California Voters Approve Various Local Cannabis Measures
November 20, 2020
By Alexis Lazzeri
Under the Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”), California municipalities have discretion to prohibit any or all commercial cannabis activities and businesses within their borders. Since the passage of Proposition 64 in November 2016, a majority of cities and counties within the state have maintained a total prohibition on commercial cannabis activities. However, over the past few years, several cities have come to realize that they are missing out on desperately needed tax revenue from these legal cannabis operators.
Local Government officials and proponents of Voter Initiatives across California portrayed these recent cannabis taxation and regulatory measures as a way to help their community in a time of financial crisis and budget shortfalls. Thus, local elections in November 2020 were rife with ballot initiatives related to cannabis businesses, from taxes to licensing.
Taxation on limited commercial cannabis activities is not a hard sell to voters. In fact, most of the recent legislation simply creates a tax structure, establishing a range of taxes on gross receipts of commercial cannabis businesses. Several cities, such as Hawthorne and Madera, will not even begin to generate any tax revenue until cannabis businesses are actually permitted within the city. Arguably, cities are coming around to the idea of allowing commercial cannabis businesses and activities, if only for the tax revenue.
Strikingly, several municipalities also succeeded in passing initiatives during the November 2020 election that authorized new or expanded commercial cannabis activities. Below are summaries of some of the successful initiatives. We have sorted these by the license classifications established under Cal. Bus. & Prof. Code § 26050(a). It should be noted that several California cities granted the authorization of multiple types of licenses for commercial cannabis activities and are therefore mentioned more than once. (Please note that this is not a comprehensive list.)
Types 1 to 3 – Cultivation. (For cultivating cannabis plants to maturity via an outdoor, indoor, or mixed-light growing environment.)
Encinitas – Measure H Authorizing Commercial Cannabis Activities
Measure H would amend current zoning to authorize cannabis retail, cultivation, and manufacturing activities in specified zones with various restrictions. This measure would allow uses that are not currently allowed under Encinitas Municipal Code Chapter mm9.21, the city’s current ban on all commercial cannabis activity.
Commercial cannabis cultivation will now be allowed in agricultural zones and must be inside buildings or greenhouses – there must be no visual evidence of cultivation from the streets and sidewalks. There is a preference for environmentally sustainable cultivation. “Public nuisance” conditions may subject the licensee to penalties, suspension or revocation. Measure H will also allow industrial hemp cultivation within agricultural zones. This hemp cultivation must comply with California’s industrial hemp laws and regulations.
Ventura County – Measure O Adoption of Ordinance to Allow Commercial Cultivation, Processing, Distribution and Sale of Cannabis
Voters in Ventura County approved an ordinance allowing cannabis cultivation, processing, distribution and sale within the unincorporated areas of the county. This ordinance places limitations on the total canopy, not individual growers, within the county: 500 acres for indoor cultivation. No outdoor or mixed-light cultivation is allowed. Thus, this commercial cultivation is to be grown in a “pre-existing permanent greenhouse or indoor facility” in the unincorporated areas of Ventura County – those areas zoned exclusively for agricultural purposes and industrial activities. Measure O § 2702(b)(1-2). This limits cannabis activities to the Agricultural Exclusive (AE), Light Industrial (M2) and General Industrial (M3) zoning districts. Measure O § 2702(b). Applicants must obtain a zoning clearance and any other necessary land use entitlements for the subject property prior to issuance of the cannabis business license. Measure O § 2704(h). Additionally, under Measure O, voters approved a tax of 4% of gross receipts for cultivation and 1% of gross receipts on all nursery cultivation.
Type 4 – Cultivation; Nursery. (Cultivation of cannabis solely as a nursery. Type 4 licensees may also transport live plants.)
Ventura County – Measure O Adoption of Ordinance to Allow Commercial Cultivation, Processing, Distribution and Sale of Cannabis
Voters in Ventura County approved an ordinance allowing cannabis cultivation, processing, distribution and sale within the unincorporated areas of the county. This ordinance places limitations on the total canopy within the county: 100 acres for indoor nurseries. This commercial cannabis nursery cultivation must be non-flowering and not emit odor. Nursery cultivation is also required to be grown in a “pre-existing permanent greenhouse or indoor facility” in the unincorporated areas of Ventura County, those areas zoned exclusively for agricultural purposes and industrial activities, as discussed above.
Type 6/7 – Manufacturing. (Manufacturing License Types 6 & 7 allow for the production of cannabis products using non volatile solvents. In addition, Type 7 Licensees are also allowed the use of volatile solvents.)
Encinitas – Measure H Authorizing Commercial Cannabis Activities
Measure H would amend current zoning laws to authorize cannabis retail, cultivation, and manufacturing activities in specified zones with various restrictions. Manufacturers of non-edible products, under a Type 6 license, are authorized to manufacture in business parks, light industrial parks and agricultural areas, without the use of volatile solvents. These manufacturers must comply with all applicable California Department of Public Health regulations.
