1. Local Regulation of Commercial Cannabis
Overview
Napa County Cannabis Roundtable – 8/25/17 – Napa County Counsel’s Office

2. Disclaimer Current law only Subject to change New legislation
Forthcoming regulations
Case law

3. Local Regulatory Authority
Lessons learned and best practices
Determine 1) how many, and 2) where located
May need to amend general/specific plans or redefine zones
Ex: City of San Jose, Alameda County
Forthcoming state regulations may fill gaps or create conflicts
Balance between fitting regulations to industry and conforming industry to local needs and desires

4. Local Regulatory Authority
Local regulation of commercial cannabis
Anything not preempted
Can limit through zoning, hard caps, districts, setbacks, conditions of approval
Taxes
Local track and trace program
Medical vs. recreational
Cannabis bars – banned by default, but may allow
County-city coordination

5. Local Regulatory Authority
Taxes and fees
State imposes some taxes
Local jurisdictions low on totem pole for state revenue, and some may be excluded
Local jurisdiction may pass taxes through normal tax process, requiring voter approval
Other jurisdictions report that a majority of the revenue generated is needed for enforcement of cannabis regulatory scheme
Ex: Mendocino County, Santa Cruz County
Fees established through normal fee study

6. Local Regulatory Authority
Temporary CEQA exemption
No CEQA review required for local regulatory scheme if:
Discretionary use permit
CEQA for individual permit required as part of permit process
Regulatory scheme approved prior to 7/1/2019
But don’t forget funding, zoning, plan amendments, additional limitations, etc.

7. State Licensing State licensing agencies are the gate
Local jurisdiction creates the key
Can use the key to lock an applicant out
Ultimately similar to wine or any industry approved on local level with state/federal requirements
Local jurisdiction approves physical winery and production
State/federal government controls sales

8. State Licensing Step 1 – License applicant completes state application
Application submitted to licensing agency
Cultivation = Dept. of Food & Agriculture
Retailer = Bureau of Cannabis Control (BCC)
Step 2 – Licensing agency contacts local jurisdiction to check for local compliance
Default contact is city clerk/county clerk of the board

9. State Licensing Step 3 – Local jurisdiction has 60 days to:
Approve = license application continues with state
Deny = application rejected
Only deny if applicant in violation of law
Must point to specific law
Does not have to be cannabis-related
Law can specify local permit required first
Permissive zoning likely insufficient
Do nothing = license application continues with state

10. State Licensing Issued license good for one year
If local jurisdiction determines applicant in violation after 60 days, can notify licensing authority
Licensing authority may either commence disciplinary action against licensee or let license expire and deny renewal

11. Draft Regulations Subject to change Draft state regulations withdrawn
New regulations expected soon
Built on prior draft
Emergency regulations not subject to comment after initial implementation
Permanent regulations to follow next year

12. Cannabis Retailers Regulatory Overview
Napa County Cannabis Roundtable – 8/25/17 – Napa County Counsel’s Office

13. Retailers Current legal restrictions
Separation of “adult” and “medical”
But language likely allowing same parcel
May have non-storefront delivery only
Shipments subject to local inspection
Minimum security and reporting requirements
“Dispensaries” phased out
No cannabis and alcohol sold at same location

14. Retailers Draft regulations
Limited hours, displays, and sales per customer per day
Opaque packaging difficult for children to open
Limited hours for delivery; no contractors

15. Retailers Taxes 15% excise tax
No sale and use taxes for medical cannabis