Staff Report - City of Santa Monica

City Council Meeting: October 2, 2012

Agenda Item: 7-B

To: Mayor and City Council

From: David Martin, Director of Planning and Community Development

Subject: Initial Urgency Interim Ordinance to Establish a 45 Day Moratorium on the Approval of Any Land Use Entitlements, Business Licenses, or any other License or Permit for Medical Marijuana Dispensaries, with Specified Exceptions.

Recommended Action

Staff recommends that Council adopt the attached Initial Urgency Interim Ordinance to establish a 45 day moratorium on the approval of any land use entitlements, business licenses, or any other licenses or permits for medical marijuana dispensaries, with specified exceptions.

Executive Summary

The attached Initial Urgency Interim Ordinance would establish a 45 day moratorium on the approval of any land use entitlements, business licenses, or any other licenses or permits for medical marijuana dispensaries, with specified exceptions. The moratorium is recommended because the City has received inquiries about opening dispensaries and related businesses in Santa Monica; but the City's Zoning Ordinance currently does not contain regulations governing the establishment, location, and operation of medical marijuana collectives. And, the law governing the City's authority to adopt and enforce such regulations is, for the time being, extremely uncertain.

The present uncertainty results from both a lack of clarity in state law and a conflict between state and federal law. California voters and the California legislature established regulations authorizing the medical use of marijuana. But, these regulations leave unanswered many significant questions as to implementation; and, some California cities that initially authorized dispensaries later experienced significant detrimental secondary impacts associated with them and their proliferation. Moreover, although state law allows for the provision of medical marijuana, federal law continues to prohibit cultivating, distributing, and dispensing marijuana. This conflict in the law has yielded conflicting state appellate court decisions on the issue of municipal authority to regulate dispensaries – an issue which the California Supreme Court has accepted for review. Meanwhile, federal prosecutors have challenged the authority of California cities and counties to enact land use controls regulating medical marijuana dispensaries.

In response to this situation, several California cities have enacted moratoriums on the approval of dispensaries until their legal status is clarified and appropriate regulations to control their location and operation can be enacted. For these reasons staff is recommending adoption of the Initial Urgency Interim Ordinance which will allow the City an opportunity to:

1. Address community concerns regarding the establishment and operation of medical marijuana dispensaries;

2. Study the potential impacts that medical marijuana dispensaries may have on the public health, safety and welfare;

3. Review the legal authority that is available for the City to enact land use controls intended to regulate the distribution of medical marijuana in a manner consistent with the requirements of both state and federal law;

4. Study and determine what local regulations may be appropriate or necessary for medical marijuana dispensaries; and

5. Ensure that regulations authorizing medical marijuana dispensaries can be implemented so as not to result in harmful effects to the businesses, property owners, and residents of the City.

Background

On November 5, 1996, the voters of the State of California approved Proposition 215, codified as Health and Safety Code Section 11362.5 et seq. and entitled "The Compassionate Use Act of 1996" ("CUA"). The intent of Proposition 215 was to enable persons in need of medical marijuana for specified medical purposes to obtain and use it under limited, specified circumstances. Later, the California Legislature adopted Senate Bill 420, effective January 1, 2004, adding Article 2.5, "Medical Marijuana Program," to Division 10 of the California Health and Safety Code §11362.7 et seq. ("Medical Marijuana Program Act" or "MMPA"). The MMPA created a state-approved medical marijuana identification card program and provided certain additional immunities from state marijuana laws. However, the CUA and the MMPA leave numerous fundamental questions unanswered as to how these provisions should be implemented, particularly in regard to the distribution of medical marijuana through facilities commonly referred to as medical marijuana dispensaries.

Furthermore, marijuana is listed as a Schedule 1 drug under the Federal Controlled Substance Act ("the Act"). Under the Act, the manufacture, cultivation, distribution and dispensing of marijuana is illegal for any purpose, and the Act establishes criminal penalties for its use. In 2005, the U.S. Supreme Court held that the provisions of the Act continue to apply to and prohibit personal medical use in California, despite state law to the contrary.

