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Commercial Medical Marijuana (Cannabis)
Maps
  • Industrial Zones: Where the establishment of commercial medical cannabis uses are allowed -
    Industrial (I), Coastal Industrial (CI), and Coastal Industrial Commercial (CIC)
    (See: Maps of Industrial Areas)
  • Zoning Map of the City of Grover Beach with industrial areas outlined in yellow.

Status of Ordinance to Regulate Commercial Medical Marijuana Activities

The City of Grover Beach currently prohibits all commercial medical marijuana activities (e.g., dispensaries, manufacturing, distribution, testing, cultivation and nurseries).  

  • July 5, 2016: The City Council provided direction for staff to begin working on a draft ordinance to regulate commercial medical marijuana activities.
  • August 15, 2016 and September 6, 2016: The City Council provided direction on major components of the draft ordinance. (No formal Council action was taken at either of these meetings.) 
  • January 11, 2017:  The Planning Commission held a public hearing to consider a recommendation to the City Council on the proposed land use ordinance for commercial medical cannabis activity and uses.
    • Planning Commission Action: The Planning Commission unanimously recommended the land use ordinance establishing an Overlay Zone for commercial medical cannabis businesses to the City Council. The Commission also recommended reducing the hours of operation for dispensaries to 8:00 a.m. to 5:00 p.m. Monday-Friday and 10:00 a.m. to 3:00 p.m. on Saturday and Sunday, and applying the 100’ setback from residential zones to all commercial cannabis uses (not just dispensaries as proposed in the staff report). 
    • The proposed Overlay Zone is approximately 70 acres located in the Industrial (I) Zone and a portion of the Coastal Industrial (CI) Zone generally located south of Farroll Road, north of Highland Way, east of South 4th Street and west of South 13th Street: See Proposed Overlay Zone Map.
  • February 6, 2017: The City Council held a public hearing for first reading of a proposed land use ordinance and an ordinance to enact a commercial cannabis tax. The land use ordinance was amended, with additional direction provided to staff (see City Council Meeting Update - 02/06/17). The City Council also considered and provided direction on a draft ordinance to regulate commercial medical marijuana activities.  
  • February 21, 2017: The City Council held a public hearing to consider:
    • a land use ordinance to determine where commercial cannabis activities may be located within the city, and
    • a commercial cannabis tax ordinance 
    • Actions:
      1) The City Council provided direction for staff to make certain amendments to the land use ordinance and to schedule the amended land use ordinance for review by the Planning Commission. Recommendations from the Planning Commission on the land use ordinance will then be scheduled for consideration by the City Council.
      2) The City Council adopted the commercial cannabis tax ordinance.
    • For further details on the outcome of this meeting, see City Council Meeting Update – 02/21/17
    • At this same February 21 meeting, the Council reviewed and commented on a draft regulatory ordinance to regulate commercial medical marijuana activities that may locate within the city.
  • March 6, 2017: The City Council continued its review of the draft regulatory ordinance. Further review of the draft ordinance was scheduled for the City Council meeting on May 1, 2017.
  • Draft Initial Study-Negative Declaration. The public comment period ended on April 11, 2017 at 5:00 p.m. The draft Initial Study-Negative Declaration was based on drafts at that time of the Land Use Ordinance and Regulatory Ordinance.
  • April 12 2017: The Planning Commission held a public hearing to consider recommendations to the City Council to allow the establishment of commercial medical cannabis uses in Industrial (I), Coastal Industrial (CI), and Coastal Industrial Commercial (CIC) Zones: See Maps of Proposed Industrial Areas.
  • May 1, 2017: The City Council held a public hearing to introduce and conduct first reading of a proposed land use ordinance to allow the establishment and operation of commercial medical cannabis uses in the Industrial (I), Coastal Industrial (CI), and Coastal Industrial Commercial (CIC) Zones and a regulatory ordinance establishing regulations on the operations of commercial medical cannabis uses. The public hearing also included consideration of a Local Coastal Plan Amendment and Negative Declaration on the land use ordinance.

    Actions: The City Council introduced and conducted first reading of a proposed land use ordinance to allow the establishment and operation of commercial medical cannabis uses in the Industrial (I), Coastal Industrial (CI), and Coastal Industrial Commercial (CIC) Zones and a regulatory ordinance that establishes requirements for the ongoing operations of commercial medical cannabis uses. The City Council will consider second reading and adoption of the ordinances on May 15, 2017.

    The City Council also authorized a Local Coastal Program (LCP) Amendment as a portion of the proposed area is located within the Coastal Zone. An LCP Amendment requires approval by the Coastal Commission prior to the land use ordinance taking effect, which could take approximately three months. During this time, no Use Permit applications could be approved for any properties within the Coastal Industrial and Coastal Industrial Commercial Zones.

