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Home My WebLink About2017/08/03 Staff Presentation Cannabis Policy Workshop City of Chula Vista AUGUST 3, 2017 National Overview* 0 8 states (Colorado, Washington, Oregon, Alaska, California, Massachusetts, Maine, and Nevada) & the District of Columbia have legalized recreational cannabis • 29 States have legalized medicinal canna bis(mixture of senate and ballot measures) The states where it's tegal to smoke marijuana u!;' Lx-rws ir.)n: irr -e, -uudl&rnedical ust, 11 fical I.nx, x,N, Federal law 0 I.-cpaliz"i fin:rc.o. Q fic x, (a..': still classifies JMq()) is as an anna c b Ji[if V Illegal, Ilr '�r"' Schedule I 05 gcm.,tc-A,n D.C., narcotic under Orc N N W Federal Law-, ".0 j e Iff ar 01 Massac ht�set t's Nevada Mainc j is H R rI A T(,, I. !.I- J�, 1:1, h, t o 4",J, I :J K j I f I.),I 0IN'DEPENI)ENIP"I" StafiSta.& Cannabis Laws in Early Adoption States Colorado 1* 2000: authorize medical Cannabis • 2010: regulate medical Cannabis businesses., • 2012: authorize & regulate non-medical Cannabis • Local jurisdictions may prohibit or permit - as of May 2016, 29% of jurisdictions permit Cannabis businesses Cannabis Laws in Early Adoption States Washington • 19989. authorize medical Cannabis • 2012: authorize & regulate non-medical Cannabis • Local jurisdictions may prohibit or permit - 470 of jurisdictions permit Cannabis Laws in Early Adoption States Oregon • 1998: authorizes medical Cannabis • 2014: decriminalized non-medical cultivation and uses of Cannabis • 2015/2016: regulate medical & non-medical Cannabis • Complicated rules on how local jurisdictions can prohibit - 62% of jurisdictions permit Revenue & Chall ..... nges in Early Adoption States Revenue 01lo. Colorado: $140 million in 2016 01lo. Washington: $256 million in 2016 Poo- Oregon: $60.2 million in 2016 Challenges: Oo,. 400 of retail sales take place on black market 000. increase in Cannabis-related traffic deaths , hospital visits, and school suspensions (factcheck.oLg). 370 of accidents with THC in their system also had alcohol with noway to know when the THC came on board loo. Odor control loo. Cash handling Olo- Infrastructure demands California Cannabis Law History ► Prop 216 ( 1996) : decriminalized medical Cannabis ► MMP (2005): established collectives and co-ops ► MCRSA (2015) : regulated medical Cannabis businesses (2018 start) ► Proposition 64 (2016) : Adult Use of Cannabis Act - decriminalized and regulated non-medical Cannabis (2018 start) ► MAUCRSA (2017) California Cannabis Stats ► California currently has approximately 5 million cannabis users, 4 million of whom are adults. 200 of users are using 800 of the product. ► As of November 2016, 750 of CA cannabis sales were on the black market ► 10 million lbs. cannabis produced (some legal, most illegal) each year Po. 2 million is consumed in CA (8 million illegally goes out of state) . oo. There are an estimated 50,000 current cannabis cultivation businesses in California (mostly in the emerald triangle). In some rural areas of California, Cannabis growth now accounts for 15-200 of their economy. Po. Most cannabis related jobs are currently in retail. However, anticipate that processing and manufacturing will be where the greatest future growth occurs. California Cannabis Revenue State Revenue: • approx. $100 million in sales tax from medical Cannabis dispensaries in 2016 • 2017 analysis by UC Davis estimates there will be a proximately $5 billion in annual recreational sales (generating 750 million in excise tax + $440 million in sales tax) • Researchers estimate that in first year: 1 ) medicinal cannabis sales will drop by 70%; and 2) 30% of medical cannabis sales will still take place on black market California Cannabis Tax Revenue CITY TAX REVENUE SQ. FT. CITY TAX REVENUE SQ. FT. Adelanto 5% Long Beach 6-8% Carson 18% $25/sq. ft. Perris 10% $1 per gram of $25/sq. ft. Cathedral City concentrate $25/sq. ft. Pittsburg 10% of gross receipts Coachella 6% $15/sq. ft. Point Arena 10% recreational $15-$25sq. .03% medical $15-$25/sq. ft. Coalinga 10% ft. Dixon 15% Salinas 5-10% $15-$25/sq. ft. Fillmore 