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2010090706 - Adopt Interim Ordinance Medical Marijuana DispensariestoW"/~F MEETING DATE: 9/7/10 = ITEM NO: )y~~ ~. m' ~ 1 C !ps Gp.\OS COUNCIL AGENDA REPORT DATE: September 2, 2010 TO: MAYOR AND TOWN COUNCIL FROM: ,GREG CARSON, TOWN MANAGER SUBJECT: MEDICAL MARIJUANA DISPENSARIES A. ADOPT 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, B. ACCEPT AND ISSUE THE WRITTEN REPORT PREPARED PURSUANT TO GOVERNMENT CODE SECTION 65858 ON THE MEASURES TAKEN TO DATE TO ALLEVIATE THE CONDITIONS THAT LED TO THE ADOPTION OF AN URGENCY INTERIM ORDINANCE IMPOSING A MORATORNM ON THE APPROVAL, COMMENCEMENT, ESTABLISHMENT OR OPERATION OF MEDICAL MARIJUANA DISPENSARIES. RECOMMENDATION: After Clerk Administrator reads the title of the Urgency Ordinance: 1. Waive reading of Urgency Ordinance (requires motion approved by a 4/5 vote) 2. Adopt Urgency Ordinance (requires motion approved by a 4/5 vote) 3. Accept written report pursuant to Govetmnent Code Section 65858 BACKGROUND: On October 5, 2009, following the opportunity for public testimony, Town Council adopted an Urgency Ordinance establishing a temporary, 45-day moratorium on the establislunent and operation of a medical marijuana dispensary. The moratorium was adopted pursuant to Government Code Section 65858, which provides that an interim zoning ordinance adopted as an urgency measure shall remain in effect for 45 days, urlless extended for an additional period of up to 10 months and 15 days, _and a second time for up to an additional year. PREPARED BY: MICHAEL MARTELLO WENDIE ROONEY Interim Town Attorney Director Community Development MM:WR:ct n Reviewed by: '`t' ~ Assistant Town Manager Clerk Administrator Finance . Community Development N:\DEV\CNCLRPTS\2010Vvledical Maiijuana\Medical Marijuana Ext.Staff Rpt. TC 9-7-2010.doc PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: MEDICAL MARIJUANA DISPENSARIES AUGUST 25, 2010 On November 2, 2009, after hearing and considering public testimony, the Town Council adopted interim Ordinance 2183, which extended the interim ordinance imposing a moratorium on the approval, commencement, establislunent m- operation of medical marijuana dispensaries for an additional 10 months and 15 days. Ordinance No. 2183 is due to expire on October 5, 2010, wiless extended for the additional one year period allowed under Government Code Section 65858. Since Ordinance 2183 does not expire until October 5, 2010, the one year extension Ordinance (Attaclunent 1) is structured to not become effective until October 4, 2010, or one day prior to the expiration of the current ordinance. As a result, the one year moratorium extension will remain in effect until October 5, 2011. DISCUSSION: The passage of the "Compassionate Use Act of 1996," which purports to legalize marijuana use for medical purposes in California, has created some confusion as to the extent a public agency may regulate medical marijuana dispensaries. Federal law prohibits marijuana use, distribution and possession. Although medical marijuana dispensaries appear to violate Federal law, these facilities still operate in some communities throughout California. This apparent conflict between Federal and State law has caused many municipalities tlu'oughout California to take proactive steps to allow their staff and decision makers sufficient time to research the issues associated with dispensaries, acid take the appropriate actions to ensure the cormnuruty is complying with Federal and State law and mitigating any potential negative that may arise from the operation of medical marijuana dispensaries. As of late 2009 in California, 63 cities and 6 counties had adopted moratoriurns and 139 cities and 8 counties had bamied medical marijuana dispensaries. The Moratorium was adopted pursuant to Govermnent Code section 65858, which provides that a 45-day interim zoning ordinance adopted as an urgency measure maybe extended for up to 10 months and 15 days, and a second time for up to an additional one year. Approval of an extension of aii interim zoning ordinance requires afour-fifths affirmative vote of the Town Council. The first 10 month and IS day Moratorium extension will expire on October 5, 2010, unless Council adopts the proposed ordinance extending the Moratorium for an additional year (Attaclunent 1). Section 65858 also requires that, not less than 10 days prior to the expiration of an interim zoning ordinance or any extension, the Town Council shall issue a written report describing the measures taken to alleviate the conditions that led to adoption of the ordinance ("Report"). The Report prepared by staff (Attachment 2) describes the steps undertaken during this past year and anticipated by staff leading to future action by Council with regard to medical marijuana dispensaries in the Town. The purpose of the Moratorium and its proposed extension is to promote the public health, safety, or welfare during the time Town staff analyzes and prepares a study on medical marijuana dispensaries, including providing Council with options and recormnendations on whether to adopt a regulatory ordinance permitting the operation of such establislunents, or whether to adopt PAGE3 MAYOR AND TOWN COUNCIL SUBJECT: MEDICAL MARIJUANA DISPENSARIES AUGUST 25, 2010 a ban on dispensaries. If medical marijuana dispensaries are allowed to operate in the Town without appropriate regulation, the dispensaries could conflict with the requirements of the Town's General Plan, Zoning