HomeMy WebLinkAbout11D - 2ND READ ORD MEDICAL MARIJUANAREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
NOVEMBER 21, 2017
TITLE:
ORDINANCE SECOND READING: ADOPT
AN ORDINANCE AMENDING AMEND
CERTAIN SECTIONS OF CHAPTERS 18
AND 21 OF THE SANTA ANA MUNICIPAL
CODE (MEDICAL MARIJUANA
COLLECTIVES/ COOPERATIVES) — CITY
OF SANTA ANA, APPLICANT
(STRATEGIC PLAN NO. 5, 1)
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 161 Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
�Y/(I FILE NUMBER
ITY MANAGER
RECOMMENDED ACTION
Place ordinance on second reading and adopt.
DISCUSSION
On November 9, 2017, the following ordinance was introduced for first reading and City Council
authorized publication of title by a vote of 5-0 (Pulido and Sarmiento absent):
ORDINANCE NO. NS -2933 — AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AMENDING CERTAIN SECTIONS OF ARTICLE XIII OF CHAPTER 18 OF THE
SANTA ANA MUNICIPAL CODE PERTAINING TO MEDICINAL MARIJUANA TO UPDATE
DEFINITIONS TO COMPLY WITH STATE LAW AND ENSURE CONSISTENCY WITH
CHAPTER 40 OF THE MUNICIPAL CODE, AND AMENDING ARTICLE XII, SECTION 21-127
OF CHAPTER 21 OF THE SANTA ANA MUNICIPAL CODE INCREASING THE TAX ON
MEDICINAL RETAIL MARIJUANA BY ONE PERCENT, FROM FIVE PERCENT TO SIX
PERCENT
In summary, this ordinance creates consistency between the Santa Ana Municipal Code and
State law regarding marijuana/cannabis and increases the tax on medicinal marijuana from 5% to
6%.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal #5 - Community Health, Livability,
Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement
initiative'to expand access to information and create opportunities for stakeholders to play an
active role in discussing public policy and setting priorities).
11D-1
Ordinance — Second Reading: Chapters 18 and 21 SAMC
November 7, 2017
Page 2
FISCAL IMPACT
There is no fiscal impact associated with this action.
�W AKA
�-
Maria D. Huizar
Clerk of the Council el
EXHIBIT: Ordinance No. NS -2933
11 D-2
11.21.17 LS
ORDINANCE NO. NS -XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF SANTA ANA AMENDING CERTAIN SECTIONS OF
ARTICLE XIII OF CHAPTER 18 OF THE SANTA ANA
MUNICIPAL CODE PERTAINING TO MEDICINAL
MARIJUANA TO UPDATE DEFINITIONS TO COMPLY
WITH STATE LAW AND ENSURE CONSISTENCY WITH
CHAPTER 40 OF THE MUNICIPAL CODE, AND
AMENDING ARTICLE XII, SECTION 21-127 OF CHAPTER
21 OF THE SANTA ANA MUNICIPAL CODE INCREASING
THE TAX ON MEDICINAL RETAIL MARIJUANA BY ONE
PERCENT, FROM FIVE PERCENT TO SIX PERCENT
THE CITY COUNCIL OF THE CITY OF SANTA ANA HEREBY ORDAINS AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
A. On November 4, 2014, Santa Ana voters approved Santa Ana's Medical
Marijuana Regulatory Program ordinance ("Measure BB") allowing up to
twenty (20) medical marijuana retail cannabis collectives/cooperatives
("dispensaries").
B. Following the adoption of Measure BB, the provisions of the measure
were codified in Chapters 18 and 21 of the Santa Ana Municipal Code.
The City also established an implementation plan, enforcement program,
administrative policies, and best practices.
C. In May 2016 and early 2017, following initial implementation of the
ordinance, the City held a roundtable discussion that invited stakeholders,
dispensary owners, and members of the medical marijuana industry to
meet with City staff regarding the implementation of Measure BB.
