06 Staff Report - Operation of Medical Marijuana Dispensaries~pW R 0
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!psA~p4 COUNCIL AGENDA REPORT
DATE: September 30, 2009
MEETING DATE: 1015109
ITEM NO: 6
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: URGENCY ORDINANCE ESTABLISHING A TEMPORARY MORATORIUM
ON THE ESTABLISHMENT AND OPERATION OF MEDICAL MARIJUANA
DISPENSARIES
RECOMMENDATION:
Adopt the proposed interim urgency ordinance placing a moratorium on the establishment and
operation of medical marijuana dispensaries in order to provide the Town with time to determine
whether to adopt an ordinance regulating the location or operation of medical marijuana
dispensaries.
BACKGROUND:
Town staff has recently received several inquiries from prospective medical marijuana
dispensary operators, and at least one of these individuals applied to the Finance Department for
a business license to open a medical marijuana dispensary whether or not the Town permits such
use. The Town of Los Gatos' Code does not specifically address the regulation or location of
medical marijuana dispensaries or list medical marijuana dispensaries as a permitted use or
conditionally pennitted use in any zoning district.
In California cities that have permitted the establishment of medical marijuana dispensaries,
issues and concerns have arisen related to the establishment of medical marijuana dispensaries in
close proximity to residential properties, schools, and daycare facilities. Furthermore, those
cities have reported adverse impacts on public health, safety, and welfare, including an increase
in cringes such as loitering, illegal drug activity, burglaries, robberies and other criminal activity
within and around dispensaries, as well as increased pedestrian and vehicular traffic, noise and
parking violations. Medical marijuana dispensaries have also resulted in increased demands for
police response, as well as maintenance of public streets and sidewalks.
8~ k
PREPARED BY: U WENDIE R. ROONEY, Community Development Director
1I /
Reviewed by: Assistant Town Manager Town Attorney
Clerk Administrator Finance Community Development
N:IDEVICNCLRPTS120091Medica]Mariinana.doe
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: URGENCY ORDINANCE ESTABLISHING A TEMPORARY MORATORIUM
ON MEDICAL MARIJUANA DISPENSARIES
September 30, 2009
Therefore, staff is proposing the adoption of an interim urgency ordinance imposing a
moratorium on the approval, commencement, establishment or operation of medical marijuana
dispensaries until such time staff is able to study the issue and present recommendations to the
Council.
DISCUSSION:
In November 1996, California voters enacted "The Compassionate Use Act of 1996," also
known as Proposition 215, and codified at Health and Safety Code Section 11362.5 et seq.
Proposition 215 allows a person to use marijuana for medical purposes with a doctor's
recommendation without violating state law regarding possession or cultivation of marijuana.
In October 2003, the State Legislature adopted Senate Bill 420 (Vasconeellos) "Medical
Marijuana," which established the Medical Marijuana Program that recognizes a right to
collective and cooperative cultivation of medical marijuana. These regulations went into effect
on January 1, 2004.
The U.S. Supreme Court has confirmed that the Controlled Substances Act, which provides that
possession and use of marijuana is a crime, is constitutional and that because federal law
preempts any conflicting state law, the Act may be enforced by federal authorities against
persons possessing or using marijuana, regardless of the protections offered by the
Compassionate Use Act and Medical Marijuana Program. Despite this, the United States
Attorney General has recently indicated that he would no longer raid medical marijuana
dispensaries.
The Town of Los Gatos Municipal Code does not specifically address the regulation or location
of medical marijuana dispensaries. Many California jurisdictions have taken the position of
prohibiting medical marijuana dispensaries due to the violation of federal law. Although this
approach does not arguably enforce federal law, but relies on the jurisdictions' police powers,
more recently California courts have concluded that local governments may not enforce federal
law specifically when dealing with medical marijuana. Based upon recent case law and the U.S.
Attorney General's new policy, we recominend that the Town Council adopt a moratorium on
medical marijuana dispensaries to allow the Town time to properly study this issue and develop
an appropriate position for the Town of Los Gatos.
