Staff Report
City Council
Item No. {{section.number}}.{{item.number}}
Meeting Date: September 24, 2025
From: Andrew Firestine, AICP, Director of Community and Economic Development
Title: Ordinance Amending Chapters 3.48, 5.88, 9.108, and 13.240 and Section 9.30.030 of the Cathedral City Municipal Code to Update the Cannabis Tax, Cannabis Licensing and Zoning Regulations, and Enforcement Provisions
RECOMMENDATION:
Find that the Zoning Ordinance Amendment 25-0004 is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(B)(3) and introduce an ordinance amending Chapters 3.48, 5.88, 9.108, and 13.240 and Section 9.30.030 of the Cathedral City Municipal Code to substantially update the cannabis tax, cannabis licensing and zoning regulations, and enforcement provisions.
BACKGROUND:
On January 22, 2025, the Cathedral City Council enacted a 45-day initial moratorium on new cannabis conditional use permits and cannabis licenses in response to a large increase in cannabis odor complaints in 2024 and continuing into 2025. This moratorium was extended by 10 months and 15 days on February 26, 2025.
The January 22, 2025 and February 26, 2025 City Council staff reports supporting the moratorium include a thorough account of the cannabis odor complaints that led to the adoption of a moratorium; an account of the existing cannabis businesses within the City; and an overview and assessment of the City’s current cannabis regulations. The February 26, 2025 staff report began to identify those areas where further research was needed and the initial scope of an ordinance update, including:
Definitions and standards in the cannabis regulations, including the thresholds for an odor violation;
Requirements for a separate odor control plan to be submitted as part of a cannabis permit or license;
Enforcement provisions, including the maintenance of an approved odor control plan and a well-articulated enforcement process for odor violations; Fines and penalties for non-compliance with an approved odor control plan; and An evaluation of the allowances for cultivation, manufacturing, and distribution sites as a conditional use in the PCC zoning district together with the locational requirements from the RR zoning district.
Both the January 22, 2025 and the February 26, 2025 staff reports and presentations are attached for reference.
An interim update was presented to the City Council on April 23, 2025, detailing the research performed up to that point and outlining the City’s next steps, including consultant support to identify those best practices and odor control requirements the City should model in an amendment to its cannabis regulations. The April 23, 2025 City Council staff report and presentation are attached.
The research included a continued review of the City’s current cannabis regulations. It also encompassed a review of all 84 California cities and counties that allow indoor cultivation, focusing on a subset of 15 cities and 3 counties, including those with licensed large indoor cultivation licenses through the Department of Cannabis Control (five are in Oakland, one is in Richmond, and one is in Cathedral City). The staff led research focused on a set of 11 questions:
1. What zoning districts are cannabis cultivation, manufacturing, and lab uses permitted?
2. What separation requirements existing between cannabis uses and either residential zones or uses and other sensitive uses? Identify both the use and the separation requirement.
3. Are there separation requirements between cannabis uses?
4. Are there limits on either the number or size of cannabis uses?
5. What is the definition of a nuisance cannabis odor?
6. What are the odor mitigation requirements, either through a CUP or cannabis license? Are there specific requirements or standards for cultivation and manufacturing uses?
7. Does the city or county require an odor mitigation plan or permit? If so, who is authorized to prepare and submit it? What are the submission requirements? Does it need to be renewed annually as part of the license? Who approves it?
8. What constitutes an odor violation? Are there thresholds or measurements for cannabis odor, either for the concentration of odor or the time period over which it is detected?
9. When there is an odor complaint, how is it investigated? Does the cannabis business have a period of time to correct a violation before a citation or further action is taken? If so, how long?
10.What are the fines for a violation of the cannabis ordinance? Are there penalties beyond fines? If so, what?
11.Are there any unique provisions, such as a hearing officer, that warrant further evaluation?
The April 23, 2025 City Council staff report and attachments provide detailed analysis of these questions among the peer cities and counties. The initial research reveals that while there are some models for odor control permit processes and stronger enforcement, no city or county is at the forefront of cannabis regulation. No city or county has adopted objective cannabis odor standards and most rely on reactive and subjective odor measurements for enforcement.