  • May 15, 2017: The City Council held a public hearing to conduct the second reading of a proposed land use ordinance to allow the establishment and operation of commercial medical cannabis uses in the Industrial (I), Coastal Industrial (CI), and Coastal Industrial Commercial (CIC) Zones and a regulatory ordinance establishing regulations on the operations of commercial medical cannabis uses. The public hearing also included consideration of a Local Coastal Plan Amendment.
    • Action: The City Council adopted the land use ordinance to allow the establishment and operation of commercial medical cannabis uses in the Industrial (I), Coastal Industrial (CI), and Coastal Industrial Commercial (CIC) Zones with three minor revisions:
      • Reduced the number of dispensaries from four to two.
      • Reduced the hours of operations for dispensaries from 9:00 a.m. to 9:00 p.m. to 9:00 a.m. to 7:00 p.m.
      • Established a minimum 100 foot setback for all commercial medical cannabis uses from the CR2 Zone on Atlantic City Avenue to the Coastal Industrial Commercial (CIC) Zone as measured from property boundary to property boundary.
    • Action: The City Council adopted the regulatory ordinance establishing regulations on the operations of commercial medical cannabis uses.
    • Action: The City Council adopted a resolution authorizing staff to submit a local Coastal Program (LCP) Amendment for the portion of the proposed area located within the Coastal Zone.

Effective Date: The land use and regulatory ordinances shall become effective on June 14, 2017, except for the area in the Coastal Industrial and Coastal Industrial Commercial Zones. These areas are within the Coastal Zone and require approval of a Local Coastal Program (LCP) Amendment by the Coastal Commission prior to the land use ordinance taking effect, which could take approximately three months. During this time, applications may be submitted to the City, but no Use Permit applications could be scheduled for a hearing until the LCP Amendment is approved by the Coastal Commission.

The City Council also provided direction to staff regarding implementation of the Commercial Medical Cannabis Ordinances. The Council indicated that the first day the City will accept Use Permit and Commercial Cannabis Permit applications for commercial medical cannabis uses is June 14, 2017, except for dispensary applications. At the June 5, 2017 Council meeting, the City Council will consider establishing a pre-application process for dispensary applications (see summary of the four phase selection process in the May 15, 2017 staff report). Application forms and Application checklists were posted on the City website in early June.     

  • June 5, 2017: The City Council reviewed and considered a pre-application process for dispensary applications, operating requirements for extraction manufacturing, cultivation, and testing labs, and other implementation actions related to the Commercial Medical Cannabis Ordinances.
  • September 7, 2017: The City Council received an assessment of the submitted commercial medical cannabis dispensary pre-applications and determined seven pre-applications should be considered for the eligibility ranking list, pending completion of background reviews. Additionally, the Council provided direction to schedule a special meeting on September 25, 2017 to further review the seven eligible pre-applications and establish a final eligibility ranking list that identifies the top two applicants.
  • September 25, 2017: The City Council considered additional factors for establishing a ranking list of eligible dispensary applicants and established a final eligibility list that identified the top four pre-applications among the seven that were eligible.
  • October 16, 2017: The City Council provided policy direction that affirmed the placement of one applicant as one of the top two applicants while authorizing the three other applicants to submit Use Permit applications. The Council also provided direction for staff to draft an amendment to the cannabis land use ordinance for Council consideration of allowing up to four dispensaries and several amendments to the cannabis regulatory ordinance.
  • December 4, 2017: The City Council introduced and conducted first reading of two separate Ordinances to increase the number of allowable commercial medical cannabis retailers and/or microbusinesses with a retailer use (previously referred to as “dispensaries”) from two (2) to up to four (4) allowable permits, revise certain definitions, and make changes consistent with newly established state law. The Ordinances are scheduled for second reading and adoption on January 8, 2018. Additionally, the Council reviewed the eligibility ranking list and provided direction for staff to proceed with processing the top two ranked applications. Once the Ordinance allowing up to four permits becomes effective, the third and fourth ranked applications will be authorized to proceed through the process for a Use Permit.

If you have any questions, please email them to Community Development Director Bruce Buckingham 


Taxation of Commercial Cannabis Activities

On August 1, 2016 the City Council voted unanimously to place a cannabis tax measure on the November 2016 ballot for consideration by Grover Beach voters. If approved, the City Council would be authorized to enact a tax on commercial cannabis businesses which may establish within city limits. The tax would apply to both medical cannabis businesses and non-medical cannabis businesses, if those businesses are allowed under state and local laws.

On November 8, 2016, Measure L-16, which required a simple majority vote (50%+1) for approval by Grover Beach voters, passed by 70.59%.

The ordinance to enact the commercial cannabis tax is scheduled to be presented to the City Council at the same meetings as the ordinances regarding land use and regulatory matters. Once the ordinance setting the tax rate is adopted by the City Council, the tax would become effective 30 days thereafter.

Summary of proposed tax rate:

Commercial Medical Marijuana Activities: 5% tax on gross receipts.

Non-medical Commercial Medical Marijuana Activities: 10% tax on gross receipt. 

Cultivation and Nurseries: $25 per sq ft on the first 5,000 sq ft and $10 per sq ft on the remainder. 

Once the ordinance enacting the tax rate is adopted, the tax will not sunset and would be subject to annual CPI adjustments. The revenue generated by Measure L-16 would go to the City’s General Fund.

Any tax on non-medical (i.e., recreational) marijuana activities could only occur if the City adopted laws allowing the recreational use of marijuana. 



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