The original adoption of Proposition 215, as well as more recent enactment of SB 420, has
created interest in the establishment of medical marijuana dispensaries. Several persons have
made inquiries to the Town of Los Gatos Community Development Department and the Finance
Department about locating medical marijuana dispensaries within Los Gatos Town limits. The
Town of Los Gatos currently does not have regulations regarding licensing or background
checks for persons seeking to establish a medical marijuana dispensary.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: URGENCY ORDINANCE ESTABLISHING A TEMPORARY MORATORIUM
ON MEDICAL MARIJUANA DISPENSARIES
S eptember 3 0, 2009
A medical marijuana dispensary is not a type of use which is specifically defined in the Los
Gatos Town Code's zoning regulations. Because a medical marijuana dispensary is not
specifically defined in the Town Code, an interested person could apply to conduct such a use
and claim that it is similar to a pharmacy, medical office, or retail use. Then, that person could
seek to operate a medical marijuana dispensary in various zoning districts, as well as near
schools or places of religious assembly.
Medical marijuana dispensaries have been established in a few locations in California and the
Bay Area including San Francisco, Oakland, and Santa Cruz. As a result of the presence of
medical marijuana dispensaries, some of these local agencies have reported increases in illegal
drug activity, illegal drug sales, robberies of persons leaving the dispensaries, loitering around
dispensaries, falsely obtained identification cards, and other criminal activity. Medical
marijuana dispensaries have resulted in increased demands for police response, as well as
maintenance of public streets and sidewalks.
Because of the recent adoption of SB 420 establishing further State regulations regarding
medical marijuana dispensaries, inquiries from interested persons regarding the establislunent of
medical marijuana dispensaries in the Town of Los Gatos, and the experiences of other local
jurisdictions, Town staff believes it is appropriate to adopt a moratorium on medical marijuana
dispensaries until the issue is further studied. The scope of the study resulting from the
moratorium may include, but not limited to the following;
1. Review processes used by other cities and counties when considering applications from
persons seeking to open and operate a medical marijuana dispensary;
2. Determine whether to establish licensing and criminal background check processes for
proposed operators and employees of a medical marijuana dispensary;
3. Decide if licensing needs to be regularly renewed;
4. Determine in which zoning districts, if any, medical marijuana dispensaries might be
allowed to operate;
5. Decide whether to prohibit medical marijuana dispensaries from locating near public or
private schools, places of religious assembly, or other sensitive uses;
6. Decide whether medical marijuana dispensaries should be located a minimum distance
from other medical marijuana dispensaries;
7. Potential regulations regarding the operation, hours, security features, and other conditions
for the operation of medical marijuana dispensaries;
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MAYOR AND TOWN COUNCIL
SUBJECT: URGENCY ORDINANCE ESTABLISHING A TEMPORARY MORATORIUM
ON MEDICAL MARIJUANA DISPENSARIES
September 30, 2009
8. Decide whether to rely on a State or Santa Clara County program for issuing eligible
patient identification cards and primary caregiver identification cards, or adopting a Los
Gatos-specific identification card program; and
9. Other related issues.
The adoption of a moratorium will give Town staff sufficient time to study this issue and prevent
medical marijuana dispensaries from locating in the Town until proper procedures and
regulations are established.
Goverrnnent Code Section 65858 allows a jurisdiction to adopt a zoning ordinance that prohibits
any uses that conflict with a contemplated zoning proposal that the Town Council, Planning
Commission, or Planning Division is considering or studying or intends to study within a
reasonable time to protect the public safety, health, and welfare. The urgency ordinance requires
a four-fifths vote of the Town Council for adoption and shall be effective for no more than 45
days. The Town Council may further extend the urgency ordinance for 10 months and 15 days
after a noticed public hearing, and may subsequently extend the urgency ordinance for one
additional year. Ten days prior to the expiration of the ordinance, the Town Council shall issue a
written report describing the measures taken to alleviate the conditions which led to the adoption
of the ordinance.
Town staff estimates that it will take 12 to 18 months to study issues related to medical
marijuana dispensaries; therefore, it is likely that staff will return to the Town Council with a
request for a moratorium extension.
ENVIRONMENTAL ASSESSMENT:
The proposed moratorium ordinance is exempt from review under the California Environmental
Quality Act (CEQA), pursuant to Sections 15060(c)(2), 15060(c)(3), and 15601(b)(3), because
the proposal will not result in a direct or reasonably foreseeable indirect physical change in the
environment, and only directs that a planning study be undertaken.
FISCAL IMPACT:
Instituting a study of medical marijuana dispensaries will require a significant commitment of
staff time. While funding this staff time will not require an additional appropriation, it will
require staff to adjust its priorities in working on other issues. Failure to adopt a moratorium
could require the commitment of additional police resources to deal with any criminal issues
associated with medical marijuana dispensaries. Subsequent adoption of a licensing requirement
could increase staffing costs which could be offset by license fees.