Following the April 23, 2025 update to the City Council, a scope of work was released to four consulting firms with experience in the cannabis industry to support the development and implementation of an update to the cannabis ordinance, including:
Regulatory review and best practices assessment
Odor control technology evaluation
Odor control permitting process
Inspection and verification protocols
Stakeholder engagement and presentations
Training
The City contracted with SCS Engineers to provide additional support to staff. SCS Engineers prepared a comprehensive report for the City titled “Cathedral City – Regulatory Review – Cannabis Odor Control”, a report that provided substantial support for the creation of an odor control permitting process together with checklists and inspection forms. The SCS Engineers report is attached for reference.
Following the research performed by City staff and the development of a report by SCS Engineers, a comprehensive ordinance amending the Cathedral City Municipal Code, including the zoning ordinance, was prepared. This ordinance amends the licensing (chapter
5.88), permitting and zoning (chapter 9.108 and section 9.30.030), and enforcement (section
13.80.240) regulations related to cannabis uses and to amend various sections of the Municipal Code relating to administrative fines contained in titles 1, 3, 5, 8, 9, 11 and 14).
DISCUSSION:
Updated Cannabis Zoning Regulations
The proposed changes to Cathedral City’s zoning regulations affect the issuance of new conditional use permits for cannabis businesses within the City. The proposed changes would not affect existing businesses that already have an approved conditional use permit.
The proposed changes include:
Cannabis cultivation is proposed to be removed as a conditional use within the Planned Community Commercial (PCC) zoning district (Section 9 of the draft ordinance). Existing cultivation businesses in the PCC zoning district would become legal non-conforming uses. Cultivation would remain a conditional use in the Commercial Business Park (CBP-2) and Light Industrial (I-1) zoning districts. A 300-foot separation requirement is proposed to be added between cultivation, manufacturing, and distribution sites and any property zoned Resort Residential (RR) in the same manner that the uses are separated from residential zoning districts (Section 10 of the draft ordinance).
The standard conditions of approval for a cannabis conditional use permit are proposed to be modified to require an odor control plan (Section 11 of the draft ordinance).
Odor Control Plan Requirements
The City does not currently require odor control plans and instead relies on a standard condition of approval through a conditional use permit requiring an odor absorbing ventilation and exhaust system be installed and maintained. The same condition is applied to all cannabis conditional use permits regardless of the type of business. The proposed changes require odor control plans for all cannabis business and incorporate a performance-based approach for their design and preparation such that cannabis odors are not detected off-site.
More specifically:
Odor control plans are proposed as a new section of the cannabis licensing code (Section 8 of the draft ordinance). The implementation of this section is proposed to be based on the type of use, with varying submittal and content requirements for: 1) cultivation and manufacturing; 2) retail, distribution, and testing laboratories; and 3) lounges. Example submittal and content checklists are included in Appendix E of the SCS Engineers report. The review of an odor control plan is proposed to evaluate its effectiveness to mitigate cannabis odors. The cannabis license renewal regulations are proposed to be modified to require existing cannabis businesses to obtain approval of an odor control plan as a requirement of their local license renewal beginning January 1, 2026. Should an odor control plan identify any additionally required odor control equipment, the equipment would need to be installed and operational within 6 months of the local license renewal application date and no later than December 31, 2026 (Section 4 of the draft ordinance).
The operational requirements for cannabis businesses are proposed to be amended to require all required odor control equipment be installed and operational prior to the commencement of operations and to further require that it be maintained (Section 5 of the draft ordinance). The requirements are further proposed to be amended to require meteorological sensors for all cultivation and manufacturing sites to assist the City in the tracking of the source of nuisance odors.
Enforcement
The current enforcement provisions declare persistent cannabis odors offensive to individuals of normal sensitivity and odors which adversely impact or unreasonably interfere with the use and enjoyment of property and odors that emanate across a property line a public nuisance. The proposed changes maintain this enforcement standard while establishing an enforcement process centered on an odor control plan. More specifically:
Following the initiation of enforcement action, cannabis businesses with an approved odor control plan are proposed to have a period of 10 days to take corrective action (Section 16 of the draft ordinance). This is further proposed to require a business to submit a statement documenting the corrective actions it has taken, including confirmation that the measures contained within its approved odor control plan are being followed. As part of the corrective actions, the proposed changes stipulate that the City may require a cannabis business to conduct a cannabis odor assessment. If a violation persists after corrective actions have been taken by a business and upon reinspection by the City, an administrative citation may be issued.
