The Hollister City Council and the public discussed at the June 20 meeting the Medicinal Marijuana Administrative Ordinance that the ad hoc committee—comprised of Councilmen Raymond Friend and Karson Klauer—has labored to draft for several months.
According to the agenda description: The ordinance will provide for cultivation, dispensing, manufacturing processes to be performed on, and other ancillary services provided to medicinal marijuana businesses. The ad hoc committee reviewed the new Medical Marijuana Regulation and Safety Act (MMRSA) that consists of three separate bills (AB 243, AB 266 and SB 643), which were enacted together on Sept. 11, 2015. The bills create a comprehensive state licensing system for the commercial cultivation, manufacture, retail sale, transport, distribution, deliver, and testing of medical cannabis. All licenses must also be approved by local governments. The included ordinance initiates this process, and will be followed with regulations that can be adopted and updated to account for foreseeable changes at state and federal level relating to marijuana use and regulation.
City staff recommended that the council provide it input on any further changes that provide a two-part regulatory process where a use permit can be conferred on real property with appropriate conditions to minimize, if not eliminate impacts on neighboring properties. And there would be an operator’s permit given to qualified and screened individuals. After submitting any changes, the ordinance would be brought back to the council for a second read and adoption, along with any proposed regulations. Staff also wanted the city manager to be authorized to seek a request for qualifications to determine costs and impacts on city services if the ordinance were adopted, after which, there would be a second reading and final adoption of the ordinance on Aug. 1, 2016.
City Attorney Paul Rovella, who has not been previously involved in formulating the ordinance, said, as he launched the discussion, that he would depend on Klauer to fill in any gaps of his understanding of the ordinance. He described MMRSA as a statewide effort to create a licensing oversight system for medicinal marijuana. He went on to say that the previous March 2016 deadline for local governments to establish their own guidelines that Gov. Brown later lifted.
“What you have before you is a draft ordinance for the first reading that is somewhat flexible that would allow for dispensaries, cultivation activities, manufacturing facilities, testing operations in certain restricted areas throughout the city,” Rovella said.
He said this was the council’s opportunity to review the ordinance, hear from the public, refine the ordinance, and have the final version of it ready for the council's next meeting in August.
Councilman Victor Gomez wanted to know more about the fee structure and wondered when it would be available for scrutiny. Rovella said the fees would be similar to the city’s impact fee schedule. He asked that the council authorize the city manager to come up with a study of possible impacts on the city, which would be needed in order to develop a fee structure. Gomez said he had other questions, but wanted to wait until after public comments.
During the public comment period, Luke Brenner said he thought the ordinance was, “…on an excellent trajectory,” and stated that many cities do not have the same level of collaboration as Hollister has among stakeholders and city staff. He said there was an issue still to be discussed concerning the privacy of those who use medical marijuana. He said there is concern about including a patient’s name on a mandatory receipt.
“That could have a negative impact on a person,” he said. “You’re still able to have consequences at your employment for being a medical cannabis patient. It may impact somebody’s child custody situation.”
Taylor Rodriguez said that as a recent college graduate who has returned to his hometown, he wants to open a family-run dispensary. He complemented the city staff in its work to fine tune the ordinance. He wanted to know if a county health permit would be required in order to run a dispensary in selling pre-packaged edibles. He wondered about what sort of bags could be used for customers to take their cannabis with them. He, too, addressed patient privacy, concerned about social stigma, and he concurred with Brenner that it might be a good idea not to include patient’s names on receipts.
Lobbyist Sean Donohoe also complimented the city on its work in developing the ordinance. He said Hollister will most likely not experience some of the “stumbles” that other cities have as they rushed ordinances through. He agreed with concerns about privacy and added that there might need to be some attention to manufacturing of extractions as he pointed out that a Santa Rosa operator who has an exemplary reputation suddenly found himself in jail after a disgruntled employee made certain accusations and the nature of health and safety codes concerning extractions are somewhat vague. He said he did not believe Hollister would experience any troubles because of the attention to detail and its openness to listening to stakeholders.
Councilman Gomez asked if the issues brought up at the meeting were added to the ordinance clarified how long the process would continue, figuring that it might be adopted 30 days after the second reading in August. He asked if those who are operating in a nonprofit status will be able to move to a for-profit status at some point. Klauer said he and Councilman Raymond Friend, who made up the ad hoc committee, tried to look into the future as far as possible, and for that reason the non-profit portion was dropped from the draft ordinance. He said, though, that there is still language that states operators have to abide current law and that the issue is still open.
“I don’t expect we’re going to be able to include every single thing that’s going to happen in the next couple weeks,” Klauer said. “I don’t know if council will want to move with this and change it later, or what.”
City Manager Bill Avera said there will always be little things that come up that can be added later on. Gomez said if the ordinance moves forward “as-is” he would insist on checking in six months to see if there is a need to make revisions. Rovella said the ordinance is “silent on the issue of nonprofits” and his office did seek council from the Attorney General’s office, which said “they only work for the Legislature” and Gomez came back with, “Last time I checked, I thought we paid their salaries.”
Gomez went on to point out that Hollister is not a trailblazer when it comes to a fee schedule and can very well follow other cities that have already done the work. He said fees need to be fair to give Hollister a competitive edge over other cities.
Councilwoman Mickie Luna said it was important to include language on privacy and said she has no problem moving forward on the ordinance.
Klauer concurred with Gomez that he didn’t want to price Hollister out of being competitive. He also did not want to cap the number of permits, as one public speaker suggested, too early. He said the private marketplace should determine how many cannabis businesses should operate within the city.
The council voted unanimously (Councilman Friend was absent) to move the ordinance forward for further revisions before bringing it back for a second reading in August.