In October, 2007, in response to Council’s request for information on medical marijuana dispensaries, staff forwarded to Council a comprehensive Information Item that discussed the myriad of issues surrounding medical marijuana dispensaries, including legal background, how the issue has been addressed in other cities, where such dispensaries might be located, operational conditions that may be considered and law enforcements’ perspective. The Information Item outlined the issues and potential impacts that may result from authorizing medical dispensaries within the City, how those impacts may be mitigated, and policy actions for Council to consider.

In April of 2009, the California Police Chief's Association issued a "White Paper" explaining that many violent crimes have resulted from the proliferation of dispensaries within the state.

In July of 2010, the City adopted a new Land Use and Circulation Element of the General Plan of the City of Santa Monica ("LUCE"), and is presently in the process of preparing a comprehensive revision to the City's Zoning Ordinance reflecting the LUCE's policies, goals and standards. It is contemplated that this process will extend well into 2013.

In January 2011, the U.S. Drug Enforcement Agency (DEA), which is responsible for enforcing the federal Act, published The DEA Position on Marijuana (Attachment C). In that publication, the DEA took a firm position against marijuana having any medical value. And, in October 2011 federal prosecutors announced an aggressive crackdown on medical marijuana dispensaries in the state. (Attachment D) The four regional U.S. Attorneys for California subsequently began a coordinated prosecution effort against marijuana dispensaries, including sending letters to the owners of property where dispensaries operate, and informing them of the possibility of criminal prosecution, imprisonment, fines and asset forfeiture if dispensary operations continued. (Attachment E) Since this crackdown, hundreds of medical marijuana dispensaries have shut down or been put out of business. Additionally, federal prosecutors have also challenged the authority of cities and counties to enact land use regulations for medical marijuana dispensaries. (Attachment F) The prosecutors have raised concerns about the potential criminal and civil liability of local government employees, boards, commissions, and agents involved in the permitting of dispensaries since it is a violation of federal law.

Late last year, the State Attorney General sent a letter to the State Assembly (Attachment B) indicating that she was troubled by the exploitation of the State's medical marijuana provisions by gangs, criminal enterprises, and others and that State law needed to be amended to address significant unsettled questions of law and policy.

Finally, the California Supreme Court has granted review of six appellate court decisions on local government's authority to regulate dispensaries. The grants of review include two, very recent Los Angeles cases: one holding that state law preempts Los Angeles County's ban on dispensaries, and the other upholding dispensary restrictions adopted by the City of Los Angeles. See County of Los Angeles v. Alternative Medicinal Cannabis Collective, 143 Cal. Rptr.3d 716 (2012); 420 Caregivers LLC v. City of Los Angeles, 143 Cal. Rptr.3d 754 (2012). The grants of review in these cases indicate that the California Supreme Court will resolve conflicts between the appellate court decisions and thereby provide much-needed guidance as to cities' authority to regulate dispensaries.

Discussion

Since medical marijuana dispensaries are not included in the Zoning Ordinance's list of permitted uses within any zoning district in the City, they are currently considered a prohibited use and are not allowed. Thus, the City's current Zoning Ordinance does not contain regulations specific to the establishment, location, and operation of medical marijuana collectives, cooperatives or dispensaries. During the past three months, the City has received four over-the-counter inquiries and eleven telephone inquiries relating to establishing medical marijuana businesses in the City. Quite apart from the significant legal uncertainties described above, in order to address both community and statewide concerns regarding establishing medical marijuana dispensaries, it is necessary for the City to study the potential impact such facilities may have on the public health, safety, and welfare.

The need for careful regulation is also demonstrated by the experiences of other California cities. Those that have permitted the establishment of medical marijuana dispensaries have experienced an increase in crime; such as burglary, robbery, and assaults; the distribution of tainted marijuana; the sale of illegal drugs in the areas immediately surrounding such medical marijuana dispensaries, collectives and cooperatives; the unavoidable exposure of school-age children and other sensitive residents to medical marijuana; fraud in issuing, obtaining, or using medical marijuana recommendations; and the diversion of marijuana for non-medical and recreational uses. The California Police Chief's "White Paper" (Attachment G) documents that, throughout California, many violent crimes can be traced back to the proliferation of marijuana dispensaries, including armed robberies and murders. Increased noise and pedestrian traffic, including nonresidents in pursuit of marijuana and out of area criminal in search of prey are commonly encountered just outside marijuana dispensaries.