Participants of the roundtable discussions voiced opinions on various
aspects of the regulatory program and provided their recommendations for
future policy level consideration.
D. On June 20, 2017, the City Council approved amendments to Chapter 18
to streamline Measure BB and create more business -friendly conditions
for the existing collectives/cooperatives.
Ordinance No. NS -XXX
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E. Further modifications to amend Chapter 18 and Chapter 21 are currently
proposed to update certain definitions to comply with state law and ensure
consistency with the newly adopted Chapter 40 (Commercial Cannabis).
F. The proposed amendment includes increasing the tax on medicinal retail
marijuana. Measure BB authorized a business license tax rate of up to
ten percent (10%) of the gross receipts generated from each
collective/cooperative. The proposed ordinance increases the tax from
the initial rate of five percent (5%) to six percent (6%) as permitted by
Measure BB.
G. All provisions of the Santa Ana Municipal Code which are repeated herein
are repeated solely in order to comply with the provisions of section 418 of
the Charter of the City of Santa Ana. Any such restatement of existing
provisions of the Code is not intended, nor shall it be interpreted, as
constituting a new action or decision of the City Council, but rather such
provisions are repeated for tracking purposes only in conformance with
the Charter.
Section 2. Pursuant to the California Environmental Quality Act ("CEQA")
and the state CEQA Guidelines, the adoption of this Ordinance is exempt from CEQA
review pursuant to California Code of Regulations section 15061(b)(3), which is
applicable if it can be seen with certainty that there is no possibility that the project may
have a significant effect on the environment. As a result, a Notice of Exemption will be
filed upon the adoption of this ordinance.
Section 3. Section 18-611 of Article XIII of Chapter 18 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 18-611. - Definitions. (Not in alphabetical order)
(a) "Cultivation" and/or "Cultivate" shall mean the planting, growing, harvesting, drying,
curing, grading or trimming of one (1) or more marijuana plants or any part thereof,
as set forth in Business and Profession Code § 26001 (1) as amended from time to
time.
(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
(1) 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. This term shall include any legal
form of business recognized in the State of California. 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
Ordinance No. NS -XXX
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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 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.
(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 (1) 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.
(i) "Private Residence" shall have the same definition as that contained in Health
and Safety Code sections 11362.2(5) and 17922. A recreational vehicle does not
constitute a lawfully established structure for the purposes of this article.
(j) "Premises" means a single, legal parcel of property. Where contiguous legal parcels
under common ownership or control, such contiguous legal parcels shall constitute
a single "premises' for purposes of this chapter.
(k) 'Parcel' means property assigned a separate parcel number by the Orange County
assessor.
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(1) "Marijuana Products" shall have the same definition as that contained in Health and
Safety Code section 11018.1.
(m) "Marijuana Accessories' shall have the same definition as that contained in Health
and Safety Code section 11018.2.
(n) "Personal Cultivation" shall mean the planting, growing, harvesting, drying, curing,
grading or trimming of marijuana plants for personal use within a private residence
or accessory structure to a private residence.
(o) "Commercial Cultivation" shall mean the planting, growing, harvesting, drying,
curing, grading or trimming of marijuana plants in any structure other than a private
residence.
(p) "Outdoor Cultivation" shall mean the planting, cultivating, growing, harvesting,
drying, curing, grading or trimming of marijuana plants in any location within the City
of Santa Ana that is not within a fully enclosed and secure structure.
(q) "Fully enclosed and secure structure" means a space within a building, greenhouse
or other structure which has a complete roof enclosure supported by connecting
walls extending from the ground to the roof, which is secure against unauthorized
entry, provides complete visual screening, and which is accessible only through one
or more lockable doors.