The proposed changes outline a separate enforcement process for cannabis businesses with odor violations that have failed to obtain approval of, comply with, or maintain an odor control plan, which may lead directly to an administrative citation and may constitute a finding of good cause for denying a local license renewal or the suspension or revocation of a local license (Section 16 of the draft ordinance).
Currently, the fines for an administrative citation for cannabis nuisance odors are set at $100 for a first violation, $250 for a second violation, and $500 for a third and any subsequent citation within a 12-month period. The proposed changes allow the City Council to set a greater administrative fine by resolution.
Provisions Not Included in Draft Ordinance
Nearly all the recommendations made by SCS Engineers through their report have been incorporated into the draft ordinance. The limited exceptions include increasing the buffer from residential areas to 1,000 feet (up from 300 feet) and a separation requirement of 500 feet between licensed businesses where there currently is no separation requirement.
Staff has analyzed the effect of these and found that they would create multiple non- conformities while not substantially improving the nuisance cannabis odor issue or the conflicts between cultivation and residential uses. A GIS map analyzing a 1,000-foot separation requirement between cultivation and manufacturing uses and residential areas is attached. While the analysis was analyzed from an address point and not actual building footprints, as the Cathedral City Municipal Code measures the separation requirements, it reveals that the Perez Road corridor is in close proximity to several residential zones, including chose comprising Cathedral Canyon Country Club, Date Palm Country Club, Cathedral Palms RV Resort, and Nirvana Estates (under construction).
The proposals to remove cultivation as a conditional use in the PCC zoning district and to further add a 300-foot separation requirement between cultivation and the RR zoning district more directly address the conflict between incompatible uses and would have the effect of restricting cultivation largely to the Perez Road corridor and the Bankside Drive and Sunair Plaza industrial park. These would both create non-conformities on their own, although significantly less than a 1,000-foot separation requirement.
GIS maps evaluating the impacts of these changes are also attached.
There are five existing cultivation businesses that would become legal non-conforming uses through the elimination of cultivation and manufacturing as a conditional use in the PCC zoning district, including businesses: in Canyon Plaza Shopping Center (Target); adjacent to the former Barracks Bar; across Date Palm Drive from the Cathedral City Market Place; in the same building as Palm Springs Lanes; and C4 Industry on Ramon Road.
An alternative to the complete removal of cultivation as a conditional use in the PCC zoning district is to restrict the size of total canopy of cultivation. Of the five cultivation businesses in the PCC zoning district, one is licensed by the state as a large indoor cultivation license, defined as a cultivation site with more than 22,000 square feet of total canopy; two are licensed as medium indoor cultivation licenses, defined as a cultivation site with between 10,001 and 22,000 square feet of total canopy; and two are licensed as specialty indoor cultivation licenses, defined as a cultivation site with between 501 and 5,000 square feet of total canopy.
A total canopy limit of 10,000 square feet as a conditional use in the PCC zoning district, for example, would permit small indoor cultivation (between 5,001 and 10,000 square feet of total canopy), specialty indoor cultivation, and specialty cottage indoor licenses, as defined by the Department of Cannabis Control and it may permit microbusinesses. The Department of Cannabis Control defines a cannabis microbusiness as a state license engaged in at least three commercial cannabis activities, including: cultivation, manufacturing, distribution, and retail sales. The City issues each of these licenses individually, not as a microbusiness license. The removal of cultivation and manufacturing as a conditional use in the PCC zoning district would not allow a state licensed cannabis microbusiness to operate in the PCC zoning district.
In the same way the City has seen conflict between cannabis odor and residential areas generated by cannabis cultivation, there remains a possibility that cannabis cultivation in a multi-tenant building in the PCC zoning district could generate complaints from other tenants within the building, particularly with larger canopies. Through the City’s research of cannabis regulations in other cities and counties, staff found that cultivation uses are typically restricted to industrial zones and are not permitted within commercial zoning districts. For these reasons, the proposed ordinance has been prepared to remove cultivation as a conditional use in the PCC zoning district.