Ordinance, and forthcoming Town regulations and state and/or _ federal law, and result in irreversible incompatibility of land uses and adverse impacts on residents, businesses and neighborhoods that present a current and irmnediate threat to the public health, safety, or welfare. Specifically, marijuana is listed as a Schedule 1 drug under the Federal Controlled Substances Act. The only similar drugs dispensed in Town are distributed by pharmacies, hospitals, or licensed professionals, such as doctors. Marijuana dispensaries are most similar to pharmacies which are licensed, regulated, and controlled under both federal and state law as to security, record keeping, and the licensing of practitioners. hi consultation with our police department, we know that a marijuana dispensary will place drugs, cash, and patients in one place at predictable times. In other communities this combination has led to both personal and property crimes. As such, several of the. key issues staff is studying involve how to protect the community, patrons, and operators from these types of tlueats, should a permitting process move forward at the end of the study period. If extended, the Moratorium will remain in effect until October 5, 2011, or until the Town has completed its study and adopted any necessary revisions or additions to the Town Code or other regulations to alleviate the conditions leading to the adoption of the Moratorium. If the latter occurs, the Moratorium could be rescinded prior to its expiration. ENVIRONMENTAL ASSESSEMENT: The proposed extension of the Moratorium is exempt from review under the California Environmental Qualify Act ("CEQA") pursuant to sections 15060(c) (2), 15060(c) (3) and 15601 (b) (3) of the CEQA Guidelines, because the action will not result in a direct or reasonably feasible indirect physical change in the enviromnent, and only directs that a planning study be undertaken. FISCAL ANALYSIS: Continuing a study of medical marijuana dispensaries will require a significant cormnitment of staff tune. While funding this staff time does not require an additional appropriation, it will require staff to adjust its priorities in working on other issues. Failure to extend the Moratorium could require the comrnihnent 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. Urgency Ordinance Extending Moratorium. 2. Report Pursuant to Government Code Section 65858 TIIIS PAGE INTENTIONALLY LEFT BLANK ORDINANCE AN INTERIM ORDINANCE OF THE TOWN OF LOS GATOS EXTENDING THE INTERIM ORDINANCE IMPOSING A MORATORIUM ON THE APPROVAL, COMMENCEMENT, ESTABLISHMENT, OR OPERATION OF MEDICAL MARIJUANA DISPENSARIES THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: SECTION I RECITALS 1. The possession, cultivation, possession for sale, h~ansportation, distribution, furnishing, and giving away of marijuana is generally unlawful under California law. [Health and Safety Code Sections 11357-11360] 2. In November 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 recormnendation, without violating state criminal law regarding the use, possession, or cultivation of marijuana. hz 2003, the State Legislature adopted Senate Bi11420 (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 acid enforce rules and regulations related to medical marijuana. 3. Federal law (codified as 21 USC Section 801 et seg. 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 dilermna, in that federal law conflicts with Califonua law. 4. The Town Cormnuruty Development Department staff has received numerous 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. 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. 5. Throughout the State in cities that have permitted the establislunent 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, Page 1 of 8 Attachment 1 safety, and welfare, including an increase in crimes such as loitering, illegal drug activity, burglaries, robberies and other crhnhial 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. 6. There are a number of unresolved questions under state law regarding the regulation of medical marijuana dispensaries and 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. 7. The Town Council desired 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 establislunents. During the moratorium period, staff will examine various ways to address these establishments and provide the Town Council with options and recormnendations on whether to adopt a regulatory ordinance permitting the operation of such establishments, or, hi the alternative, adopt a ban on dispensaries. 8. On October 5, 2009, the Town Council adopted by a unanimous vote an irrterim ordinance imposing as an urgency measure a moratorium on the approval, cormmencement, establislunent or operation of medical marijuana dispensaries and on November 2, 2009, the Town Council adopted by a unanimous vote an interim ordinance extending the interim ordinance for 10 months and 15-days imposing a moratorium on the approval, commencement, establislunent or operation of medical marijuana dispensaries, which is set to expire on October 5, 2010, unless extended by the Council for an additional period of up to one year. 9. During the first 11 months of the study period, staff has collected information, participated in educational seminats, and surveyed the experiences and actions of other cities and counties relative to marijuana regulation. Staff has learned that there has been some success with the regulation of dispensaries, but that there remains serious public safety issues, including adequate security of patrons and substances, as well as the allowable proximity of these uses next to children's venues to be resolved before a final report and range of options can be presented to the Town Council. 