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Staff Report
City Council
Item No. 3.F
Meeting Date: June 28, 2023
From: Charles McClendon, City Manager
Title: Second Reading of an Ordinance Amendment - Renewal of Inactive Cannabis Dispensary Licenses
City Council
RECOMMENDATION:
To provide second reading, by title only, and adopt an ordinance amending Sections
5.88.040 and 5.88.055 of the Cathedral City Municipal Code related to Cannabis Business License expiration and renewals.
BACKGROUND:
During City Council discussions on cannabis taxes in January and February of this year, City Council expressed some interest in measures that would have the effect of reducing the number of retail licenses over time by limiting the renewal of inactive licenses. This was reported to the Cannabis Task Force during their meeting on April 3, 2023. It was further reported the municipal code currently includes a provision that licenses inactive for a period of at least one year may not be renewed (discretionary) and the City Attorney’s concern that non-discretionary language would be advisable if the desire is to stop renewing inactive licenses. After discussion, it was the consensus of the task force that licenses inactive for over a year should not be renewed and non- discretionary language should be adopted. They also indicated prior to implementing the non-renewal practice existing inactive license holders should be surveyed regarding their intent and there should be a well-advertised start date in the future so existing inactive license holders aren’t caught off-guard by the change.
Council discussed this update from the Cannabis Task Force during the study session on May 10, 2023. Direction was provided to staff to prepare an ordinance amendment removing the discretion in renewing inactive dispensary licenses and to provide language indicating licenses will not be renewed if the business is not current on their taxes due to the City.
On June 14th, the City Council approved the introduction of an ordinance amending Sections 5.88.040 and 5.88.055 of the Cathedral City Municipal Code related to Cannabis Business License expiration and renewals.
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DISCUSSION:
Staff recommends the City Council provide the second reading and adopt an ordinance adding to the Cathedral City Municipal Code Chapter 5.88.040 and 5.88.055 updating the Local License Application Process and the Renewal of a Local License sections.
FISCAL IMPACT:
No direct fiscal impact. The hope is that reducing, over time, the number of retail licenses will result in remaining businesses becoming more profitable.
FIVE-YEAR STRATEGIC PLAN:
GOAL C: FISCAL STABILITY AND SUSTAINABILITY
Objective: Cathedral City has economically prospered by facilitating the investment of private dollars in high quality development which benefits the community. We remain financially solvent by instituting prudent fiscal policies and transparent financial practices.
ATTACHMENTS:
Cathedral City - Cannabis Inactive Operation Ordinance Amendment