Legalization in California Alameda County’s Perspective Nate Miley Alameda County Board of Supervisors, District 4 California State Association of Counties Cannabis (CSAC) Working Group Co-Chair National Forum for Black Public Administrators April 20, 2018

Cannabis Legislation in California In 2015, the Legislature passed and the Governor signed into law three bills (Assembly Bills 243 and 266, and Senate Bill 643) that create a licensing and regulatory framework for medical cannabis through the Medical Cannabis Regulation and Safety Act. This legislation created the Bureau of Cannabis Control within the Department of Consumer Affairs. It also divided the responsibility for state licensing between three state entities – the CA Department of Food and Agriculture, the CA Department of Public Health and the Bureau of Cannabis Control, with the Bureau designated as the lead agency in regulating the cannabis industry in California. In June 2017, the California State Legislature passed a budget trailer bill, Senate Bill 94 (Chapter 27), that integrated MCRSA with AUMA to create the Medicinal and Adult‐Use Cannabis Regulation and Safety Act (MAUCRSA). Under MAUCRSA, a single regulatory system governs the medical and adult use cannabis industry in California. In plant agriculture, a pesticide is a substance used for destroying insects or other organisms harmful to cultivated plants. By this definition any substance, even water, could be a pesticide. Some substances that can be used as pesticides are illegal. Some substances are illegal to use as pesticides. And some pesticides are only legal to use on certain types of plants. Cannabis pesticide regulation is a fairly novel territory, since cannabis is one of the few agricultural products commonly used for inhaling. Some pesticides that are legal to use on edible food crops are not legal to use on Cannabis. One example is myclobutanil, commonly marketed as “Eagle 20”. Myclobutanil is also not approved for use on tobacco. Combustion of Myclobutanil creates highly toxic hydrogen cyanide gas. Used properly, pesticides can increase crop yield and crop quality. Modern agriculture does not seek to eliminate all pests, instead through a paradigm known as Integrated Pest Management (IPM) pests are kept at a low enough level that they do not cause economic injury to the crop. IPM requires careful consideration of all available pest control techniques, then subsequent integration of appropriate measures that discourage the development of pest populations and keep pesticides and other interventions to levels that are economically justified and reduce or minimize risks to human health and the environment. IPM includes non-pesticide controls, such as companion planting and predatory bugs. It’s worth noting that the healthiest plants are the least susceptible to pest pressure. A responsible cannabis farmer minimizes the need for pesticides by keeping plants healthy and instituting a wide range of non-pesticidal controls.

California Cannabis Program Priorities The creation of the Medicinal and Adult-Use Cannabis Regulation and Safety Act A single regulatory system for commercial cannabis activity in California Requires all persons engaged in commercial cannabis activity to be licensed Allows local jurisdictions to control what activities are permitted in their jurisdiction Places the protection of the public as the highest priority In a traditional open-field setting, Cannabis is a fast-growing annual crop, planted in the spring and harvested in the fall. In the greenhouse or an indoor facility full control over the elements can and the light cycle can be obtained. In these settings Cannabis plants can be grown in cycles of anywhere from 2-4 months. This allows for the potential of 3 or more harvests per year. Cannabis is a tolerant plant that can grow well under a wide range of conditions, but producing the best cannabis, like producing the best produce, takes an optimal environment and an abundance of care. The primary active constituents of adult-use and medicinal cannabis (cannabinoids and terpenes) are referred to as “secondary metabolites”, meaning they are produced by a plant but not necessary for it’s survival. Similar to Laszlo’s hierarchy of needs, a cannabis plant must first have it’s base needs met before it will expend it’s energy to produce it’s active compounds. This means the plant must have the right combination of air, water, and soil characteristics to produce the highest quality version of itself. Like any logistical endeavor, a major component of farm operation is planning. Ensuring little to no downtime requires that crops be planned according to specific cultivar (ex: short flower indica, tolerates cold and only gets 3 feet tall vs long flower sativa tolerating heat and growing 20 feet, ) , available light, work capacity, market conditions, and other factors. Currently, agricultural Cannabis production starts with a clone, an exact genetic copy of a female “mother” plant of the desired cultivar. A clone is cut and rooted in a moist environment before being “hardened off” by exposing it to an increasingly high level of light and lowered humidity.