(r) "Delivery" means the commercial transfer of medical cannabis or medical cannabis
products from a dispensary, up to an amount determined to be authorized by the State
of California, or any of its departments or divisions, to qualified patients and their
caregivers. "Delivery" also includes the use by a dispensary of any technology platform
owned, controlled, and/or licensed by the dispensary, or independently licensed by the
State of California under the State law (as amended from time to time), that enables
anyone to arrange for or facilitate the commercial transfer by a licensed dispensary of
medical cannabis or medical cannabis products. For the purposes of this article,
"delivery' does not include distribution or purchase of cannabis from a licensed
cultivator, and cannabis products from a licensed manufacturer, for sale to a licensed
dispensary or a wholesale establishment.
(s) "Dispensary" means a premises where medical cannabis or medical cannabis
products, or devices for the use of medical cannabis or medical cannabis products are
offered, either individually or in any combination, for retail sale, including an
establishment that delivers, pursuant to Business and Professions Code § 19340,
medical cannabis and medical cannabis products as part of a retail sale.
(t) "Responsible person" means any of the following:
(1) A person who causes a Code violation to occur.
(2) A person who maintains or allows a Code violation to continue, by his or her
action or failure to act.
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(3) A person whose agent, employee, or independent contractor causes a Code
violation by its action or failure to act.
(4) A person who is the owner of, and/or a person who is a lessee or sub lessee
with the current right of possession of, real property where a property -related
Code violation occurs.
(5) A person who is the on-site manager of a business who normally works daily
at the site when the business is open and is responsible for the activities of such
premises.
For the purposes of this section "person" includes a natural person or legal entity,
and the owners, majority stockholders, corporate officers, trustees, and general
partners of a legal entity.
(u) "Distribution" means the procurement, sale and transport of cannabis and cannabis
products between entities licensed pursuant to the Medicinal and Adult -Use of Cannabis
Regulation and Safety Act, and any subsequent State of California legislation regarding
the same.
Section 4. Section 18-613 of Article XIII of Chapter 18 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 18-613. - Operating Standards.
(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. In the event that the
security guard is employed by an outside security guard company; such security
guard company shall maintain a valid Santa Ana Business License.
(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 comply with Article XI of Chapter 41 of the Santa Ana
Municipal Code. Interior signage or advertising may not be visible from the exterior.
Collectives and dispensaries must comply with the advertising and marketing
provisions of Business and Professions Code §§ 26150-26155.
(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: 7:00 a.m. to 11 p.m. daily. No licensed
dispensary/collective shall be open to the public between the hours of 11:01 p.m.
and 6:59 a.m. of any day.
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(g) The property shall provide an air treatment system with sufficient odor absorbing
ventilation and exhaust systems so that odor generated inside the location is not
detected outside the building, anywhere on adjacent property or public rights-of-
way, or within any other unit located within the same building as the collective if the
use only occupies a portion of a building.
(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 (1) 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 marijuana
laws.
(5) That the use of medical marijuana may impair a person's ability to drive a motor
vehicle or operate machinery.
(j) A collective shall not provide marijuana to any individual in an amount not
consistent with personal medical use.
(k) All agents, private security officers or other persons acting for or employed by a
collective shall display a laminated identification badge at least 2" x 2" in size,
issued by the collective. The badge, at a minimum, shall include the collective's
"doing business as" name and license number, the employee's first and last name,
and a color photo of the employee that shows the full front of the employee's face.
(1) No one under twenty-one (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 the Code Enforcement Division of the Planning and
Building Agency for notification if there are operational problems with the
establishment.
(n) Each collective owner, operator(s) and employees shall complete a criminal
background check and wear a visible photo ID at all times during operating hours.
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Owners, operator(s), employees, managers or volunteers may not have been
convicted of, or pleaded guilty/no-contest to a felony or misdemeanor drug charge
within the past four (4) years; nor shall they be a person required to register as a
controlled substance offender pursuant to Health & Safety Code section 11590.
(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 (6) 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 with all relevant state laws and city
and/or County ordinances pertaining to the preparation, distribution and sale of
food.