Attachments: 1. Proposed Interim Urgency Ordinance
ORDINANCE
AN INTERIM ORDINANCE OF THE TOWN OF LOS GATOS IMPOSING AS
AN URGENCY MEASURE A MORATORIUM ON THE APPROVAL,
COMMENCEMENT, ESTABLISHMENT, OR OPERATION OF MEDICAL
MARIJUANA DISPENSARIES
WHEREAS, the possession, cultivation, possession for sale, transportation, distribution,
furnishing, and giving away of marijuana is generally unlawful under California law. [Health and
Safety Code sections 11357-11360]
WHEREAS, in Noveinber of 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"), which allows a person to use marijuana for medical
purposes with a doctor's recommendation, without violating state criminal law regarding the use,
possession, or cultivation of marijuana.
WHEREAS, in 2003, the State Legislature adopted Senate Bill 420 (codified as Health
and Safety Code section 11362.7 et seq. and entitled the "Medical Marijuana Program Act"),
which clarified the scope of the Compassionate Use Act and allowed cities and other governing
bodies to adopt and enforce rules and regulations related. to medical marijuana.
WHEREAS, federal law (codified as 21 USC section 801 et seq. and entitled the
"Controlled Substances Act") makes it unlawful to manufacture, distribute, or possess any
controlled substances, including marijuana. This creates a significant law enforcement dilemma,
in that federal law conflicts with California law.
WHEREAS, the Town Community Development Department staff recently received
several inquiries from prospective medical marijuana dispensary operators, and at least one of
these individuals attempted to obtain a business license from the Town Finance Department to
operate a medical marijuana dispensary whether or not the Town permits such use.
WHEREAS, the Los Gatos Town Code does not specifically address the regulation or
location of medical marijuana dispensaries or list medical marijuana dispensaries as a permitted
or conditionally permitted use in any zoning district.
WHEREAS, California law established a limited affirmative defense to criminal
prosecution for qualifying individuals that collectively gather to cultivate medical marijuana, as
well as for persons that qualify as a "patient," or a "primary caregiver," as those terms are
defined within the statutory scheme. [Health and Safety Code sections 11362.765 and
11362.775] No provision of California law authorizes or protects the establishment of a medical
marijuana dispensary or other storefront distribution operation.
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Attachment 1
WHEREAS, some individuals have utilized the above-referenced provisions of
California law as a basis for operating dispensaries that sell or otherwise provide medical
marijuana. Presently, no such establishments operate in the Town; however, without restrictions
in place, a medical marijuana dispensary might attempt to open and operate without restrictions.
WHEREAS, in California cities that have permitted the establishment of medical
marijuana dispensaries, issues and concerns have arisen related to the establishment of medical
marijuana dispensaries in close proximity to residential properties, schools, and daycare
facilities. Furthermore, those cities have reported adverse impacts on public health, safety, and
welfare, including an increase in crimes such as loitering, illegal drug activity, burglaries,
robberies and other criminal activity within and around dispensaries, as well as increased
pedestrian and vehicular traffic, noise and parking violations. The operation of medical
marijuana dispensaries have also caused increased demands for police response, as well as,
additional maintenance of public streets and sidewalks.
WHEREAS, there are a number of unresolved questions under state law regarding the
regulation of medical marijuana dispensaries.
WHEREAS, if medical marijuana dispensaries are allowed to be established in the Town
of Los Gatos without appropriate regulation, such uses might: (1) conflict with the requirements
of the General Plan, the Town's zoning ordinance, forthcoming Town regulations and California
and/or federal law; (2) be inconsistent with surrounding uses; and (3) present a current and
immediate threat to the public health, safety, or welfare.
WHEREAS, the Town Council desires on an urgency basis to temporarily prohibit
medical marijuana dispensaries in the Town in order to allow the Town the time necessary to
study issues surrounding such establishments. During the moratorium period, staff will examine
various ways to address these establishments and provide the Town Council with options and
recommendations on wbether to adopt a regulatory ordinance permitting the operation of such
establishments, or, in the alternative, adopt a ban on dispensaries.
WHEREAS, this interim urgency ordinance is adopted in accordance with the
requirements of Government Code Section 65858.