The proposed ordinance does not address AB 1775, a new amendment to the state cannabis law, which took effect January 1, 2025. For jurisdictions that allow cannabis lounges, AB 1775 grants those jurisdictions the authority to allow retail food and beverage sales and live entertainment, including the sale of ticketed events. While the proposed ordinance makes comprehensive changes to the City’s cannabis regulations, there has been no policy discussion or direction on AB 1775. If there is a desire to evaluate expanded opportunities for cannabis lounges, staff recommends this be considered as a separate ordinance.
Updates Since the Public Release of the Draft Ordinance in July 2025 Based on additional staff review and feedback from the City’s cannabis consultant, the ordinance has been modified since it was released for public comment in July 2025. In addition to a reordering and renumbering of the sections, the changes include:
The addition of sections to make changes to promote the efficient administration of Chapters 3.48 and 5.88 of the Cathedral City Municipal Code; Minor corrections throughout the ordinance;
The addition a requirement to bring local cannabis taxes current prior to renewing a local license and the addition of an operational requirement for the renewal of a dispensary license in Section 4;
The deletion of specific references to a cannabis odor assessment performed by a field olfactometer and the revision of the same section to indicate the City may require a cannabis business to conduct a cannabis odor assessment using a method acceptable to the City in Section 16;
The deletion of certain penalties and the addition of language clarifying a cannabis business’ responsibility for the payment of any additional banking fees or charges in Section 20; and
The addition of a new section for the purpose of regulating tax payment arrangement agreements in Section 22.
Environmental Review:
The project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3), referred to as the commonsense exemption which states that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
Public Notification:
This project was noticed in accordance with the Government Code statute requiring public notice to be provided a minimum of 10 days prior to the public hearing.
The draft ordinance was posted on the City’s website on July 17, 2025 and shared electronically with a cannabis odor update distribution list, the Coachella Valley Cannabis Alliance Network (CVCAN), and all email contacts on a local cannabis license. As a result of this outreach, comments received by the City are attached.
Cannabis Task Force:
The Cannabis Task Force met and discussed the proposed ordinance on August 18, 2025 and recommended its approval to City Council on a 5-1 vote. The draft Cannabis Task Force meeting minutes are provided as Attachment 9.
Planning Commission:
The Planning Commission met and discussed the proposed ordinance on August 20, 2025 and recommended its approval to City Council on a 4-1 vote. The Planning Commission discussed various alternatives, including increasing the separation requirements from residential zones and adding separation requirements between existing uses. While the City’s consultant has recommended these additional measures, the Planning Commission chose not to include them in their motion. The Planning Commission motion included the addition of Section 23 of the ordinance limiting the cannabis cultivation canopy area to a maximum of 22,000 square feet as a condition of approval on future conditional use permits.
Amendment To Fee Resolution:
On April 23, 2025, the City Council conducted a public hearing and adopted by resolution an update to the City’s master schedule of user and regulatory fees. As was established in the prior staff report, all fees should bear a fair and reasonable relationship to the payer’s burdens on, or benefits received from, the activities and/or services provided by the City.
The study prepared for the fee update examined multiple fee categories, including those for entitlement and post-entitlement application review and permitting review of new construction or modifications to existing structures, and analyzed the full cost of service against the City’s goals for cost recovery.
The review of an odor control plan was not contemplated when the fee update was prepared.
Nonetheless, a similar methodology can be applied to set the review fee for an odor control plan and the annual certification of an odor control plan. Any cost incurred by the City through a third-party review of an odor control plan together with the City staff time reviewing or administering the review of an odor control plan or performing related inspections on a cannabis business constitute the cost to the City to perform the review of an odor control plan.
Based on the complexity of the review and the specialized skillset and knowledge needed to determine whether an odor control plan appropriately and effectively proposes controls to mitigate cannabis odors, including a review of the odor emitting activities or processes and methods of odor control, staff recommends that odor control plans for cultivation, manufacturing, and consumption lounges, all of which have the potential for greater odor emissions, be reviewed by a third-party. City staff would still incur time processing and issuing approval of an application and would still conduct inspections to verify the installation of any required cannabis odor control equipment as part of an odor control plan application for a cultivation, manufacturing, or consumption lounges use. The anticipated City staff time is four hours per application.