The Three Licensing Authorities in California

License Categories in California License Categories: M (Medicinal) or A (Adult -Use) Distributor (Type 11) Distributor Transport Only (Type 13) Retailer (Type 10) Non-Storefront Retailer (Type 9) Microbusiness (Type 12) Testing Laboratory (Type 8, no M or A designation) Cannabis Event Organizer (Type 14) Temporary Cannabis Event

New License Type in California Shared-Use Manufacturing Facilities On March 22, 2018, the State Department of Public Health (CDPH) issued emergency regulations for a Type S manufacturing license which would allow the license holder to conduct manufacturing operations at a shared-use facility. The regulations define shared-use facility as a manufacturing facility operated by a Type 7, Type 6, or Type N licensee in which Type S licensees are authorized to conduct manufacturing operations. To operate a shared-use facility, the Type 7, Type 6, or Type N licensee must register with CDPH.

Not all Counties in California are Approving Cannabis Programs

Cannabis regulation in unincorporated Alameda County: a 2+ year snapshot First presentation by staff to Board of Supervisors regarding new local/ State dual licensing scheme First draft ordinances presented to Board of Supervisors for consideration Draft ordinances (updated in response to public hearings) presented to the Board of Supervisors CEQA public review period for Mitigated Negative Declaration Board of Supervisors adopts amendments to ordinances Board of Supervisors adopts resolution allowing existing retailers to sell adult use cannabis Amended retailer, delivery and cultivation ordinances before the Board of Supervisors for consideration, including proposal for adult use cannabis September 7, 2016 December 5, 2015 Project Commences Board of Supervisors adopts prohibition on deliveries and cultivation and staff commences review of regulatory options March 2017 December 2017 March 2018 Ordinance development including feedback from community meetings Board of Supervisors adopts retailer, delivery and cultivation ordinances Today State adopts MMRSA October 15, 2015 January 21, 2016 Throughout 2016 September 12, 2017 1980 2019 … 2015 2016 2017 2018 … Today Public meetings in 2016 Public meetings in 2017 Public meetings in 2017 21 public meetings held in 2016, including: Board of Supervisors Board Transportation & Planning Committee Planning Commission Castro Valley Municipal Advisory Committee Agricultural Advisory Committee Sunol Citizens Advisory Committee Unincorporated Services Committee East County Community Meeting 27 public meetings held in 2017, including: Board of Supervisors Board Transportation & Planning Committee Planning Commission Castro Valley Municipal Advisory Committee Agricultural Advisory Committee Sunol Citizens Advisory Committee Unincorporated Services Committee Meetings held so far in 2018, include: Board of Supervisors Board Transportation & Planning Committee Planning Commission Agricultural Advisory Committee Sunol Citizens Advisory Committee From October 6, 2017 Upcoming actions… Draft ordinance for additional license types (manufacturing, testing, distribution) CUP’s for cannabis cultivation and retailers and permits for delivery Develop and implement monitoring and compliance program Request for Proposals (RFP’s): October - RFP’s released for retailers and cultivation November - RFP applications submitted and evaluated (5 retailers, 10 cultivation applications received). December - Notice of Intention to Grant a Permit issued to successful applicants (2 retailer, 4 cultivation) January & February – Appeals process conducted and permits granted.

What is Allowed in Unincorporated Alameda County Dispensaries Up to five (5) dispensaries in total may be permitted in unincorporated Alameda County, subject to a Request for Proposal process (RFP) and the selected candidate(s) obtaining a Cannabis Dispensary Permit pursuant to Chapter 6.108 of the County General Code and a Conditional Use Permit ("CUP"). This will allow three (3) new dispensaries in addition to the (2) existing dispensaries that are already in operation in the unincorporated area: A maximum of one (1) new dispensary in the west of the County, which must be located in the Retail Business or General Commercial zone; and A maximum of two (2) new dispensaries in the east of the County, which must be located in the Agricultural zone and must be at least five (5) miles apart from another dispensary in the east County and 1 mile from any dispensary in an incorporated city. A dispensary must not be located within 1,000 feet of any other dispensary or any school, licensed child or day care facility, public park or playground, drug recovery facility or recreation center and must not be located in a residential zone or its equivalent.

What is Allowed in Unincorporated Alameda County Delivery Delivery operators must obtain a Cannabis Delivery Permit pursuant to Chapter 6.108 of the County General Code. A Cannabis Delivery Permit can be issued to a "brick and mortar" dispensary holding a valid license or permit to dispense medical cannabis issued by a California city or county.