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS
FOLLOWS:
SECTION I
PURPOSE AND FINDINGS
A. The above recitals are incorporated herein and are each relied upon independently by the
Town Council for its adoption of this urgency interim ordinance.
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B. The Town of Los Gatos General Plan does not presently contain a goal or policy or
textual discussion of the issue of a prospective use of medical marijuana dispensaries.
C. The Los Gatos Town Code does not address or regulate the existence or location of
medical marijuana dispensaries, operator licensing, or cultivation of marijuana plants.
D. The Town Community Development Department staff recently received several inquiries
from prospective medical marijuana dispensary operators as to whether a medical
marijuana dispensary is currently permitted or conditionally permitted in any of the
Town's zoning districts. At least one of these individuals attempted to obtain a business
license from the Town Finance Department to open a medical marijuana dispensary in
the Town of Los Gatos, whether or not the Town permits such use.
E. In cities that have permitted medical marijuana dispensaries, issues and concerns have
arisen related to the establishment of medical marijuana dispensaries in close proximity
to residential properties, schools, and daycare facilities. Cities have reported increases in
loitering, illegal drug activity, burglaries, robberies, and other'criminal activity within
and around the dispensaries, as well as increased pedestrian and vehicular traffic, noise
and parking violations. Medical marijuana dispensaries have also caused increased
demands for police response, and required additional maintenance of public streets and
sidewalks.
F. The manufacture, distribution or possession of marijuana for any purpose remains illegal
under federal law. Furthermore, the cultivation or distribution of medical marijuana for
profit is illegal under. California law.
G. There are several unresolved questions of law regarding the regulation of medical
marijuana dispensaries, including how to interpret the California Attorney General's
August 2008 "Guidelines for the Security and Non-Diversion of Marijuana Grown for
Medical Use" [marijuana dispensaries generally considered to be unprotected, illegal
drug-trafficking enterprises unless they fall within the narrow legal definition of a
"cooperative" under California law] and the California Supreme Court case People v,
il'Ientch (2008) 45 CalAth 274 [who may qualify as a "primary caregiver" for the purpose
of cultivating or dispensing medical marijuana to qualified patients]. A pending court of
appeal case (Qualified Patients Assn, v. Town of Anaheim, 4th Dist., Div. 3, Case No.
G040077) may shed light on these questions in the coming months. In addition, a recent
Califomia Court of Appeal decision in a case entitled City of Claremont v. Krause,
Cal.App.4ti' , 2009 Cal. App. LEX1S 1563, August 27, 2009, holds that the
Compassionate Use Act does not supersede local zoning authority, so that an unpermitted
medical marijuana dispensary can constitute a nuisance per se.
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H. To protect residents and businesses from potential harmful community impacts resulting
from medical marijuana dispensaries, the Town staff requires sufficient time to study the
legality, potential adverse community impacts, and mechanisms for regulating medical
marijuana dispensaries, in order to provide the Town Council with options and
recommendations on whether to adopt a regulatory ordinance permitting the operation of
such establishments, or whether to adopt a ban on dispensaries.
1. If medical marijuana dispensaries are allowed to proceed without appropriate
Town staff review, such dispensaries could conflict with the requirements of the General
Plan, the zoning ordinance, and forthcoming Town regulations and California and/or
federal law, and result in irreversible incompatibility of land uses and adverse impacts on
residents, businesses, and neighborhoods. Therefore, there is a current and immediate
threat to the public health, safety, or welfare, and the approval of a use permit, variance,
building permit, business license, or any other permit or entitlement for use ofproperty
within the Town as a medical marijuana dispensary would result in that threat to the
public health, safety, or welfare.
This urgency interim ordinance establishing a moratorium on medical marijuana
dispensaries is necessary to avoid the previously identified current and immediate threat
to the public health, safety, or welfare.
SECTION II
INTERIM MORATORIUM IMPOSED
A. For a period of forty-five (45) days, commencing on the date of the adoption of this
urgency interim ordinance, or until such time as this urgency interim ordinance may
expire subject to any extension of this urgency interim ordinance that the Town Council
may adopt and approve pursuant to Government Code section 65858, no zoning
ordinance interpretation or amendment, amendment to the General Plan, use permit,
variance, building pennit, business license, or any other permit or entitlement for use
shall be approved or issued for the approval, commencement, establishment or operation
of, and no person or entity shall own, manage, conduct, or operate any "medical
marijuana dispensary," as that phrase is hereinafter defined, or participate as an
employee, contractor, agent, volunteer, or in any other manner or capacity, in any
medical marijuana dispensary, upon any property in any zoning district within the Town
of Los Gatos during the period this urgency interim ordinance is in effect.
B. For the purposes of this urgency interim ordinance, the phrase "medical marijuana
dispensary" includes any site, facility, location, use, cooperative, center, or business that
distributes, dispenses, stores, sells, exchanges, processes, delivers, gives away, or
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cultivates marijuana for medical purposes to qualified patients, healthcare providers,
patients' primary caregivers or physicians, pursuant to Proposition 215, Senate Bill 420,
or any California regulations adopted in furtherance thereof. As used herein, the term
"marijuana" shall mean cannabis and all parts-of that plant.
SECTION III
PENALTIES
Pursuant to section 1. 10.040 of the Los Gatos Town Code, violation of any provision of
this urgency interim ordinance shall constitute an infraction and knowing and willful violations
shall constitute misdemeanors, all punishable by a fine and, in the case of misdemeanors, a fine
and/or imprisonment. Each and every day such a violation exists shall constitute a separate and
distinct violation of this urgency interim ordinance. In addition to the foregoing, any violation of
this urgency interim ordinance shall constitute a public nuisance and shall be subject to
abatement as provided by all applicable provisions of law.
SECTION IV
URGENCY ORDINANCE; EFFECTIVE DATE AND DURATION
Based on the findings set forth in Section 1 hereof, the recent inquiry and threat by a
prospective operator to obtain a business license to open a medical marijuana dispensary in the
Town of Los Gatos whether or not the Town permits such use, and the adverse impacts of
dispensaries, a current and immediate threat to the public health, safety, or welfare exists. This
urgency interim ordinance is necessary to alleviate and address that threat until permanent
zoning regulations can be established.
Therefore, this ordinance is adopted as an urgency interim ordinance pursuant to
Government Code section 65858 and shall take effect immediately upon approval by a four-
fifths vote of the Town Council. This urgency interim ordinance shall be in full force and effect
for a period of forty-five (45) days from and after the date of its adoption unless this period is
extended by the Town Council in accordance with Government Code section 65858.
Ten (10) days prior to the expiration of this interim ordinance or any extension thereof,
the Town Council shall issue a written report describing the measures that have been taken to
study the relevant issues and to establish policies and regulations for medical marijuana
dispensaries within the Town.
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SECTION V
ENVIRONMENTAL ANALYSIS
With respect to compliance with the California Environmental Quality Act ("CEQA"),
the Town Council finds as follows:
A. This urgency interim ordinance is not a "project" within the meaning of section
15378 of the State CEQA Guidelines, because it has no potential for resulting in
physical change in the environment, directly or ultimately. This urgency interim
ordinance does not,-in itself, allow the operation of medical marijuana
dispensaries; therefore there is no potential for resulting in physical change in the
environment, directly or ultimately.
B. This urgency interim ordinance is categorically exempt fiom CEQA under
Section 15308 of the State CEQA Guidelines. This urgency interim ordinance is
a regulatory action taken by the Town in accordance with Government Code
section 65858, to assure maintenance and protection of the environment pending
the completion of contemplated zoning ordinance revisions.
C. This urgency interim ordinance is covered by the general rule that CEQA applies
only to projects that have the potential for causing a significant effect on the
environment. For the reasons set forth in subparagraphs (A) and (B) of this
paragraph, it can be seen with certainty that there is no possibility that this
ordinance will have a significant effect on the environment and, therefore, the
urgency interim-ordinance is not subject to CEQA.
SECTION VI
SEVERABILITY
If any section, subsection, phrase, or clause of this urgency interim ordinance is for any
reason held to be unconstitutional, such decision shall not affect the validity of the remaining
portions of this urgency interim ordinance. The Town Council hereby declares that it would
have passed this urgency interim ordinance and each section, subsection, phrase or clause thereof
irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared
unconstitutional.
SECTION VII
PUBLICATION
This urgency interim ordinance shall be published in accordance with the provisions of
Government Code section 36933. .
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SECTION VIII
This urgency interim ordinance was introduced and adopted at a regular meeting of the
Town Council of the Town of Los Gatos by the following vote as an urgency interim ordinance
of the Town of Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on
October 5, 2009. This urgency interim ordinance takes effect immediately.
COUNCIL MEMBERS:
AYES:
NAYS :
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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