The uncertain state of California law, the lack of local regulatory oversight, statements by federal prosecutors that challenge local authority to regulate medical marijuana dispensaries, and the adverse secondary effects experienced by other cities presently make the establishment of medical marijuana dispensary facilities an immediate risk to the preservation of the public peace, health, and safety.

Government Code Section 65858 allows a city, without following the procedures otherwise required prior to the adoption of a zoning ordinance, to protect public safety, health and welfare through adoption of an urgency interim ordinance by four-fifths vote prohibiting any uses which may be in conflict with a contemplated general plan, specific plan or a zoning proposal that the City Council, Planning Commission or Planning Department is considering or studying or plans to consider or study within a reasonable time.

For the reasons described above, a temporary moratorium is required to allow the City an opportunity to:

1. Address the community concerns regarding the establishment and operation of medical marijuana dispensaries;

2. Study the potential impacts that medical marijuana dispensaries may have on the public health, safety and welfare;

4. Study and determine what local regulations may be appropriate or necessary for medical marijuana dispensaries; and

5. Ensure that regulations authorizing medical marijuana dispensaries can be implemented so as not to result in harmful effects to the businesses, property owners, and residents of the City.

For purposes of this ordinance, "medical marijuana dispensary" or "dispensary" means any facility, building, structure or fixed location where one or more qualified patients and/or persons with identification cards and/or primary caregivers cultivate, distribute, sell, dispense, transmit, process, exchange, give away, or otherwise make available marijuana for medical purposes. The terms "primary caregiver," "qualified patient," and "person with an identification care" shall be as defined in California Health and Safety Code Section 11362.5 et seq. However, a "medical marijuana dispensary" shall not include any dwelling unit where qualified patients or persons with an identification card permanently reside and collectively or cooperatively cultivate marijuana on-site for their own personal medical use. Nor shall it include the provision, cultivation, or distribution of medical marijuana at this dwelling unit by primary caregivers for the personal medical use of the qualified patients or persons with an identification card who have designated the individual(s) as a primary caregiver, in accordance with California Health and Safety Code Sections 11362.5 and 11362.7 et seq. The proposed ordinance would also not include specified health care facilities licensed and regulated by the State.

In accordance with Government Code Section 65858, the proposed interim ordinance would expire after 45 days; however, because 10 day advanced published notice was provided, the ordinance can be extended up to 22 months and 15 days based on the requisite findings after additional published notice and hearing. Ten days prior to the expiration of the interim ordinance, or any extension thereof, the legislative body is required to issue a written report describing the measures taken to alleviate the condition necessitating the adoption of the interim ordinance.

Environmental Analysis

Pursuant to Section 15001 of the California Environmental Quality Act ("CEQA") Guidelines, this initial urgency interim ordinance is exempt from CEQA based on the following:

(a) This ordinance is not a project within the meaning of CEQA Section 15378 because it has no potential for resulting in physical change to the environment, either directly or indirectly.

(b) This ordinance is categorically exempt under CEQA Section 15308 as a regulatory action taken by the City pursuant to its police power and in accordance with Government Code Section 65858 to assure maintenance and protection of the environment pending the evaluation and adoption of potential local legislation, regulation, and policies.

(c) This ordinance is also exempt pursuant to CEQA Section 15061(b)(3) since the proposed ordinance involves a proactive measure to temporarily prohibit cannabis dispensaries and does not have the potential to significantly impact the environment.

Public Hearing

The public notice for this hearing was published at least 10 days prior to the hearing in the Santa Monica Daily Press.

Next Steps

The interim ordinance would allow the City an opportunity to:

1. Address the community concerns regarding the establishment and operation of medical marijuana dispensaries;

2. Study the potential impacts that medical marijuana dispensaries may have on the public health, safety and welfare;

3. Review the legal authority the legal authority that is available for the City to enact land use controls intended to regulate the distribution of medical marijuana in a manner consistent with the requirements of both State and federal law;

4. Study and determine what local Study and determine what local regulations may be appropriate or necessary for medical marijuana dispensaries; and

5. Ensure that regulations authorizing medical marijuana dispensaries can be implemented so as not to result in harmful effects to the businesses, property owners, and residents of the City.

Financial Impacts & Budget Actions

The recommendation presented in this report does not have any budgetary or fiscal impact.

Prepared by: Paul Foley, Principal Planner

Approved:

Forwarded to Council: