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Ordinance Amendment No. 2017-03 — Create Chapter 40 in the Santa Ana Municipal Code <br />(Commercial Cannabis Excepting Medicinal Retail) <br />October 17, 2017 <br />Page 2 <br />the Adult Use of Marijuana Act (AUMA). The AUMA immediately legalized the possession, use, <br />and cultivation of up to six mature cannabis plants at a residence for personal use. Following <br />Proposition 64's passage, the California legislature adopted SB 94 which merged and <br />streamlined many of the standards and license types for medicinal- and adult -use cannabis. <br />Both Proposition 64 and SB 94 provide for the following types of commercial cannabis activities: <br />• Testing • Cultivation <br />• Manufacturing/Processing • Retail <br />• Distribution (Wholesale) • Microbusiness <br />Significance and Enforcement Background <br />Local jurisdictions such as the City of Santa Ana must adopt an ordinance to establish a <br />regulatory framework for cannabis related activities. If the City fails to adopt an ordinance on <br />commercial cannabis activities by January 1, 2018, the City could lose control over local land <br />decisions and commercial cannabis businesses may be able to operate legally. <br />The City of Santa Ana and its community have benefited from the successes brought by Measure <br />BB. Through Measure BB, the City has been able to responsibly allow and regulate the <br />medicinal cannabis retail industry. Measure BB has generated significant revenue through gross <br />receipts taxes that have funded enforcement efforts by the Santa Ana Police Department, Code <br />Enforcement, the City Attorney's Office, and the Finance & Management Services Agency. Of <br />the roughly 120 illegal dispensaries open prior to Measure BB, 85 percent were successfully <br />shutdown and additional properties are in receivership in an effort to close outstanding illegal <br />operators. The ordinance under consideration will allow the City to continue its success of <br />responsibly allowing and regulating additional commercial cannabis business activities in <br />industrial areas. <br />Following analysis of the impacts of Proposition 64 and SB 94 on Santa Ana, in September 2017, <br />the City embarked on an extensive outreach campaign to respond to community questions and <br />concerns surrounding the passage of Proposition 64 and to solicit input prior to drafting this <br />ordinance. Commercial Cannabis was added as a topic of discussion in eight Neighborhood <br />Association meeting agendas; staff attended these meetings and met with approximately 180 <br />residents. <br />The feedback and input shared at these meetings varied from supporting expanded cannabis <br />uses to opposition; those opposed to commercial cannabis were against all types (medicinal and <br />adult -use). The majority of those in support were for both medicinal and adult -use activities. All <br />groups raised questions regarding the potential impact of commercial cannabis activity. Also, the <br />groups supported maintaining commercial cannabis activities in industrial zones. <br />75B-2 <br />