _..___._..._..... ....... _a._._._Proof ofineorporation,._ariicles._of' association,_or___.__... limited compp4m status shall be satisfied b a true and correct copy of the articles of incorporation filed with the Secretary of State, Chanters of Association or-an y othgr c_ ompetent verifiable documentation; (d) Possesses or hm-ppplied for a Seller's Permit from the State Board of Equalization in the name of the business. (e) Possesses or has applied for a License to Sell Nursery Stock for the City of Costa Mesa which was applied for or issuedby the Dc aitrnent of Food and Agriculture, (f) Has applied for a Live Scan background check (g) Possesses a iLhysician's medical cannabis or medical mari'uma recommendation pursuant to California Health and Safety Code section 11362 et. sec, (h) Possess or has applied for a medical marijtuaua identification card pursuant to Health and Safety Code Section 1.13623 et sec.; (i) Possesses or has applied for a gencra.l liability insurance policy(bodily injury,1property, dalnagee.and medical -15- MEDICAL CANNABIS CONTOL ACT cannabis liability), which specifically includes liability for medical cannabis andlor medical, marijuana. a, Proof of gpplication fora general 11abilijy insurance policy, which specifically includes liabili1y for medical cannabis and/or medical marlj papa may be shown by a quote from an insurance company or any other verifiable documentation. (�) The applicant possesses a notarized si ed and dated iiln�;gMjinting and a�.khorizalson to submit to photographingand authorizing the City in wr!tLng to obtain information from Criminal Justice agencies, financial ins 'tutions Federal State and local government agencies, and other Persons and entities. The written authorization shall include consent to release the information to the City for, use in connection with the business license, (k) The applicant possesses a notarized signed, and dated statement .indicating; to the City that the applicant will hold harmless indemni and defend the CiLy a ainst A claims and litigation arising from the issuance of a licenses including gny claims and litigation arjsj from the est blislu- nent operation, or ownephip of the medical cannabis establishment. c. The Tax Collector or QX shall issue a business license or a. rejection, with a written ex lanation, ,to an applicant Adthin 45„ days of the .............. _ ap�c_ant"s written request for a business license, The failure of the . Tax Collectorfo issue a business license within the 45 &y period shall be deemed_ i acceptance of the gpplication for the business license wid the medical cannabis business shall be perm ttcd tooperate, d, The business license shall be valid for two (2) years, irresmetive of whether or not the business is active operating d-arhig that Period. An gpplication for renewal of a medical cannabis business license must be filed no later than thin 30 calendar da s prioT to the expiration of the registration, but no earlier than sixty (60) calendar days Dior to the expiration of the reaisttation. A reistdation shall be renewed for an additional eriod of two 2 ears by subn-dtfing an gpplication to the Tax Collector or City. e. The fee re aired for application and registration for a medical cannabis business license shall not exceed five hundred dollars ($500.001. 2. No permit required: The People of the Qjy of Costa Mesa herebX declate that the operation of a medical cannabis dis ensary in compliance with tris Chapter is not detrimental to the public health safety, welfare or moral standards of the City. As such. the City shall not regLdre the medical cannabis —16— ME DICA GMEDICAL CANNABIS CONTOL ACT business to obtain Qy special -use permit, conditional use permit, or any other permit pursuant to @gy section of this code specifically, but not limited to Sections 9-33 and 9-1„14, as a condition president or condition subsequent to obtaininy a business license and/or business tax registration tration . certificate. Additionally, n.o special site plan, variance, or an other ther permit or certificate shall be re uired for a medical cannabis business other than those specified in this Chapter. 3. Business tax re istration certificate e Transfer: Notwi hstandina Section 9-44, Medical cannabis Business licenses shall be transferable only solong as the medical cannabis business taxed is transferred whether by sale or p �..,__ e , s .l otherwise, to another person or entity under ndsuch circumstance that the rea or ultimate ownership of the business after the transfer is substantially similar to the real or ultimate ownerft existi:gbefore the, transfer and the transferee meets alI the non- riorit registration requirements listed in Subsections a through of Section 9-487 A. 1. b. i. . 4. Maximum number of businesses: City shall issue no more than eight $ business licenses for the operation of medical cannabis businesses subject to )absections 4(a) below, If the munber of certified medical cannabis businesses falls below nine L& then the Cijy shall issue additional business licenses pursuant to the terms of this Chapter. a. City couacil shall have the discretion to increase but not decrease the number of business licenses issued by the Tax Collector City Treasur Division Management De artment or City to medical cannabis businesses pursumit to the terms of this Chapter. 5. Any such exercise of discretion under Section 4(a) above increasing the riYariri -er�f new- usrnes - ��ensos-above the cu�ent z�:a�iz�.tutt� number -of nine ---- -- 9 sliall ..comply with the minimlun non-priority -registration standards enumerated in in Subsections (al, through M of Sectiox19-487(A..)(1.)(b )(i.). SEC. 9-487,1. Operational reguirexnents. A medical cannabis business shall be immumeto the prohibition set. out in_Section 9-486 and the remedies set forth ixa Costa Mesa Municipal Code so long as that xnedical carsnabis business obtains a business licome and coni lies with the following operational requirements: Safe radius restrictions: The medical carunabis business is not located within: M 1.7 MEDICAL CANNABIS CONTOL ACT A 600 -foot radius of a public school as defined under Health and Safety Code §11362.768 ft The distances specified in this paragrgph,shatl be the horizontal distance measured in a straijzht line from the property line of the school to the propetty line of the medical cannabis business without re and to intervening structures iii. ' Medical caxunabis businesses shall be permitted in the following use districts or zones in the City: AP, CL, C2, C1 -S, MG, MP, PDC, PDI, Cl,& TC. Medical cannabis businesses are prohibited in all other use districts or zones. 2. Non-concentratioan, of businesses reciuireme en_. _ � et: The medical cannabis businesses shall be disbursed in accordance with the.followina: t. Azn _ariJuana business shall not be located within a 1000 -foot radius of any other licensed medical cannabis busin ss, ii. The distances specified in this paragraph shall be the horizontal distance measured in a straight line from the proppity line of the first licensed medical cannabis bu nese to On closest property 1i ie of the second medical cannabis business without regard to iatexyening structures: 3. DeliveKy restrictions: The medical cannabis business shall not deliver mari'uana to its members within the City of Costa Mesa unless the medical cannabis business maintains insurance for its managers, volunteers or employees who deliver the mgnjuana and the medical cannabis business maintains a locationwithin the City of Costa Mesa which possesses a business licensewunder this Chapter. 4. License re uirements: The medical cannabis business shall maintain a valid state Board o__ _Egrx� t2,ul�o�n state e lex's�permitin tho name oi'-the-business-- -------- -- --- ---- 5. Insurance Re uirement: The medical cannabis business shall 12ossosses a commercial general liabilfty insurance policy (bodilyinj-ufy. propertydamage, and medical camiabis liability), which specifically includes liability for medical cannabis. 6. Restriction of manors on premises: The ,medical cannabis business shall not allow .minors under the age of 18 ,veers to enter its premises during any hours of operation. 7, Restriction of minors its employees- It shall be unlawful for my medical cannabis business to employ any person who is not at least 19 years of age. S. Restriction on hours of operation: Hours of o enation are limited to the bows between 9 a.rTz, arnd 1-0 P.M., seven, clays a week. 9. Visible pia "uana restrictions: Any wari'..ana within a medical cannabis business shall not be visible with the naked eye from the exterior of the buskiess's pTenAses. -18- MEDICAL 8MEDICAL CANNABIS CONTOL ACT 14. Alcohol restrictions: The medical caiumbis business shall prohibit the saledisnensing or consumption of alcoholic beveTagres at its location, in the parking area of,the.,locatioxi or within fifty (50) feet of the business, 11. Premises use restrictions: The medical cannabis business shall not allow ail persons to inhale smoke eat ingest, or otherwise consume marijuana at the location, in the parking areas of the location, within fifty (50) feet of the premises, or in those aivas restricted under the provisionsof California Health and Safety Code section 11362.79. This prohibitionshall not ap_p1y to _a qualified patient's use of marijuana for his or her own medical needs if the qualified patient's permanent legal residence is at the medical cannabis business's location, nor shall this prohibition limit or conflict with the exceptions provided in local and state law that permit smoking in designated areas within licensed residential medical and elder care facilities. 12. Legal notice requirements; A sign shall be posted inside the medical cannabis y cannabis for non-inedical businesses stating substantially as follows: The diversion of purposes is a violation of State Law. Loitering at the location of a medical canugLbis dispensing or business for an illegal pui o se is prohibited by California Penal Code section_647(b), No medical_ cannabis sha11 be smoked, ingested or otherwise consumed on the premises of the business or within, fifty „(50) feet of a medical cannabis business" Such si is shall be tinted in 14- oint font or lar ger a on 8 1/a by 11 paver and posted at same compicuous pant of such site. 13. Restrictions relating to cultivation, manufacturing and processing: Medical cannabis businesses shall exchange, sell, trcuisfer, and distribute only inari'uana or cmumbis cultivated, manufacttzed., or processed in the State of California and that has not t_hgState be- _axxiving-al-thihusiness-and_that_has_been..cultivated_only-b�r,.and _.-----.---_...... _ _ ._... rovided o& to its verified members in a closed-circuit of production and eonsuin tion, 14. Medicine inventory restrictions: The medical cm-inabis business mn Rossess and cultivate a reasonable quantity of dried marijuana and marij uana. plants to meet the personal medical needs of their members. 15. Employee background requirements: The medical cannabis business shall utilize the Live Scan baclz round checks stem as set forth in this Article prior to employing an mmager, volunteer or employee. The medical cannabis businesses' managers must be registered members of the medical cannabis business, Verification of all Live Scan pplieations received by a medical cannabis business shall be processed and receive_ _cid the Costa Mesa Police Departmetit in accordance with California De-oartment of Justice RT6delines. 16. Employee background restrictions: Prior to being offered a position of mans eixient or eiinployment at a medical._ ctin abis business. an Mplicant for a position of maria eg_r, volunteer, or employee of the medical cannabis business who dispenses medical „camiabis 19-1 MEDICAL, CANNABIS CONTO:L ACT must submit and successfully pass as annual, Live Scats background check by December 31 of each year iii order to be employed at the medical cannabis businessA failed Live Scan is any Live Scan that shows a felony conviction havin,.g, _occurred within the bast 7 years and/or shows that the manager, „volunteer or employee, iscurrently on parole or ;probation for the sale or distribution of a controlled substance. For the purposes of this section, a conviction „of a felony that has been dismissed, withdrawn expunged, or set aside whether pursuant to California Penal Code section 1203.4 California Penal Code section 1000 California Penal Code section 1385 or My other judicial Tutingy or prosecution agreement, shall not be deemed a felony_c_onviction and, copse ucueenily, shall not result in a failed Live Scan. 17. Patient eonfidentiali : In order to protect confidentiality, the medical cannabis business may maintain records of all qualified patients with a valid identification card and primary caregivers with a valid identification card using only the identification oard gumber issued by the State or County pursuant to California Health and Safety Code section 113 62.7., et sea. 18, Manufacture of concentrated cannabis restrictions: The ine ical cannabis business shall not participate in or otherwise engage in the manufacture of concentrated cannabis in violation of Ca.lifomia Health and SafetyCode section 11379.6, 19, Security re uirements: The medical cannabis business shall provide the following security measures: i, the medical cannabis business shall maintain a i alarms stein reasoiibl designed o ensure the safety ofersoas I the btishiess. shall provide a security ward patrol for the premises during all_hoars of oNration; _ licensed„axed„t�nifozzned securitytard rig. the security soar atrol shall be a duly-, ap firol• 20. Packaging requirements: All medical cannabis businesses shall distribute all non -live marijuana in sealed acka in or in "Child Proof' containers eguipped with either a "Push or Tum”, evaxsib e top vial. or --'Top Tota or Squeeze Top” locic_izrg mechanism. 21, Warning labels requirements: All medical cannabis packaging shall contain a warning that the product contains marijuana, and it is to be consumed only with a physician's recommendation. -20- MEDICAL 2VrMEDICAL CANNABIS CONTOL SCT 22. Signage restrictions: Outdoor siggage on medical cannabis business remises shall comply with all Ci • signage restrictions and shall not contain pictorial representations of the marijuana plant or pictorial representations of marijuana use 23. Edible restrictions: Medical cannabis businesses that „prepare dispense or sell edible medical cannabis roducts or food containing, gm form of medical cannabis must comply with and are, subject to the provisions of ell relevant state and local. laws regarding the xrreparation, distribution, and sale of food. Failure to obtain and comply with all necessaa perrnits related to the preparation. distribution and gle of food will be an express violation of this Chapter, 24. Odor restrictions: A business shall „have an air treatment filtration or ventilation system that reasonably aevents odors generated_&om the storage of marijuana on the business ro 25. Taxation of medical cannabis businesses: The rate of sales tax and use tax imposed by this Chapter shall be: i. Every _person engaged in operating or otherwise „conducting a medical cannabis busin.es not other 'sc specificaUy taxed by other business tax provisions of this Cha ter shall 12ay a business tax of six (apercent or $60.00 for each $1000.00 of gross_receipt or fractional parts thereof on all proceeds from the distribution, sale, transfer of medical cannabis by the operation of a medical cannabis rbusiness ii. Ong (l.) percent or $10.00 for each 1,000 on the sale of all other tangible personalroroperty at retail. iii. For the purposes of this Section., the above taxes any only prospectively. The city shall make no claim cuilent retroactive or prospective for p9BE—eint by any medial marijuana business or another Ci tax except for the Cit portion of an ---......- - - Sales-Tax-col-lected-b the -California -Slate -Board -of Equalisation iv. For the purpose of this section a "medical cannabis business" means any activi regulated or permitted by Chapter VI of this Code and California Health and Safety Code sections 11362.5, et seq., that involves tra.nsportiing,,dimensing_ delivoring, providingor manufacturing, compounding, convertin rocessj�q& preparing, storing,packaging,or testing harvesting of any part of the marijuana plant for medical purposes, See. 9-488. Cultivation of medical cannabis: Medical cannabis businesses may cultivate a reasonable amount of marijuana consistent with their member patient's needs. All medical cannabis cultivation subject to this Cha ter shall be concealed_fron- public view at all stages of growth, and there shall be no exterior evidence of cultivation occurring=at the premises from a public right of way or from an adjacent parcel. Medical camiabis cultivation subject to this Chapter shall not create unreasonably offensive odors, create excessive dust, noise, heat, smoke, or other impacts that are tugeasonably disturbing to persons of normal sensitivity z•esent on adjacent Property, Sec. 9-489. _. Transportation of medical cannabis: _Activities entailing the transportation of medical caimabis in accordance with the Corn assionate Use Act the Medical marijuana ;pxogrm act., The Attorney General Guidelines, and this Chapter, shall be lawful,., only when -21- MEDICAL CANNABIS CONTOL DICT conducted by a particil2ant of a recognized medical cannabis business or collective or cultivation site for_delivea to a participant member of the same medical cannabis collective or medial marijuana business of the satire medical cannabis collective or association when the quantity transported and the method, timing, and _distance of the transportatioll are reasonably related to the medicai needs of the qualified patient or medical cantnabis businesses receivbag the medication. See. 9-490. Violation and enforcement: Eachviolationof-this Chapter shall constitute a separate violation and._shall be subject to all remedies and enforcement measures authorized by Costa Mesa Municipal Code, Additionally, as a nuisancetier se. any violation of this Cha ter shall be subject to legally authorized remedies including rocedLrres for in'umtive relief, disgorgement and payment to the Ci# of an olid all monies iunlawfull obtaixiad casts of abatement, costs of investigation, attorney's „fees, and any other relief or remedy_ available at law or equi1y. The City may also pursue.4gy and all remedies and actions available and a licable under local and ptate laws for gDy violations committed by the medical caivnabis business and persons related or associated with such medical cannabis business, See. 9-491. Majority approval-, Effectiv date: This Measure shall be effective only if approved by a majority of voters and shall go into effect immediately u on passage. _ ._p � this Measure and another Measure or Sec. 9-49�. Competing measures: In tln0 event that .,, Measures relating to the ra ulation of medical cannabis in the Cfty of Costa Mesa shall appear oyi the same ballot, the provisions of the other Measures shall be deemed to be in conflict with this Measure. In the event that this Measure shall retie yc a treater number of affirmative votes, the provisions of this Measure shall revail in their entirgly, and the provisiom of the other relgmL to the regulation of medical cannabis in the City of Costa Mesa shall be null and void. See. 9-493. _ Amendment and reveal: The, „provisions of the Costa Mesa Miunicipal Code -added-by-m-ended-by--or contehied in -this initiative-MeasLmITI -be-aimnded--onl -as- rovided- in each section, The arovisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative measure shall not be repealed, except by an ordinanceadopted ei#her by petition or by the CoLuicil at its own instance and ado ted by a inktjority vote of the electors. See 9-494.... SeverabilitI.- If any portion of Us initiative Measure is for any reason hold to be unconstitutional, invalid or unenforceable by a court of coxa etent jurisdiction that invalidit. shall not affect the remaining ortions of this initiative Measure that can be implemented without the invalid provision,.and, to this end the rovisions of this initiative Measure are severable. See. 9-495......Statewide regulation.: This initiative Measure, and the, xrrovisions herein, shall be read consistent with any statewide regulation of medical cannabis of recreational mariiLiana that is promulgated by the leg lattue or by voter apWoval in tho future. See, 9-495. Special or .General election; This initiative Measylre shall be set for a_special or re itiar election at the earliest time allowed by law, -22- MEDICAL 22MEDICAL CANNABIS CONTOL ACT SECTION 4 - AMENDMENTS TO COSTA MESA MFTNICIPAL CODE TITLE 9, CHAPTER 1, ARTICLE 5, SECTION 9-32. The People of the City of Costa Mesa do hereby enact and ordain that Title 9, Chapter 1, Article 5, Section 9-32, entitled Unlawful Business Not Authorized, is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted.) Sec. 9-32 Unlawful lousiness not authorized. No business license or permit issued tuader the provisions of this title, nor the payment of any tax required undex the provisions of this title shall be construed as authorizing the conduct or continuance of any ille l business businesses deemed illegal by state law or a legal business in an illegal marmer. SECTION 5 - AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 13, CHAPTER 1, ARTICLE 2, SECTION 13-6. The People of the City of Costa Mesa do hereby enact and ordain that Title 13, Chapter 1, Article 2, Section 13-6, entitled, is hereby amended to read as follows: (All underlined language is new and to be inserted, All language struck through is to be deleted) Section 13-6. Definitions Akdv n,n�waJ� arm qtatia3Ge71 ., a+r, ,...� ., rh�on -wr,�� n - 8 a&tyG- ., d .a t+e:r& w n- 4-4; 342 4--.. _-.._.,n�--1-yam seq., which shall , Wit i e--li sited ter,, aff eifity eeaOon 8ng"IP'g � aQ1.o___dispensati or a48t a1 adiGaltn"osesgiaideegaelhavea h wt've-role-iia- duet that a+ ,.r19, a;Sse s,he its „16,n+4an--& 1„c�___�,.f;, ., i, n+; .•g site �,.,-,w,k h{-faoili•, ,. 1e n4; ,nom ..1-...1 y A L salmi-di-speirhsaCton, r,r .a�rvlw.•r.vva•a,.,., /Medical Cannabis Business, A uninco1porated or incorporated entity or association of qualified patients and/or pritnuy caregivers and/or persons with identification cards, who provide money and in-kind contributions, reimbursements and reasonable compensation towards__. the aforementioned emit 's actual expenses for activities i n cluding, but not limited to-, planting, cultivation harvesting., transporting, manufacturing, compounding, convertin.processing, 1 wring, stariii , packs yin rovidiza and/or retail sales of medical cannabis. A medical cannabis business may provide medical cannabis, products services and assistance to ualified atientstipersons with a. medical mari'uana, identification card (asset .forth in the MMPA or the primal,r-� caregiver iyer of such persons. Medical c nnabis businesses may assist with the acquisition of skills necessary to cultivate or provide marijuana for medical purposes in compliance with State Law, A medical onnitabis business includes wiy facility, building, structure or location, whether permanent, or temporM, ,.where marijuana is made available, sold, given awa� -23- MEDICAL CANNABIS CONTOL ACT distributedLor otherwise provided in accordance with Health and Safety Code section 11362.5 et seg. A medical cannabis businessincludes medical cannabis "cooperatives" and marijuana delivery services. (1) "Medical cannabis business" shall not include, or be interpreted to include, atiy_of the following a. Any location which is a legal dwelling zoned exclusively_ for residential use and not pertnitted for any commercial activity where three (3)or less people who reside at a prop,, .erty cultivate maxi liana. ,,,,,.,_„ b. The location of any clinic licensed pursuant „to „Chapter 1 (commencing with. Section 1200), a health care &gU ty lice_ used pursuant to Chapter 2 (commencing with Section 1250 a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01), a residential care facility for the elderly licensed pursuant to Chapter 3.2 (commencing with Section 1569), a hos ice, or a 11 me health any licensed pursuant to Chapter S(commencing with Section 1725), any facility specified in Division 2 of the California Health and Safely Code where: Ci) a qualified patient or person with an identification, card receives medical care or supportive services, or both frorri the clinic„ facility, hospice, or home health agency; and (ii the owner or operator, or one of not more than three employees designated; by, the owner or operator, o_f the clinic, facility, hospice, or home health agency has been designated as a primary caregiver pursuant to California Health and Safety Code Section „11362.7(d) by that qualified patient or person ' ma identification _card. SECTION 6 _ AMENDMENTS TO COSTA MESA MUNICIPAL CODE TITLE 13, CHAPTER 4, SECTION 1330, ROVE' 31a OF TABLE 1330 THE COSTA MESA LAND USE MATRIX. The People of the City of Costa Mesa do hereby enact and ordain that Title 13, Chapter 4, Section 13-30, Table 13-30, Row 3la, entitled City of Costa Mesa Land Use Matrix, is hereby amended to read as follows: (All underlined language is new and to be inserted. All language struck through is to be deleted.) —24— MEDICAL CANNABIS CONTOL ACT Section 13-30, Table 13-30 Section 13-30, Table 13-30, Row 318 25 MEDICAL CANNABIS CONTOL ACT Zones LAND USES R R R R A C CIC CIT M M P P P P P P I I P 1. 2 2 3 P L 1 2 1 C G P D D D D D D&& M H S R R R R C I R R D D L M H N S D D D C 1VI 31 a. Medical P P P P P P P P P P Aj& • • • • — — — — • e • r — • a a disp Cannabis Businesses subject to the requirements of THE 9 CHAPTER VI. MEDICAL CANNABIS BiTS1NE�I SSSS) 25 MEDICAL CANNABIS CONTOL ACT ATTACHMENT 0 11NITIATIVE MEASURE TO BE SUBMITTED DIRECTLY TO THE VOTERS AN ORDINANCE OF THE PEOPLE OF TIE CITY OF COSTA MESA AMENDING THE THE COSTA MESA ZONING CODE AND MUNICIPAL CODE Comnuttee ofproponents, who are registered voters of the City of Costa Mesa, sponsoring the petition: Taylor Webster Michael Levesque TEXT OF PROPOSED MEASURE; "AIV' INITIATIVE TO PROVIDE REVENUE TO COSTA MESA CITIZENS" WHEREAS, the Costa Mesa. Police Department ('CMPD") has reported that, as the number of rnari uana dispensaries and conxnercial growing operations proliferated without sufficient legal oversight, the City and its neighborhoods have experienced negative secondary effects, including; an increase in crime at certain locations associated. with unregulated marijuana, dispensaries; WH'E-kEAS, The League of California Cities and. California Chief of Polices Association have authored statewide legislation, presented by veteran State Senator Lou Correa to provide a clear road snap for reasonable statewide in-pleinentation of Proposition 215 and the Medical Maruana, Program Act of 2004. in California; WHEREAS, legislation regulating the medical marijuana industry is supported by the Association for Los Angeles :Deputy Sheriffs; Association of Orange County Deputy Sheriffs; California Fraternal Order of Police; International Faith Based Coalition; Long Beach Police Officers Association; :Los Angeles County Professional Peace Officers .Association; Los Angeles Police Protective League; Riverside Sheriffi Association and. Santa Anna Police Oihcers Association; WIIEREA.S, it is in the interest of the citizens of Costa Mesa to have medical cooperatives operate with reasonable regulation that lxvrror those part forward by The League of California Cities and. California Chief of Polices Association in order to regulate the distribution of imdlcal marijuana, which if unregulated threatens the interests of local neighborhoods and dispensaries, as well as negatively impacting those seriously ill residents of the City; WJMi EAS, the City has a substantial and clear interest in ensuring that :medical marijuana is distributed in an orderly manner, in protecting the public health, safety and welfare of its residents, its dispensaries, the neighborhoods in which Medical Cooperative operate, while ensuring compassionate access by seriously ill residents to medical marijuana in accordance with the CUAand the MMPA; WHEREAS, the City seeks to create a gross receipts tax on medical cooperative at a rate of $60 per $1,000 of gross receipts, which will help to fund necessary general municipal services, which may include but is not limited to, code enforcement, building inspections, police protection and trine suppression services, fire prevention and suppression services, which will facilitate the purposes of this law and which will fund necessary services as determined by the City Council, NOW, THEREFORE, THE PEOPLE OF THE CITY OF COSTA MESA HEREBY ORDAIN AS FOLLOWS: Section 1. Code Amendment. Section 16-14, of Chapter 11 in Title 16 of the Costa Mesa Municipal code is hereby amended in its entirety to read as follows: (a) The rate of sales tax and use tax imposed by this chapter shall be one per cent on all businesses except for medical cooperative. (b) Every person engaged in operating or otherwise conducting a business where marijuana is cultivated, distributed or transferred pursuant to Title 9, Chapter VI shall pay a tax proportionate to gross receipts earned within the taxing jurisdiction at a rate of six (6) per cent. (c) The City Council may impose the tax authorized by this section at a lower rate and may establish exemptions, incentives, or other reductions as otherwise allowed by California law. No action by the Council under this paragraph shall prevent it from later increasing the tax, up to six per cent, or removing any exemption, incentive, or reduction and restoring the maxinum tax specified in this section, Section 2. Code Amendment. Row 3 l of the Costa Mesa Land. Use Matrix Table in section 13- 30 of Chapter IV, Title 13, is hereby amended to read as follows: Section 13-30, Table 1.3-30, Row 31a Zones LAND USES R R R R A C C C C T M M P P P P P I I P 1 2 2 3 P L 1 2 1 C G P D D D D D&& M H S R R R R I R R D D L M 11 N JPD S DDDC M 31a. Medical P P P P P P_ P_ P P cooperative (Subject to the requirements to TITLE 9, CHAPTER VI, Medical cooperative Section 3. Code Amendment. TITLE 9 is hereby amended to include TITLE 9, Chapter VI, henceforth entitled "Medical Cooperative Regulations" and is hereby amended in its entirety to read as follows: Sec. 9-481. Purpose. The people of the city of Costa Mesa hereby declares that the purpose of the regulations in this chapter is to provide a uniform and enforceable set of rules for the operation of medical cooperative, in compliance with state law and future state-wide regulation, to prevent the proliferation of medical cooperatives, to tax the distribution of medical marijuana as well as to protect the public health, safety and welfare of residents. Sec. 9-482. Definitions. The fallowing terms and phrases, whenever used um this section, shall be construed as defined in tins section: (a) "Medical cooperative" or "Cooperative" shall be defined un section 13-6 if Title 13 of the Costa Mesa Municipal Code. (b) `Building" means any structure having a roof supported by columns or walls, for the housing, shelter or enclosure of persons, animals, chattels, or property of: any kind. (c) "Live Scan" means a system for inkloss electronic fingerprinting and the automated background check developed by the California Departlnent of Justice (DOJ) which involves digitizing fingerprints and electronically transmitting the fingerprint image data along with personal descriptor information to computers at the DOJ for completion of a criminal record check; or such other comparable inkless electronic fingerprinting and automated background check process as detennined by the City Council\ (d) `Live Scan application" means a form developed by the City Clerk to request Live Scan services and to contain information relevant to the Live Scan process. (e) `Location" means any parcel of land, whether vacant or occupied by a building, group of buildings, or accessory bufftlnngs, and includes the buildings, structures, yards, open spaces, lot width, and lot area. (1) "Lstablishment" Includes any of the following: a. The opening or oomnmencement of any such business as a new business; b. The conversion of an existing business, whether or not a medical cooperative, to any of the medical cooperative defined herein; c. T'!ne addition of any of the medical cooperative defined herein to any other ex sting medical marijuana business; or d. The relocation of any such medical cooperative. (g) Marijuana" sball be construed as defined in California Health and Safety Code Section 11018 and further shall specifically include any product that contains marijuana or a derivative of marijuana. (h) "Operator" means any person with responsibility for the establishment, organization, registration, supervision, or oversight of a medical cooperative, including but not limited to any person who performs the functions of president, vice president, board member, director, owner, operating officer, financial officer, secretary, or treasurer of the medical cooperative. (i) "Applicant." A person who is required to file an application for a license under this chapter, including an individual owner, managing partner, officer of a corporation, or any other operator, manager, employee, or agent of a medical cooperative or an operator of a medical cooperative. Q) "Licensee." The person or entity to which a medical cooperative license or medical cooperative operator's license is issued. (k) "Chief of Police." The Chief of Police of the City of Costa Mesa or the authorized. representatives thereof (1) "Premises" means the space in any buildings of a medical cooperative together with the spaces within any structures, yards, open spaces, lot width, and lot area at a location that is occupied or used in the operation of the medical cooperative. (m)"Person" means any Cooperative, individual, partnership, co -partnership, firm, association, joint stock company, corporation, limited. (n) "Structure" means anything constructed or erected which is supported directly or indirectly on the ground, but not including any vehicle. (o) "Vehicle" means a device by which any person or property may be propelled, moved, or drawn upon a street, inelud Ing but not limited to a device moved exclusively by human power. (p) The following words or phrases when used in this Section shall be construed as defined in California Health and Safety Code Sections 1746, 11362,5, 1.1362.7 and 11834.02 a. "Alcoholism or drug abuse recovery ortreatment facility"; b. 