65B - BALLOT INITIATIVE MEDICAL MARIJUANA COLLECTIVES

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Medical Marijuana Ballot Initiative June 3, 2014 Page 6 Option # 3 — City sponsored ballot initiative to regulate medical marijuana collectives) cooperatives (Recommended) Another option available to the City is to place a competing measure on the November 2014 ballot that permits medical marijuana collectives, but with additional regulations not contained in the Santa Ana Medical Cannabis Restriction and Limitation Initiative. The regulations proposed in this option were derived from recommendations from the California Police Chiefs Association White Paper on Marijuana Collectives, a review of other cities' and counties' regulations regarding medical marijuana collectives, direct Code Enforcement experience regulating illegal medical marijuana collectives in the City over the last five years and a review of existing Municipal Code regulations regarding regulated uses. Regulations proposed as part of a City initiative to permit, but regulate medical marijuana collectives would generally include: 1. Limit to industrially zoned (M1, M2) properties only. 2. Set a maximum number of eight collectives permitted in the City. 3. Establish distance /separation requirements from sensitive uses (schools, parks and residentially zoned properties). 4. Establish a separation requirement from other medical marijuana collectives to prevent overconcentration. 5. Specify operational requirements including security guards, signage, ventilation, lighting, hours of operation, restricting minors, prohibiting on -site consumption, etc. 6. Update the Business License Tax Code (SAMC Chapter 21) to require a 5% gross receipts cannabis tax, which is commensurate with the other cities surveyed, as well as initial registration fees and annual regulatory fees to account for the costs associated with regulating these businesses. Similar to the City's current enforcement and initiative to ban collectives, this initiative would not prohibit medical marijuana from being prescribed to patients by licensed physicians through State - licensed clinics, health care facilities, residential care facilities for the elderly or residential hospice or home health agencies and would address the issues regarding mobile marijuana collectives and cultivation. Risk of regulationlpermitting medical marijuana collectives In City of Riverside v. Inland Empire Patients Health and Wellness Center, the California Supreme Court upheld the right of local governments to ban medical marijuana collectives, but the question of whether local governments can regulate these collectives was not directly before the court. However, in its holding, the Court opined "localities in California are left free to accommodate such [medical marijuana collective] conduct if they so choose, free of state interference." (City of Riverside, supra, 56 Cal. 4th at 762.) Thus, the Court clearly held that a