SCS Engineers has provided the City a cost of $3,500 to review an odor control plan. The April 23, 2025 fee study set an hourly rate of $191 for an associate planner. While multiple staff are involved in the review of cannabis applications and licenses, the planning staff has a primary role because of their experience working an application through a conditional use permit process and establishing the conditions of approval. The anticipated City staff time is four hours per application for a cost of $764, covering the full review and processing of an odor control plan or annual certification and inspection. In total, the combined fee to review an odor control plan for a cultivation, manufacturing, or consumption lounge is $4,264.
Staff recommends the review of an odor control plan for a retail dispensary, distribution, or testing lab, uses that generate less odor emissions, be reviewed by City staff. Also, staff recommends the annual certification of an odor control plan be led by City staff, a process that includes a review and verification of information submitted by a cannabis business and an inspection. The fee to review an odor control plan for retail dispensary, distribution, or testing lab is $764.
Staff has prepared an amendment to the fee resolution, provided as Attachment 11, to establish fees for the review of an odor control plan and an annual certification of an odor control plan. The fees do not exceed the reasonable cost of review of an odor control plan or annual certification. For the meeting on September 24, 2025, the fee resolution is advisory only. It will be presented to City Council for adoption when the ordinance amending the Cathedral City Municipal Code is presented for 2nd reading.
Fine Resolution:
The proposed ordinance, while focused on cannabis issues and concerns, repeals and consolidates multiple sections of existing code into a single section, establishing a default fine for administrative fines and authorizing the City Council to establish different fines by resolution. Attachment 12 proposes an administrative fine schedule implementing the proposed provisions of Section 13.58.020 and listing those fines that are different than the default fine, including an administrative fine for cannabis odor violations under Cathedral City Municipal Code Section 12.80.240(J). It also includes the existing administrative fine for a violation of Section 5.94.030 on plastic beverage straws. Should the City set administrative fines in the future that are different than its default fines, those would be an amendment to the administrative fine schedule adopted by resolution.
Cathedral City’s fines for short-term vacation rentals were most recently established by Resolution No. 2022-14. The proposed resolution has no bearing or effect on Resolution No. 2022-14 and the City’s short-term vacation rental fines.
For the meeting on September 24, 2025, the fine resolution is advisory only. It will be presented to City Council for adoption when the ordinance amending the Cathedral City Municipal Code is presented for 2nd reading.
FISCAL IMPACT:
In order to renew a Cannabis license, the odor control plan will be required. It is anticipated the cost for city staff and third-party vendor time will be offset by the Cannabis odor control plan fees.
With 34 cultivation, manufacturing and consumption lounge operating licenses, the fiscal impact for the Planning’s professional services budget will be $59,500/year (100-100-150- 152-8600-8601).
FIVE-YEAR STRATEGIC PLAN:
F-17 – Review and update, as needed, our ordinances, policies, and practices regarding cannabis.
ATTACHMENTS:
1. Attachment 1 – Ordinance
2. Attachment 2 – January 22, 2025 City Council staff report with attachments
3. Attachment 2a – January 22, 2025 City Council presentation
4. Attachment 3 – February 26, 2025 City Council staff report with attachments
5. Attachment 3a – February 26, 2025 City Council presentation
6. Attachment 4 – April 23, 2025 City Council staff report with attachments
7. Attachment 4a – April 23, 2025 City Council presentation
8. Attachment 5 – SCS Engineers report “Cathedral City – Regulatory Review – Cannabis Odor Control
9. Attachment 6 – GIS analysis
10.Attachment 7 – Public hearing notice
11.Attachment 8 – Public comments
12.Attachment 9 – August 18, 2025 Cannabis Task Force meeting minutes
13.Attachment 10 – August 20, 2025 Planning Commission meeting minutes
14.Attachment 11 – Amendment to fee resolution
15.Attachment 12 – Consolidated fine resolution