Measure H also indicates that Type 7 (cannabis kitchen sites) will be allowed in business parks, light industrial parks and general commercial zones. Here, cannabis concentrate extraction is not allowed. The cannabis kitchen sites, where edibles will be produced, must maintain compliance with California Department of Public Health regulations, as well as all Food safety and permitting requirements.
Type 10 – Retailer/Dispensary; General. (Licensed physical premise which is open to the public, in addition to retailers whose premises is closed to the public, conducting business exclusively by delivery.)
Benicia – Measure D City of Benicia 2020 Cannabis Retail Advisory Measure
The voters of Benicia approved a non-binding advisory opinion stating the city should allow new retail cannabis dispensaries. Currently, Benicia Municipal Code section 17.84.050 limits the number of retail cannabis businesses in the City to one business. Measure D would allow, but not require, the City Council to amend the Benicia Municipal Code to allow for more than one business in the City.
Costa Mesa – Measure Q Retail Cannabis Tax and Regulation Measure
Under Measure Q, Costa Mesa voted to allow the City Council to develop rules for cannabis storefront dispensaries and non-storefront delivery services. Costa Mesa already allows for manufacturing, testing and distribution, and is set to be only the second city in Orange County to institute a permitting process for commercial cannabis dispensaries. Voters also approved a 4%-7% gross receipts tax on cannabis retail activities.
Encinitas – Measure H Authorizing Commercial Cannabis Activities
Measure H would amend current zoning to authorize cannabis retail, cultivation, and manufacturing activities in specified zones with various restrictions. Cannabis retailers must operate in specified commercial land use zones for retail sales and delivery with specific restrictions. At least four licenses shall be granted to retailers, subject to City Council increase. There must be a 1,000-foot separation from day care centers, playgrounds, schools or other retailers and no on-site medical consultations. All retailers must have a security guard present 24 hours per day and may only operate between the hours of 7:00 a.m. to 9:00 p.m. There are additional signage, lighting, and contact information posting requirements.
La Habra – Measure W Cannabis Business Tax Regulation
La Habra voters passed Measure W authorizing up to four retail delivery businesses, establishing a tax of up to 2.5% on cannabis distribution and testing businesses, and imposing a tax of up to 6% gross receipts on all other cannabis businesses. The city already currently allows cannabis distribution and testing labs. However, the current ban on retail storefront cannabis businesses will remain in place.
Laguna Woods – Measure V Advisory Measure on Marijuana Dispensaries
Laguna Woods voters approved ballot Measure V, a non-binding advisory opinion. This approval would permit the city to allow cannabis retailers, although there is no guarantee the city will institute a permitting process. Laguna Woods currently bans all commercial cannabis activity.
Marina – Measure Z Commercial Cannabis Businesses
Voters in the City of Marina, located in Monterey County, approved Measure Z, restricting cannabis businesses’ proximity to parks and recreation centers and adding a 5% gross receipts tax on cannabis businesses. The measure also added a cap on dispensaries within the city: three adult-use retailers and three medical dispensaries.
Pomona – Measure PO Commercial Cannabis Businesses and Commercial Cannabis Permit Program
Pomona voters approved a commercial cannabis permit program. This is a four phase, merit based commercial cannabis permit program, which would allow for up to eight permits for cannabis retailers. In its passage, Measure PO also instituted placement restrictions requiring all cannabis businesses to be at least 1,000 feet from all schools, daycare centers and youth facilities. (State law requires a 600-foot buffer between schools and cannabis businesses, but jurisdictions can increase this distance if they choose, which Pomona has done.)
Weed – Measure B Regulating the Commercial Growth of Cannabis
Voters in the City of Weed, located in Siskiyou County, approved the adoption of Ordinance 453-2019, which would create regulations on cannabis businesses including requiring licenses, limiting licenses, and imposing regulations on operators. The issuance of retail licenses is set to follow. Following the passage of Measure K in June 2018, the city already allows for cannabis cultivation.
Type 11 License – Distributor
Encinitas – Measure H Authorizing Commercial Cannabis Activities
In addition to approving cannabis retail, cultivation, and manufacturing activities, Measure H will also allow cannabis distribution sites within business park and light industrial zones.
Banning – Measure L Cannabis Distribution Tax Measure
Measure L authorizes commercial cannabis distribution activity within the city of Banning and imposes a distribution tax of up to 10% on gross receipts. The city previously voted in 2018 to allow cannabis cultivation, manufacturing, testing and retail dispensaries.
Ventura County – Measure O Adoption of Ordinance to Allow Commercial Cultivation, Processing, Distribution and Sale of Cannabis
Voters in Ventura County, located between Los Angeles and Santa Barbara counties, approved an ordinance allowing cannabis cultivation, processing, distribution and sale within the unincorporated areas of the county, with limitations of 500 acres for indoor cultivation and 100 acres for indoor nurseries. Under Measure O, ancillary processing and distribution activities are also permitted with a cultivation permit. Measure O § 2702(b)(3-4).
This information is provided as a public educational service and is not intended as legal advice. For specific questions regarding cannabis laws in California or assistance applying for local or state licensing, please contact the Law Offices of Omar Figueroa at 707-829-0215 to schedule a confidential legal consultation.