(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 (90)
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 which
shall include all perimeter entry points and perimeter windows and the building or
the portion of the building where the collective is located shall contain a fire -proof
safe or fire -proof filing cabinet and include a safety and security plan.
(t) Reserved.
(u) Reserved.
(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.
(w) Collectives must obtain and maintain a valid City business license at all times as a
condition for receiving, renewing, and maintaining their regulatory safety permit.
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(x) Occupancy shall not exceed that required under the Uniform Building Code and
Uniform Fire Code, and the maximum occupancy load shall be posted at the main
entrance.
Section 5: Section 18-617.2 of Article XIII of Chapter 18 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 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 18-617.1 as being on the RSP Eligibility List, must
complete and file a Regulatory Safety Permit Application to the Director of the
Planning and Building Agency or designee on a form supplied by the Planning and
Building Agency. The application shall be filed together with a nonrefundable fee as
established by resolution of the City Council, to defray the cost of investigation
required by this article. The application shall contain all of the following:
(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;
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(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)lf 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.
(b) The Director of the Planning and Building Agency or designee shall have sixty (60)
calendar days in which to investigate the application and background of the
applicant. The department of building safety and 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 Director of the Planning and Building Agency or designee or designee
concerning compliance with the foregoing provisions.
(c) The Director of the Planning and Building Agency or designee, after receiving the
application and aforementioned recommendations, shall grant the permit if s/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 the 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.
(d) Failure of an applicant listed on the RSP Eligibility List to obtain a Certificate of
Occupancy within six (6) months of submitting a completed RSP application will
result in disqualification from the RSP Eligibility List and Waitlist. This sub -section
applies to RSP applications submitted after April 5, 2016.
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Section 6: Section 18-617.3 of Article XIII of Chapter 18 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 18-617.3. - Medical marijuana collective—Regulatory permit annual renewal.
(a) Applications for the renewal of a permit shall be filed with the Director of the
Planning and Building Agency or designee 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 Director of the Planning and Building Agency or designee in order to
determine whether said permit should be renewed.
Section 7: Section 18-620 of Article XIII of Chapter 18 of the Santa Ana
Municipal Code is hereby amended to read in full as follows:
Sec. 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, responsible person 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.
(iii) The prohibition in subsection (ii) above includes, renting, leasing, or
otherwise permitting a medical marijuana business to occupy or use a
location, vehicle, or other mode of transportation.
(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
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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.
(e) Cultivation of Marijuana.
(1) Personal Cultivation. Individuals 21 years of age or older may
plant, cultivate, harvest, dry, or process up to (6) living
marijuana plants for personal use in a private residence or
accessory structure to a single private residence in the City of
Santa Ana and must comply with the following requirements:
(i) The marijuana cultivation area shall be located indoors
within a private residence or accessory structure on a
single parcel of property;
(ii) No more than six (6) living marijuana plants is permitted
for indoor personal cultivation;
(iii) Marijuana in excess of 28.5 grams produced by plants
kept for indoor personal cultivation must be kept in a
locked space on the grounds of the private residence not
visible from the public right -of way.
(iv) There shall be no exterior visibility or evidence of
marijuana cultivation outside the private residence from
the public right-of-way, including but not limited to any
marijuana plants, equipment used in the growing and
cultivation operation, or any light emanating from the
cultivation; or
(v) The cultivation may not violate any California Building,
Electrical or Fire Codes or any other health and safety
standards.
(2) Commercial Cultivation. Commercial cultivation of marijuana or
medical marijuana is prohibited anywhere in the City. No
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person, including a qualified patient or primary caregiver, shall
engage, permit, or participate in the commercial cultivation of
marijuana in the City.
(3) Outdoor Cultivation. Outdoor cultivation of marijuana or medical
marijuana is prohibited anywhere in the City. No person,
including a qualified patient or primary caregiver, shall engage,
permit, or participate in the outdoor cultivation of marijuana in
the City.
(4) Nuisance.
