Staff Report with Exhibit.Cannabis Presentation
PREPARED BY: Joel Paulson
Community Development Director
Reviewed by: Community Development Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6872
www.losgatosca.gov
TOWN OF LOS GATOS
PLANNING COMMISSION
REPORT
MEETING DATE: 10/27/2021
ITEM NO: 4
DATE: October 22, 2021
TO: Planning Commission
FROM: Joel Paulson, Community Development Director
SUBJECT: Review and Discuss the Commercial Cannabis Presentation Provided by the
Town Attorney.
REMARKS:
The Town Attorney has prepared a presentation about Commercial Cannabis within the Town
of Los Gatos. Cannabis Presentation (Exhibit 1). The Town Attorney and staff look forward to
the discussion with the Planning Commission regarding the topics covered in this presentation.
EXHIBIT:
1. Cannabis Presentation
This Page
Intentionally
Left Blank
Cannabis Dialogue
Community Workshop
2021
EXHIBIT 1
The Town Council seeks public
input regarding the potential
development and implementation
of regulations that could allow
commercial retail, cultivation
production, processing,
manufacturing, delivery and/or
testing of cannabis (marijuana)
products in Los Gatos.
*Commercial cannabis includes
both medical and recreational
cannabis .
Meeting Purpose
CANNABIS WORKSHOP
•Several workshops will be held until
the end of the year.
•Each will cover the same topics and
seek the same input.
•An online survey is available on the
Town website.
•Following the workshops, a summary
report will be prepared and presented
to the Town Council.
•The Town Council will consider the
public input as they decide how to
proceed (or not) with the development
of local cannabis regulations.
How will today’s input be used?CANNABIS WORKSHOP
•Before we ask for your input, we
are going to begin today’s
meeting with:
•A Summary of applicable laws
and regulations.
•An Overview of commercial
cannabis industry.
•And Provide an opportunity to
ask any questions that you may
have.
Meeting Overview
CANNABIS WORKSHOP
•Cannabis is a plant containing more than
eighty biologically active chemical
compounds that each have a different
effect on the body.
•The Industry has shifted from term
“marijuana” to "cannabis” (they are
interchangeable).
•The most commonly known compounds
are THC and CBD.
•THC is the psychoactive compound that produces
the high in recreational cannabis.
•CBD does not produce any psychoactive effects
and may have health benefits .
What is Cannabis?CANNABIS WORKSHOP
•Medical & Industrial use of
Cannabis was allowed and
unregulated until 1937…
•Marihuana Tax Act of 1937
(Imposed a tax fines and penalties that
effectively banned it, AMA opposed the act)
•Boggs Act of 1952 and Narcotics
Control Act of 1956 (Provided for
mandatory sentencing and increased
punishment and fines).
•Controlled Substances Act of
1970-Schedule 1 classification with
heroin, LSD, MDMA (ecstasy),
mushrooms.
Dynamic History of Cannabis in US CANNABIS WORKSHOP
•1996: Prop. 215 –Provided
protection against prosecution
for medical marijuana in
California for qualified patients,
with a doctor’s recommendation.
•2015 -The Medical Marijuana
Regulation and Safety Act. S tatewide
regulatory system for medical cannabis businesses
•2016:Prop. 64 (Adult Use of
Marijuana Act) –Voters
Legalized recreational marijuana
in California.
Recent History of Cannabis in
California CANNABIS WORKSHOP
Statewide
57.1% of voters supported;
42.9% opposed
Santa Clara County
58.3% of voters supported;
41.7% opposed
Town of Los Gatos
62% of voters supported;
38% opposed
PROPOSITION 64 ELECTION RESULTS
CANNABIS WORKSHOP
•Residents can grow up to 6 plants per
household. For the Town the must be inside.
•Over 18 can legally buy and possess up to 1
oz. of cannabis with a Dr.’s recommendation.
•Over 21 can legally buy and possess up to 1
oz. of cannabis from a legal retail location.
•Cannabis cannot be consumed in public and
cannot be carried across state lines.
•Cities and counties may completely prohibit
commercial cannabis activity.
•No public consumption.
•Employers may prohibit marijuana use by
employees.
WHAT DOES PROP 64 ALLOW? CANNABIS WORKSHOP
Requires State Licensing of
Commercial Operations:
•All commercial cannabis businesses
must have a state license to engage
in any commercial cannabis
activities.
•State licenses cannot be issued to an
applicant whose operations would
violate the provisions of any local
ordinance or regulation.
•State licenses will be valid for one
year.
•Separate state licenses are required
for each business location.
WHAT DOES PROP 64 ALLOW? CANNABIS WORKSHOP
The Town’s existing cannabis
ordinance currently prohibits the
establishment or operation of a
business engaged in recreational
or medical marijuana activity and
the cultivation, production, and
processing of cannabis within the
incorporated areas of the Town,
except for the personal cultivation
of no more than six plants,
indoors. The personal cultivation
allowance is State mandated.