'Hospice''. c. "Identification card", d. "Person with an identification card" c. "Primary Caregiver' ; and f. "Qualified Patient"; Sec. 9-483, Exceptions. This chapter shall not apply to: (a) A health care .facility licensed pursuant to Chapter 2 (commencing wid) Section 1250), (b) A residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 (commencing with Section 1568.01), (c) a residential care facility for the elderly licensed pursuant to Chapter 3.2 (connnencing with Section 1569), (d) a hospice, or a home health agency licensed pursuant to Chapter 8 (commencing with Section 1725), all of Division 2 of the California Health and Safety Code where: h, a qualified patient or person with an identification care receives medical care or support services, or both, from the clinic facility, hospice, or home health agency, and ii. the owner or operator, or one of not more than three employees designated by the owner or operator, of the clinic, facility, hospice, or home health agency has been designated as a primary caregivers pursuant to California }health and Safety Code Section 11362.7(d) by that qualified patient or person with an identification care, or (e) Any vehicle during only that time reasonably required for its use by; i. A qualified patient or person with an identification card to transport majuana for his or her personal medical use, or ii. A primary caregiver to transport, distribute, deliver, or give away marijuana to a qualified patient or person with an identification card who has designated the individual asapranary caregiver, of the personal medical use of the qualified patient or person with an identification card, ii accordance with California Health and Safety Code Section 11362,76 Sec. 9-484. Zoning Requirements. In addition to the requirements of this chapter, all medical cooperative shall comply with the requirements set forth an Article 1, Chapter IX, of Title 13 of the City of Costa Mesa Municipal Code. Sac. 9-485. License required for each location; display of license. A separate medical cooperative license is required for each Iocation within the boundaries of the City of Costa Mesa at which a regulated medical cooperative is to be established. The requirements of this chapter for a medical cooperative license are separate and in addition to a business license, or business tax registration certificate, required under Chapter I of this code. Every regulated cooperative shall display its license prominently ii an area open to the public at each location, at all times when the location is open ,for business. See, 9-4S6. Term of medical cooperative license. An approved medical cooperative license shall be valid until revolted. Sec. 9-487. Application for medical cooperative license. (a) An applicant requesting issuance or renewal of a medical cooperative license shall file a written, signed and verified applicatio n or renewal application in a form provided by the Chief of Police. Each application shall be accompanied by a non-refundable fee for filing or renewal in an amount determined by resolution of the city council, which fees will be used to defray the costs of investigation, inspection and processing of such application. Such fee shall not exceed the reasonable cost of investigation, inspection and processing of such application. License fees required under this chapter shall be in addition to any license, permit or fee required under any other chapter or title of the City of Costa Mesa Municipal Code. (b) An application for a medical cooperative license shall contain the following information: I. The applicant shall be either a non-profit mutual benefit corporation or a statutory agricultural or consumer cooperative incorporated in the state of California. 2. The applicant's complete name, the date of its incorporation, evidence that the corporation is in good standing under the laws of California, the names and capacity of all officers and directors, the name of the registered corporate agent and the address of the registered ofiloe for service of process. 3. If the applicant intends to operate the medical cooperative under a name other than that of the applicant, the applicant shall file the fictitious naive of the medical cooperative and show proof of registration of the fictitious name at the time it submits its application. 4. A description of the type ofnredical cooperative for which the ficense is requested and the proposed address where the medical cooperative will operate, plus the names and addresses of the owners and lessors of the medical cooperative site, 5. The address to which notice of action on the application is to be mailed. 6. The names of all operators who will manage the distribution ofmarguana at the medical cooperative or cultivate marijuana on behalf of the medical cooperative, who are required by section 9-490 to obtain a medical cooperative operator permit. i. The medical marijuana collective shall make available to the Chief of Police the names of each person who manages the dispensing of marijuana at the medical cooperative together with a successful Live Scan background check of each such person. 1. A unsuccessful or failed Live Scan is any Live Scan that shows a felony conviction having occurred within the past 10 years and/or shows that the manager is currently on parole or probation for the sale or disfiibutio n of a controlled substance; 7. A certificate and straight-line drawing prepared within thirty (30) days prior to application depicting the building and the portion thereof to be occupied by dne medical cooperative, and: (1) the property line of any other medical cooperative widen one thousand (1,000) feet of the primary entrance of the medical cooperative and any private or public school; and (2) the property fines of any public park, within one six hundred (600) feet of the primary entrance of the medical cooperative; and the property lines of any residential zone which is abutting or across the street from a lot which the medical cooperative for which the license is requested. (c) If the Chef of Police determines that the applicant has completed the application improperly, the Chef of Police shall promptly notify the applicant of such fact and, on request of rhe applicant, grant the applicant an extension of time of tern (10) days or less to complete the application properly. In addition, the applicant may request an extension, not to exceed ten (10) days, of the time for the Chief of Police to act on the application. The tine period for granting or denying a license shall be stayed during the period in which the applicant is granted an extension of time. (d) The fact that an applicant possesses other types of state or city permits or licenses does not exempt the applicant from the requirement of obtaining a medical cooperative license. Sec. 9-488. Investigation and action on medical cooperative license application. (a) Upon receipt of completed application and payment of the application and license fees, the Chief of Police shall immediately statmp the application as received and promptly investigate the information contained in the application to determine whether the applicant shall be issued a medical cooperative license. (b) Within thirty (30) days of receipt of the completed application, the Chief of Police shall complete the investigation, grant or deny the application it accordance with the provisions of this section, and so notify the applicant as follows: I. The Chief of Police shall write or stamp "Granted" or "Denied" on the application and date and sign such notation. 2. If the application is defiled, the Chief of Poke shall attach to the application a statement of the reasons for denial. 3. If the application is granted, the Chief of Police shall attach to the application a medical cooperative license. 4. The application as granted or denied and the license, if any, shall be placed in the United States mail, first class postage prepaid, addressed to the applicant attire address stated in the application. 5. 'the Chief of Police shall grant the application and issue the medical cooperative license upon fundings that the proposed business meets the locational criteria of section 13-132 of Tide 13; and that the applicant has met all of the development and performance standards and requirements of section 9-494(8) of this chapter, unless the application is denied for one (1) or more of the reasons set forth in section 9-489. (c) If the Chief of Police neither grants the application within thirty (30) days after it is stamped as received, the application shall deemed granted and the Chief of Police shall issue of a medical cooperative license. 1. The Chief of Police shall issue no more than four (4) medical cooperative licenses, subject to subsection Sec. 9-488(c)1(i). If the number of licensed medical cooperative fall below four (4), then the City shall issue additional business Menses pursuant to tine tonus of this Chapter, L The City Council shall have the discretion to increase, but not decrease, the number of licenses issued by the city Finance Director pursuant to the terms of this Chapter. (d) Medical cooperative priority review 1. Beginning on the date that is thirty (3 0) days after the effective date of this ordinance, until the date that is forty-five (45) days after the effective date of this ordinance, an applicant who meets the following requirements may submit an application for priority review. The applicant requirements for priority review are as follows: i. applicant is an active Caldornia non-profit mutual benefit corporation or non-profit agricultural cooperative or non-profit consumer cooperative, that was incorporated prior to May 22, 2014; I the applicant has listed with the secretary of state a principal place of business in the City of Costa Mesa; iii, the applicant has been issued or has applied for a City of Costa Mesa business license, issued in the name of the entity, for the purpose of providing home care or therapeutic services, and the submissions of the application or issuance of license occurred prior to May 22, 2014; iv. the applicant, or an officer or director of the applicant, maintains a lease or rental agreement in the City of Costa Mesa with a possession or start date prior to May 22, 2014; and v. the non-profit mutual benefit corporation or non-profit agricultural cooperative or non-profit consumer cooperative maintains aCalifornia re- sellers permit issued in the name of the entity at its principal place of business in the City of Costa Mesa, prior to May 22, 2014, Sec. 9-489. Denial of application for medical cooperative license, (a) The Police depamnent shall deny the application for any of the following reasons; 1. That the building, structure, equipment and location used by the business for which a license is required herein do not comply with the requirements and standards set for it section 9-494, 2. That the applicant, his or her employee, agent, partner, director, officer, stockholder or manager has knowingly made any false, ruisleading or fraudulent statement of material fact, in the application for a license or in any report or record required to be filed with the police department or other department of the city. 3. That the applicant has had any type of medical cooperative license revoked by any public entity within two (2) years of the date of the application. 4. Within ten (10) years immediately preceding the date of the filing of the application for a license under this chapter, the director or officer of applicant has bean convicted of a felony. 5. That on the date that the business for which a license is required herein commences, and thereafter, there will be no responsible adult on the premises to act as manager at all times during which the business is open. 6. The required application fees have not been paid. (b) In the case of the Cbief of Police not acting within the time period under section 9- 487(4), the Chief of Police shall grant the application and issue the license. Sec. 9-490. Medical cooperative operator permit. (a) No person shall engage in or participate as an operator of a medical cooperative, without a valid medical cooperative operator permit issued by the city, All persons who have been issued a medical cooperative operator shall promptly supplement the information provided as part of the application for the license required by section 9-488, with the names of all operators required to obtain a medical cooperative operator permit, within thirty (30) days of any change in the information originally submitted, Failure to submit such changes shall be grounds for suspension of the medical cooperative license, (b) The Chief of Police shall grant, deny and renew medical cooperative operator permits. (c) The application for a license shall be made on a form provided by the Chief of Police. An original and two (2) copies of the completed and sworn license application shall be filed. with the Chief of Poll= (d) The completed application shall certain the following information and be accompanied by the following documents: 1, The applicant's legal name and any other names (including aliases) used by the applicant; 2. Age, date and place of bath; 3. Height, weight, hair and eye color; 4, Present residence address and telephone number; 5. Whether the applicant has ever been convicted of felony wither ten years of the application date; 6. Proof of a )wive Scan background check for all felony convictions within ten (10) years ofthe application; 7, State driver's license or identification number; 8. Satisfactory written proof that the applicant is at least eighteen (18) years of age; 9. The applicant's fingerprints on a form provided by the police department, and a color photograph clearly showing the applicants face. Any fees for the photographs and fingerprints shall be paid by the applicant; 10. If the application is made for the purpose of renewing a license, the applicant shall attach a copy of the license to be renewed. 11. The completed application shall be accompanied by a non-refundable application fee, The amount of the fee shall be setby resolution, of the city. council, 12. Upon receipt of an application and payment of the application fees, the Chief of Police shall Immediately stamp the application as received and promptly investigate the application. 13. If the Chief of Police determines that the applicant has completed the application improperly, the Chief of Police shall promptly notify the applicant of such fact and grant the applicant an extension of time of not more than tan (10) days to complete the application properly. In addition, the applicant may request an extension, not to exceed ten (10) days, of the time for the city manager to act on the application. The time period for granting or denying a license shall be stayed during the period in which the applicant is granted an extension of time. See. 9-491, Investigation and action on application for medical cooperative operator permit. (a) Within fifteen (15) days after receipt of the properly completed application, the Chief of Police shall grant or deny the application and so notify the applicant as follows: a, ]'he Chief of Police shall write or stamp "Granted" or "Delved" on the application and date and sign such notation. b, If the application is denied, the Chief of Police shall attach to the application a statement of the reasons for denial. c. If the application is granted, the Chief of police shall attach to the application a medical cooperative operator permit. d. The application as granted or denied and the license, if any, shall be placed in the United States mail, first class postage ,prepaid, addressed to the applicant at the residence address stated in the application. e. The Chief of Police shall grant the application and issue the license unless the application is denied for one (1) or more of the reasons set forth in subsection 9- 491(f) ofthis section. i. If the Chief of Police neither grants nor denies the application within fifteen (15) days after it is stamped as received, the application shall be forwarded to tine city finance department for issuance of a operator license. £ The Chief of Police shall decry the application for any of the following reasons: i. The applicant has Imowingly made any false, 'misleading, or fraudulent statement of a material fact in 8ne application for a license or in any report or document required to be filed with the application; il. The applicant is under twenty-one (2 1) years of age; iii. The applicant has been convicted. of any felonry within the last ten (10) years. A license may be issued to any person convicted of a felony if the conviction occurred more than ten (10) years prior to the date of the application. g. Each medical cooperative operator permit shall expire one (1) year from the date of issuance and may be renewed only by filing with the Chief of Police a written request for renewal, accompanied by the application fee and a copy of the license to be renewed. The request for renewal shall be made at least thirty (30) days before the expiration date of the license. When made less than thirty (30) days before the expiration date, the expiration of the license will not be stayed. Applications for renewal shall be acted on as provided herein for applications for licenses. h. Should the Chief of Police not act within the tune period provided under this section, the city finance director shall then grant the application no less than five (days) following the expiration of tune required section 9-491(e)i. Sec. 9-492. Employment of Operators without operator licenses unlawful. (a) It shall be unlawful for any medical cooperative to not have at least one licensed operator on premises during the hours of operation. (b) It shall be unlawful for any operator to allow any person to operate a medical cooperative who is not in possession of a valid operator license. Sec. 9-493. Suspension or revocation of medical cooperative licenses and medical cooperative operator permits. A medical cooperative license or medical cooperative operator permit may be suspended or revolted in accordance with the procedures and standards ofthis section. (a) On determining that grounds for license revocation exist, the Chief of Police shall furnish written notice of the proposed suspension or revocation to the licensee. Such notice shall set forth the time and place of a hearing, and the ground or grounds upon which the hearing is based, the pertinent Code sections, and a brief statement of the factual matters in support thereof. The notice shall be mailed; postage prepaid, addressed to the last known address of the licensee, or shall be delivered to the licensee personally, at least ten (10) days prior to the hearing date. Hearings shall be conducted in accordance with procedures established by the Chief of Police, but at a minimum shall include the following: (b) AD parties involved shall have a right to offer testimonial, documentary, and tangible evidence bearing on the issues; may be represented by counsel; and shall have tine right to confront and cross-examine witnesses. Any relevant evidence may be admitted that is the sort of evidence upon which reasonable persons are accustomed to rely in. the conduct of serious affairs. Any hearing under this section may be continued for a reasonable time for the convenience ofaparty orawitness. The Clvef of Police's decision may be appealed in accordance with section 2-300 et seq, of the Costa Mesa Municipal Code, (c) A licensee may be subject to suspension or revocation of Wher license, or be subject to other appropriate disciplinary action, for any of the following causes arising from the acts or omissions of the licensee, or an employee, agent, partner, director, stoc]cholder, or manager ofamedical cooperative : 1. The licensee Inas Icnowingly made any false, misleading or fraudulent statement of material facts hi the application for a license, or in any report or record required to be filed with the City. 2. The licensee, employee, agent, partner, director, stoeldnolder, ornnanager of medical cooperative has Icnowingly allowed or permitted, and has failed to make a reasonable effort to prevent the occurrence of any of the following on the premises of the medical cooperative, or in the case of a medical cooperative operator, the licensee has engaged in one (1) of the activities described below while on the p'cmises of a medical cooperative : i. Any act of unlawful distribution of marijuana; ii. Any conduct prohibited by this chapter. iii. Failure to abide by any disciplinary action previously unposed by an appropriate city official, (d) After holding the hearing in accordance with the provisions of this section, if the Chief of Police finds and deternnines that there are grounds for disciplinary action, based upon the severity of the violation, the Chief of Police shall impose one (1) of the following: 1. A waning; 2. Suspension of the license for a specified period not to exceed six (6) months; or 3. Revocation of the license. i. Revocation of the license shall issue only after two prior determinations of violation. Sec. 9-494. Appeal of denial, suspension or revocation. After denial of an application for a medical cooperative license or a medical cooperative operator permit, or after denial of renewal of a license, or suspension or revocation of a license, the applicant or person to whom the license was granted may seek review of such administrative action by the city council Li accordance with the provisions of section 2-300 et seq. of the City of Costa Mesa Municipal Code. Any proceeding to appeal such decision to the city council shall be Bled within seven (7) days of such decision. If the denial, suspension or revocation is affirmed on review, the applicant, licensee may seek prompt judicial review of such achnniistrative action pursuant to California Code of Civil Procedure section 1094.5. The city shall make all reasonable efforts to expedite judicial review, if sought by the licensee. Sec. 9-495. Medical cooperative operational requirements. The following development and performance standards shall be satisfied by a medical cooperative and included in any approved medical cooperative license: (a) No medical cooperative shall be operated in any manner that permits the observation of any marijuana finm outside the location. (b) Parking lot lighting shall be provided to illuminate all off-street parking areas serving such use for the purpose of increasing the personal safety of patrons and employees and reducing the incidents of vandalism and theft. The lighting shall provide a level of illumination not less than one (1) foot-candle, measured at the surface of the pavement, at all areas or the parking lot. The lighting shall be shown on the required plot plans and shall be reviewed and approved by the development services department. (c) A medical cooperative shall be open or operating for business only between the hours of 8:00 a.m. and 1090 p.m. on any particular day. (d) No person under the age of eighteen (18) yeas shall be permitted within the promises at any time. (e) lire medical cooperative shall possess a valid and current State Board of Equalization seller's permit; (f) The medical cooperative shall not be located within: 1. 1000 foot radius of a "school" as defined under I3ealth and Safety Code 11362.768 (h); 2. 600 foot radius of a public park, public library or licensed child care facility; 3. 1000 foot radius of another registered medical cooperative; (g) Medical cooperative shall not allow alcohol to be purchased or consumed at the premises or in any area of the location used for parking any vehicle; (h) Medical cooperative shall only be located in a commercial zoned property or industrial zoned property, as allowed pursuant to section 13-30 of Chapter IV, Title 13. (i) Medical Mac�uana Business shall not be located on property lot abutting or across the sweet from a. lot which is zoned for residential use. The above notwithstanding, this subsection shall not prohibit a medical cooperative from locating across a street Itom any land zoned residential if the medical cooperative and residential zone is separated by a public thoroughfare with a munimurn roadway width of 80 feet. Sec. 9-496. Violationslpenahies. With the exception of any violation of this chapter, any person, whether as principal, employee, agent, partner, director, officer, stockholder, or trustee or otherwise, violating or causing the violation of any of the provisions of this chapter shall be guilty of a misdemeanor, and any conviction thereof shall be punisbable by a fore of not more than one thousand dollars ($1,000.00) or by nnprison nent for not more than six (6) months, or by both such fine and imprisonment. Notwithstanding any violation of the nudity limitation under this chapter, any violation of the provisions of this chapter shall constitute a separate offense for each and every day during which such violation is committed or continued. Sec. 9-496.1. Public nuisance. In addition to the penalties set forth above, any medical cooperative which is operating in violation of this chapter or any provision thereof is hereby declared to constitute a public nuisance and, as such, may be abated or enjoined from further operation, All costs to abate such public nuisance, including attorneys' fees and court costs, shall be paid by the licensee of the medical cooperative pursuant to section 13-17. Sec. 9-497 Statewide Regulation. This ordinance, and the provisions herein, shall be read consistent with any statewide regulation of medical marijuana that is promulgated by the legislature or by voter approval in the future. In the event Statewide Regulation is passed pursuant to the decriminalization or legalization of marijuana for recreational use, this ordinance shall govern the conduct of those business allowed to distribute marijuana under such provisions. Section 4. Amendment and Reveal. The provisions of the Costa Mesa Municipal Code added by, amended by; or contained In this initiative measure may be amended to further its purposes by ordinance passed by a majority vote of the Council and approved by the Mayor. The provisions of the Costa Mesa Municipal Code added by, amended by, or contained in this initiative measure shall not be repealed, except by an ordinance adopted either by petition or by the Council at its own instance and adopted by a vote of the electors. Section 5. Severability. If any section, subsection, subdivision, sentence, clause, phrase, word, or portion of this Ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The People of the City of Costa Mesa hereby declare that they would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, word, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, words or portions thereof be declared invalid or unconstitutional. Section 6. EAflective Date. The City Clerk shall certify as to the passage and adoption of this Ordinance, This Ordinance shall take effect ten (10) days following the date on which the City Council of the City of Costa Mesa declares that this Ordinance was adopted by a majority of the voters voting ora the measure at the municipal election on November. Section 7. Majority Approvak Effective Date. This ordinance shall be e$ective only if approved by a majority of voters at the next special or general election and shall go into effect on more than ninety days after the election. Section 8. Comnetine Measure, Competing Measures. In the event that this measure and another measure or measures relating to the taxation and regulation of medical mari uana shall appear on the same ballot, the provisions of the other measures shall be deemed to be hi conflict with this measure. In the event that this measure shall receive a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other relating to the taxation and regulation of medical marijuana shall be null and void. Section 9. Special or General election. This 'initiative Measure shall be set for a special or general election at the earliest fine allowed by law. ATTACHMENT 5 COMPARISON CHART OF FOUR PROPOSED MEDICAL MARIJUANA ORDINANCES REGULATION Ordinance No. 1 Ordinance No. 2 Ordinance No. 3 Ordinance No. 4 Taft & Gardner (Atty Longwith) Webster & Levesque (Atty Welch) Proposed City's Ordinance New Santa Ana Ordinance Alarm system Yes No Yes Yes Security guard Yes No Yes Yes Security cameras No No Yes Yes Priority to old stores Yes Yes No No Number of stores Eight (minimum) Four (minimum) No limit Twenty City Council may amend (not repeal) No Yes Yes Yes (and may repeal) Inspections Authorized No No Yes Yes Tax Yes Yes No Yes Limit sales to medical marijuana and related items No No Yes No Business indemnify City if legal problems Yes No Yes No Childproof containers Yes No Yes No Pesticide testing No No Yes No Active ingredients testing No No Yes No On-site prescriptions Yes Yes No No Business license Yes Yes Yes Yes Business permit No Yes Yes Yes Operator permit No Yes No No Page 1 of 2 Cultivation permit No No Yes No Lawful zones Commercial / industrial Commercial / industrial Commercial / industrial Industrial Location restrictions Yes Yes Yes Yes Non -concentration of stores Yes Yes Yes "mistakenly said "No" in 11/18 report" Yes Hours 9am to 10pm Sam to 10pm 7am to 10pm 10 to 8 Mon -Sat 11 to7Sun Quality control No No Yes No Cultivation standards No No Yes No Background checks Yes Yes Yes Yes Patient confidentiality Yes Yes Yes No Business records No No Yes Yes Transaction records No No Yes Yes Delivery records No No Yes No Employee records No No Yes Yes Employee training No No Yes No General insurance Yes No Yes No Delivery insurance Yes No Yes No No Minors Yes Yes Yes Yes Labeling Yes No Yes No Outdoor lighting No Yes Yes No Signage restrictions Yes No Yes Yes Odor restrictions Yes No Yes Yes Edible regulations Yes No Yes Yes Page 2 of 2 ATTACHMENT 6 ORDINANCE NO. XX -XX AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COSTA MESA ADDING CHAPTER VI (MEDICAL MARIJUANA DISPENSARIES AND CULTIVATION) TO TITLE 9 (LICENSES AND BUSINESS REGULATIONS) OF THE COSTA MESA MUNICIPAL CODE, REPEALING AND REPLACING SECTION 13-16 (ENFORCEMENT) OF ARTICLE 4 (ENFORCEMENT) OF CHAPTER I (GENERAL) OF TITLE 13 (PLANNING, ZONING AND DEVELOPMENT), AND REPEALING AND REPLACING LINE 31A OF TABLE 13-30 (CITY OF COSTA MESA LAND USE MATRIX) OF CHAPTER IV (CITYWIDE LANDUSE MATRIX) OF TITLE 13 (PLANNING, ZONING AND DEVELOPMENT), RELATING TO THE REGULATION OF MEDICAL MARIJUANA DISPENSARIES AND CULTIVATION. WHEREAS, in 1996 the California voters approved Proposition 215 (known as the Compassionate Use Act (the "CUA") and codified as Health and Safety Code Section 11362.5, et seq.) to exempt certain patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana for medical purposes; and WHEREAS, in 2003 the California legislature enacted Senate Bill 420 (known as the Medical Marijuana Program Act (the "MMPA") and codified as Health and Safety Code Section 11362.7 et seq.), as later amended, to clarify the scope of the Compassionate Use Act relating to the possession and cultivation of marijuana for medical purpose, and to authorize local governing bodies to adopt and enforce laws consistent with its provisions; and WHEREAS, in 2005 the California Board of Equalization began issuing seller's permits for sales consisting only of medical marijuana; and WHEREAS, in 2008 the California Attorney General issued guidelines for the security and non -diversion of marijuana grown for medical use; and Ordinance No. XX -XX Page l of 40 WHEREAS, in 2014 the U.S. House of Representatives voted to stop federal law enforcement from interfering with medical marijuana operations in the various states which have decriminalized and/or authorized such operations; and WHEREAS, Health & Safety Code Section 11362.83 provides that cities are free to adopt and enforce local ordinances that regulate the location, operation, or establishment of medical marijuana dispensaries and cultivation; and WHEREAS, the City Council of the City of Costa Mesa intends that nothing in this Ordinance shall be deemed to conflict with federal law as contained in the Controlled Substances Act, nor to otherwise permit any activity that is prohibited under that Act or other applicable law; and WHEREAS, the City Council of the City of Costa Mesa intends that nothing in this Ordinance shall be construed to allow persons to engage in conduct that endangers others or causes a public nuisance, allow the use of marijuana for non-medical purposes, or allow any activity relating to the cultivation, distribution or consumption of marijuana that is otherwise illegal; and WHEREAS, the operation -of -medical -marijuana dispensaries and the -cultivation - of medical marijuana within the City of Costa Mesa presently remain prohibited; and WHEREAS, the City Council of the City of Costa Mesa finds that medical marijuana operations and cultivation require careful consideration as well as the regulation of the location and manner in which dispensaries operate and cultivation occurs so as to prevent negative impacts on nearby residents and businesses; and WHEREAS, the City Council of the City of Costa Mesa finds that the City of Costa Mesa has a compelling interest in protecting the public health, safety and welfare of its residents and businesses by regulating the location and operation of medical marijuana dispensaries and medical marijuana cultivation, in preserving the peace and Ordinance No. XX -XX Page 2 of 40 quiet of the neighborhoods in which medical marijuana dispensaries operate and medical marijuana is cultivated, and in providing compassionate access to medical marijuana to its seriously ill residents; and WHEREAS, the California Constitution grants local governments in Article XI, Section 7 the authority under their police powers to regulate land use; and WHEREAS, the proposed ordinance has been reviewed by City staff in accordance with the Environmental Checklist Form (Appendix G of the CEQA Guidelines) to determine if there would be any possibility that the proposed ordinance would have the possibility of creating any environmental impacts, and City staff has determined that the establishment of regulations for medical marijuana businesses does not meet any of the thresholds contained in the Checklist that would trigger an environmental impact, and thus according to the "general rule exemption" (Section 15061(b)(3)) of the CEQA Guidelines, projects which have no potential for causing a significant effect on the environment are not subject to CEQA, no further environmental analysis is required, and a notice of exemption will be filed. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA ---DOES-H- EREB-Y-ORDAIN-AS-FOLL-O-WS: — --- --- -- SECTION 1. Chapter VI (Medical Marijuana Dispensaries and Cultivation) of Title 9 (of the Costa Mesa Municipal Code is hereby added as follows: CHAPTER VI. MEDICAL MARIJUANA DISPENSARIES AND CULTIVATION Sec. 9-491. Purpose The purpose of this chapter is to establish a comprehensive set of regulations with attendant regulatory permits applicable to the operation of medical marijuana dispensaries, as well as the cultivation of medical marijuana. The regulations are Ordinance No. XX -XX Page 3 of 40 intended to ensure such operations and cultivation are consistent with the overall health, welfare and safety of the city and its populace, and that such operations are in compliance with California's Compassionate Use Act of 1996 as well as California's Medical Marijuana Program Act of 2003. The chapter is not intended to permit activities that are otherwise illegal under federal, state or local law. This chapter is not intended to conflict with federal or state law. Sec. 9-492. Operation Prohibited Without Permit It shall be unlawful to own, establish, operate, use, or permit the establishment or operation of a medical marijuana business, or to participate as an employee, contractor, agent, volunteer, or in any manner or capacity other than as provided in this chapter. The general prohibition contained in this section shall include renting, leasing, or otherwise permitting a medical marijuana business to occupy or use a location, vehicle, or other mode of transportation. Sec. 9-493. Definitions The -following -definitions shall -apply -to this chapter -unless the context clearly denotes otherwise. a) "Applicant" means a person who is required to file an application for a permit or a license under this chapter. b) "Attending physician" has the same definition as set forth in Health and Safety Code section 11362.7. c) "Attorney General Guidelines" shall refer to the California Attorney General Guidelines for the Security and Non -diversion of Marijuana Grown for Medical Use, issued by the Attorney General's Office in August, 2008, as amended from Ordinance No. XX -XX Page 4 of 40 time to time, which sets regulations intended to ensure the security and non - diversion of marijuana grown for medical use by qualified patients or primary caregivers. d) "City CEO" has the same meaning as "city manager" in Section 2-97 of this code and shall include his or her designee. e) "Cultivation" means the growing of medical marijuana for medical purposes as defined in strict accordance with Health and Safety Code sections 11362.5 and 11362.7 et seq. f) "Cultivator" means a person who engages in the cultivation of medical marijuana. g) "Delivery" means the act of taking something to a person or place. h) "Dispense" means the selection, measuring, packaging, labeling, delivery, or distribution or sale of medical marijuana to a qualified patient or a primary caregiver. -- ---------- -i)- "Edible" has the -same-definition -a&�food"-as-set forth in Health and Safety -Code section 109935. j) "Employee" means any person (whether paid or unpaid) who provides regular labor or regular services for a medical marijuana business, including but not limited to at the location of a medical marijuana business. k) "Identification card" has the same definition as set forth in Health and Safety Code section 11362.7, and as may be amended, and which provides that "Identification card" means a document issued by the State Department of Health Services that document identifies a person authorized to engage in the medical use of marijuana and the person's designated primary caregiver, if any. Ordinance No. XX -XX Page 5 of 40 1) "Labeling" means all labels and other written, printed, or graphic matter (a) upon any marijuana intended for medical use, or (b) accompanying such marijuana intended for medical use. m) "Location" means any parcel of land, whether vacant or occupied by a building, group of buildings, or accessory buildings, and includes the buildings, structures, yards, open spaces, lot width, and lot area. n) "Lighting" means the act of illuminating as well as the effect achieved by the arrangement of lights. o) "Live scan" means a system for inkless electronic fingerprinting and the automated background check developed by the California Department of Justice (DOJ) which involves digitizing fingerprints and electronically transmitting the fingerprint image data along with personal descriptor information to computers at the DOJ for completion of a criminal record check; or such other comparable inkless electronic fingerprinting and automated background check process as determined by the city council. p) "Manager' means an employee responsible for management and/or supervision of a medical marijuana business. q) "Marijuana" has the same definition as set forth in Health and Safety Code section 11018, and as may be amended. r) "Medical marijuana" means marijuana used for medical purposes in accordance with the Compassionate Use Act (Health and Safety Code section 11362.5) and the Medical Marijuana Program Act (Health and Safety Code sections 11362.7 et seq.). Ordinance No. XX -XX Page 6 of 40 s) "Medical marijuana business" means a medical marijuana dispensary and/or a medical marijuana cultivation site. t) "Medical marijuana cultivation site" means a location where the cultivation of medical marijuana occurs. u) "Medical marijuana dispensary" has the same meaning as Section 13-6 of the Costa Mesa Municipal Code. v) "Member" means either a qualified patient, a person with an identification card, or a primary caregiver. w) "Non-profit' means to use surplus revenue to achieve the goals of an organization rather than distributing surplus revenue as profit or dividends. x) "Owner" means the owner of a medical marijuana dispensary and/or a medical marijuana cultivation site. y) "Permit' means the various regulatory licenses issued pursuant to this chapter, ineluding-but not -limited -to a -license -for a -medical marijuana -business— - — z) 'Person" means any natural person, firm, corporation, partnership, club, or any association or combination of natural persons, whether acting by themselves or through any servant, agent or employee. aa)"Person with an identification card" has the same definition as set forth in Health and Safety Code section 11362.7, and as may be amended, and which provides that `Person with an identification card" means an individual who is a qualified patient who has applied for and received a valid identification card pursuant to this article [being Article 2.5 of Chapter 6 of Division 10 of the Health and Safety Code]. Ordinance No. XX -XX Page 7 of 40 bb)"Physician's referral" means a written recommendation for a patient from a licensed medical doctor indicating that marijuana would be a beneficial treatment for a serious medical condition of the patient. cc) "Police Department" means the Police Department of the City of Costa Mesa. dd)"Primary caregiver" has the same definition as set forth in Health and Safety Code section 11362.7(d), (e), and as may be amended. ee)"Qualified Patient" has the same definition as set forth in Health and Safety Code section 11362.7(f). ff) "Reasonable Compensation" means compensation commensurate with wages and benefits paid to officers and employees of other not-for-profit organizations who have similar job descriptions and duties, required level of education and experience, prior individual earnings history, and number of hours worked. gg)"Serious Medical Condition' has the same definition as set forth in Health and -Safety-Code-section 1136Z7(h), and -as -may be -amended. - - Sec. 9-494. Medical Marijuana Dispensary Permit Prior to initiating operations as a medical marijuana dispensary and as a continuing requisite to conducting operations, the owner of a medical marijuana dispensary shall obtain a regulatory permit from the City CEO or his/her designee under the terms and conditions set forth in this chapter. Conditions necessary for the continuing validity of any and all regulatory permits issued for the operation of a medical marijuana dispensary include: a) Strict adherence to each and every requirement of this chapter. Ordinance Na. XX -XX Page 8 of 40 b) Allowing the City CEO or his/her designee and the Police Department to conduct reasonable inspections of the location of the medical marijuana business at the discretion of the city, including but not limited to inspection of security, inventory, and written records and files pertaining to the medical marijuana business, for the purposes of ensuring compliance with local and state law. c) Maintaining with the city current and valid contact information of the owner(s) of the medical marijuana dispensary. d) Maintaining with the city current and valid contact information of a legal representative of the medical marijuana dispensary. e) Transferable only if transferee successfully completes all of the requirements that a new applicant would otherwise need to meet. Sec. 9-495. Medical Marijuana Cultivation Permit Prior to initiating operations as a medical marijuana cultivator and as a continuing - ----- ---- requisite -to -conducting operations, the—persons-intending to -cultivate -medical --marijuana - shall obtain a regulatory permit from the City CEO or his/her designee under the terms and conditions set forth in this Section. Conditions necessary for the continuing validity of any and all regulatory permits issued for the operation of a medical marijuana cultivation site include: a) Strict adherence to each and every requirement of this chapter. b) Allowing the City CEO or his/her designee, as well as the Police Department, to conduct reasonable inspections of the location of the medical marijuana business at the discretion of the city, including but not limited to inspection of security, inventory, and written records and files pertaining to the medical marijuana Ordinance No. XX -XX Page 9 of 40 business, for the purposes of ensuring compliance with local and state law. c) Maintaining with the city current and valid contact information of the owner(s) of the medical marijuana cultivation site. d) Maintaining with the city current and valid contact information of a legal representative of the medical marijuana cultivation site. e) Transferable only if transferee successfully completes all of the requirements that a new applicant would otherwise need to meet. Sec. 9-496. Applications for Medical Marijuana Dispensary and Cultivation Permits The owner of a proposed medical marijuana dispensary and/or a medical marijuana cultivation site shall file an application with the City CEO or his/her designee upon a form provided by the city and shall pay a filing fee as established by resolution adopted by the city council as amended from time to time. An -application -fora regulatory permit for -a medical marijuana -dispensary permit -and/or a medical marijuana cultivation permit shall include, but shall not be limited to, the following information: a) Address of the location where the medical marijuana business will be located. b) A site plan and floor plan of the premises denoting all the use of areas on the premises of the medical marijuana business, including storage, cultivation areas, exterior lighting, restrooms, and signage. c) A security plan including the following measures: Ordinance No. XX -XX Page 10 of 40 Security cameras shall be installed and maintained in good condition, and used in an on-going manner with at least 30 days of digitally recorded documentation in a format approved by the Police Department. The cameras shall be in use 24 hours per day, 7 days per week. The areas to be covered by the security cameras include, but are not limited to, the storage areas, cultivation areas, all doors and windows, and any other areas as determined by the Police Department. ii. The lease/business space/cultivation site shall be alarmed with a centrally - monitored fire and burglar alarm system, and monitored by an alarm company properly licensed by the State of California Department of Consumer Affairs Bureau of Security and Investigative Services in accordance with California Business & Professions Code section 7590 et seq. and whose agents are properly licensed and registered under applicable law. iii. Entrance to the dispensing area, cultivation site and any storage areas shall be locked at all times, and under the control of employees with current and valid employee permits. iv. Interior Lighting. The premises within which the medical marijuana business is operated shall be equipped with and, at all times during which is open to the public or any portion thereof, shall remain illuminated with overhead lighting fixtures of sufficient intensity to illuminate every place to which members of the public or portions thereof are permitted access with an illumination of not less than two foot-candles as measured at the floor level. V. Exterior Lighting. The exterior of the premises upon which the medical marijuana business is operated shall be equipped with and, at all times between sunset and sunrise, shall remain illuminated with fixtures of Ordinance No. XX -XX Page 11 of 40 sufficient intensity and number to illuminate every portion of the property with an illumination level of not less than one foot-candle as measured at the ground level, including, but not limited to, landscaped areas, parking lots, driveways, walkways, entry areas, and refuse storage areas. vi. All windows on the building that houses the dispensary and/or cultivation site shall be appropriately secured and all marijuana securely stored, and a reliable, commercial alarm system shall be installed and maintained. d) The name and address of any person who is managing or responsible for the medical marijuana business' activities. e) The name and address of the owner and lessor of the real property upon which the medical marijuana business is to be conducted. In the event the applicant is not the legal owner of the property, the application must be accompanied with a notarized acknowledgement from the owner of the property that a medical marijuana business will be operated on his/her property. f) Authorization for the City CEO or his/her designee to seek verification of the information contained -within -the -application g) Evidence that the medical marijuana business is organized as a bona fide non- profit cooperative, affiliation, association, or collective of persons comprised exclusively and entirely of qualified patients and the primary caregivers of those patients in strict accordance with California's Compassionate Use Act. h) A statement in writing by the applicant that he or she certifies under penalty of perjury that all the information contained in the application is true and correct. i) Any such additional and further information as is deemed necessary by the City CEO or his/her designee to administer this chapter. Ordinance No. XX -XX Page 12 of 40 Sec. 9-497. Obligation of Medical Marijuana Dispensary and/or Cultivation Operation The obligations of the medical marijuana dispensary and/or cultivator, including all on- going and continuing obligations required pursuant to any provision of this chapter or as may be provided in any conditional approval of the City CEO or his/her designee or the city council, shall be set forth in a written agreement, approved as to form by the city attorney, and enforceable by the city. Such written agreement shall also provide that the medical marijuana dispensary and/or cultivator shall annually provide to the City CEO or his/her designee an updated application containing the information provided in the granted application for a medical marijuana dispensary permit and/or medical marijuana cultivation site permit Upon receiving possession of a regulatory permit as provided in this chapter, the medical marijuana dispensary and/or cultivator shall: a) Provide written authorization to the City CEO or his/her designee as well as the Police Department, to conduct reasonable inspections of the location of the medical -marijuana businessat the -discretion -of -the city, -including -but not limited - - - to inspection of security, inventory, and written records and files pertaining to the medical marijuana business, for the purposes of ensuring compliance with local and state law. b) Execute an agreement indemnifying the city, its elected officials, employees, agents, officers, and representatives, and each and all of them individually, from all liability in connection with all claims, damages, attorney's fees, costs and allegations arising from or in any way related to the operation of the medical marijuana business. c) Carry insurance in the amounts and of the types that are acceptable to the City Ordinance No. XX -XX Page 13 of 40 CEO or his/her designee, with minimal coverage provided of comprehensive commercial general liability insurance and comprehensive automotive liability insurance (if automobiles are used by the medical marijuana business for any purpose) protecting the medical marijuana business 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 liability and each accident. Such insurance shall name the city, its council members, officers, employees, agents and contractors as additional insured as respects to any liability arising out of the operation of the medical marijuana business. d) Agree to defend at its sole expense, any action against the city, its elected officials, employees, agents, officers, and representatives, and each and all of them individually, which arises from the application and/or use of this chapter by an applicant. e) Agree to reimburse the city for any court costs and attorney fees that the city may be required to pay as a result of such action. The city may, at its sole discretion, participate at its own expense in the defense of any such action. Failure to perform the aforementioned actions shall render the operation of a medical marijuana business unlawful. Sec. 9-498. Review of Permit Applications The City CEO or his/her designee shall conduct a review of any applicant for any permit authorized under this chapter, and shall prepare a report on the acceptability of the application. Upon completing the review process, the permit shall be deemed a qualified application, unless the City CEO or his/her designee finds: a) The applicant has made one or more false or misleading statements, or Ordinance No. XX -XX Page 14 of 40 omissions on the application or during the application process; or b) A proposed location for a medical marijuana business is not allowed by state or local law, statue, ordinance, or regulation, including this code, at a particular location; or c) The applicant is not a primary caregiver or qualified patient or the legal representative of the medical marijuana business; or d) The applicant or any person who is managing or is otherwise responsible for the activities of the cooperative or collective has engaged in unlawful, fraudulent, unfair, or deceptive business acts or practices; or e) The applicant has not satisfied each and every requirement of this chapter. Based on the information set forth in the application and the City CEO or his/her designee's review, the City CEO or his/her designee may impose reasonable terms and conditions on the use of the permit in addition to those specified in this chapter to ensure the safe operation of the business, and to ensure the health, safety and welfare - —-of-the-citizens-and-visitors-of-the-City-of-Costa-Mesa. Sec. 9-499. Action on Applications for Permits This section shall govern action on all applications for all permits provided for in this chapter. a) Upon receipt of a completed application and payment of the application and license fees, the City CEO or his/her designee shall investigate the information contained in the application to determine whether the applicant shall be issued the requested permit. Ordinance No. XX -XX Page 15 of 40 b) If the City CEO or his/her designee determines that the applicant has completed the application improperly, the City CEO or his/her designee shall notify the applicant of such fact within thirty (30) days of receipt of the application. The incomplete application upon return as incomplete shall be deemed abandoned. The applicant may then resubmit a new application for a new review pursuant to the requirements of this section. c) Within sixty (60) days of receipt of the completed application, the City CEO or his/her designee shall complete the investigation, grant or deny the application in accordance with the provisions of this chapter, and so notify the applicant as follows: If the application is denied, the City CEO or his/her designee shall attach to the application a statement of the reasons for denial. If the application is granted, the City CEO or his/her designee shall attach to the application the requested permit. iii. The application as granted or denied and the permit, if any, shall be placed -in the -United -States -mail, first class postage-prepaid,—addressed to - the applicant at the address stated in the application. d) The City CEO or his/her designee shall grant the application and issue the requested permit upon findings that the proposed permit meets all of the requirements of this chapter, unless the application is denied for one (1) or more of the reasons set forth in section 9-498. e) If the City CEO or his/her designee neither grants nor denies a complete application within sixty (60) days after it is received (except as provided in section 9-499(b)), the application shall be forwarded to the city council at its next regularly scheduled meeting for consideration in strict conformance with the Ordinance No. XX -XX Page 16 of 40 requirements of this chapter. Sec. 9-500. General Operating Standards and Restrictions A medical marijuana business shall operate in conformance with the following minimum standards, and such standards shall be deemed to be part of the conditions of approval on the permit for a medical marijuana business to ensure that its operation is in compliance with California law, the Attorney General Guidelines, and the Costa Mesa Municipal Code, and to mitigate any potential adverse impacts of the medical marijuana business on the public health, safety or welfare. a) Security. One security guard who is licensed by the State of California shall be present at the location of the medical marijuana business during all business hours. The security guard shall only be engaged in activities related to providing security for the medical marijuana business, except on an incidental basis. Each security guard shall possess a "Security Guard Card" at all times, and shall not possess firearms. The duties of the security guard shall -include -but -are not -limited to. - --—- -- - a. Ensuring no person smokes any substance within twenty feet (20') of any building entrance, exit, window and air intake vent. b. Monitoring of the outside of the premises for loitering and unlawful sale of medical marijuana by members. Security guards shall be directed to report to the medical marijuana business all unlawful sales of medical marijuana by members, and the medical marijuana business shall make a report within twenty-four (24) hours to the Costa Mesa Chief of Police. Ordinance No. XX -XX Page 17 of 40 H. Security cameras shall be installed and maintained in good condition, and used in an on-going manner with at least 30 days of digitally recorded documentation in a format approved by the City CEO or his/her designee. The cameras shall be in use 24 hours per day, 7 days per week. The areas to be covered by the security cameras include, but are not limited to, the storage areas, cultivation areas, all doors and windows, and any other areas as determined by the City CEO or his/her designee. iii. The location of the medical marijuana business shall be alarmed with a centrally -monitored fire and burglar alarm system, and monitored by an alarm company properly licensed by the State of California Department of Consumer Affairs Bureau of Security and Investigative Services in accordance with California Business & Professions Code section 7590 et seq. and whose agents are properly licensed and registered under applicable law. iv. All entrances into the building housing a medical marijuana business shall be locked from the exterior at all times with entry controlled by employees. -----b) Authorizations; i. The City CEO or his/her designee shall have the right to enter the medical marijuana dispensary and/or cultivation site from time to time unannounced for the purpose of making reasonable inspections to observe and enforce compliance with this chapter and all laws of the city and State of California. ii. Recordings made by security cameras required pursuant to this chapter shall be made available to the City CEO or his/her designee or the Police Department upon verbal request; no search warrant or subpoena shall be needed to view the recorded materials. Ordinance No. XX -XX Page 18 of 40 c) Records. i. Medical marijuana businesses shall maintain records reflecting: a. The full name, address, and telephone number(s) of the owner and/or lessee of the property. b. The full name, address, and telephone number(s) of all employees. c. Results of annual live scans of all employees. d. The full name, address, and telephone number(s) of all members who participate in cultivation of marijuana. e. The state issued identification card number of all members to whom the medical marijuana business provides medical marijuana. If a member does not have a state issued identification card, then the medical marijuana business shall assign the member a unique identifying number for the -use of the medical -marijuana business, - - and maintain a written copy of the physician's referral for the member. f. The full name, address, and telephone number(s) of all members to whom the medical marijuana business provides medical marijuana. This specific identifying information of names, addresses and telephone numbers of members is considered to be conditionally privileged by the City and shall be deemed confidential and not subject to City inspection unless such inspection has been authorized by the City of Costa Mesa Police Chief or his/her designee in writing pursuant to a reasonable justification. Ordinance. No. XX -XX Page 19 of 40 g. The designation, by qualified patient(s) and person(s) with identification cards, of any and all primary caregivers who participate in the collective cultivation of marijuana. h. The dates upon which all members are dispensed medical marijuana, the amount dispensed, and the name of the recipient. L The delivery of medical marijuana, from the medical marijuana business to a member located outside of the medical marijuana business location, including but not limited to the identity of the recipient, the amount delivered, the date of the delivery, the address of the delivery, the name of the employee making the delivery, and a written receipt from the member confirming the delivery. j. A written accounting of all cash and in-kind contributions, reimbursements, and reasonable compensation provided by the management members and members to the medical marijuana - - business-,,-and-all-expenditures and costs -incurred -by the -medical— - - marijuana business. k. A copy of the medical marijuana business' commercial general liability insurance policy and all other insurance policies related to the operation of the medical marijuana business. I. An inventory record documenting the dates and amounts of medical marijuana received at the medical marijuana business, the amounts of medical marijuana being cultivated at the location of the medical marijuana business, the daily amounts of medical marijuana stored at the location of the medical marijuana business, and the daily Ordinance No. XX -XX Page 20 of 40 amounts distributed to members. m. Proof of a valid and current permit issued by the city in accordance with this chapter. Every medical marijuana business shall display at all times during business hours the permit issued pursuant to the provisions of this chapter in a conspicuous place so that it may be readily seen by all persons entering the location of the medical marijuana business. ii. Records shall be maintained on-site, either in paper or electronic form, and secured and verified by the City CEO or his/her designee as needed (consistent with requirements pertaining to patient confidentiality pursuant to applicable State and Federal law), and at least every 12 months by the qualified patient's attending physician. iii. All records required to be maintained by the medical marijuana business for no less than 3 years and are subject to immediate inspection upon written request by the City CEO or his/her designee. d) Employees — - -- i. A medical marijuana business shall maintain results of live scans conducted annually by the medical marijuana business on all employees, the written results of such live scans being maintained at the location of the medical marijuana business. ii. No employee convicted within the last ten years of a felony substantially related to the qualifications, functions or duties of an employee of a medical marijuana business (such as a felony conviction for distribution of controlled substances, money laundering, racketeering, etc.) shall be employed by a medical marijuana business, unless such employee has Ordinance No. XX -XX Page 21 of 40 obtained a certificate of rehabilitation (expungement of felony record) under California law or under a similar federal statute or state law where the expungement was granted. At the request of the medical marijuana business, the City CEO shall determine the applicability of this section to a potential employee within a reasonable period of time after a written request has been made to the City CEO for such determination. iii. All employees must possess a valid government issued (or equivalent) form of identification containing an identifying photograph of the employee, the name of the employee, the date of birth of the employee, and the residential address of the employee. Color copies of such identification shall be maintained at the location of the medical marijuana business. A valid California Driver's license will satisfy this requirement. iv. All owners and managers must have a current and valid identification card. e) Volume. A medical marijuana business shall only cultivate, dispense, store or transport medical marijuana in aggregate amounts tied to its members' needs. To that end a medical marijuana business shall ensure compliance with state law limits on amount of dried marijuana and amount of marijuana plants allowed per qualified patients and persons with identification cards and/or primary caregivers f) Only Medical Marijuana. Medical marijuana businesses shall dispense, offer for sale or provide only products which are closely associated with medical marijuana, such as pipes, rolling papers, etc. Ordinance No. XX -XX Page 22 of 40 g) No Recommendations On-site. A medical marijuana business shall not have a physician or an attending physician at the location of the medical marijuana business to evaluate patients or provide a recommendation for medical marijuana. h) Signage. The following signs in measurements of not less than eight by ten inches shall be clearly and legibly posted in a conspicuous location inside the medical marijuana business where they will be visible to members in the normal course of a transaction, stating: L "Smoking, ingesting or consuming marijuana on this property or within 20 feet of the medical marijuana business is prohibited." ii. "Minors are prohibited from entering this property unless they are a qualified patient or a primary caregiver and they are in the presence of their parent or legal guardian." iii. "Neither the City of Costa Mesa, County of Orange, nor any other governmental agency has tested or inspected any marijuana product for pesticides, or other regulated contaminants, distributed at this location." iv. 