1 STAFF REPORT
DATE: April 4, 2023
TO: Justin Hess, City Manager
FROM: Jonathan Jones, Communications Manager
BY: Daniel Amaya, Administrative Analyst II
SUBJECT: Discussion of a Citywide Community Survey Regarding Commercial Cannabis Activity in the City of Burbank
RECOMMENDATION
The City Council could:
1) Note and file the report, or
2) Direct staff to return with a second step staff report with more information pertaining to distributing a citywide survey on community interest for cannabis sales in the City of Burbank.
BACKGROUND
At the January 10, 2023, City Council meeting, Mayor Anthony requested a first step staff report for a citywide survey on community interest for cannabis sales in the City of Burbank. The City currently prohibits all commercial cannabis activity, which includes the cultivation, manufacturing, distribution, testing, retail and delivery of cannabis/marijuana.
Regulatory History of Cannabis/Marijuana in California
Both Federal and California laws generally prohibit the use, possession, cultivation, transportation, and furnishing of marijuana. However, the Compassionate Use Act of 1996 (CUA) and the Medical Marijuana Program of 2003 (MMP) removed obstacles in State law for patients with a diagnosed medical need who could benefit from using marijuana for medical purposes. Among other things, these statutes exempted qualified patients, primary caregivers and persons who collectively or cooperatively cultivated medical marijuana from State criminal liability under specified State laws. After the CUA and MMP, on October 9, 2015, Governor Jerry Brown approved the Medical Marijuana Regulation and Safety Act (MMRSA). MMRSA regulations include among other things, the establishment of a dual licensing scheme where individuals engaged in commercial medical cannabis activities were required to obtain both a State-issued and locally-issued license prior to engaging in such activities. MMRSA preserved local control by giving local governments the authority to expressly ban the cultivation of medical cannabis for CITY MANAGER’S OFFICE
2 commercial and non- commercial purposes, as well as prohibit commercial medical cannabis activity of all types.
On November 8, 2016, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA) was approved by California voters, legalizing the use of recreational (non- medical) cannabis by those who are 21 years of age or older and established a comprehensive system for the State to regulate commercial recreational cannabis activity, similar to the dual licensing system established by MMRSA. Following the AUMA, on June 27, 2017, Governor Jerry Brown approved Senate Bill No. 94, the Medicinal and Adult -Use Cannabis Regulati on and Safety Act (MAUCRSA). MAUCRSA became effective immediately and merged the medical cannabis and recreational cannabis regulations.
Regulatory History of Cannabis/Marijuana in Burbank
On January 26, 2016, the City Council adopted Ordinance No. 16 -3,872, which codified the City’s prohibition of all commercial medical cannabis activities, including medical cannabis deliveries, medical cannabis dispensaries, and commercial medical cannabis cultivation throughout the City. Notwithstanding the prohibition of commercial medical cannabis activities, Ordinance No. 16-3,872 specifically authorized (1) medical cannabis delivery to qualified patients located within the City by primary caregivers, and (2) personal cultivation of medical cannabis by qualified patients or primary caregivers, in order to ensure that seriously ill patients had access to medical cannabis if necessary.
Ordinance No. 16- 3,872 did not expressly address non- medical cannabis activities, as those activities remained prohibited under then-existing State law.
Furthermore, in response to AUMA and MAUCRSA, staff introduced Ordinance 17–6094 to the City Council on November 7, 2017, to amend Title 3, Title 5 and Title 10 of the Burbank Municipal Code (BMC) to define and regulate certain cannabis activities in the City. This ordinance amended definitions within the BMC to remain consistent with recent changes to State law, allowed for personal cannabis cultivation for recreational use, and overall maintained the City’s existing ban on all comm ercial cannabis activity. The City Council unanimously adopted this amended ordinance on November 14, 2017.
DISCUSSION
Commercial Cannabis Activity in Los Angeles County
While changes to State Law made adult-recreational cannabis use legal in California, cities and counties have the option to prohibit certain types or all cannabis businesses within their jurisdiction. Neighboring cities in Los Angeles County such as Glendale, Beverly Hills, La Cañada Flintridge , and Inglew ood have codified the prohibition of all commercial cannabis activity , similar to Burbank . Cities such as Los Angeles, Long Beach, Culver City, and Pasadena permit all commercial cannabis activity, both medical and recreational, which includes cultivation, manufacturing, distribution, testing, retail, and delivery. There are however cities like Malibu and West Hollywood that only permit the retail and delivery of cannabis, medical and recreational. Los Angeles County has a total of 23 cities that allow at least one cannabis business type, and 65 cities that prohibit all cannabis business types. All cannabis business types are prohibited in unincorporated parts of the county.
3 Survey Contents
Should staff be directed to proceed with distributing a citywide survey, it is important to understand the contents of the survey and the questions being asked to the community.
Council may choose to move forward with distributing a less detailed survey, focusing on specific commercial activities, with the intention to limit the commercial cannabis activity types in Burbank or can move forward with a survey that assesses the community’s sentiments of potentially permitting all commercial cannabis activities. There are several types of cannabis commercial activities. Incorporated cities such as Burbank can decide which types they license or prohibit within their city . Council may choose to permit only medical cannabis commercial activity, permit only non- medical cannabis commercial activity, permit both or prohibit both. Council may choose to permit the following commercial cannabis activities:
- Retail (storefront)
- Retail (delivery)
- Distribution
- Testing
- Manufacturing
- Cultivation
In addition , Council may also choose to impose local marijuana taxes. Following California’s legalization of recreational marijuana, cities throughout the state began imposing taxes on cannabis within their borders — on top of sales tax and a state excise tax. Under the AUMA, a local jurisdiction may choose to impose a local tax on the cultivation, manufacturing, and/or sale of marijuana (either medical or non-medical). Many cities have chosen to adopt a specific tax for marijuana sales. In most cases these taxes have been based on gross receipts. For example, in 2017 voters in Los Angeles approved a gross receipts tax of 10% for non-medical marijuana, 5% for medical marijuana, and between 1- 2% for the manufacturing, cultivation, tr ansportation, testing, or other commercialization of marijuana. Should a local marijuana tax be established, this would be in addition to the City’s 10.25% sales tax and a 15% state excise tax.
ENVIRONMENTAL REVIEW
This activity has no potential for res ulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and as such, is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA) 14 Cal. Code Regs § 15378.
FISCAL IMPACT
The total cost of distributing a citywide survey is dependent on the contents within the survey. It is estimated that the cost for a survey discussing only the retail and delivery of cannabis can range anywhere from $30,000 -$40,000. For a more in- depth survey that covers all commercial activity of cannabis, it is estimated to be $40,000- $50,000.
Proceeding with a survey will require an appropriation from the General Fund.
CONCLUSION
Staff recognizes the importance of input from the community. As cannabis use and general commercial activity surrounding cannabis within the state becomes more 4 common, opening dialogue regarding this subject is critical prior to proceeding with any action. City codes relating to commercial cannabis activity have remained unchanged since November 2017. The City Council may choose to note and file this report or request a second step report with more information pertaining to distributing a citywide survey on community interest for cannabis sales in the City of Burbank.
ATTACHMENTS
None.