10. Staff has prepared a public report outlining some of the work it has engaged in since the moratorium began to move this matter forward for consideration by the Town Council. 11. If the Town of Los Gatos does not extend the interim ordinance for an additional period of up to one year, then the potential exists for the approval, cormmencement, establislunent or operation of medical marijuana dispensaries within the Town, with the Page 2 of 8 accompanying adverse impacts identified herein, without adequate regulations in place. 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 of property within the Town as a medical marijuana dispensary would result in that threat to the public health, safety, or welfare. 12. Although Town staff has diligently worked on this issue, other pressing issues of greater importance and concern to the Town and the region have competed for limited Town resources; including, but not limited to, public safety, environmental quality, housing in general, and affordable housing. 13. In order to protect the public health, safety, or welfare, it is necessary for the Town Council to extend the interim ordinance on an urgency basis to temporarily prohibit any uses and/or acfivities as hereinafter provided, which maybe in conflict with the possible regulations to be studied. The extension of the interim ordinance is adopted in accordance with the requirements of Government Code Section 65858. SECTION II 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. B. The Town of Los Gatos General Plan does not presently contain a goal or policy or textual discussion of the issue of a prospecfive 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 Cormnunity Development Deparhment staff has received numerous 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. hl cities that have permitted medical marijuana dispensaries, issues and concerns have arisen related to the establislunent 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. Page 3 of 8 P. The manufacture, distribution or possession of marijuana for any purpose remains illegal under federal law. Furthermore, the culfivation 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-ri~afficking enterprises unless they fall within the narrow legal definition of a "cooperative" under California law] and the California Supreme Court case People v. Mentch (2008) 45 Ca1.4th 274 [who may qualify as a "primary caregiver" for the purpose of cultivating or dispensing medical marijuana to qualified patients]. In addition, a recent California Court of Appeal decision in a case entitled City of Claremont v. Krause, 177 Ca1.App.4"' 1153, (2009), holds that the Compassionate Use Act does not supersede local zoning authority, so that an unpennitted medical marijuana dispensary can constitute a nuisance per se. 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 cormmunity 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. I. If medical marijuana dispensaries are allowed to proceed without appropriate review and regulation, 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 in-eversible incompatibility of land uses and adverse impacts on residents, businesses, neighborhoods, and children of the community. 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 of property within the Town as a medical marijuana dispensary would result in that tlm~eat to the public health, safety, or welfare. J. On October 5, 2009, the Town Council adopted by a unanimous vote an interim ordinance imposing as an urgency measure a moratorium on the approval, commencement, establishment or operation of medical marijuana dispensaries. K. On November 2, 2009, the Town Council adopted by a unanimous vote Ordinance 2183 extending the interim ordinance imposing as an urgency measure a moratorium on the approval, cormmencement, establishment or operation of medical marijuana dispensaries. L. Pursuant to Govenunent Code Section 65858, the interim ordinance shall expire on October 5, 2010, unless extended by the Town Council for an additional one year period. Page 4 of 8 M. More tirne is needed for Town staff to study the issues surrounding medical marijuana dispensaries and to consult with the Chief of Police and Town Attorney. N. If the Town of Los Gatos does not extend the interim ordinance, then the potential exists for the approval, commencement, establishment or operation of medical marijuana dispensaries within the Town, with the accompanying adverse impacts identified herein, without adequate regulations in place. There is a current an irmmediate 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 of property within the Town as a medical nnarijuana dispensary would result in that threat to the public health, safety, or welfare. O. The extension of the interim ordinance establishing a morator7urn on medical marijuana dispensaries pursuant to Government Code Section 65858 is necessary to avoid the previously identified current and immediate threat to the public health, safety, or welfare. SECTION III EXTENSION OF INTERIM MORATORIUM A. For an additional period of one year, to and including October 4, 2011, no zoning ordinance interpretation or amendment,. use permit, variance, building permit, business license, or any other permit or entitlement for use shall be approved