'The sale of marijuana and the diversion of marijuana for non-medical purposes are violations of state law." i) No Alcohol. Medical marijuana businesses shall not hold or maintain a license from the State Department of Alcoholic Beverage Control to sell alcoholic beverages, or operate Ordinance No. XX -XX Page 23 of 40 a business that sells alcoholic beverages. j) No Lounge or Cafe. Medical marijuana businesses shall not operate as a lounge, cafe or restaurant serving food or drinks for consumption on-site. There shall be no seating area, tables, couches, or chairs for the gathering or congregating of members. k) Quality control. Medical marijuana businesses shall disclose the percentage level of specified compounds, as designated from time to time by the City CEO or his/her designee, which are present in medical marijuana to members before providing medical marijuana. 1) Labeling. i. Any medical marijuana provided to members shall be properly labeled in strict compliance with state and local laws, regulations and policies, - - - ----including-but not -limited -to those established by the City Office -of Cultivation Standards and Quality Control. ii. A distinct and clearly legible label must be affixed onto all medical marijuana items provided by a medical marijuana business which states: a. This item contains medical marijuana b. Warning that the item is a medication and not a food c. Warning that the item is to be kept away from children. d. Warning if nuts or other known allergens are used. e. Date of manufacture. f. Total weight (in ounces or grams) of marijuana in the item. Ordinance No. XX -XX, Page 24 of 40 iii. Packaging that makes the product attractive to children or imitates candy is not allowed. iv. Any edible cannabis product that is made to resemble a typical food product (i.e. brownie, cake) must be in a properly labeled opaque (non see-through) package before it leaves the medical marijuana business. V. The City Office of Cultivation Standards and Quality Control shall establish additional minimum requirements as deemed necessary for labeling of medical marijuana products, which shall be strictly adhered to by all medical marijuana businesses. m) Edibles All medical marijuana edibles shall comply with the California Sherman Food, Drug, and Cosmetic Law, as codified in section 109875, et seq. of Part 5 of Division 104 of the Health and Safety Code, and as amended from time to time. Further minimum requirements for all medical marijuana edibles include: i. No edible medical marijuana products requiring refrigeration or hot -holding shall be manufactured for sale or distribution at a medical marijuana business, due to the potential for food -borne illness. Baked medicinal products (i.e. brownies, bars, cookies, cakes), tinctures and other non - refrigerated type items are acceptable for manufacture and sale at a medical marijuana business. ii. Edible medical marijuana products for sale or distribution at a medical marijuana business must have been prepared by a member of that medical marijuana business. No non-member medical marijuana products are allowed for sale or distribution at a medical marijuana business. Ordinance No. XX -XX Page 25 of 40 n) Signage. i. Signs on the premises shall not obstruct the entrance or the video surveillance system. The size, location, and design of any signage must conform to the sign provisions in the Costa Mesa Municipal Code. ii. Business identification signage shall be limited to that needed for identification only, consisting of a single window sign or wall sign that shall comply with the appropriate sign requirements with the applicable zoning district. o) Employee Training. All employees of a medical marijuana business shall receive appropriate training for their intended duties to ensure understanding of rules and procedures regarding maintaining compliance by the operation with State and local law. -ii. - -The-medical marijuana business shall take those steps -necessary -to - assure that the persons assigned to provide security are properly trained or employed by a private security service in good standing with all supervisory or regulatory bodies exercising jurisdiction over such services. P) Supply. A medical marijuana dispensary shall only acquire its supply of medical marijuana from its members. q) Operating Hours for Medical Marijuana Dispensary. Ordinance No. XX -XX Page 26 of 40 The maximum hours of operation for a medical marijuana dispensary shall be daily from 7:00 a.m. to 10:00 p.m. r) Use Restrictions. Smoking, ingesting or consuming marijuana at the location of the medical marijuana business or within 20 feet of the medical marijuana business is prohibited. s) No Minors. i. Minors are prohibited from entering the location of the medical marijuana business unless they are a qualified patient or a primary caregiver and they are in the presence of their parent or legal guardian. ii. No minor shall operate a medical marijuana dispensary in any capacity, including but not limited to, as a management member, employee, contractor or volunteer. t)- Odors. A medical marijuana business shall have an air treatment system that ensures off-site odors shall not result from its operations. This requirement at a minimum means that the medical marijuana business shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location of the medical marijuana business is not detected outside the building, on adjacent properties or public rights-of-way, or within any other unit located within the same building as the medical marijuana business, if the use only occupies a portion of a building. u) Insurance. Ordinance No. XX -XX Page 27 of 40 A medical marijuana business shall carry insurance in the amounts and of the types that are acceptable to the City CEO or his/her designee, with minimal coverage provided of comprehensive commercial general liability insurance and comprehensive automotive liability insurance (if automobiles are used by the medical marijuana business for any purpose) protecting the medical marijuana business 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 liability and each accident. Such insurance shall name the city, its council members, officers, employees, agents and contractors as additional insured as respects to any liability arising out of the operation of the medical marijuana business. v) Site management. The medical marijuana business permit holder shall take all reasonable steps to discourage and correct conditions that constitute a nuisance in parking areas, sidewalks, alleys and areas surrounding the premises and adjacent properties -during -business hours if related to the members of the subject medical marijuana business. a. 'Reasonable steps" shall include immediately calling the police upon observation of the activity, and requesting that those engaging in activities that constitute a nuisance or are otherwise illegal to cease those activities, unless personal safety would be threatened in making the request. b. "Nuisance" includes but is not limited to disturbances of peace, open public consumption of medical marijuana or alcohol, excessive pedestrian or vehicular traffic, including the formation of Ordinance No. XX -XX Page 28 of 40 any pedestrian lines outside the building, illegal drug activity, harassment of passersby, excessive littering, excessive loitering, illegal parking, excessive loud noises, especially late at night or early in the morning hours, lewd conduct or police detentions and arrests. ii. The medical marijuana business permit holder shall make available to members who are dispensed medical marijuana a list of the rules and regulations governing medical marijuana use and consumption within the city and recommendations on sensible medical marijuana etiquette. w) Non-profit. A medical marijuana business shall operate on a non-profit basis. A medical marijuana business shall not profit from the sale or distribution of marijuana. Any monetary reimbursement that members provide to the medical marijuana business should only be an amount necessary to cover overhead costs and operating expenses. Retail sales of medical marijuana that violate California law or this chapter are expressly prohibited. ii. Reasonable proof (as determined to the satisfaction of the City CEO or his/her designee) of compliance with these non-profit requirements shall be providing annually to the City CEO or his/her designee in writing along with supporting documentation. x) Delivery of Medical Marijuana to Members All employees who provide delivery of medical marijuana from a medical marijuana business to a member located outside the medical marijuana business location must have a valid identification card at all times with the employee while the delivery is being made. Ordinance No. XX -XX Page 29 of 40 ii. All deliveries must be recorded by the medical marijuana business and maintained in the regular records of the medical marijuana business. These records shall include but not be limited to the identity of the recipient, the amount delivered, the date of the delivery, the address of the delivery, and the name of the employee making the delivery. iii. Upon receipt of a delivery outside of the location of the medical marijuana business, a member must sign for the delivery on a written identifiable receipt to be kept in the regular records of the medical marijuana business. iv. All deliveries must leave the medical marijuana business in sealed containers whose seals will not be broken until receipt of the delivery by the member. y) Exemptions The regulations contained in this Chapter shall not apply to a medical marijuana - - business engaged in -the following -uses- a -clinic permitted -pursuant to Chapter I of Division 2 of the Health and Safety Code; a health care facility permitted pursuant to Chapter 2 of the Division 2 of the Health and Safety Code; a residential care facility for persons with chronic life-threatening illness permitted pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code; a residential care facility for the elderly licensed pursuant to Chapter 3.2 of Division 2 of the Health and Safety Code; a residential hospice or a home health agency permitted pursuant to Chapter 8 of Division 2 of the Health and Safety Code, as long as such use complies strictly with applicable law regulating such use and the location of such use, including, but not limited to, Health and Safety Code sections 11362.5 and 11362.7 et. seq. Ordinance No. XX -XX Page 30 of 40 Sec. 9-501. Medical Marijuana Cultivation Standards and Quality Control A medical marijuana cultivation site shall operate in conformance with the following standards, and such standards shall be deemed to be part of the conditions of approval on the medical marijuana cultivation site's permit to ensure that its operation is in compliance with California law and this Code, and to mitigate any potential adverse impacts of the cultivation of medical marijuana on the public health, safety or welfare. To this end the City CEO or his/her designee is authorized (but not required) to establish a City Office of Cultivation Standards and Quality Control whose purpose will be to conduct regular inspection of cultivation practices and procedures at medical marijuana cultivation sites, as well as to test medical marijuana cultivated at medical marijuana cultivation sites. a) Cultivation Standards. The City Office of Cultivation Standards and Quality Control may: i. Establish model guidelines for recommended best practices and procedures for the cultivation of medical marijuana. - ii. Determine whether the model guidelines are being adhered to by a permit holder for a medical marijuana cultivation site, and make available to the public the results. b) Quality Control. The City Office of Cultivation Standards and Quality Control may: i. Establish testing standards for the quality of medical marijuana dispensed at medical marijuana businesses. Ordinance No. XX -XX Page 31 of 40 iii. Apply the testing standards to medical marijuana dispensed at medical marijuana businesses, and make available to the public the results. c) Labeling. The City Office of Cultivation Standards and Quality Control may establish labeling standards for all medical marijuana products consistent with both the results of inspections and testing pursuant to this section as well as deemed appropriate and necessary by the City CEO or his/her designee. d) Pesticides and Contaminants. i. Representative samples of all strains of medical marijuana distributed by a medical marijuana business shall be analyzed by the medical marijuana business or an independent laboratory (if and when such is available) to ensure it is free of harmful pesticides and other contaminants regulated by local, state or federal regulatory statutory standards. ii. Any medical marijuana from which -the representative sample tested positive for a harmful pesticide or other contaminant at a level that exceeds the local, state or federal regulatory or statutory standards shall be destroyed forthwith. iii. The City Office of Cultivation Standards and Quality Control shall have the authority to enforce this section. Sec. 9-502. Fees a) Fees. Ordinance No. XX -XX Page 32 of 40 i. An application fee set by resolution of the city council shall be required for formal processing of every application made under this chapter. ii. The City Council is authorized to pass resolutions to recover any and all fees and costs incurred by the implementation of this chapter through an appropriate fee recovery mechanism to be imposed upon medical marijuana businesses and their operations. b) State Board of Equalization Seller's Permit Required. The State Board of Equalization has determined that medical marijuana transactions are subject to sales tax, regardless of whether the individual or group makes a profit, and those engaging in transactions involving medical marijuana must obtain a Seller's Permit from the State Board of Equalization. Such permit shall be conspicuously displayed at the Medical Marijuana Business. Failure to maintain the Seller's Permit is grounds for revocation of a medical marijuana dispensary permit and/or medical marijuana cultivation site permit. Sec. 9-503. Location Restrictions a) Medical marijuana businesses shall not be located within one thousand feet of a public or private school, public library or youth center (serving youth ages eighteen (18) and under). b) Medical marijuana businesses shall not be located within two hundred (200') feet of a residential zone except pursuant to the issuance of a minor conditional use permit as determined by the director of development services. c) Medical marijuana businesses may only be located in commercial, manufacturing or industrial zones as designated in Row 31 a, Table 13-30, of Section 13-30 of chapter 4 of Title 13 of the Costa Mesa Municipal Code. Ordinance No. XX -XX Page 33 of 40 d) No medical marijuana business can be located within one thousand (1000') feet of any other medical marijuana business, irrespective of ownership. Sec. 9-504. Suspension and Revocation. The City CEO or his/her designee is authorized to suspend and/or revoke any and all permits issued pursuant to this chapter upon the determination through written findings of a failure to comply with any provision of this chapter, any condition of approval, or any agreement or covenant as required pursuant to this chapter. The City CEO or his/her designee may revoke a medical marijuana regulatory permit if any of the following, singularly or in combination, occur: a) The City CEO or his/her designee determines that the medical marijuana dispensary or cultivation site has failed to comply with any aspect of this chapter, any condition or approval, or any agreement or covenant as required pursuant to this chapter; or b) Operations cease for more than 180 calendar days (including during any change of ownership; if applicable); or c) Ownership is changed without securing a new regulatory permit; or d) The medical marijuana dispensary and/or cultivation site fails to maintain required security camera recordings; or e) The medical marijuana dispensary and/or cultivation site fails to allow inspection of the security recordings, the activity logs, or of the premise by authorized city officials. Sec. 9-505. Violations and Penalties. Ordinance No. XX -XX Page 34 of 40 Any person, whether as principal, employee, agent, partner, director, officer, stockholder, or trustee or otherwise, violating or causing the violation of any of the provisions of this chapter shall be guilty of a misdemeanor, and any conviction thereof shall be punishable by a fine of not more than one thousand dollars ($1,000.00) or by imprisonment for not more than six (6) months, or by both such fine and imprisonment. Any violation of the provisions of this chapter shall constitute a separate offense for each and every day during which such violation is committed or continued. Sec. 9-506. Public Nuisance. In addition to the penalties set forth in this chapter, any medical marijuana business which is operating in violation of any provisions of this chapter is hereby declared to constitute a public nuisance and, as such, may be abated or enjoined from further operation. All costs to abate such public nuisance, including attorneys' fees and court costs, shall be paid by the permit holder of the medical marijuana business pursuant to Chapter III (Public Nuisance Abatement) of Title 20 (Property Maintenance) of the Costa Mesa Municipal Code. Any appeals to a determination that a medical marijuana business is operating as a public nuisance shall be pursuant to the provisions in the same chapter: -- - Sec. 9-507. Appeals Any decision regarding approval, conditional approval, denial, suspension or revocation may be appealed to the city council in accordance with the provisions of Chapter IX of the Costa Mesa Municipal Code. Sec. 9-508. Prohibited Operations and Nonconforming Use Ordinance No. XX -XX Page 35 of 40 All medical marijuana businesses in violation of Health and Safety Code Section 11362.7 et seq. and 11362.5 et seq., this chapter, or any other applicable State law are expressly prohibited. It is unlawful for any medical marijuana business in the city, or any agent, employee or representative of such medical marijuana business, to permit any breach of peace therein or any disturbance of public order or decorum by any tumultuous, riotous or disorderly conduct on the premises of the medical marijuana business, or to violate any State law, or this chapter. No use which purports to have distributed marijuana prior to the enactment of this chapter shall be deemed to have been a legally established use under the provisions of the Costa Mesa Zoning Code, the Costa Mesa Municipal Code, or any other local ordinance, rule or regulation, and such use shall not be entitled to claim legal nonconforming status. Sec. 9-509. Severability If any section, subsection, subdivision, sentence, clause, phrase, word, or portion of this - - - — Ordinance is, for any reason, held -to -be invalid or unconstitutional -by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The People of the City of Costa Mesa hereby declare that they would have adopted this Ordinance and each section, subsection, subdivision, sentence, clause, phrase, word, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, words or portions thereof be declared invalid or unconstitutional. Sec. 9-510. Amendment Provisions of this chapter may be amended to further their purposes by ordinance passed by a majority vote of the city council. Ordinance No. XX -XX Page 36 of 40 Sec. 9-511. Consistency with Statewide Regulation of Marijuana This chapter shall be read consistent with any statewide regulation of medical marijuana that is promulgated by the California legislature or by voter approval in the future. In the event statewide regulation is passed pursuant to the decriminalization or legalization of marijuana for recreational use, this chapter shall govern the conduct of those business allowed to distribute marijuana under such provisions to the fullest extent possible consistent with such statewide regulation. SECTION 2. Section 13-16 (Enforcement) of Article 4 (Enforcement) of Chapter I (General) of Title 13 (Planning, Zoning and Development) is hereby repealed and replaced with the following: Sec. 13-16. Enforcement. (a) Criminal prosecution. Any person, whether as principal, agent, or employee, violating the terms of this zoning code may be prosecuted as provided in section 1-33 of this Municipal Code. (b) Criminal citation. For the purposes of this zoning code, a violation of the terms of this zoning code may be cited as either an infraction or misdemeanor pursuant to State Government Code Sections 36900 and 36901 and as provided in section 1-33 of this Municipal Code. (c) Civil action. As an alternative to prosecution or citation, or as an additional action, the city attorney may, at the request of the development services director, institute an action in any court of competent jurisdiction to restrain, enjoin, or abate the condition(s) or activity(ies) found to be in violation of the provisions of this zoning code. Ordinance No. XX -XX Page 37 of 40 (d) Nuisance. Any use, structure, or property that is altered, enlarged, erected, established, maintained, moved, or operated contrary to the provisions of this title or any condition of approval, is hereby declared to be unlawful and a public nuisance and may be abated by the city through civil 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. SECTION 3. Line 31a of Table 13-30 (City of Costa Mesa Land Use Matrix) of Chapter IV (Citywide Landuse Matrix) of Title 13 (Planning, Zoning and Development) is hereby repealed and replaced with the following: Ordinance No. XX -XX Page 38 of 40 5 Subject to the limitations and requirements of Chapter VI (Medical Marijuana Dispensaries and Cultivation) of Title 9 (Licenses and Business Regulations). Ordinance No. XX -XX Page 39 of 40 ZONES LAND USES R R R R A C C C C T M M P P P P P P I I P 1 2 2 3 P L 1 2 1 C G P D D D D D D & & M H S R R R R C I R R D D L M H N S D D D C M 31a Medical P p P P P p p P marijuana dispensaries 5 Subject to the limitations and requirements of Chapter VI (Medical Marijuana Dispensaries and Cultivation) of Title 9 (Licenses and Business Regulations). Ordinance No. XX -XX Page 39 of 40 SECTION 4. Effective Date. This Chapter, if approved by the electorate of the City of Costa Mesa at the Special Election of , 2015 shall become effective immediately upon the declaration of the results of that election by the City Council of the City of Costa Mesa. SECTION 5. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this Ordinance shall nonetheless remain in full force and effect. The People hereby declare that they would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable. SECTION 6. Execution. The Mayor is hereby authorized to attest to the adoption of the Ordinance by the voters of the City of Costa Mesa by signing where indicated below. I hereby certify that the foregoing Ordinance was PASSED, APPROVED and ADOPTED by the People of the City of Costa Mesa, California voting on the day of 2015. Mayor ATTEST: City Clerk APPROVED AS TO FORM: City Attorney Ordinance No. XX -XX Page 40 of 40 ATTACHMENT 7 CHAPTER VI. MEDICAL MARIJUANA DISPENSARIES AND CULTIVATION Section 9-494. Medical Marijuana Dispensary Permit and Section 9-495. Medical Marijuana Cultivation Permit • Follow Chapter regulations • Allow reasonable inspections by City • Maintain contact information with City • Transferable if new permit Section 9-496. Applications for Medical Marijuana Dispensary and Cultivation Permits • Address • Site and floor plan • Security plan (cameras / alarms / secure entrances / lighting) • Names and addresses of manager and owners • Non-profit status • Further information deemed necessary by City CEO Section 9-497. Obligation of Medical Marijuana Dispensary and/or Cultivation Operation • Allow reasonable inspections by City • Indemnify City • Insurance • Defend City if legal action Section 9-498. Review of Permit Applications • Appropriate location • Applicant must be primary caregiver, qualified patient or legal representative • No history of unlawful, fraudulent, unfair, or, deceptive business acts or practices Section 9-499. Action on Applications for Permits • Decision in 60 days • Granted if meet all requirements of Chapter Section 9-500, General Operating Standards and Restrictions • Security (security guard / security cameras / alarm system / secure entrances) • Authorize inspections by City • Records (identification / inventory / deliveries / finances / live scan / insurance) • Employees (certain felony restrictions / ID card and live scan for all / MMP ID card for owners & managers) • Volume (limited to member needs) • Only Medical Marijuana (and related products) • No Recommendations On-site • Signage (mandatory signs posted) • No Alcohol • No Lounge or Cafe • Quality control (possibly disclose percentage level of certain compounds) • Labeling (warning labels / date / weight / no packaging attractive to minors) • Edibles • Signage • Employee Training • Supply (only from members) • Operating Hours for Medical Marijuana Dispensary (7am to 10pm) • Use Restrictions (no smoking onsite) • No Minors • Odors (air treatment system / no off-site smell) • Insurance • Site management (business to monitor nuisance activities / written rules) • Non-profit • Delivery of Medical Marijuana (MMP ID card on deliverers / receipts / records) • Hospice, etc. exemptions Section 9-501. Medical Marijuana Cultivation Standards and Quality Control City authorized (but not required) to create City Office of Cultivation Standards and Quality Control • Cultivation Standards (model guidelines / publicize adherence) • Quality Control (testing standards / publicize results) • Labeling. • Pesticides and Contaminants. Section 9.502. Fees • Fees (cost recovery) • State Board of Equalization Seller's Permit Required. Section 9-503. Location Restrictions Y 1000 feet from schools, libraries, youth. centers • 200 feet from residential zone (can apply for minor CUP) • Only commercial or industrial zones • 1000 feet from each other Section 9-504. Suspension and Revocation. • Failure to follow Chapter requirements • Cease operations for 180 days • Change ownership without new permit • Failure to maintain security camera records • Failure to allow City inspections --------------Section 9-505. Violationsand-Penalties. -- - - - -- - - --- • Misdemeanor Section 9-506. Public Nuisance. • Abatement and injunctions Section 9-507. Appeals Y Pursuant to local code Section 9-508. Prohibited Operations and Nonconforming Use • Follow California law • No nonconforming use authorized Section 9-509. Severability Section 9-510. Amendment • To further purposes of Chapter the ordinance may be amended Section 9-511. Consistency with Statewide Regulation of Marijuana 0 Statewide change in law to be accommodated as much as possible City of Santa Ana ATTACHMENT 8 PROPOSED ORDINANCE NO. NS -2864 AN ORDINANCE OF THE PEOPLE OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE MUNICIPAL CODE TO DELETE AND REPLACE ARTICLE XIII, TO DELETE SECTION 41-121, DELETE SUBSECTION (B) OF SECTION 41-144, AND AMEND ARTICLE XII OF CHAPTER 21 BY ADDING SECTIONS 21-126, 21-127, 21-128, 21-129 AND 21-130 TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES WHEREAS, in 1996, the California electorate approved Proposition 215, the Compassionate Use Act of 1996, which allows a patient, with a doctor's recommendation, to use marijuana for medical purposes without the fear of prosecution or arrest; and WHEREAS, in 2003, the California legislature passed Senate Bill 420 (Medical Marijuana Program Act) which amended the Health and Safety Code to permit the establishment of medical marijuana dispensaries for the distribution of marijuana for medical purposes; and WHEREAS, cities where medical marijuana dispensaries have been permitted to operate have experienced significant problems, including burglaries and takeover robberies of dispensaries, robberies of customers leaving dispensaries, an increase in crime (especially thefts and robberies) in the vicinity of dispensaries, illegal re -selling of marijuana obtained from dispensaries, physicians issuing apparently fraudulent recommendations for the use of marijuana, collective staff selling marijuana to customers with obviously counterfeit patient identification cards, street dealers attempting to sell marijuana to collective customers, collective customers using marijuana and then driving under the influence of marijuana, the sale of illegal drugs other than marijuana in the dispensaries, sales of marijuana to minors; and WHEREAS, after studying various alternatives for the regulation of medical marijuana dispensaries, considering testimony from members of the public, and reviewing the legal status of medical marijuana dispensaries under applicable law, the City Council finds that the regulation and operation of medical marijuana dispensaries is necessary to protect the public health, safety, and welfare by mitigating the adverse secondary effects from the operations of medical marijuana dispensaries; and WHEREAS, the City of Santa Ana has a compelling interest in ensuring that marijuana is not distributed in an illicit manner, in protecting the public health, safety and welfare of its residents and businesses, in preserving the peace and quiet of the neighborhoods in which medical marijuana collectives operate, and in providing compassionate access to medical marijuana to its seriously ill residents. 1 NOW, THEREFORE, THE PEOPLE OF THE CITY OF SANTA ANA DO ORDAIN AS FOLLOWS: SECTION 1. The People hereby adopt the recitals and findings set forth above and in the request for Council action -staff report prepared in connection with this ordinance. SECTION 2. Article XIII of Chapter 18 of the Santa Ana Municipal Code is hereby deleted in its entirety and replaced with the following: Chapter 18 ARTICLE XIII. MEDICAL MARIJUANA COLLECTIVES/COOPERATIVES 18.610. Purposes and intent. It is the purpose and intent of this article to regulate the collective distribution of medical marijuana in order to ensure the health, safety and welfare of the residents of the City of Santa Ana. The regulations in this article, in compliance with the Compassionate Use Act, the Medical Marijuana Program Act, and the California Health and Safety Code (collectively referred to as "State Law") do not interfere with a patient's right to use medical marijuana as authorized under State Law, nor do they criminalize the possession or cultivation of medical marijuana by specifically defined classifications of persons, as authorized under State Law. Under State Law, only qualified patients, persons with identification cards, and primary caregivers may cultivate medical marijuana collectively. Medical marijuana collectives shall comply with all provisions of the Santa Ana Municipal Code ("Code"), State Law, the 2008 California Attorney General Guidelines for the Security and Non -Diversion of Marijuana Grown for Medical Use, and all other applicable local and state laws. Nothing in this article purports to permit activities that are otherwise illegal under state or local law. 18.611. Definitions. (a) "Cultivation" and/or "Cultivate" shall mean the planting, growing, harvesting, drying, processing, or storage of one or more marijuana plants or any part thereof. (b) "Medical Marijuana Collective" or "Cooperative" or "Collective" means any facility or location where medical marijuana is made available and/or distributed by or to one or more of the following: a primary caregiver, a qualified patient or a person with an identification card in strict accordance with California Health and Safety Code Section 11362.5 et seq., as sometimes amended. A "medical marijuana collective" shall not include the following uses, as long as the location of such uses are otherwise regulated by this Code or applicable law: a clinic licensed pursuant to Chapter 1 of Division 2 of the Health and Safety Code, a health care facility licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code, a residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code, a residential care facility for the elderly licensed pursuant to 2 Chapter 3.2 of Division 2 of the Health and Safety Code, a residential hospice or a home health agency licensed pursuant to Chapter 8 of Division 2 of the Health and Safety Code, as long as such use complies strictly with applicable law including, but not limited to, Health and Safety Code Section 11362.5 et seq. For purposes of this Municipal Code, "Dispensary" and "Dispensaries" have the same the same meaning as Collective or Cooperative. (c) "Identification Card" shall have the same definition as that contained in Health and Safety Code § 11362.7 et seq., as sometimes amended. (d) "Manager" means any person responsible for the establishment, organization, supervision, or oversight of the operation of a Collective, including but not limited to members who perform the functions of president, vice-president, director, operating officer, financial officer, secretary, or treasurer. Ability to control one or more of the following functions shall be prima facie evidence that such person is a manager: (1) to hire, select, or separate employees or staff, including volunteers; (2) to acquire facilities, furniture, equipment or supplies other than occasional replenishment of stock; (3) to disburse funds of the business other than occasional expenditures for replenishment of stock; or (4) to make, or participate in making, policy decisions relative to the operations of the business. (e) "Marijuana" shall have the same definition as that contained in Health and Safety Code § 11018 as sometimes amended. (f) "Medical Marijuana" shall have the same definition as that contained in Health and Safety Code § 11362.5 et seq., as sometimes amended. (g) "Primary Caregiver" shall have the same definition as that contained in Health and Safety Code § 11362.5 and 11362.7, as sometimes amended. (h) "Qualified Patient" shall have the same definition as that contained in Health and Safety Code § 11362.5 as sometimes amended. 18-612. Scope of article. The operating standards established in this article apply to any site, facility, location, use, cooperative or business currently operating in the City of Santa Ana, or which commences operations after the effective date of this Article, that distributes, dispenses, stores, sells, exchanges, processes, delivers, or gives away, medical marijuana to qualified patients, health care providers, patients' primary caregivers, or physicians, pursuant to Health & Safety Code § 11362.5 (adopted as Proposition 215, the "Compassionate Use Act of 1996") or any state regulations adopted in furtherance thereof. Any collective in the City of Santa Ana shall operate in conformance with the operating standards set forth in section 18-613 of this Code to assure that the operations of the collective are in compliance with California law and to mitigate the adverse secondary effects from operations of dispensaries. 18-613. Operating standards. 3 (a) At all times the collective is open, a collective shall provide at least one security guard who is licensed, possesses a valid Department of Consumer Affairs "security guard card", and has a valid Santa Ana Business License. Security guards shall not possess firearms. (b) The security guard and collective personnel shall monitor the site and the immediate vicinity of the site to assure that patrons immediately leave the site and not consume medical marijuana in the vicinity of the collective or on the property or in the parking lot. (c) Exterior signage shall be limited to one wall sign not to exceed ten square feet in area and may not be externally or internally illuminated. Interior signage or advertising may not be visible from the exterior. (d) No recommendations from a doctor for medical marijuana shall be issued on-site. (e) There shall be no on-site sales of alcohol or tobacco products, and no on- site consumption of food, alcohol, tobacco or marijuana by patrons. (f) Hours of operation shall be limited to: Monday --Saturday 10 a.m.--8 p.m. and Sunday 11 a.m.--7 p.m. (g) The property provides a sufficient odor absorbing ventilation and exhaust system so that odor generated inside the property is not detected outside the property, anywhere on adjacent property or public rights-of-way, or within any other unit located within the same building as the collective. (h) A collective shall only dispense medical marijuana to qualified patients and their caregivers as defined by California Health and Safety Code § 11362.5 (Proposition 215). This shall include possession of an original valid doctor's recommendation, not more than one year old, for medical marijuana use by the patient. (i) A collective shall notify patrons of the following both verbally and through posting of a sign in a conspicuous location: (1) Use of medical marijuana shall be limited to the patient identified on the doctor's recommendation. Secondary sale, barter or distribution of medical marijuana is a crime and can lead to arrest. (2) That loitering on and around the collective site is prohibited by California Penal Code § 647(e) and that patrons must immediately leave the site and not consume medical marijuana in the vicinity of the collective or on the property or in the parking lot. (3) Forgery of medical documents is a felony crime. (4) A warning that patrons may be subject to prosecution under federal 4 marijuana laws. (5) That the use of medical marijuana may impair a person's ability to drive a motor vehicle or operate machinery. 0) A collective shall not provide marijuana to any individual in an amount not consistent with personal medical use. (k) A collective shall not store more than $200.00 in cash reserves overnight on the premises and shall make at least one daily bank drop that includes all cash collected on that business day. (1) No one under 21 years of age shall be permitted to enter establishment, unless such person is a qualified patient and is accompanied by his or her Primary Caregiver, licensed Attending Physician, parent(s) or documented legal guardian. (m) A collective shall provide the name and phone number of an on-site staff person to the Police Department and Community Preservation Division for notification if there are operational problems with the establishment. (n) Each collective operator(s) and employees shall complete a criminal background check. Employees, managers or volunteers may not have been convicted of, or plead guilty/no-contest to a felony or misdemeanor drug charge within the past four years. (o) Marijuana shall not be grown or cultivated at collective sites, except that cuttings of the marijuana plant may be kept or maintained on-site for distribution to qualified patients and primary caregivers as follows: (1) The cuttings shall not be utilized by a collective as a source for the provision of marijuana for consumption on-site, however, upon provision to a qualified patient or primary caregiver, that person may use the cuttings to cultivate marijuana plants off-site for their own use and they may also return marijuana from the resulting mature plant for distribution by the collective. (2) For the purposes of this paragraph, the term "cutting" shall mean a rootless piece cut from a marijuana plant, which is no more than six inches in length, and which can be used to grow another plant in a different location. (p) A collective shall comply with applicable provisions of the California Health and Safety Code §§ 11362.5 through 11362.83, inclusive. (q) If food is distributed, the collective shall comply which all relevant state laws and City ordinances pertaining to the preparation, distribution and sale of food. 5 (r) The location, interior and exterior, shall be monitored at all times by web - based closed-circuit television for security purposes. The camera and recording system must be of adequate quality, color rendition and resolution to allow the ready identification of any individual committing a crime anywhere on or adjacent to the location. The recordings shall be maintained for a period of not less than ninety days. The Police Department may request the recordings in connection with an investigation. If the recordings are not voluntarily provided, the Police Department may seek a warrant or court order for the recordings. (s) The location shall have a centrally -monitored fire and burglar alarm system and the building or the portion of the building where the collective is located shall contain a fire -proof safe; (t) No manufacture of concentrated cannabis in violation of California Health and Safety Code section 11379.6 is allowed; (u) No collective shall operate for profit. Cash and in-kind contributions, reimbursements, and reasonable compensation provided by members towards the collective's actual expenses of the growth, cultivation, and provision of medical marijuana shall be allowed provided that they are in strict compliance with State Law. All such cash and in-kind amounts and items shall be fully documented. (v) If the collective operator is not the owner of the property where the collective is to operate, the operator shall provide evidence that the property owner(s) consent to the operation of a collective on the property. 18-614. Reserved. 18-615. Zones permitted. No collective shall operate within a residential (R-1, R-2, R-3, R-4, RE, CR) zone, Professional (P) zone, Arterial Commercial (C-5) zone, Planned Shopping Center (C-4) zone, Specific Development (SD), Specific Plan (SP) or Agricultural (A-1) zone. A Collective may only operate in an Industrial zone (M-1, M-2) in accordance with this Article. 18-616. Separation requirements. (a) No collective shall be located within 500 feet of another Medical Marijuana Collective or Cooperative or within 1,000 feet of any: (1) School; (2) Park; (3) Residential zone. 6 18-617.01 Cooperative/Collective registration required. Within 30 days after the adoption of this Chapter, the Director of Planning and Building shall prepare Cooperative/Collective registration application forms and a related administrative policy. Each collective interested in operating pursuant to this article may submit an application together with a non-refundable processing fee in an amount established by the City Council within 60 days after the adoption of this article, the Director shall stop accepting applications and process all applications received. The Director or his or her designee shall determine whether each application demonstrates compliance with this article. Each application that is in compliance with this article shall be placed on a qualified registration list and the Director shall notify the applicant in writing of its qualified registration status. Once all applications are processed, the Director shall hold a "lottery" process in an open and public location and select 20 applications. Each applicant may then choose to file an application for a Regulatory Safety Permit pursuant to Section 18-617.2. The Director shall maintain the qualified registration list and update it on an annual basis. Any applicant on the list must submit a written request each year to maintain its status on the list and the Director may place new applicants on the list in order in which the applications are received. 18-617.01 Cooperative/Collective regulatory safety permit. (a) Every Medical Marijuana Collective shall obtain a Regulatory Safety Permit from the Police Department. The applicant shall pay a non-refundable fee in an amount established by the City Council. It shall be unlawful for any person, association, partnership or corporation to engage in, conduct or carry on, in or upon any premises within the City a Medical Marijuana Collective without the required permit. (b) A copy of the Regulatory Safety Permit shall be displayed at all times in a place visible to the public. (c) A Regulatory Safety Permit shall be valid for a period of one (1) year, unless sooner revoked. No permit granted herein shall confer any vested right to any person or business for more than the above -referenced period. 18.617.2. Medical marijuana collective — regulatory permit application process. (a) Any Medical Marijuana Collective desiring a regulatory safety permit required by this article shall, prior to initiating operations and after receiving notice of its successful registration under section 18-617.01, complete and file an application to the Chief of Police on a form supplied by the Police Department. The application shall be filed together with a nonrefundable fee as establish by resolution of the City Council, to defray, the cost of investigation required by this article. The application shall contain all of the following: 7 (1) The address of the property where the proposed Medical Marijuana Collective(s) will operate; (2) A site plan describing the property with fully dimensioned interior and exterior floor plans including electrical, mechanical, plumbing, and disabled access compliance pursuant to Title 24 of the State of California Code of Regulations and the federally mandated Americans with Disabilities Act; (3) Exterior photographs of the entrance(s), exits(s), street frontage(s), parking, front, rear and side(s) of the proposed property; (4) Photographs depicting the entire interior of the proposed property; (5) If the property is being rented or leased or is being purchased under contract, a copy of such lease or contract; (6) If the property is being rented or leased, written proof that the property owner, and landlord if applicable, were given notice that the property will be used as a Medical Marijuana Collective, and that the property owner, and landlord if applicable, agree(s) to said operations; (7) The name, address, telephone number, title and function(s) of each manager, employee, volunteer, etc.; (8) For each manager, employee, volunteer, a fully legible copy of one valid government issued form of photo identification, such as State Driver's License or Identification Card; (9) If the Medical Marijuana Collective is a corporation, a certified copy of the Collective's Secretary of State Articles of Incorporation, Certificate(s) of Amendment, Statement(s) of Information and a copy of the Collective's Bylaws; (10) If the Medical Marijuana Collective is an unincorporated association, a copy of the Articles of Association; (11) The name and address of the applicant's current agent for Service of Process; (12) A copy of the applicant's Board of Equalization Seller's Permit; (13) A copy of the Medical Marijuana Collective Operating Standards, listed in Section 18-613, containing a statement dated and signed by the responsible party on-site stating under penalty of perjury, that they read, understand and shall ensure compliance with the aforementioned operating standards. The Chief of Police shall have sixty (60) calendar days in which to investigate the application and background of the applicant. The department of building safety and 0 housing, the fire department and the Orange County Health Department shall inspect the premises proposed to be devoted to the collective establishment and shall make separate recommendations to the Chief of Police or designee concerning compliance with the foregoing provisions. The Chief of Police or designee, after receiving the application and aforementioned recommendations, shall grant the permit if he finds: (1) The required fee has been paid. (2) The application conforms in all respects to the provisions of this article. (3) The applicant has not knowingly made a material misrepresentation in the application. (4) The applicant has fully cooperated in the investigation of his application. (5) The applicant has not had a regulatory safety permit or other similar license or permit denied or revoked for cause by this City or any other city located in or out of this state within the five (5) years prior to the date of application. (6) The collective as proposed by the applicant would comply with all applicable laws including, but not limited to, health, zoning, fire and safety requirements. (7) The applicant has demonstrated compliance with the California Department of Justice, Office of the Attorney General, "Guidelines for the Security and Non -Diversion of Marijuana Grown for Medical Use" standards. 18-617.3. Medical marijuana collective — regulatory permit annual renewal (a) Applications for the renewal of a permit shall be filed with the Chief of Police at least sixty (60) calendar days before the expiration of the current permit. Temporary permits will not be issued. Any permittee allowing his or her permit to lapse or which permit expired during a suspension shall be required to submit a new registration application and pay the corresponding original application fees. (b) Any person desiring to obtain a renewal of his/her respective permit shall file a written application under penalty of perjury on the required form with the Chief of Police who shall conduct an investigation. The application shall be accompanied by a nonrefundable filing fee established by separate resolution of the City Council to help defray the cost of the investigation required by this article. An applicant shall be required to update the information contained in his/her original permit application and provide any new and/or additional information as may be reasonably required by the Chief of Police in order to determine whether said permit should be renewed. 18.617.4 Maintenance of records. 9 A Medical Marijuana Collective shall maintain records at the location accurately and truthfully documenting: (1) the full name, address, and telephone number(s) of the owner, landlord and/or lessee of the location; (2) the full name, address, and telephone number(s) of all members who are engaged in the management of the collective and the exact nature of each member's participation in the management of the collective; (3) the full name, address, and telephone number(s) of all patient members to whom the collective provides medical marijuana, a copy of a government -issued identification card for all patient members; (4) the full name, address, and telephone number(s) of all primary caregiver members to whom the collective provides medical; (5) all receipts of the collective, including but not limited to all contributions, reimbursements, and reasonable compensation, whether in cash or in kind, and all expenditures incurred by the collective for the cultivation of medical marijuana; and (6) proof of compliance with the California Attorney General Guidelines for the Security and Non -Diversion of Marijuana Grown for Medical Use. These records shall be maintained by the collective for a period of five years and shall be made available by the collective to the Police Department and/or Community Preservation Division upon request. If they are not produced as requested the City may seek a search warrant, subpoena, or court order. In addition to all other formats that the collective may maintain, these records shall be stored by the collective at the location in a printed format in its fire -proof safe. Any loss, damage or destruction of the records shall be reported to the Police Department within 24 hours of the loss, destruction or damage. 18-617.5 Audits. Annual Audits. No later than February 15 of every year, each collective shall file with the City one copy of an audit of its operations of the previous calendar year, completed and certified by an independent certified public accountant in accordance with generally accepted auditing and accounting principles. The audit shall include but not be limited to a discussion, analysis, and verification of each of the records required to be maintained pursuant to this article. 18-618. Inspection and enforcement responsibilities. The Community Preservation Division may enter and inspect the location of any collective between the hours of 10:00 a.m. and 8:00 p.m., or at any reasonable time, to ensure compliance with this article. In addition, a designated unit within the Police Department may enter and inspect the location of any collective and the recordings and records maintained as required by this article, except that the inspection and copying of private medical records shall be made available to the Police Department only pursuant to a properly executed search warrant, subpoena, or court order. It is unlawful for any owner, landlord, lessee, member (including but not limited to a member engaged in the management), or any other person having any responsibility over the operation of the collective to refuse to allow, impede, obstruct or interfere with an inspection, review or copying of records and closed-circuit monitoring authorized and required under this article, including but not limited to, the concealment, destruction, and falsification of any recordings, records, or monitoring. 10 18-619. Applicability to existing medical marijuana operations. Any existing medical marijuana collective, dispensary, operator, establishment, or provider that does not comply with the requirements of this article must immediately cease operation until such time, if any, when it complies fully with the requirements of this article. No medical marijuana collective, dispensary, operator, establishment, or provider that existed prior to the enactment of this article shall be deemed to be a legally established use under the provisions of this article, and such medical marijuana collective, dispensary, operator, establishment, or provider shall not be entitled to claim legal nonconforming status. 18-620. Compliance with this article and state law. (a) It is unlawful for any person to (i) cause, permit or engage in the cultivation, possession, distribution or giving away of marijuana or (ii) own establish, operate, use or permit the establishment or operation of a medical marijuana collective or cooperative, or to participate as an employee, contractor, agent or volunteer of a collective or cooperative, except as provided in this article, and pursuant to any and all other applicable local and state laws. (b) It is unlawful for any person to cause, permit or engage in any activity related to medical marijuana except as provided in Health and Safety Code Sections 11362.5 et seq., and pursuant to any and all other applicable local and state laws. (c) It is unlawful for any person to knowingly make any false, misleading or inaccurate statements or representations in any forms, records, filings or documentation required to be maintained, filed or provided to the City under this article, or to any other local, state or federal government agency having jurisdiction over any of the activities of collectives. (d) It shall be the sole responsibility of the members engaged in the management of the collective to ensure that the collective is at all times operating in a manner compliant with all applicable state laws and this article. Nothing in this article shall be construed as authorizing any actions which violate state law with regard to the cultivation, transportation, provision, and sale of medical marijuana. 18-621. Violation and enforcement. Each and every violation of this article shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by this Municipal Code. Additionally, as a nuisance per se, any violation of this article shall be subject to injunctive relief, revocation of the collective's registration, revocation of the certificate of occupancy for the location, disgorgement and payment to the City of any and all monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or equity. The City may also 11 pursue any and all remedies and actions available and applicable under local and state laws for any violations committed by the collective and persons related or associated with the collective. SECTION 3. Section 41-121 of the Santa Ana Municipal Code is hereby deleted in its entirety. SECTION 4. Subsection (b) of Section 41-144 of the Santa Ana Municipal Code is hereby deleted in its entirety. SECTION 5. Chapter 21, Article XII of the Santa Ana Municipal Code, comprised of sections 21-126, 21-127, 21-128, 21-129 and 21-130, is hereby added such that it reads as follows: Sec. 21-126. Purpose. This article is required for the purpose of fixing the rate of taxation for Marijuana Collectives/Cooperatives and for the purpose of providing a tax levy for the usual and current expenses of the City of Santa Ana. The taxes required to be paid under this article are declared to be required pursuant to the taxing power of the City of Santa Ana solely for the purpose of obtaining revenue and are not regulatory permit fees. Sec. 21-127. Marijuana collectives/cooperatives — Annual business license tax assessment. (a) Annual business license tax assessment for Marijuana Collectives/ Cooperatives: (1) Every Collective/Cooperative whether it is organized or conducted as a "not for profit' business, a "non-profit" business, or a "for-profit' business, shall pay an annual business license tax in accordance with Chapter 21 of this Code and the Sections and Subsections hereunder. (2) For the purposes of this article, a Marijuana Collective/Cooperative is defined in section 18-611 of this Municipal Code and is considered to be a business as that term is defined in Section 21-3 of this Chapter. (3) For the purposes of this article, a Collective/Cooperative is not considered to be a religious or charitable organization. (4) "Medical Marijuana Collective/Cooperative" or "Collective/ Cooperative" shall mean any activity regulated or permitted by Chapter 18 of this Municipal Code. (5) For the purposes of this article, a Marijuana Collective/Cooperative is not considered to be a business or person having a "specified exemption" or "specified exclusion" from business license taxation as set forth in Sections 21-48 12 and 21-49 of this Chapter. (6) For the purposes of this article, a "Nonprofit Organization" shall mean any institution or organization that is exempted from taxes measured by income or gross receipts pursuant to Article XIII, Section 26 of the California Constitution as codified under Chapter 4 (commencing with Section 23701) of Part 11 of Division 2 of the Revenue and Taxation Code and Section 37101 (c) of the Government Code or Sub -Chapter F (commencing with Section 501) of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986. An institution or organization operating as a Collective/Cooperative and claiming a gross receipts assessment business license tax exemption under this section shall have the burden of furnishing to the collector such information as the collector may require to validate the claim of exemption including but not limited to such a determination by the California Franchise Tax Board or any other information requested by the collector. (7) For the purposes of this article, "gross receipts" shall mean any transfer of title or possession, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration including any monetary consideration for marijuana whatsoever, including, but not limited to, membership dues, reimbursements provided by members, regardless of form, or the total amount of cash or in-kind contributions, including all operating costs related to the growth, cultivation or provision of marijuana or any transaction related thereto. "Gross receipts" shall also include without limitation anything else of value obtained by a Collective/Cooperative. The term "gross receipts" shall also include the total amount of the sale price of all sales, the total amount charged or received for the performance of any act, service or employment of whatever nature it may be, whether or not such service, act or employment is done as a part of or in connection with the sale of goods, wares, merchandise, for which a charge is made or credit allowed, including all refunds, cash credits and properties of any amount or nature, any amount for which credit is allowed by the seller to the purchaser without any deduction therefrom, on account of the cost of the property sold, the cost of materials used, the labor or service cost, interest paid or payable, losses, or any other expense whatsoever; provided that cash discounts allowed or payment on sales shall not be included. "Gross receipts" shall also include the amount of any federal, manufacturer's or importer's excise tax included in the price of property sold, even though the manufacturer or importer is also the retailer thereof and whether or not the amount of such tax is stated as a separate charge. "Gross receipts" shall not include the amount of any federal tax imposed on or with respect to retail sales whether or not the amount of such tax is stated as a separate charge. "Gross receipts" shall not include the amount of any federal tax imposed on or with respect to retail sales whether imposed upon the retailer or the consumer and regardless of whether or not the amount of federal tax is stated to customers as a separate charge, or any California state, city or city and county sales or use tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser, or such part of the 13 sales price of any property previously sold and returned by the purchaser to the seller which is refunded by the seller by way of cash or credit allowances given or taken as part payment on any property so accepted for resale. "Gross receipts" shall be calculated without any deduction on account of any of the following: (i) The cost of tangible property sold or bartered; (ii) The cost of materials or products used, labor or service cost, interest paid, losses, or other expense; or (iii) The cost of transportation of the marijuana, or other property or product. (b) Business license tax rates for Marijuana Collectives/Cooperatives (1) Every Collective/Cooperative, excepting a qualified "Nonprofit Organization", whether it is organized or conducted as a "not for profit" business, a "non-profit' business, or a "for-profit' business, shall pay a separate business license tax at a rate of up to ten percent (10%) of the gross receipts generated or otherwise received for each branch establishment or separate property location of the business. The gross receipts tax shall be initially set at a rate of five percent (5%). The maximum tax rate shall not exceed ten percent (10%) of gross receipts. This tax shall not be adjusted for inflation pursuant to Section 21- 121 of this