(i) It is hereby declared to be unlawful, a public nuisance, and a
violation of this Chapter for any person owning, leasing, occupying,
or having charge or possession of any parcel within the City to
cause or allow such parcel to be used for the cultivation of
marijuana, unless the person is authorized by state law to grow
marijuana within a private residence, and such authorized person is
complying with all requirements of this Chapter.
(5) Public Nuisance Prohibited.
(i) It is hereby declared to be unlawful and a public nuisance for
any person owning, leasing, occupying, or having charge or
possession of any parcel within the City to create a public nuisance
in the course of cultivating marijuana plants or any part thereof in
any location, indoor or outdoor. A public nuisance may be deemed
to exist, if such activity produces:
(1) Odors which are disturbing to people of
reasonable sensitivity residing or present on
adjacent or nearby property or areas open to the
public;
(2) Repeated responses to the parcel by law
enforcement personnel;
(3) A repeated disruption to the free passage of
persons or vehicles in the neighborhood,
excessive noise which is disturbing to people of
normal sensitivity on adjacent or nearby property
or areas open to the public;
(4) Any other impacts on the neighborhood which
are disruptive of normal activity in the area
including, but not limited to, grow lighting visible
outside the dwelling, excessive vehicular traffic
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or parking occurring at or near the dwelling, and
excessive noise emanating from the dwelling.
(5) Outdoor and Commercial growing and cultivation
of marijuana.
(f) A permitted medical marijuana dispensary may deliver medical marijuana
only to a qualified patient or caregiver. Medical marijuana delivery services by
dispensaries possessing regulatory safety permits must comply with Business
and Professions Code §19340. Delivery of cannabis from a dispensary permitted
pursuant to this Chapter can only be made in a city or county that does not
expressly prohibit it by ordinance. Delivery services by dispensaries not in
possession of regulatory safety permits is expressly prohibited.
Section 8: Section 21-127 of Article XII of Chapter 21 of the Santa Ana Municipal
Code is hereby amended to read in full as follows:
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 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 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 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
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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 sales price of any property
previously sold and returned by the purchaser to the seller which is
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11D-16
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 (10) percent 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 (5) percent. The maximum tax rate shall not
exceed ten (10) percent 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 (10) percent 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 (10) percent 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) Effective January 1, 2018, the gross receipts tax initially set at a rate of
five (5) percent pursuant to subsection (b)(1), shall be increased to a rate
of six (6) percent. The maximum tax rate shall not exceed ten (10) percent
of gross receipts. This tax rate shall not be adjusted for inflation pursuant
to section 21-121 of this chapter.
(4) As part of the gross receipts tax imposed by this article, each
collective/cooperative shall pay a minimum basic rate of two thousand
dollars ($2,000.00) annually for each separate branch location or separate
property location of the business.
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(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 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
(5) 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.
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(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 ($2,000.00) 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 31st 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 (%) 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
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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.
(i) 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.
Q) Classification of business license assessment type—Term and renewal.
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 subsection 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.
(1) Operative date of increased gross receipts tax rate. The gross receipts
tax set initially at a rate of five (5) percent pursuant to subsection (b)(1)
shall be increased to a rate of six (6) percent effective January 1, 2018,
pursuant to subsection (b)(3).
Section 9. If any section, subsection, sentence, clause, phrase 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 City Council of the City of Santa Ana hereby
declares that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase or portion thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
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ADOPTED this day of 2017.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM
Sonia R. Carvalho, City Attorney
By j��
Lisa Storck
Assistant City Attorney
AYES: Councilmembers:
NOES: Councilmembers:
ABSTAIN: Councilmembers:
NOT PRESENT: Councilmembers:
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the
attached Ordinance No. NS- to be the original ordinance adopted by the
City Council of the City of Santa Ana on , and that said
ordinance was published in accordance with the Charter of the City of Santa Ana.
Date:
Clerk of the Council
City of Santa Ana
11 D-21
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