or issued for the approval, cormmencement, 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 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 fw-therance thereof. As used herein, the term "marijuana" shall mean carmabis and all parts of that plant. SECTION IV PENALTIES Violation of any provision of this interim ordinance shall constitute a misdemeanor punishable by a fine and/or imprisonment, as set forth in State law. Each and every day such a Page 5 of 8 violation exists shall constitute a separate and distinct violation of this urgency interim ordinance. In addition to the foregoing, any violation of this interim ordinance shall constitute a public nuisance and shall be subject to abatement as provided by all applicable provisions of law. SECTION V 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 tlm•eat to the public health, safety, or welfare exists. This 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 Govenunent Code Section 65858 and shall take effect one day prior to one year from the expiration of Ordinance 2183 or October 4, 2010, and shall remain in full force and effect for a period of one year to October 5, 2011. In extending this urgency moratorium, the Town Council has issued a written report pursuant to Government Code Section 65858, 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. SECTION VI ENVIRONMENTAL ANALYSIS With respect to compliance with the California Enviromnental Quality Act ("CEQA"), the Town Council finds as follows: A. This 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 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 interim ordinance is categorically exempt from CEQA under Section 15308 of the State CEQA Guidelines. This 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. Page 6 of 8 C. This 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, this interim ordinance is not subject to CEQA. SECTION VII SEVERABILITY If any section, subsection, phrase, or clause of this 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 VIII PUBLICATION This interim ordinance shall be published in accordance with the provisions of Government Code Section 36933. Page 7 of 8 SECTION IX This interun Urgency Ordinance was introduced and adopted at a regular meeting of the Town Council of the Town of Los Gatos on September 7, 2010, by the following vote. This Urgency Ordinance takes effect October 4, 2010. COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED; /s/Diane McNutt MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: /s/ Jackie Rose CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA N:\DEV\CNCLRPTS\2010\Medica] Marijuana\Medical Marijuana Ext.Ord. TC 9-7-2010.doc Page 8 of 8 WRITTEN REPORT ISSUED PURSUANT TO GOVERNMENT CODE SECTION 65858 REGARDING MEASURES TAKEN TO ALLEVIATE CONDITIONS RESULTING IN THE ADOPTION OF AN URGENCY INTERIM ORDINANCE IMPOSING A MORATORIUM ON THE APPROVAL, COMMENCEMENT, ESTABLISHMENT, OR OPERATION OF MEDICAL MARIJUANA DISPENSARIES On November 2, 2009, the Town Council adopted Ordinance 2183 extending an interim ordinance imposing as an urgency measure a moratorium on the approval, commencement, establishment or operation of medical marijuana dispensaries within the Town. The interim ordinance was necessary to promote the public health, safety, or welfare during the time that Town staff analyzes and prepares a study on medical tarijuana dispensaries, including providing the Town Council with options and recommendations on whether to adopt a regulatory ordinance permitting the operation of such establishments, or whether to adopt an outright ban on such dispensaries. Since that time, Town staff commenced the following measures to alleviate the conditions that led to the adoption of the interinn ordinance, which measures are ongoing: • Conduct legal research into the relevant state and federal case law on medical marijuana dispensaries; and • Determine, based on recent case law and penduig cases, whether the Town may legally prohibit medical marijuana dispensaries; and • Review secondary sources on medical marijuana dispensaries, including, but not limited to, the California Attorney General's August 2008 "Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use;" and • Collect and review medical marijuana dispensary ordinances from other California municipalities; and • Research laws and enactrnents in other states regarduig medical marijuana; and • Research option of adopting a regulatory ordinance permitting the operation of medical marijuana dispensaries. Town staff anticipates adding the following measures during the remaitung period of the moratorium: • Research operation of existing medical marijuana dispensaries in other municipalities acid counties; and • Conduct public outreach via web site, meetings, newspaper articles, mailings to neighborhoods, and business groups; and • Prepare survey of other municipalities related practices and conduct study sessions with the Planning Comm~ission and Town Council; and • Prepare surveys, recommendations and related ordinances, staff reports and other documentation, as necessary, for formal consideration by the Town Council. Attachment 2 It is anticipated that based on other priorities and workload, including enviromnental quality, housing acid affordable housuig issues, the development of regulations relative to marijuana dispensaries may take the full amount of the one year ordinance extension. N:\DBV\CNCLRPTS\2010Vdedical MaiijuanaWiedical Marijuana Ext.Gov.SectRpt. (Attach.2) TC 9-7-2010.doc