15% $20/sq. ft. San Diego 5-15% $15-$25/sq. San Jacinto 15% Up to $50/sq. ft. Gonzales ft. San $15-$25/sq. Leandro 10% Greenfield ft. Santa Grover Beach 10% $25/sq. ft. Barbara 20% maximum Hayward Not to exceed 15% Santa Cruz 7-10% $30,000 ea. Stockton $5 - $50 per $1,000 King City Manufacturing/ E: testing facilities $25/sq. ft. Watsonville maximum 2.5% $20/sq. ft. Local Jurisdiction Cannabis Revenue Local Revenue: ► Medical Cannabis - L.A. $7 million (2015); San Jose $17 million (2011 -2015); Sacramento $2.8 million (2014-2015); Santa Cruz $2 million (2014-2015) ► Recreational Cannabis - City of San Diego: estimates up to $22 million in revenue from gross receipts tax by mid-2019 ► SD City Treasurer estimates that the Cannabis Business Tax administration costs would increase expenditures and require hiring six new positions at a cost of approx. $650,000. Current California Cannabis Regulations oo. Limited Personal Use and Possession Permitted (H&S 11362. 1 ) oo. Persons 21 years and older can possess, process, transport, purchase, obtain, or give away to persons 21 and over without compensation, not more than 28.5 grams of cannabis po.. Persons 21 years and older can possess, process, transport, purchase, obtain, or give away to persons 21 and over without compensation, not more than 8 grams of cannabis concentrate Current California Cannabis Regulations Cont . oo. Limited Personal Cultivation Permitted (H&S 11362.2) oo. Not more than 6 living plants can be planted, cultivated, harvested, dried, or processed within a single private residence or on the grounds of that residence at any time Living plants and any cannabis produced by the plants in excess of 28.5 grams must be kept within a private residence or on the grounds of a private residence in a locked space and not publicly visible Must plant, cultivate, harvest, dry or process plants in accordance with local ordinances. Local jurisdictions can reasonably regulate personal indoor cultivation & completely ban outdoor cultivation. Current Local Cannabis Regulations oo. State laws govern personal cannabis activity - use, possession, and cultivation (to an extent) ► Cities have home rule authority to permit and regulate or prohibit any and all commercial marijuana activity In San Diego County, three jurisdictions currently have ordinances permitting some commercial cannabis retail activity (City of San Diego, City of La Mesa,, and City of Lemon Grove) . ► Chula Vista currently prohibits commercial cannabis activity, with the exception of limited delivery into Chula Vista by cannabis businesses licensed in another jurisdiction Future Local Cannabis Considerations ► Potential Types of Local Businesses (M-typeorA-type) ► Cultivation (small, medium, large; indoor,, outdoor, mixed-light; nurseries) ► Manufacturing po.. Testing Laboratories po.. Retailers po.. Distributors po.. Microbusinesses ► State law outlines communication between state licensing authorities and local jurisdictions Future Local Cannabis Considerations Cont . ► Fees and Revenues ► Regulatory fee tied to cost of administering license ► Revenue as gross receipts tax and/or square foot tax po.- No sales tax on medicinal cannabis (excise only) ► Consider competition (including black market) Challenges to collecting revenue lo.- Safety concerns ► Audit challenges ► General Fund vs. Specific Purpose Future Local Cannabis Considerations Cont . ► Permitting Considerations ► Location restrictions ► Security & Inspection requirements ► Odor control po.. Environmental requirements ► Cross-Business restrictions po.. Applicant qualifications po.. Applicant disqualifications Future Local Cannabis Considerations ( Cont . ) ► Staff Involvement ► Finance ► Code Enforcement ► Planning & Building ► Police Department ► Fire Inspector ► Administration ► City Attorney Future Local Cannabis Considerations Cont . ► Social Impacts ► Local authority to decide what is best for this community ► City Image ► Public Health ► Carcinogens/Toxins in smoked cannabis po. Youth Access/Use ► Safety oo. Drugged Driving po. All Cash Business Issues ► UC Irvine study ► Environmental Impacts Questions