Chapter. (2) Notwithstanding the maximum tax rate of ten percent (10%) of gross receipts imposed under subsection (b)(1), the City Council may in its discretion at any time by ordinance implement a lower gross receipts tax rate for all Marijuana Collectives/Cooperatives, as defined in such ordinance, subject to the maximum rate of ten percent (10%) of gross receipts. The City Council may by ordinance increase any such gross receipts tax rate from time to time, not to exceed the maximum gross receipts tax rate established under subsection (b)(1). (3) As part of the gross receipts tax imposed by this article, each Collective/Cooperative shall pay a minimum basic rate of two thousand dollars annually for each separate branch location or separate property location of the business. (c) Modification, Repeal or Amendment The City Council may repeal the ordinance codified in this article, or amend it in a manner which does not result in an increase in the tax or taxes imposed herein, without further voter approval. The City Council may likewise by ordinance adopt and add additional provisions to any other article of this Chapter and relate them to this article, or amend any existing provisions of any article of this Chapter as they may already relate to this article in any manner which does not result in an increase in the tax or taxes imposed herein, without further voter approval. If the City Council repeals said ordinance or any provision of this article, it may subsequently reenact it without voter 14 approval, as long as the reenacted ordinance or section does not result in an increase in the tax or taxes imposed herein. (d) Administration - rules, regulations, and guidelines; interpretation/ clarification. In order to aid in the City's collection of taxes due under this article and to ensure that all Marijuana Collectives/Cooperatives are taxed consistently to the best of the City's ability, the collector, with the concurrence of the City Attorney, may promulgate rules, regulations, and guidelines, to implement and administer this article including, but not limited to rules, regulations, and guidelines harmonizing other provisions of this Chapter with the provisions of this article in any manner not inconsistent with the intent of this article and which does not result in an increase in the tax or taxes imposed herein. The collector may also, with the concurrence of the City Attorney, interpret or clarify the methodology of the tax, or any definition applicable to the tax, so long as such interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the language of this article. (e) Occasional transactions — Exemptions (1) The provisions of this article shall not apply to persons having no fixed place of business within the City of Santa Ana who come into the City for the purpose of transacting a specific item of Marijuana Collective/Cooperative business at the request of a specific patient, client or customer, provided that such person does not come into the City for the purpose of transacting business on more than five days during any calendar year. (2) For any person not having a fixed place of business within the City of Santa Ana who comes into the City for the purpose of transacting Collective/Cooperative activities, the business tax payable by such person may be apportioned by the collector in accordance with this Chapter. (f) Reporting and Remittance Beginning as set forth in subsection (k) below, and monthly thereafter, each Marijuana Collective/Cooperative (except qualified Nonprofit Organizations exempt from taxes measured by income or gross receipts) required to pay a tax based on gross receipts under this article, shall report to the City any gross receipts received during the preceding monthly reporting period and shall likewise remit to the City the taxes due and owing during said period. For purposes of this section, month shall mean calendar month, and taxes shall begin to accrue on the date that a person or entity first receives a business license or other permit to operate as a Collective/Cooperative. The payment of the two thousand dollars minimum basic rate gross receipts tax required annually for each separate branch location or separate property location of the business in accordance subsection (b)(3), shall be made annually prior to the beginning of the fiscal year beginning April first of the current year and expiring on the thirty-first 15 day of March of the following year. In the case of a new Collective/Cooperative the minimum basic rate gross receipts tax shall be paid in advance prior to any new business activity being undertaken. Every new licensee shall pay in advance an amount equal to one-quarter ('/4) of the annual minimum basic rate gross receipts tax, for each quarter and fraction of a quarter remaining during the period for which the new license is issued. (g) Delinquent date -Penalty. Any individual or entity who fails to pay the taxes required by this article when due shall be subject to penalties and interest as set forth in accordance with this Chapter. The collector is not required to send a delinquency or other notice or bill to any person subject to the provisions of this Chapter and failure to send such notice or bill shall not affect the validity of any tax or penalty due under the provisions of this Chapter. (h) Payment of tax does not authorize unlawful business (1) The payment of a business tax required by this article, and its acceptance by the City, shall not entitle any person to carry on any Collective/Cooperative unless the person has complied with all of the requirements of this Code and all other applicable laws, nor to carry on any Collective/Cooperative in any building or on any premises in the event that such building or premises are situated in a zone or locality in which the conduct of such Collective/Cooperative is in violation of any law. (2) No tax paid under the provisions of this article shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any legal business in an illegal manner, or any business in violation of any ordinance of the City. Nothing in this article implies or authorizes that any activity connected with the distribution or possession of marijuana is legal unless otherwise authorized and allowed by California and federal law. Nothing in this section shall be applied or construed as authorizing the sale of marijuana. Business license tax certificate - Required There are imposed upon all persons engaged in transacting and carrying on any Collective/Cooperative business activity in the City taxes in the amounts prescribed in this article. It shall be unlawful for any person, either for him or herself or for any other person, to commence, transact or carry on any business in the City without first having procured a business license from the City under this Chapter and having paid the taxes set forth in this article, and without complying with any and all applicable provisions contained in this Chapter. The carrying on of any Collective/Cooperative without complying with all the provisions of this article shall constitute a separate violation of this Chapter for each and every day that such Collective/Cooperative is so carried on. (j) Classification of business license assessment type — term and renewal. 16 The business license issued to Marijuana Collectives/Cooperatives shall be classed as a gross receipts assessment type, issued for the same term of license as set forth in Section 21-71 (c) and shall be subject to renewal in accordance with Sections 21-72(c), 21-73(c), and 21-77 of this Chapter. (k) Operative Date. Upon the approval by the majority of the voters of the City of Santa Ana at the November 4, 2014 general election, the taxes imposed by this article shall become operative and shall be applied by the collector upon all Marijuana Collectives/Cooperatives. Sec. 21-128. Effect of state and federal reference/authorization. Unless specifically provided otherwise, any reference to a State or Federal statute in this article or Chapter shall mean such statute as it may be amended from time to time, provided that such reference to a statute herein shall not include any subsequent amendment thereto, or to any subsequent change of interpretation thereto by a State or Federal agency or court of law with the duty to interpret such law, to the extent that such amendment or change of interpretation would require voter approval under California law, or to the extent that such change would result in a tax decrease. Only to the extent voter approval would otherwise be required or a tax decrease would result, the prior version of the statute (or interpretation) shall remain applicable; for any application or situation that would not require voter approval or result in a decrease of a tax, provisions of the amended statute (or new interpretation) shall be applicable to the maximum possible extent. To the extent that the City's authorization to collect or impose any tax imposed under this article is expanded or limited as a result of changes in State or Federal law, no amendment or modification of this article shall be required to conform the tax to those changes, and the tax shall be imposed and collected to the full extent of the authorization up to the full amount of the tax imposed under this article. Sec. 21-129. Violation deemed misdemeanor - penalty. Any person violating any of the provisions of this article or any regulation or rule passed in accordance herewith, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by the maximum penalties provided for in Penal Code section 19. Sec. 21-130. Severability. Should any provision of this article, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this article or Chapter or the application of this article or Chapter to any other person or circumstance and, to that end, the provisions hereof are severable. 17 SECTION 6. Council to Make Future Amendments to Voter Approved Ordinance. This is a City Council sponsored initiative ordinance which traditionally would only be subject to amendment by the Voters of the City of Santa Ana. However, pursuant to Section 9217 of the California Elections Code the City Council reserves the right and authority to amend or repeal the ordinance without any restrictions. SECTION 7. Severability. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are severable. The People of the City of Santa Ana hereby declare that they would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof. SECTION 8. Effective Date. After its adoption by the voters, this ordinance shall be in full force and effect ten (10) days after the vote is declared by the legislative body, pursuant to the provisions of Elections Code sections 9217 and 15400 and as provided by law. SECTION 9. Competing Measures. In the event that this measure and another measure or measures relating to the regulation of medical marijuana in the City of Santa Ana appear on the same ballot, the provisions of the other measure or measures shall be deemed to be in conflict with this measure. In the event that this measure shall receive a greater number of affirmative votes required to pass than the other measure or measures, the provisions of this measure shall prevail in their entirely over the competing measure or measures, and the competing measure or measures shall be null and void. 18 Memorandum To: Clerk of the Council Maria Huizar File No.: 55394.00002 From: City Attorney Date: July 14, 2014 Re: Impartial Analysis of Council Sponsored Medical Marijuana Ordinance Proposition The City Attorney impartial analysis is set forth below. Please feel free to call me if you have any questions. Impartial Analysis Measure , is proposed by the City Council as a competing ballot measure that would regulate medical marijuana collectives and cooperatives (hereafter "collectives") in the City of Santa Ana. This measure is a proposition. The other measure was placed on the ballot through a citizens' initiative petition process. This Council proposition would regulate medical marijuana collectives by establishing a registration and public safety permit approval process. Applicants would have to pay application fees to cover the cost of processing permits. The proposition would also establish a tax of ten percent (10%) on gross receipts, but would initially impose the tax at five percent (5%). Collectives would be: *Restricted to Industrial M-1 and M-2 zones; *Located no closer than 500 feet from another collective; and *Located 1,000 feet from schools, parks and residential zones. *Prohibited from growing marijuana on-site. Collectives would be subject to all of the following operating standards, among others: *Must have at least one security guard on-site; *Must not sell alcohol, tobacco or food products; *Must provide an on-site ventilation system; *All operators and employees must go through criminal background checks and will be denied approval if they have been convicted of or plead guilty or no contest to a di ug charge in the previous four years; *Each location must be monitored by fire and burglar systems; *Must only operate between 10:00am and 8:OOpm Monday through Saturday and from 11:OOam and 7:OOpm on Sundays. *Must comply with California Attorney General Guidelines for the operation of collectives. * Must submit to an annual audit and permit renewal process. If this Council measure and the initiative measure are approved by a majority of the voters, only the measure that receives the most votes will become effective. Furthermore, if the Council measure is approved, the Council would be authorized to amend or repeal the measure without voter approval. This measure must be approved by a majority of the voters and must receive a higher number of votes than the competing measure. A "yes" vote is a vote in favor of adopting the City proposition to regulate collectives. A "no" vote is a vote against permitting and regulating medical marijuana collectives in the City of Santa Ana. Santa Ana City Attorney -2- FORM OF STATEMENT TO BE FILED BY AUTHOR(S) OF ARGUMENT IN FAVOR OF THE CITY'S INITIATIVE 7(111 Jit, 15 27. All arguments concerning measures filed r n t T ARS? Division 9, Chapter 3 (beginning with SectiorO oljNn, Elections Code shall be accompanied by the f i rm statement to be signed by each author of the argument. The undersigned author(s) of the argument in favor of Measure_, relating to the following question to be submitted to the voters of Santa Ana at the Municipal Election consolidated with the 2014 General Municipal Election to be held on Tuesday, November 4, 2014, hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief: In the event Measure _ is approved, the ordinance titled "AN ORDINANCE OF THE PEOPLE OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE MUNICIPAL CODE TO DELETE AND REPLACE ARTICLE XIII, TO DELETE SECTION 41-121, DELETE SUBSECTION (B) OF SECTION 41-144, AND AMEND ARTICLE XII OF CHAPTER 21 BY ADDING SECTIONS 21-126, 21-127, 21- 128, 21-129 AND 21-130 TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES", Is established. Sign Name Print Name/Title Date Sal Tinaiero, Mavor Pro Tem July 15, 2014 Angelica Amezcua, Cauncllmember July15, 2014 Vincent Sarmiento Councilmember July 15, 2014 All Authors must print his/her name and sign this form (EC9600) OR Print his/her name and sign the actual argument (EC 9283) ARGUMENT IN FAVOR OF MEASURE The majority of the Santa Ana City Council urges a YES VOTE on Measure Marijuana companies in the city decided to put a measure on the ballot that would allow them to sell medical marijuana all over the city. There Measure is bad for the city because: • It allows sales to 18 year olds! • Marijuana collectives will be allowed to stay open 24 hours in your neighborhood! • It allows for Mobil trucks to sell Marijuana all over the city! • It allows for Marijuana sales only 600 ft. away from schools! • Only pays a 2% tax above the sale tax for police enforce - that is not enough! The Santa Ana Sponsored City Measure will: • Allow adults 21 years of age or over to purchase at dispensaries, • It will regulate Marijuana stores to industrial areas, far from our children, neighborhoods and schools! • Require all dispensaries to pay a minimum of a 411/b tax that will go toward more police and code enforcement in the city! Vote NO on Measure it only helps Marijuana growers! Our cities quality of life depends on a YES VOTE on Measure ! Measure PROTECTS Santa Ana! FORM OF STATEMENT TO 13gT4I.,9P Wf P'r4 4: 12 AUTHOR(S) OF ARGUMENT AGAINST THE CITY'S INITIATIVEUTY OF SANTA ANA CLERK OF COl.,H('hl. All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with Section 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each author of the argument. The undersigned author(s) of the argument in opposition of Measure____, relating to the following question to be submitted to the voters of Santa Ana at the Municipal Election consolidated with the 2014 General Municipal Election to be held on Tuesday, November 4, 2014, hereby state that the argument is true and correct to the best of (his/ her/their) knowledge and belief: In the event Measure _ is not approved, the ordinance titled "AN ORDINANCE OF THE PEOPLE OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE MUNICIPAL CODE TO DELETE, AND REPLACE ARTICLE XIII, TO DELETE SECTION 41-121, DELETE SUBSECTION (B) OF SECTION 41•-144, AND AMEND ARTICLE XII OF CHAPTER 21 BY ADDING SECTIONS 21-126, 21-127, 21-128, 21-129 AND 21-130 TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES", is rejected. Print NaaneiTltle Date All Authors must print his/heir name and siun this farm (EC980q) Or Print his/her name and ILU the actual argument (EC 92811 Argument Against Measure __ Vote NO on measure --.,rhe city of Santa Ana has created the current situation with unregulated medical marijuana dispensaries in Santa Ana — they acre oant of touch and we cannot trust theana to resolve the^ site€atiou, This oneasure has been hastily put together and has serious fhnws — and the City has proven time and tinge aagaaiaa incapable of enforcing their crnrrcut hang. *'Chis naneasure has no cap on the number of locations that can be permitted. *Allows annabile collectives to deliver in the City of Santa Ana with no requirement to repiater or follow safety regulations, *Places dispensaries only in hard to reach industrial areas that will become hot zones for crime and loitering and create a planned "res. light district." 'Requires the collectives to create lists of patient names, addresses and government ilk's which would he available to the pollee. Patients .who wish to keep their medical needs coxnladcnatial Will not he abee to use the registered locations, `Only allows patients 2.1 and over to enter dispensaries which leaves returning veterans suffering f€°oven PTSD and traunaaatic brabi injuries without access to medicine they deserve. *'Chis uxcamwe wwiH place as tax of 5-10% in addition to scales tax on transactions. An excessive IS% total tax 043 medical aaaariiaaana will naturally result in increased black market sales wand as paroliferition of uanregpistcred locations, *The City Council has asked for the unique power to reserve the right to amend or repeal this measure without the consent of the voters. *There is no eanl'oreemennt plan to handle the number of uraperm fitted locations, The voters of Santa Ana have come up with a comprehensive and reasonable alteruaatpve. Vote NO on Measure as there is anaother measure onthe ballot that has aaddr ; al 111.)' the alcove mentioned issues. �,. •� nix". � c -y aa° Rebuttal to Argument in Favor of Measure A majority of Santa Ana Community Leaders urges a NO VOTE on Measure T . Voting Noon Measure —will send a clear message to the City Council that they cannot lie and deceive the Citizens and Voters of Santa Ana. THE CITY COUNCIL'S Measure — will restrict Medical Marijuana Dispensaries to such a small area of Santa Ana that SUPER RETAIL sites will be the only option to responsible Cannabis providers. The Santa Ana City Council Measure — sponsors have lied to the Voters about: • Measure — was promoted by concerned Patient Advocates, NOT MARIJUANA GROWERS or Dispensary Operators. • Petition Signature qualified Measure __ does NOT allow Mobile Trucks at all. • Measure — has adequate taxation rate to pay for Police Enforcement. • Measure.____ does not SET ANY HOURS of operation. The City Council can enact reasonable hours of operation If the City Council could find the will to cast a vote as they were elected to do. • Measure _ duplicates State Law requiring a 600 foot separation from schools. Proponents of Measure — attempted to engage the City Council since 2010 to draft a law that would be to the Council's satisfaction. The City Council forced Citizens to gather signatures to place Measure,-,--- on the ballot. Direct Democracy was used when Santa Ana Elected Officials ignored the needs of their Citizens. Vote NO to the City Council's Measure __. A NO VOTE on Measure _ will tell the City Council to do the JOB they were elected for FORM OF STATEMENT TO BE FILED BY AUTHOR(S) OF REBUTTAL ARGUMENT RELATED TO CITY'S INITIATIVE All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with Section 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each author of the argument. The undersigned author(s) of the rebuttal argument of Measure_, relating to the following question to be submitted to the voters of Santa Ana at the Municipal Election consolidated with the 2014 General Municipal Election to be held on Tuesday, November 4, 2014, hereby state that the rebuttal argument is true and correct to the best of (his/her/their) knowledge and belief: In the event Measure —is not approved, the ordinance titled "AN ORDINANCE OF THE PEOPLE OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE MUNICIPAL CODE TO DELETE AND REPLACE ARTICLE XIII, TO DELETE SECTION 41-121, DELETE SUBSECTION (B) OF SECTION 41-144, AND AMEND ARTICLE XII OF CHAPTER 21 BY ADDING SECTIONS 21-126, 21-127, 21-128, 21-129 AND 21-130 TO REGULATE THE ESTABLISHMENT,- OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES", is rejected. All Authors must print his/her name and sign this form ORPrint his/her name and sign the actual rebuttal arnump Date u"b�\ � > 4i: Q�31;1 co REBUTTAL TO ARGUMENT IN OPPOSITION OF MEASURE The majority of the Santa Ana City Council, City Attorney's Office and executive Santa Ana city staff urge a YES VOTE on Measure . Our measure was created to ensure that we have responsible oversight of medical marijuana collectives and dispensaries in our city. Please don't be confused by the opponents of this measure. Our staff was very careful in creating a measure that provided adequate funds for public safety and enforcement. This City measure will: • Ensure that marijuana dispensaries will be removed from neighborhoods, parks, and schools. • Regulate marijuana dispensaries to industrial areas only! • Require all dispensaries to pay a higher tax that will be directly used towards public safety and code enforcement in the City. • Only allow patients 21 years or older to purchase at dispensaries. The marijuana companies have placed Measure on the ballot that will decrease the quality of life for the residents of Santa Ana. Our Measure protects our neighborhoods. Please don't allow yourself to be deceived by marijuana companies who are trying to infiltrate our city and handcuff the city's ability to regulate them. In order to protect our neighborhoods, schools, and quality of life, we urge a YES VOTE on Measure FORM OF STATEMENT TO BE FILED BY AUTHOR OF REBUTTAL ARGUMENT IN FAVOR OF THE CITY'S INITIATIVE All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with Section 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each author of the argument. The undersigned author(s) of the rebuttal argument in favor of Measure, relating to the following question to be submitted to the voters 'of Santa Ana at the Municipal Election consolidated with the 2014 General Municipal Election to be held on Tuesday, November 4, 2014, hereby state that the rebuttal argument is true and correct to the best of (his/her/their) knowledge and belief: Sign Name kL In the event Measure _ is approved, the ordinance titled "AN ORDINANCE OF THE PEOPLE. OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE MUNICIPAL CODE TO DELETE AND REPLACE ARTICLE XIII, TO DELETE SECTION 41-121, DELETE SUBSECTION (B) OF SECTION 41-144, AND AMEND ARTICLE XII OF CHAPTER 21 BY ADDING SECTIONS 21-126, 21-127, 21- 128, 21-129 AND 21-130 TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES", is established. Print Name/Title Vincent Sarmiento, Councilmember Angelica Amezcua Councilmember All Authors must print his/her name and sign this form OR Print his/her name Date July 2y5,2014 July 25, 2014 FORM OF STATEMENT TO BE FILED BY AUTHOR OF REBUTTAL ARGUMENT IN FAVOR OF THE CITY'S INITIATIVE All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with Section 9200) of the Elections Code shall be accompanied by the following farm statement to be signed by each author of the argument. The undersigned author(s) of the rebuttal argument in favor of Measure_, relating to the following question to be submitted to the voters of Santa Ana at the Municipal Election consolidated with the 2014 General Municipal Election to be held on Tuesday, November 4, 2014, hereby state that the rebuttal argument is true and correct to the best of (his/her/their) knowledge and belief: In the event Measure _ is approved, the ordinance titled "AN ORDINANCE OF THE PEOPLE OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE MUNICIPAL CODE TO DELETE AND REPLACE ARTICLE XIII, TO DELETE SECTION 41-121, DELETE SUBSECTION (B) OF SECTION 41-144, AND AMEND ARTICLE XII OF CHAPTER 21 BY ADDING SECTIONS 21-126, 21-127, 21- 128, 21-129 AND 21-130 TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES", is established. Sigh. r Print Name/Title Date .77 a: 4? :X w All Authors must print his/her name and siren this form (EC960d)"' ' OR Print his/her name and sign the actual rebuttal argument (EC 9285 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE COUNTY OF ORANGE TO CONDUCT A SPECIAL MUNICIPAL ELECTION TO BE HELD ON , 2015 WHEREAS, the City Council of the City of Costa Mesa has called a Special Municipal Election to be held on , 2015, for the purpose of submitting to the voters of the City of Costa Mesa questions relating to the adoption of proposed ordinances; and WHEREAS, given the expertise and experience of the Elections Department of the County of Orange, it is desirable that this Special Municipal Election be conducted by the County within the City of Costa Mesa, in precincts, polling places and with election officers utilized by the County's Elections Department, and that the County Election's Department also canvass the returns of the Special Municipal Election. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. The City Council of the City of Costa Mesa hereby respectfully requests that the Board of Supervisors of the County of Orange consent and agree to conduct a Special Municipal Election to be held on , 2015, for the purpose of submitting proposed ordinances to the voters of the City of Costa Mesa through measures to appear on the ballot as follows: Resolution No. 14 -XX Page 1 of 4 Measure _: Allow Operation of up to Eight Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana businesses with: six percent tax on medical Yes marijuana; one percent tax on other products; exemption from permits; regulations not subject to change by City No Council except for increasing businesses; precedence to No prior businesses; and locations limited to commercial and industrial areas, be adopted? 2. Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana; required industry specific licenses; required operator permits; regulations subject to change by City No Council including increasing businesses; precedence to prior No businesses; and locations limited to commercial and industrial areas, be adopted? 9 Measure _: Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation Response Vote Shall the ordinance, to allow general operation of medical marijuana businesses with: required dispensary permits; Yes required cultivator permits; requirement to allow City inspections; mandatory security cameras; requirement to No maintain business records; City Office of Cultivation Standards and Quality Control; regulations subject to amendment by City Council; and locations limited to commercial and industrial areas, be adopted? Resolution No. 14 -XX Page 2 of 4 SECTION 2. That the County Election's Department is requested and authorized to canvass the returns of the Special Municipal Election. That only one form of ballot be used in such special election. SECTION 3. The Board of Supervisors is requested to issue instructions to the County Election's Department to take any and all steps necessary for the holding and canvassing of such special election. SECTION 4. That in all particulars not recited in this resolution, said election shall be held and conducted in accordance with the provisions of law regulating special elections and the holding of municipal elections. SECTION 5. That the City of Costa Mesa recognizes that costs will be incurred by the County by reason of such special election and the City Council hereby agrees to reimburse the County for any and all such costs. SECTION 6. That the City Clerk is hereby directed to file a certified copy of this Resolution with the Board of Supervisors and the County Election's Department of the County of Orange. SECTION 7. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original Resolutions. Resolution No. 14 -XX Page 3 of 4 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) l.\»d411121D7_Far0lEel G1LTA i Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: /_\7x 01 Eel l0LVA l21►VA10.121Z61.1 0 Eel x11111111111111136101110Eel 10LTA 121►vA10.121:�91 /_1:1.921►1�i101110Eel 10 L 121 L 10.121161.1 IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, CALLING AND GIVING NOTICE FOR THE HOLDING OF A SPECIAL MUNICIPAL ELECTION TO BE HELD ON , 2015, FOR THE SUBMISSION TO THE VOTERS OF A PROPOSED ORDINANCE THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, pursuant to authority provided by statute a petition has been filed with the legislative body of the City of Costa Mesa, California, signed by fifteen percent (15%) of the number of registered voters of the city to submit a proposed ordinance entitled: Allow Operation of up to Eight Medical Marijuana Businesses in City of Costa Mesa; and WHEREAS, the City Clerk has caused to be examined, through the office of the Orange County Registrar, the records of registration and is in receipt of that certain "Certificate as to Verification of Signatures on Petition," from the Orange County Registrar, has examined such certificate and has accepted as true and correct the findings contained therein and, thereby, ascertained that the petition is signed by the requisite number of voters; and WHEREAS, the City Council has not voted in favor of the adoption of the ordinance, and is required by law to submit the same to the voters of the City of Costa Mesa. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: Resolution No. 14 -XX Page 1 of 4 SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on a Special Municipal Election for the purpose of submitting the following proposed ordinance: Measure _: Allow Operation of up to Eight Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana businesses with: six percent tax on medical Yes marijuana; one percent tax on other products; exemption from permits; regulations not subject to change by City Council except for increasing businesses; precedence to No prior businesses; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached. SECTION 4. That the ballots to be used at the election shall be in the form and content as required by law. SECTION 5. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same day when said polls shall be closed, pursuant to Election Code Section 10242, except as Resolution No. 14 -XX Page 2 of 4 provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That the Orange County Registrar of Voters is authorized to canvass the returns of the Special Municipal Election. SECTION 8. That in all particulars not recited in this resolution, said election shall be held and conducted in accordance with the provisions of law regulating special elections and the holding of municipal elections. SECTION 9. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give such further or additional notice of the election, in the time, form, and manner required by law. SECTION 10. The Costa Mesa City Council hereby requests that the Orange County Registrar of Voters conduct all necessary services related to the Costa Mesa Special Municipal Election. Pursuant to Elections Code Section 10002, the Finance Director, or his/her designee, is hereby authorized to reimburse the County for the actual cost incurred in conducting the election upon receipt of a bill stating the amount due as determined by the elections official. SECTION 11. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original Resolutions. Resolution No. 14 -XX Page 3 of 4 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9t" day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9t" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED MEASURE ENTITLED ALLOW OPERATION OF UP TO EIGHT MEDICAL MARIJUANA BUSINESSES IN THE CITY OF COSTA MESA; SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING THE MEASURE AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a Special Municipal Election is to be held in the City of Costa Mesa, California, on , at which there will be submitted to the voters the following measure: Measure _: Allow Operation of up to Eight Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana businesses with: six percent tax on medical Yes marijuana; one percent tax on other products; exemption from permits; regulations not subject to change by City Council except for increasing businesses; precedence to prior No businesses; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council affirms for measures placed on the ballot by petition, the persons filing an initiative petition, pursuant to Elections Code 9282(a) may file a written argument in favor of the ordinance, and the legislative body may submit an argument against the ordinance. SECTION 2. That the City Council authorizes ALL members of the City Council to file (a) written argument(s) In Favor of or Against Measure as specified above not exceeding 300 words, accompanied by the printed names(s) and signature(s) of the Resolution No. 14 -XX Page 1 of 5 author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. SECTION 3. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the measure may be submitted to the City Clerk. The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 4. If more than one argument for a measure is received from individuals or groups with the same preference and priority, the authors will be asked to witness a random drawing by a designee of the city elections official to determine which argument will be published. SECTION 5. That the City Council directs the City Clerk to transmit a copy of the measure to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. The City Attorney shall prepare an impartial analysis of the proposed Ordinance not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. In the event the entire text of the measure is not printed on the ballot, nor in the voter Resolution No. 14 -XX Page 2 of 5 information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is an impartial analysis of Ordinance or Measure . If you desire a copy of the ordinance or measure, please call the election official's office at 714-754-5225 and a copy will be mailed at no cost to you. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 6. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney Resolution No. 14 -XX Page 3 of 5 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 5 Attachment 1 FORM OF STATEMENT TO BE FILED BY AUTHORS OF ARGUMENTS All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with § 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each proponent, and by each author, if different, of the argument: The undersigned proponent (s) or author(s) of the (primary/rebuttal) argument (in favor of/against) ballot proposition (name or number) at the Special Municipal election for the City of Costa Mesa to be held on , hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief. Print Name_ Title Print Name_ Title Print Name_ Title Print Name_ Title Print Name_ Title Editor's Notes: Signature Date Signature Date Signature Date Signature Date Signature Date All Authors must print his/her name and sign this form (EC 9600) AND Print his/her name and sign the Argument itself (EC 9283) AND Print his/her name and sign the Rebuttal Argument itself (EC 9285) Further, pursuant to Election Code § 9282, printed arguments submitted to the voters shall be titled either "Argument In Favor Of Measure _" or "Argument Against Measure _" Likewise, printed rebuttal arguments submitted pursuant to Election Code § 9285 shall be titled either "Rebuttal To Argument In Favor Of Measure _" or "Rebuttal to Argument Against Measure ". Resolution No. 14 -XX Page 5 of 5 RESOLUTION NO. 14 - XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR PROPOSED MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, §9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for measures submitted at municipal elections. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the elections official has selected the arguments for and against the measure which will be printed and distributed to the voters, the elections official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a proposed measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. If more than five authors provide a signature to the rebuttal, then only the signatures of the first five authors shall be printed to the exclusion of the excess signatures. Resolution No. 14 -XX Page 1 of 4 The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument (Attachment 1). The rebuttal arguments shall be filed by Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on , and shall then be repealed. SECTION 4. That the City Clerk is hereby directed to submit the rebuttal arguments, as described herein, in compliance with State law and to perform all duties required of the elections official for the City of Costa Mesa. SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. Resolution No. 14 -XX Page 2 of 4 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 4 Attachment 1 FORM OF STATEMENT TO BE FILED BY AUTHORS OF ARGUMENTS All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with § 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each proponent, and by each author, if different, of the argument: The undersigned proponent (s) or author(s) of the (primary/rebuttal) argument (in favor of/against) ballot proposition (name or number) at the Special Municipal election for the City of Costa Mesa to be held on hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief. Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Editor's Notes: All Authors must print his/her name and sign this form (EC 9600) AND Print his/her name and sign the Argument itself (EC 9283) AND Print his/her name and siqn the Rebuttal Argument itself (EC 9285) Further, pursuant to Election Code § 9282, printed arguments submitted to the voters shall be titled either "Argument In Favor Of Measure _" or "Argument Against Measure Likewise, printed rebuttal arguments submitted pursuant to Election Code § 9285 shall be titled either "Rebuttal To Argument In Favor Of Measure _" or "Rebuttal to Argument Against Measure Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, CALLING AND GIVING NOTICE FOR THE HOLDING OF A SPECIAL MUNICIPAL ELECTION TO BE HELD ON , 2015, FOR THE SUBMISSION TO THE VOTERS OF A PROPOSED ORDINANCE THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, pursuant to authority provided by statute a petition has been filed with the legislative body of the City of Costa Mesa, California, signed by fifteen percent (15%) of the number of registered voters of the city to submit a proposed ordinance entitled: Allow Operation Of Up To Four Licensed Medical Marijuana Businesses In City of Costa Mesa; WHEREAS, the City Clerk has caused to be examined, through the office of the Orange County Registrar, the records of registration and is in receipt of that certain "Certificate as to Verification of Signatures on Petition," from the Orange County Registrar, has examined such certificate and has accepted as true and correct the findings contained therein and, thereby, ascertained that the petition is signed by the requisite number of voters; and WHEREAS, the City Council has not voted in favor of the adoption of the proposed ordinance, and is required by law to submit the same to the voters of the City of Costa Mesa. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: Resolution No. 14 -XX Page 1 of 4 SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on a Special Municipal Election for the purpose of submitting the following proposed ordinance: Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana; required industry specific licenses; required operator permits; regulations subject to change by City No Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached. SECTION 4. That the ballots to be used at the election shall be in the form and content as required by law. SECTION 5. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same day when said polls shall be closed, pursuant to Election Code Section 10242, except as Resolution No. 14 -XX Page 2 of 4 provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That the Orange County Registrar of Voters is authorized to canvass the returns of the Special Municipal Election. SECTION 8. That in all particulars not recited in this resolution, said election shall be held and conducted in accordance with the provisions of law regulating special elections and the holding of municipal elections. SECTION 9. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give such further or additional notice of the election, in the time, form, and manner required by law. SECTION 10. The Costa Mesa City Council hereby requests that the Orange County Registrar of Voters conduct all necessary services related to the Costa Mesa Special Municipal Election. Pursuant to Elections Code Section 10002, the Finance Director, or his/her designee, is hereby authorized to reimburse the County for the actual cost incurred in conducting the election upon receipt of a bill stating the amount due as determined by the elections official. SECTION 11. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. Resolution No. 14 -XX Page 3 of 4 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9t" day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9t" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED ORDINANCE TO ALLOW OPERATION OF UP TO FOUR LICENSED MEDICAL MARIJUANA BUSINESSES IN THE CITY OF COSTA MESA; SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING THE MEASURE AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a Special Municipal Election is to be held in the City of Costa Mesa, California, on , at which there will be submitted to the voters the following measure: Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana; required industry specific licenses; required operator permits; regulations subject to change by City No Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council affirms for measures placed on the ballot by petition, the persons filing an initiative petition, pursuant to Elections Code 9282(a) may file a written argument in favor of the ordinance, and the legislative body may submit an argument against the ordinance. SECTION 2. That the City Council authorizes ALL members of the City Council to file (a) written argument(s) In Favor of or Against City Measure as specified above not exceeding 300 words, accompanied by the printed names(s) and signature(s) of the Resolution No. 14 -XX Page 1 of 4 author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. SECTION 3. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the measure may be submitted to the City Clerk. The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 4. If more than one argument for a measure is received from individuals or groups with the same preference and priority, the authors will be asked to witness a random drawing by a designee of the city elections official to determine which argument will be published. SECTION 5. That the City Council directs the City Clerk to transmit a copy of the measure to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. The City Attorney shall prepare an impartial analysis of the proposed Ordinance not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. In the event the entire text of the measure is not printed on the ballot, nor in the voter Resolution No. 14 -XX Page 2 of 4 information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is an impartial analysis of Ordinance or Measure . If you desire a copy of the ordinance or measure, please call the election official's office at 714-754-5225 and a copy will be mailed at no cost to you. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 6. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney Resolution No. 14 -XX Page 3 of 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 - XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR PROPOSED MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, §9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for measures submitted at municipal elections. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the elections official has selected the arguments for and against the measure which will be printed and distributed to the voters, the elections official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a proposed measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. If more than five authors provide a signature to the rebuttal, then only the signatures of the first five authors shall be printed to the exclusion of the excess signatures. Resolution No. 14 -XX Page 1 of 4 The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument (Attachment 1). The rebuttal arguments shall be filed by Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on , and shall then be repealed. SECTION 4. That the City Clerk is hereby directed to submit the rebuttal arguments, as described herein, in compliance with State law and to perform all duties required of the elections official for the City of Costa Mesa. SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. Resolution No. 14 -XX Page 2 of 4 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 4 Attachment 1 FORM OF STATEMENT TO BE FILED BY AUTHORS OF ARGUMENTS All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with § 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each proponent, and by each author, if different, of the argument: The undersigned proponent (s) or author(s) of the (primary/rebuttal) argument (in favor of/against) ballot proposition (name or number) at the Special Municipal election for the City of Costa Mesa to be held on hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief. Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Editor's Notes: All Authors must print his/her name and sign this form (EC 9600) AND Print his/her name and sign the Argument itself (EC 9283) AND Print his/her name and siqn the Rebuttal Argument itself (EC 9285) Further, pursuant to Election Code § 9282, printed arguments submitted to the voters shall be titled either "Argument In Favor Of Measure _" or "Argument Against Measure Likewise, printed rebuttal arguments submitted pursuant to Election Code § 9285 shall be titled either "Rebuttal To Argument In Favor Of Measure _" or "Rebuttal to Argument Against Measure Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA CALLING AND GIVING NOTICE FOR THE HOLDING OF A SPECIAL MUNICIPAL ELECTION TO BE HELD ON , 2015 ORDERING THE SUBMISSION TO THE VOTERS OF THE CITY OF COSTA MESA, CALIFORNIA A MEASURE RELATING TO A PROPOSED ORDINANCE TO ESTABLISH REGULATION OF MEDICAL MARIJUANA DISPENSARIES AND REGULATION OF MEDICAL MARIJUANA CULTIVATION WHEREAS, in 1996 the California voters approved Proposition 215 (known as the Compassionate Use Act (the "CUA") and codified as Health and Safety Code Section 11362.5 et seq.) to exempt certain patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana for medical purposes; and WHEREAS, in 2003 the California legislature enacted Senate Bill 420 (known as the Medical Marijuana Program Act (the "MMPA") and codified as Health and Safety Code Section 11362.7 et seq.), as later amended, to clarify the scope of the Compassionate Use Act relating to the possession and cultivation of marijuana for medical purpose, and to authorize local governing bodies to adopt and enforce laws consistent with its provisions; and WHEREAS, in 2005 the California Board of Equalization began issuing seller's permits for sales consisting only of medical marijuana; and WHEREAS, in 2008 the California Attorney General issued guidelines for the security and non -diversion of marijuana grown for medical use; and Resolution No. 14 -XX Page 1 of 6 WHEREAS, in 2014 the U.S. House of Representatives voted to stop federal law enforcement from interfering with medical marijuana operations in the various states which have decriminalized and/or authorized such operations; and WHEREAS, Health & Safety Code Section 11362.83 provides that cities are free to adopt and enforce local ordinances that regulate the location, operation, or establishment of medical marijuana dispensaries and cultivation; and WHEREAS, the City Council of the City of Costa Mesa intends that nothing in this Ordinance shall be deemed to conflict with federal law as contained in the Controlled Substances Act, nor to otherwise permit any activity that is prohibited under that Act or other applicable law; and WHEREAS, the City Council of the City of Costa Mesa intends that nothing in this Ordinance shall be construed to allow persons to engage in conduct that endangers others or causes a public nuisance, to allow the use of marijuana for non-medical purposes, or to allow any activity relating to the cultivation, distribution or consumption of marijuana that is otherwise illegal; and WHEREAS, the operation of medical marijuana dispensaries and the cultivation of medical marijuana within the City of Costa Mesa presently remains prohibited and unregulated; and WHEREAS, the City Council of the City of Costa Mesa finds that medical marijuana operations and cultivation require careful consideration, as does the regulation of the location and manner in which dispensaries operate and cultivation occurs, so as to prevent negative impacts on nearby residents and businesses; and Resolution No. 14 -XX Page 2 of 6 WHEREAS, the City Council of the City of Costa Mesa finds that the City of Costa Mesa has a compelling interest in protecting the public health, safety and welfare of its residents and businesses by regulating the location and operation of medical marijuana dispensaries and medical marijuana cultivation, in preserving the peace and quiet of the neighborhoods in which medical marijuana dispensaries operate and medical marijuana is cultivated, and in providing compassionate access to medical marijuana to its seriously ill residents; and WHEREAS, the California Constitution grants local governments in Article XI, Section 7 the authority under their police powers to regulate land use; and WHEREAS, the proposed ordinance has been reviewed by City staff in accordance with the Environmental Checklist Form (Appendix G of the CEQA Guidelines) to determine if there would be any possibility that the proposed ordinance would have the possibility of creating any environmental impacts, and City staff has determined that the establishment of regulations for medical marijuana businesses does not meet any of the thresholds contained in the Checklist that would trigger an environmental impact, and thus according to the "general rule exemption" (Section 15061(b)(3)) of the CEQA Guidelines, projects which have no potential for causing a significant effect on the environment are not subject to CEQA, no further environmental analysis is required, and a notice of exemption will be filed; WHEREAS, the City Council desires to submit to the voters of the City, at a Special Municipal Election to be held on proposed Ordinance No. 14 -XX to establish regulation of medical marijuana dispensaries and regulation of medical marijuana cultivation; Resolution No. 14 -XX Page 3 of 6 WHEREAS, the City Council is authorized by the law of the State of California to submit the proposed ordinance to the voters; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on a Special Municipal Election for the purpose of submitting the following proposed ordinance: Measure _: Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation Response Vote Shall the ordinance, to allow general operation of medical marijuana businesses with: required dispensary permits; Yes required cultivator permits; requirement to allow City inspections; mandatory security cameras; requirement to No maintain business records; City Office of Cultivation Standards and Quality Control; regulations subject to amendment by City Council; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached, being Ordinance No. 14 -XX. SECTION 4. That the ballots to be used at the election shall be in the form and content as required by law. Resolution No. 14 -XX Page 4 of 6 SECTION 5. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same day when said polls shall be closed, pursuant to Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That the Orange County Registrar of Voters is authorized to canvass the returns of the Special Municipal Election. SECTION 8. The ballot measure shall not take effect, unless and until the ballot measure receives the approval of a majority of the votes cast by the voters of the City voting upon the ballot measure at the special municipal election. SECTION 9. That in all particulars not recited in this resolution, the election will be held and conducted in accordance with the provisions of law regulating special elections and the holding of municipal elections. SECTION 10. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SECTION 11. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. Resolution No. 14 -XX Page 5 of 6 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 6 of 6 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED ORDINANCE WHICH WOULD ESTABLISH REGULATION OF MEDICAL MARIJUANA DISPENSARIES AND REGULATION OF MEDICAL MARIJUANA CULTIVATION IN THE CITY OF COSTA MESA; SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING THE MEASURE AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a Special Municipal Election is to be held in the City of Costa Mesa, California, on measure: , at which there will be submitted to the voters the following Measure _: Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation Response Vote Shall the ordinance, to allow general operation of medical marijuana businesses with: required dispensary permits; Yes required cultivator permits; requirement to allow City inspections; mandatory security cameras; requirement to No maintain business records; City Office of Cultivation Standards and Quality Control; regulations subject to amendment by City Council; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council authorizes ALL members of the City Council to file (a) written argument(s) In Favor of or Against City Measure as specified above not exceeding 300 words, accompanied by the printed names(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. Resolution No. 14 -XX Page 1 of 3 The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 2. If more than one argument for a measure is received from individuals or groups with the same preference and priority, the authors will be asked to witness a random drawing by a designee of the city elections official to determine which argument will be published. SECTION 3. That the City Council directs the City Clerk to transmit a copy of the measure to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. The City Attorney shall prepare an impartial analysis of the measure not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is an impartial analysis of Ordinance or Measure . If you desire a copy of the ordinance or measure, please call the election official's office at 714-754-5225 and a copy will be mailed at no Resolution No. 14 -XX Page 2 of 3 cost to you. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 4. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9t" day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9t" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 3 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, REQUESTING THE ORANGE COUNTY BOARD OF SUPERVISORS TO CONSOLIDATE A GENERAL MUNICIPAL ELECTION TO BE HELD NOVEMBER 8, 2016, WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON THE DATE PURSUANT TO SECTION 10403 OF THE ELECTIONS CODE WHEREAS, the City Council of the City of Costa Mesa called a General Municipal Election to be held on November 8, 2016 for the purpose of submitting proposed ordinances to the voters of the City of Costa Mesa for their consideration; and WHEREAS, the City Council of the City of Costa Mesa is submitting to the voters of the City of Costa Mesa questions relating to the adoption of proposed ordinances; and WHEREAS, it is desirable that the general municipal election be consolidated with the Statewide General election to be held on the same date and that within the city, the precincts, polling places, and election officers of the two elections be the same, and that the Registrar of Voters of the County of Orange canvass the returns of the General Municipal Election and that the election be held in all respects as if there were only one election; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1. That pursuant to the requirements of Section 10403 of the Elections Code, the Board of Supervisors of the County of Orange is hereby requested to consent and agree to the consolidation of a General Municipal Election with the Statewide General Election on Tuesday, November 8, 2016, for the purpose of submitting to the voters of the City of Costa Mesa questions relating to the adoption of proposed Resolution No. 14 -XX Page 1 of 4 ordinances. SECTION 2. That the following measures are to appear on the ballot as follows: Measure _: Allow Operation of up to Eight Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana businesses with: six percent tax on medical Yes marijuana; one percent tax on other products; exemption from permits; regulations not subject to change by City No Council except for increasing businesses; precedence to No prior businesses; and locations limited to commercial and industrial areas, be adopted? 2. Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana; required industry specific licenses; required operator permits; regulations subject to change by City No Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? 3. Measure _: Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation Response Vote Shall the ordinance, to allow general operation of medical marijuana businesses with: required dispensary permits; Yes required cultivator permits; requirement to allow City inspections; mandatory security cameras; requirement to No maintain business records; City Office of Cultivation Standards and Quality Control; regulations subject to amendment by City Council; and locations limited to commercial and industrial areas, be adopted? Resolution No. 14 -XX Page 2 of 4 SECTION 3. That the County of Orange Registrar of Voters is authorized to canvass the returns of the General Municipal Election. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. The election will be held and conducted in accordance with the provisions of law regulating the statewide election. SECTION 4. That the Board of Supervisors is requested to issue instructions to the county election department to take any and all steps necessary to hold the consolidated election. SECTION 5. That the City of Costa Mesa recognizes that additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County for any costs. SECTION 6. That the City Clerk is directed to file a certified copy of this Resolution with the Board of Supervisors and county election department of the County of Orange. SECTION 7. That the City Clerk shall certify to the passage and adoption of this resolution. Resolution No. 14 -XX Page 3 of 4 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9t" day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9t" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 • z1a:193- GENERAL �iy NOVEMBER • 2016 RESOLUTION NO. 14 - XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR PROPOSED MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, §9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for measures submitted at municipal elections. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the elections official has selected the arguments for and against the measure which will be printed and distributed to the voters, the elections official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a proposed measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. If more than five authors provide a signature to the rebuttal, then only the signatures of the first five authors shall be printed to the exclusion of the excess signatures. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed Resolution No. 14 -XX Page 1 of 4 name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument (Attachment 1). The rebuttal arguments shall be filed by Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on , and shall then be repealed. SECTION 4. That the City Clerk is hereby directed to submit the rebuttal arguments, as described herein, in compliance with State law and to perform all duties required of the elections official for the City of Costa Mesa. SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council Resolution No. 14 -XX Page 2 of 4 of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 4 Attachment 1 FORM OF STATEMENT TO BE FILED BY AUTHORS OF ARGUMENTS All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with § 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each proponent, and by each author, if different, of the argument: The undersigned proponent (s) or author(s) of the (primary/rebuttal) argument (in favor of/against) ballot proposition (name or number) at the Special Municipal election for the City of Costa Mesa to be held on , hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief. Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Editor's Notes: All Authors must print his/her name and sign this form (EC 9600) AND Print his/her name and sign the Argument itself (EC 9283) AND Print his/her name and siqn the Rebuttal Argument itself (EC 9285) Further, pursuant to Election Code § 9282, printed arguments submitted to the voters shall be titled either "Argument In Favor Of Measure _" or "Argument Against Measure _' Likewise, printed rebuttal arguments submitted pursuant to Election Code § 9285 shall be titled either "Rebuttal To Argument In Favor Of Measure _" or "Rebuttal to Argument Against Measure Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, CALLING AND GIVING NOTICE FOR THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2016 FOR THE SUBMISSION TO THE VOTERS OF A PROPOSED MEASURE THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, pursuant to authority provided by statute a petition has been filed with the legislative body of the City of Costa Mesa, California, signed by fifteen percent (15%) of the number of registered voters of the city to submit a proposed ordinance entitled: Allow Operation of up to Eight Medical Marijuana Businesses in the City of Costa Mesa; and WHEREAS, the City Clerk has caused to be examined, through the office of the Orange County Registrar, the records of registration and is in receipt of that certain "Certificate as to Verification of Signatures on Petition," from the Orange County Registrar, has examined such certificate and has accepted as true and correct the findings contained therein and, thereby, ascertained that the petition is signed by the requisite number of voters; and WHEREAS, the City Council has not voted in favor of the adoption of the ordinance, and is required by law to submit the same to the voters of the City of Costa Mesa. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: Resolution No. 14 -XX Page 1 of 4 SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on November 8, 2016 a General Municipal Election for the purpose of submitting the following proposed ordinance: Measure _: Allow Operation of up to Eight Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana businesses with: six percent tax on medical Yes marijuana; one percent tax on other products; exemption from permits; regulations not subject to change by City Council except for increasing businesses; precedence to No prior businesses; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached. SECTION 4. That the ballots to be used at the election shall be in the form and content as required by law. SECTION 5. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same day when said polls shall be closed, pursuant to Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. Resolution No. 14 -XX Page 2 of 4 SECTION 7. That the Orange County Registrar of Voters is authorized to canvass the returns of the General Municipal Election. SECTION 8. That in all particulars not recited in this resolution, said election shall be held and conducted in accordance with the provisions of law regulating the statewide election. SECTION 9. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give such further or additional notice of the election, in the time, form, and manner required by law. SECTION 10. The Costa Mesa City Council hereby requests that the Orange County Registrar of Voters conduct all necessary services related to the Costa Mesa General Municipal Election. Pursuant to Elections Code Section 10002, the Finance Director, or his/her designee, is hereby authorized to reimburse the County for the actual cost incurred in conducting the election upon receipt of a bill stating the amount due as determined by the elections official. SECTION 11. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. Resolution No. 14 -XX Page 3 of 4 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9t" day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9t" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED ORDINANCE TO ALLOW OPERATION OF UP TO EIGHT MEDICAL MARIJUANA BUSINESSES IN THE CITY OF COSTA MESA; SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING THE MEASURE AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a General Municipal Election is to be held in the City of Costa Mesa, California, on November 8, 2016, at which there will be submitted to the voters the following proposed measure: Measure _: Allow Operation of up to Eight Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to eight medical marijuana businesses with: six percent tax on medical Yes marijuana; one percent tax on other products; exemption from permits; regulations not subject to change by City Council except for increasing businesses; precedence to prior No businesses; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council affirms for measures placed on the ballot by petition, the persons filing an initiative petition, pursuant to Elections Code 9282(a) may file a written argument in favor of the ordinance, and the legislative body may submit an argument against the ordinance. SECTION 2. That the City Council authorizes ALL members of the City Council to file (a) written argument(s) In Favor of or Against Measure as specified above not exceeding 300 words, accompanied by the printed names(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and Resolution No. 14 -XX Page 1 of 3 including the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. SECTION 3. The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 4. If more than one argument for a measure is received from individuals or groups with the same preference and priority, the authors will be asked to witness a random drawing by a designee of the city elections official to determine which argument will be published. SECTION 5. That the City Council directs the City Clerk to transmit a copy of the measure to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. The City Attorney shall prepare an impartial analysis of the measure not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is an impartial analysis of Ordinance or Measure . If you desire a copy of the ordinance or measure, Resolution No. 14 -XX Page 2 of 3 please call the election official's office at 714-754-5225 and a copy will be mailed at no cost to you. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 6. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9` day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9t" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 3 RESOLUTION NO. 14 - XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR PROPOSED MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, §9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for measures submitted at municipal elections. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the elections official has selected the arguments for and against the measure which will be printed and distributed to the voters, the elections official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a proposed measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. If more than five authors provide a signature to the rebuttal, then only the signatures of the first five authors shall be printed to the exclusion of the excess signatures. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed Resolution No. 14 -XX Page 1 of 4 name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument (Attachment 1). The rebuttal arguments shall be filed by Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on , and shall then be repealed. SECTION 4. That the City Clerk is hereby directed to submit the rebuttal arguments, as described herein, in compliance with State law and to perform all duties required of the elections official for the City of Costa Mesa. SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council Resolution No. 14 -XX Page 2 of 4 of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 4 Attachment 1 FORM OF STATEMENT TO BE FILED BY AUTHORS OF ARGUMENTS All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with § 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each proponent, and by each author, if different, of the argument: The undersigned proponent (s) or author(s) of the (primary/rebuttal) argument (in favor of/against) ballot proposition (name or number) at the Special Municipal election for the City of Costa Mesa to be held on , hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief. Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Editor's Notes: All Authors must print his/her name and sign this form (EC 9600) AND Print his/her name and sign the Argument itself (EC 9283) AND Print his/her name and siqn the Rebuttal Argument itself (EC 9285) Further, pursuant to Election Code § 9282, printed arguments submitted to the voters shall be titled either "Argument In Favor Of Measure _" or "Argument Against Measure _' Likewise, printed rebuttal arguments submitted pursuant to Election Code § 9285 shall be titled either "Rebuttal To Argument In Favor Of Measure _" or "Rebuttal to Argument Against Measure Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, CALLING AND GIVING NOTICE FOR THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2016, FOR THE SUBMISSION TO THE VOTERS OF A PROPOSED ORDINANCE THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY RESOLVES AS FOLLOWS: WHEREAS, pursuant to authority provided by statute a petition has been filed with the legislative body of the City of Costa Mesa, California, signed by fifteen percent (15%) of the number of registered voters of the city to submit a proposed ordinance entitled: Allow Operation Of Up To Four Licensed Medical Marijuana Businesses In City of Costa Mesa; WHEREAS, the City Clerk has caused to be examined, through the office of the Orange County Registrar, the records of registration and is in receipt of that certain "Certificate as to Verification of Signatures on Petition," from the Orange County Registrar, has examined such certificate and has accepted as true and correct the findings contained therein and, thereby, ascertained that the petition is signed by the requisite number of voters; and WHEREAS, the City Council has not voted in favor of the adoption of the ordinance, and is required by law to submit the same to the voters of the City of Costa Mesa. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: Resolution No. 14 -XX Page 1 of 4 SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on November 8, 2016 a General Municipal Election for the purpose of submitting the following proposed ordinance: Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana; required industry specific licenses; required operator permits; regulations subject to change by City No Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached. SECTION 4. That the ballots to be used at the election shall be in the form and content as required by law. SECTION 5. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same day when said polls shall be closed, pursuant to Election Code Section 10242, except as Resolution No. 14 -XX Page 2 of 4 provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That the Orange County Registrar of Voters is authorized to canvass the returns of the General Municipal Election. SECTION 8. That in all particulars not recited in this resolution, said election shall be held and conducted in accordance with the provisions of law regulating the statewide election. SECTION 9. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed, and directed to give such further or additional notice of the election, in the time, form, and manner required by law. SECTION 10. The Costa Mesa City Council hereby requests that the Orange County Registrar of Voters conduct all necessary services related to the Costa Mesa General Municipal Election. Pursuant to Elections Code Section 10002, the Finance Director, or his/her designee, is hereby authorized to reimburse the County for the actual cost incurred in conducting the election upon receipt of a bill stating the amount due as determined by the elections official. SECTION 11. That the City Clerk shall certify to the passage and adoption of this resolution. Resolution No. 14 -XX Page 3 of 4 PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9t" day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9t" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED MEASURE TO ALLOW OPERATION OF UP TO FOUR LICENSED MEDICAL MARIJUANA BUSINESSES IN THE CITY OF COSTA MESA; SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING THE MEASURE AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS WHEREAS, a General Municipal Election is to be held in the City of Costa Mesa, California, on Tuesday, November 8, 2016, at which there will be submitted to the voters the following measure: Measure _: Allow Operation of up to Four Licensed Medical Marijuana Businesses in the City of Costa Mesa Response Vote Shall the ordinance, to allow operation of up to four medical marijuana businesses with: six percent tax on medical Yes marijuana; required industry specific licenses; required operator permits; regulations subject to change by City No Council including increasing businesses; precedence to prior businesses; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council affirms for measures placed on the ballot by petition, the persons filing an initiative petition, pursuant to Elections Code 9282(a) may file a written argument in favor of the ordinance, and the legislative body may submit an argument against the ordinance. SECTION 2. That the City Council authorizes ALL members of the City Council to file (a) written argument(s) In Favor of or Against Measure as specified above not exceeding 300 words, accompanied by the printed names(s) and signature(s) of the author(s) submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Resolution No. 14 -XX Page 1 of 4 Code of the State of California. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City measure may be submitted to the City Clerk. SECTION 3. The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 4. If more than one argument for a measure is received from individuals or groups with the same preference and priority, the authors will be asked to witness a random drawing by a designee of the city elections official to determine which argument will be published. SECTION 5. That the City Council directs the City Clerk to transmit a copy of the proposed ordinance to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. The City Attorney shall prepare an impartial analysis of the measure not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is Resolution No. 14 -XX Page 2 of 4 an impartial analysis of Ordinance or Measure . If you desire a copy of the ordinance or measure, please call the election official's office at 714-754-5225 and a copy will be mailed at no cost to you. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments. SECTION 6. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9` day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney Resolution No. 14 -XX Page 3 of 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 - XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR PROPOSED MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, §9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for measures submitted at municipal elections. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the elections official has selected the arguments for and against the measure which will be printed and distributed to the voters, the elections official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a proposed measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. If more than five authors provide a signature to the rebuttal, then only the signatures of the first five authors shall be printed to the exclusion of the excess signatures. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed Resolution No. 14 -XX Page 1 of 4 name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument (Attachment 1). The rebuttal arguments shall be filed by Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on , and shall then be repealed. SECTION 4. That the City Clerk is hereby directed to submit the rebuttal arguments, as described herein, in compliance with State law and to perform all duties required of the elections official for the City of Costa Mesa. SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council Resolution No. 14 -XX Page 2 of 4 of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 4 Attachment 1 FORM OF STATEMENT TO BE FILED BY AUTHORS OF ARGUMENTS All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with § 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each proponent, and by each author, if different, of the argument: The undersigned proponent (s) or author(s) of the (primary/rebuttal) argument (in favor of/against) ballot proposition (name or number) at the Special Municipal election for the City of Costa Mesa to be held on , hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief. Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Editor's Notes: All Authors must print his/her name and sign this form (EC 9600) AND Print his/her name and sign the Argument itself (EC 9283) AND Print his/her name and siqn the Rebuttal Argument itself (EC 9285) Further, pursuant to Election Code § 9282, printed arguments submitted to the voters shall be titled either "Argument In Favor Of Measure _" or "Argument Against Measure _' Likewise, printed rebuttal arguments submitted pursuant to Election Code § 9285 shall be titled either "Rebuttal To Argument In Favor Of Measure _" or "Rebuttal to Argument Against Measure Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA ORDERING THE SUBMISSION TO THE VOTERS OF THE CITY OF COSTA MESA, CALIFORNIA A MEASURE RELATING TO A PROPOSED ORDINANCE TO ESTABLISH REGULATION OF MEDICAL MARIJUANA DISPENSARIES AND REGULATION OF MEDICAL MARIJUANA CULTIVATION WHEREAS, in 1996 the California voters approved Proposition 215 (known as the Compassionate Use Act (the "CUA") and codified as Health and Safety Code Section 11362.5 et seq.) to exempt certain patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana for medical purposes; and WHEREAS, in 2003 the California legislature enacted Senate Bill 420 (known as the Medical Marijuana Program Act (the "MMPA") and codified as Health and Safety Code Section 11362.7 et seq.), as later amended, to clarify the scope of the Compassionate Use Act relating to the possession and cultivation of marijuana for medical purpose, and to authorize local governing bodies to adopt and enforce laws consistent with its provisions; and WHEREAS, in 2005 the California Board of Equalization began issuing seller's permits for sales consisting only of medical marijuana; and WHEREAS, in 2008 the California Attorney General issued guidelines for the security and non -diversion of marijuana grown for medical use; and WHEREAS, in 2014 the U.S. House of Representatives voted to stop federal law enforcement from interfering with medical marijuana operations in the various states which have decriminalized and/or authorized such operations; and Resolution No. 14 -XX Page 1 of 6 WHEREAS, Health & Safety Code Section 11362.83 provides that cities are free to adopt and enforce local ordinances that regulate the location, operation, or establishment of medical marijuana dispensaries and cultivation; and WHEREAS, the City Council of the City of Costa Mesa intends that nothing in this Ordinance shall be deemed to conflict with federal law as contained in the Controlled Substances Act, nor to otherwise permit any activity that is prohibited under that Act or other applicable law; and WHEREAS, the City Council of the City of Costa Mesa intends that nothing in this Ordinance shall be construed to allow persons to engage in conduct that endangers others or causes a public nuisance, to allow the use of marijuana for non-medical purposes, or to allow any activity relating to the cultivation, distribution or consumption of marijuana that is otherwise illegal; and WHEREAS, the operation of medical marijuana dispensaries and the cultivation of medical marijuana within the City of Costa Mesa presently remains prohibited and unregulated; and WHEREAS, the City Council of the City of Costa Mesa finds that medical marijuana operations and cultivation require careful consideration, as does the regulation of the location and manner in which dispensaries operate and cultivation occurs, so as to prevent negative impacts on nearby residents and businesses; and WHEREAS, the City Council of the City of Costa Mesa finds that the City of Costa Mesa has a compelling interest in protecting the public health, safety and welfare of its residents and businesses by regulating the location and operation of medical marijuana dispensaries and medical marijuana cultivation, in preserving the peace and quiet of the Resolution No. 14 -XX Page 2 of 6 neighborhoods in which medical marijuana dispensaries operate and medical marijuana is cultivated, and in providing compassionate access to medical marijuana to its seriously ill residents; and WHEREAS, the California Constitution grants local governments in Article XI, Section 7 the authority under their police powers to regulate land use; and WHEREAS, the proposed ordinance has been reviewed by City staff in accordance with the Environmental Checklist Form (Appendix G of the CEQA Guidelines) to determine if there would be any possibility that the proposed ordinance would have the possibility of creating any environmental impacts, and City staff has determined that the establishment of regulations for medical marijuana businesses does not meet any of the thresholds contained in the Checklist that would trigger an environmental impact, and thus according to the "general rule exemption" (Section 15061(b)(3)) of the CEQA Guidelines, projects which have no potential for causing a significant effect on the environment are not subject to CEQA, no further environmental analysis is required, and a notice of exemption will be filed; WHEREAS, the City Council desires to submit to the voters of the City, at a General Municipal Election to be held on November 8, 2016 proposed Ordinance No. 14 - XX to establish regulation of medical marijuana dispensaries and regulation of medical marijuana cultivation; WHEREAS, the City Council is authorized by the law of the State of California to submit the proposed ordinance to the voters; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: Resolution No. 14 -XX Page 3 of 6 SECTION 1. The foregoing recitals are true, correct, and adopted by the City Council as if set forth in full. SECTION 2. That pursuant to the requirements of the laws of the State of California relating to general law cities there is called and ordered to be held in the City of Costa Mesa, California on November 8, 2016, a General Municipal Election for the purpose of submitting the following proposed ordinance: Measure _: Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation Response Vote Shall the ordinance, to allow general operation of medical marijuana businesses with: required dispensary permits; Yes required cultivator permits; requirement to allow City inspections; mandatory security cameras; requirement to No maintain business records; City Office of Cultivation Standards and Quality Control; regulations subject to amendment by City Council; and locations limited to commercial and industrial areas, be adopted? SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached, being Ordinance No. 14 -XX. SECTION 4. That the ballots to be used at the election shall be in the form and content as required by law. SECTION 5. That the City Clerk is authorized, instructed, and directed to coordinate with the County of Orange Registrar of Voters to procure and furnish any and all official ballots, notices, printed matter, and all supplies, equipment, and paraphernalia that may be necessary in order to properly and lawfully conduct the election. SECTION 6. That the polls for the election shall be open at 7 a.m. of the day of the election and shall remain open continuously from that time until 8 p.m. of the same Resolution No. 14 -XX Page 4 of 6 day when said polls shall be closed, pursuant to Election Code Section 10242, except as provided in Section 14401 of the Elections Code of the State of California. SECTION 7. That the Orange County Registrar of Voters is authorized to canvass the returns of the General Municipal Election. SECTION 8. The ballot measure shall not take effect, unless and until the ballot measure receives the approval of a majority of the votes cast by the voters of the City voting upon the ballot measure at the November 8, 2016 general municipal election. SECTION 9. That in all particulars not recited in this resolution, the election shall be held and conducted as provided by law and in accordance with the provisions of law regulating the statewide election. SECTION 10. That notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in time, form and manner as required by law. SECTION 11. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 9t" day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney Resolution No. 14 -XX Page 5 of 6 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 6 of 6 RESOLUTION NO. 14 -XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING A CITY MEASURE RELATING TO A PROPOSED ORDINANCE TO ESTABLISH REGULATION OF MEDICAL MARIJUANA DISPENSARIES AND REGULATION OF MEDICAL MARIJUANA CULTIVATION; AND, DIRECTING THE CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS FOR THE SAME CITY MEASURE WHEREAS, a General Municipal Election is to be held in the City of Costa Mesa, California, on November 8, 2016 at which there will be submitted to the voters the following measure: Measure _: Establish Regulation of Medical Marijuana Dispensaries and Regulation of Medical Marijuana Cultivation Response Vote Shall the ordinance, to allow general operation of medical marijuana businesses with: required dispensary permits; Yes required cultivator permits; requirement to allow City inspections; mandatory security cameras; requirement to No maintain business records; City Office of Cultivation Standards and Quality Control; regulations subject to amendment by City Council; and locations limited to commercial and industrial areas, be adopted? NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the City Council authorizes ALL members of the City Council to file written arguments in Favor of or Against City measures not exceeding 300 words, accompanied by the printed names and signatures of the authors submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City measures may be submitted to the City Clerk. Resolution No. 14 -XX Page 1 of 4 The arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument. SECTION 2. If more than one argument for a measure is received from individuals or groups with the same preference and priority, the authors will be asked to witness a random drawing by a designee of the city elections official to determine which argument will be published. SECTION 3. That the City Council directs the City Clerk to transmit a copy of the measures to the City Attorney, unless the organization or salaries of the office of the City Attorney is affected. The City Attorney shall prepare an impartial analysis of a City measure which relates to a proposed ordinance to establish regulation of medical marijuana dispensaries and medical marijuana cultivation, not exceeding 500 words showing the effect of the measure on existing law and the operation of the measure. If a measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the city. In the event the entire text of the proposed Ordinance is not printed on the ballot, nor in the voter information portion of the sample ballot, there shall be printed immediately below the impartial analysis, in no less than 10 -point type, the following: "The above statement is an impartial analysis of Ordinance or Measure _. If you desire a copy of the ordinance or measure, please call the election official's office at 714-754-5225 and a copy will be mailed at no Resolution No. 14 -XX Page 2 of 4 cost to you. The impartial analysis for the measure shall be filed with the City Clerk by 5:00 p.m. SECTION 4. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Costa Mesa on this 91" day of December, 2014. Stephen Mensinger, Mayor ATTEST: APPROVED AS TO FORM: Brenda Green, City Clerk Thomas Duarte, City Attorney Resolution No. 14 -XX Page 3 of 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 91" day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9t" day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 4 of 4 RESOLUTION NO. 14 - XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, PROVIDING FOR THE FILING OF REBUTTAL ARGUMENTS FOR PROPOSED MEASURES SUBMITTED AT MUNICIPAL ELECTIONS WHEREAS, §9285 of the Elections Code of the State of California authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for measures submitted at municipal elections. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to Section 9285 of the Elections Code of the State of California, when the elections official has selected the arguments for and against the measure which will be printed and distributed to the voters, the elections official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments. The author or a majority of the authors of an argument relating to a proposed measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument. A rebuttal argument may not be signed by more than five authors. If more than five authors provide a signature to the rebuttal, then only the signatures of the first five authors shall be printed to the exclusion of the excess signatures. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed Resolution No. 14 -XX Page 1 of 4 name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument (Attachment 1). The rebuttal arguments shall be filed by Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument that it seeks to rebut. SECTION 2. That all previous resolutions providing for the filing of rebuttal arguments for city measures are repealed. SECTION 3. That the provisions of Section 1 shall apply only to the election to be held on , and shall then be repealed. SECTION 4. That the City Clerk is hereby directed to submit the rebuttal arguments, as described herein, in compliance with State law and to perform all duties required of the elections official for the City of Costa Mesa. SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council Resolution No. 14 -XX Page 2 of 4 of the City of Costa Mesa on this 9th day of December, 2014. Stephen Mensinger, Mayor ATTEST: Brenda Green, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF COSTA MESA ) APPROVED AS TO FORM: Thomas Duarte, City Attorney I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that foregoing Resolution No. 14 -XX was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 9th day of December, 2014, by the following roll call vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 9th day of December, 2014. Brenda Green, City Clerk Resolution No. 14 -XX Page 3 of 4 Attachment 1 FORM OF STATEMENT TO BE FILED BY AUTHORS OF ARGUMENTS All arguments concerning measures filed pursuant to Division 9, Chapter 3 (beginning with § 9200) of the Elections Code shall be accompanied by the following form statement to be signed by each proponent, and by each author, if different, of the argument: The undersigned proponent (s) or author(s) of the (primary/rebuttal) argument (in favor of/against) ballot proposition (name or number) at the Special Municipal election for the City of Costa Mesa to be held on , hereby state that the argument is true and correct to the best of (his/her/their) knowledge and belief. Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Print Name Signature Title Date Editor's Notes: All Authors must print his/her name and sign this form (EC 9600) AND Print his/her name and sign the Argument itself (EC 9283) AND Print his/her name and siqn the Rebuttal Argument itself (EC 9285) Further, pursuant to Election Code § 9282, printed arguments submitted to the voters shall be titled either "Argument In Favor Of Measure _" or "Argument Against Measure _' Likewise, printed rebuttal arguments submitted pursuant to Election Code § 9285 shall be titled either "Rebuttal To Argument In Favor Of Measure _" or "Rebuttal to Argument Against Measure Resolution No. 14 -XX Page 4 of 4 Costa Mesa 19th S Measure No 1 schools 600 feet radius exclusion area 0 L Cz 2 0 490 980 1,960 2,940 3,920 4,900 5,880 6,860 7,840 8,820 9,800 Feet \\Sw6\Dev lopment\Gisdata\PrimaryData\Planning2oning_25x28.mxd /S�hS vrhsf I Hr - HUF11111I5Lrd11Ve dr1U rUUTe5510r1dl '06- © CL - Commercial Limited C1 -S - Shopping Center - C1 - Local Business ® C2 - General Business TC - Town Center PDR -LD - Planned Development Residential - Low Density PDR -MD - Planned Development Residential - Medium Density - PDR -HD - Planned Development Residential - High Density - PDR -NCM - Planned Development Residential - North Costa Mesa - PDC - Planned Development Commercial PDI - Planned Development Industrial CI&R - Institutional and Recreational I&R-S - Institutional and Recreational - School P - Off -Street Parking MG - General Industrial MP - Industrial Park Aug 20, 2014 Costa Mesa 19th S Measure No 2 exclusion area schools 1000 feet, parks 600 feet, library and child care 600 feet radius W L 0 L M 2 TC - Town Center PDR -LD - Planned Development Residential - Low Density PDR -MD - Planned Development Residential - Medium Density PDR -HD - Planned Development Residential - High Density - PDR -NCM - Planned Development Residential - North Costa Mesa - PDC - Planned Development Commercial PDI - Planned Development Industrial I&R - Institutional and Recreational I&R-S - Institutional and Recreational - School P - Off -Street Parking MG - General Industrial MP - Industrial Park 0 490 980 1,960 2,940 3,920 4,900 5,880 6,860 7,840 8,820 9,800 Feet Aug 20, 2014 \\S rv60—lop mant\G isda WT ri maryDa WT Ian pi ng\Zo ni ng_25x28, mxd 16 Costa Mesa 1 City Draft Measure A Schools parks library and child care 1000 ft R1 R2 R3 200 ft commercial industrial manufacturing zone only Total:83 IT L O L M WE 0 315 630 1,260 1,890 2,520 3,150 3,780 4,410 5,040 5,670 6,300 Feet ;solve ,sa I&R-S - Institutional and Recreational - School P - Off -Street Parking MG - General Industrial MP - Industrial Park Dec 2nd, 2014 Costa Mesa 19th S City Draft Measure B Schools parks library and child care 1000 ft R1 R2 R3 500 ft Commercial industrial manufacturing zone only Total:63 L O L RN 0 315 630 1,260 1,890 2,520 3,150 3,780 4,410 5,040 5,670 6,300 Feet 'VOS� �2y ity )ensity 3ity osta Mesa MtM-J - I115lILUllU11al a11U I'CUUVeaLIUllal - 0U11UU1 P - Off -Street Parking MG - General Industrial MP - Industrial Park Dec 2nd, 2014 Costa Mesa 19th S City Draft Measure C Schools parks library and child care 1000 ft R1 R2 R3 1000 ft Commercial industrial manufacturing zone only Total:48 re 0 CU WE 0 315 630 1,260 1,890 2,520 3,150 3,780 4,410 5,040 5,670 6,300 Feet ity density s ity osta Mesa &R -S - Institutional and Recreational - School P - Off -Street Parking MG - General Industrial MP - Industrial Park Dec 2nd, 2014