What is Allowed in Unincorporated Alameda County Cultivation Up to six (6) cultivation sites in total may be permitted in unincorporated Alameda County as part of a two year pilot program for cannabis cultivation: Two (2) cultivation permits are available to existing dispensary operators in unincorporated Alameda County only, subject to those operators obtaining a Cannabis Cultivation Permit pursuant to Chapter 6.106 of the County General Code and a CUP; and The remaining four (4) cultivation permits are available to the general public, subject to an RFP process and the selected candidate(s) obtaining a Cannabis Cultivation Permit and a CUP. Cultivation operations can be permitted in the Agricultural Zoning District only. A cultivation operation must not be located within 1,000 feet of any school, licensed child or day care facility, public park or playground, drug recovery facility or recreation center and must not be within 50 feet from any adjacent property line or 300 feet from any residence on an adjacent property, unless waived in writing by the adjacent owner. Cultivation operations will be required to comply with the County's Performance Standards and Standard Conditions for Pilot Program Cultivation Sites which, among other things, limit the maximum cultivation area for any cultivation site to 22,000 square feet. The Performance Standards and Standard Conditions may be amended by the CDA Director during the implementation of the Pilot Program.

Phase II Considerations in Unincorporated Alameda County Recently-adopted County ordinances address cannabis retail sales, delivery, and cultivation, but not manufacturing, distribution, testing laboratories, or microbusinesses. In order to allow these additional uses in the unincorporated area, amendments to the County Ordinance Code, similar to those for retail sales and cultivation, would need to be adopted. Alameda County will be considering these additional license types: Manufacturing Testing Distribution Microbusiness

State Temporary Licenses Issued in Alameda County

Alameda County Hosted the Three Licensing Agencies Link to View the Summit: https://www.youtube.com/playlist?list=PLQWyDJgd1fvU9g9hOTw7F0hq3yywYN75I

Challenges to Legalization for the Cannabis Industry in California Extremely high taxes has lead to an increase in the black market causing operators to rethink if “coming into the light” is really feasible. Lack of a regulatory frame work for banking continues to be a challenge for cannabis businesses. Local’s (counties/cities) banning cannabis after having a thriving unregulated industry. Barriers to entry for persons of color and women. (Lack of funds, experience, property, etc.) Public sentiment…Not in my backyard (NIMBY) Legalization is "off to a ragged start," due to black-market sellers siphoning off customers who don't want to pay high taxes” -Assemblyman Tom Lackey, R-Palmdale

Best Practices for Counties/Cities Working as the Co-Chair for the California Cannabis Program, I have learned the importance: Listening to industry and your internal county/city staff. Willing to say “I do not know” but we can learn together. Understanding and patience, as this is a new legal industry and it will take time to ensure all things are working properly. It will take trial and error. Working collaboratively to build an effective program in Alameda County: I have convened an Internal Cannabis working group consisting of practically all departments in the county, to meet weekly to discuss cannabis related issues. I meet monthly with the External Cannabis Stakeholders (industry) to advise me on the cannabis industry perspective.

Best Practices for Counties/Cities California’s Proposition was very specific in ensuring that Cannabis operators must be proactive in addressing cannabis use, mis-use & abuse. I have spearheaded the Cannabis Education Youth and Adult Awareness (CEYAA) The CEYAA work group consist of our Alameda County Public & Behavioral Health Departments, Alameda County Office of Education, and Prevention Specialist. The goal of CEYAA is to create a messaging campaign to address 21 years and under cannabis use, mis-use & abuse. We hope to pilot this program with the California Department of Public Health. California is a very diverse state and I recognize the importance of removing barriers to entry for this program. Ensuring all boats rise together. I have spearheaded a Cannabis Equity For All (CEFA) working group that will address: Barriers to entry Training and Development via Alameda County Community Development Department Developing internships with local cannabis operators in Alameda County.

You are Cordially Invited Please join us for the Alameda County Summer Cannabis Summit Date: August 2, 2018 Time: 9am – 4pm Location: Alameda County Board Chambers Topics: Equity, Taxation & Cannabis Education for Youth & Adults

For more information or questions from the internal workgroup in Alameda County: Staff Contact Liz McElligott  Alameda County Planning Department  224 West Winton Avenue, Suite 111  Hayward, CA 94544  Phone: (510) 670-5400  For more information or questions from the external stakeholders workgroup in Alameda County: Patricia R. Brooks  Cannabis and Technology Advisor to Supervisor Nate Miley  1221 Oak Street Oakland, CA 94612 Phone: (510) 590-1107