Today’s Legal Reality in –Los Gatos
CANNABIS WORKSHOP
28 Delivery locations
41 Dispensary locations
Where is the Cannabis Industry in the
Region CANNABIS WORKSHOP
•Cultivation
•Processing and Manufacturing
•Testing
•Distribution
•Retail sales
Commercial Industry Overview
CANNABIS WORKSHOP
Indoor Cultivation:
•Grow room or greenhouse
•Soil and fertilizer
•Water
•Overhead lighting
•Exhaust fan(s)
•Monitoring equipment
Outdoor Cultivation:
•Land
•Soil and Fertilizers
•Water
•Pesticides
Cultivation
CANNABIS WORKSHOP
•Requires drying after
harvest.
•Requires heat and
pressure.
•Essential Oil (for
vaporizing or edibles)
either butane, carbon
dioxide, or oxygen).
•Other products similar to
cooking/baking.
Manufacturing and Processing
CANNABIS WORKSHOP
•Laboratory work.
•Tests for the presence or
absence of various analytes,
including cannabinoids, residual
solvents, micro -organisms,
pesticides, heavy metals, and
mycotoxins; water activity and
moisture content; and filth and
foreign material.
•Labs must be accredited by the
International Organization for
Standardization.
Testing
CANNABIS WORKSHOP
•A State excise cannabis tax of
15% of the gross receipts of
any retail sale.
•A State cultivation tax is set
at $9.25 per ounce for
marijuana flowers and $2.75
per ounce for marijuana
leaves.
•Sales and use tax (exemption
applies to the retail sales of
medicinal cannabis under
certain circumstances).
State Taxation
CANNABIS WORKSHOP
Four potential revenue/fee
sources:
•Local tax (Gross Receipts
Business Tax/Square footage
tax).
•Sales & Use Tax.
•Business License Fee.
•Development (Community
Benefit) Agreement.
LOCAL FISCAL IMPACT
CANNABIS WORKSHOP
•Estimating future tax revenues for
commercial cannabis business
activities is difficult but not
impossible.
•The Town’s determination on the
type, size, location and number of
cannabis businesses will impact tax
revenue.
•Initial research -Receipts per
potentially generate between
approximately $250,000 to
$1,500,000 in revenue for the Town.
LOCAL TAX REVENUE
PROJECTIONS CANNABIS WORKSHOP
•Public Safety Impacts
•Impacts on Youth
•Noise, Lighting and Odor
Impacts.
•Environmental Impacts
•Traffic Impacts
POSSIBLE COMMUNITY CONCERNS CANNABIS WORKSHOP
Public Safety Impacts
•Limit hours of operation.
•Locations away from
residential neighborhoods.
•Require surveillance systems.
•Require security guards.
•Require compliance
inspections.
POSSIBLE COMMUNITY CONCERNS CANNABIS WORKSHOP
Impact on Youth
•Limit hours of operation.
•Require 1,000 -foot buffer
from sensitive uses.(
Schools, Youth centers,
Daycare facilities).
•Regulate signage and
appearance.
•State prohibits
employment, access or
advertising to anyone
under 21.
POSSIBLE COMMUNITY CONCERNS CANNABIS WORKSHOP
Noise, Lighting and Odor Impacts
•Limit noise levels after certain
hours.
•Limit to industrial areas where
noise and odor may be
acceptable.
•Require odor control systems.
•Limit cultivation to indoors.
•Require exterior lighting
standards.
POSSIBLE COMMUNITY CONCERNS CANNABIS WORKSHOP
Environmental Impacts
•Limit to industrial areas
where similar activities are
permitted and mitigated.
•Require energy conservation
measures.
•Require water conservation
measures.
•Require energy from
renewable sources.
POSSIBLE COMMUNITY CONCERNS CANNABIS WORKSHOP
Traffic Impacts
•Limit to locations with
appropriate access and parking
infrastructure
•Require adequate onsite parking
standards
POSSIBLE COMMUNITY CONCERNS CANNABIS WORKSHOP
•What should the Town’s objectives and
goals be with respect to cannabis?
•What should the Town’s vision be for
Los Gatos business districts and
adjacent neighborhoods if
commercial/retail cannabis businesses
were allowed?
•What are the top issues of concern
related to cannabis use and sales that
the Town may be able to address
through its regulations?
•If allowed, how many
commercial/retail cannabis businesses
should be allowed in the Town?
Group Discussion
CANNABIS WORKSHOP
•If allowed, in which zoning districts
should commercial/retail cannabis
businesses be allowed in the Town?
•If allowed, what type of restrictions
should be placed on each of the
operations?
•If allowed, what concerns, if any, with
commercial cannabis cultivation,
manufacturing, testing, and
distribution in the Town of Los Gatos.
•Do you have different concerns for
indoor vs. outdoor cultivation?
•Do you have different concerns for
manufacturing/processing vs.
cultivation?
Group Discussion ( cont.)CANNABIS WORKSHOP
•Following the public workshops,
community meetings and town
advisory board meetings, a summary
report will be presented to The Town
Council.
•The Town Council will determine
whether to proceed with drafting
cannabis regulations.
•If the Town Council elects to proceed,
the process will be open to the
public, with ample opportunity to
provide input on the details and
specifics.
Next Steps
CANNABIS WORKSHOP
•Take the online survey!
www.losgatosca.gov/2689/Cannabis
•Stay informed
•Periodically check the Town
website for updates on this effort
•Thank you for being involved!
Wrap Up
CANNABIS WORKSHOP