ORDINANCE NO. _____
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CATHEDRAL CITY, CALIFORNIA, AMENDING CHAPTERS 3.48 AND 5.88 OF THE CATHEDRAL CITY
MUNICIPAL CODE RELATING TO CANNABIS TAX ADMINISTRATION, CANNABIS
BUSINESS LICENSING AND OPERATIONS, NONCANNABIS FOOD AND
BEVERAGE SERVICE AND LIVE PERFORMANCES PURSUANT TO ASSEMBLY BILL 1775, AND THE DEADLINE FOR INSTALLATION OF ODOR CONTROL
EQUIPMENT
WHEREAS, the City of Cathedral City is a charter city authorized to regulate municipal affairs and to exercise its police power under Article XI, Sections 5 and 7 of the California Constitution; and
WHEREAS, the City imposes a cannabis business tax under Chapter 3.48 and regulates cannabis business licensing and operations under Chapter 5.88 of the Cathedral City Municipal Code; and
WHEREAS, Business and Professions Code Section 26200 preserves local authority to regulate commercial cannabis activities, subject to applicable State law; and WHEREAS, Assembly Bill 1775 amended Business and Professions Code Section 26200 to allow local authorization of non-cannabis food and beverage preparation or sales and live musical or other performances, including ticket sales, within approved cannabis consumption areas, subject to statutory conditions; and WHEREAS, the City desires to authorize those activities within approved indoor consumption areas while retaining applicable health, safety, land use, licensing, and enforcement requirements; and
WHEREAS, the Cannabis Task Force reviewed proposed amendments and provided input concerning tax deadlines, licensing qualifications, administrative delegation, and events; and
WHEREAS, the City desires to clarify tax reporting and collection, ownership and management review, actual business operations, appeals, inspections, and enforcement; and
WHEREAS, the City desires to measure the installation period for additional odor control equipment for eligible existing licenses from approval of the odor control plan and to establish March 31, 2027 as the final installation deadline, while retaining plan approval, performance, maintenance, certification, and nuisance enforcement requirements; and
WHEREAS, Section 3.48.070 authorizes amendments to the administration of the cannabis tax subject to the limitations stated therein, and this ordinance does not increase the maximum tax rates stated in Section 3.48.010.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CATHEDRAL CITY DOES ORDAIN AS FOLLOWS:
SECTION 1. RECITALS
The foregoing recitals are incorporated by reference into this ordinance as findings of the City Council.
SECTION 2. ENVIRONMENTAL DETERMINATION
The City Council finds that this ordinance is exempt from review under the California Environmental Quality Act pursuant to Section 15061(b)(3) of the State CEQA Guidelines. The ordinance updates tax administration, licensing, and operating standards for regulated cannabis businesses. The food, beverage, and performance activities authorized by this ordinance are limited to approved indoor consumption areas and remain subject to existing occupancy, fire, building, noise, security, ventilation, and odor requirements. The ordinance does not authorize expansion of a licensed premises or outdoor cannabis consumption. The revised equipment installation deadline does not suspend odor performance standards or public nuisance enforcement. On that basis, the City Council finds that there is no possibility that adoption of this ordinance may have a significant effect on the environment. Any subsequent proposal requiring a discretionary approval remains subject to applicable environmental review.
SECTION 3. AMENDMENT OF CHAPTER 3.48
Chapter 3.48 (Cannabis Tax) of the Cathedral City Municipal Code is amended to read in full as follows:
Ҥ 3.48.005 Purpose and intent.
This chapter shall be known as the "Cannabis Tax" and is enacted as a business license tax pursuant to Government Code Section 37101 solely to raise revenue for the general governmental purposes of the city and not for purposes of regulation or raising revenues for regulatory purposes. All of the proceeds from the tax imposed by this chapter shall be placed in the city's general fund and used for the usual current expenses of the city.
This chapter is intended to impose a tax on lawful cannabis businesses operating in the city, consistent with the city's authority in Government Code Section 37101. Cannabis businesses operating under California's medical marijuana laws (Health and Safety Code Sections 11362.7 through 11362.85) are subject to the tax imposed by this chapter. This tax shall apply to cannabis businesses engaged in commercial cannabis activity for nonmedical uses, as defined in the MAUCRSA. § 3.48.010 Imposition of tax.
Every cannabis business operating in the city, regardless of whether such cannabis business has a license pursuant to Chapter 5.88 of this code or a permit pursuant to Chapter 9.108 of this code, shall pay a cannabis tax in the following amounts:
A. Fifteen cents for each one dollar of gross receipts or fractional part thereof received by a dispensary or by any other cannabis business with activities other than cannabis cultivation or manufacturing.
B. Twenty-five dollars for each square foot or fractional part thereof of cannabis cultivation space.
C. One dollar for each gram of cannabis concentrate produced or manufactured.
D. One dollar for each unit of cannabis-infused product other than cannabis concentrate produced or manufactured and packaged or intended for individual sale.
§ 3.48.020 Definitions.
For purposes of this chapter:
"Cannabis" means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also means marijuana as defined by Section 11018 of the Health and Safety Code as enacted by Chapter 1407 of the Statutes of 1972. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination, nor paraphernalia used to consume cannabis products. For the purpose of this chapter, "cannabis" does not mean "industrial hemp" as defined by Section 81000 of the Food and Agricultural Code or Section 11018.5 of the Health and Safety Code.
"Cannabis business" means any person engaged in commercial cannabis activity, including cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of cannabis or a product containing cannabis.
A cannabis business does not include any business whose activities are limited exclusively to the production or sale of cannabis accessories. "Cannabis concentrate" means cannabis that has undergone a process to concentrate the cannabinoid active ingredient, thereby increasing the product's potency. Types of cannabis concentrate include, but are not limited to, hash, butane hash oil, CO2 oil, kief, dry sift, Rick Simpson oil, and rosin. A cannabis concentrate is not considered food, as defined by Section 109935 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.
"Cannabis cultivation space" means the gross square footage of any building, facility or site, including any limited access area, where cannabis cultivation and related activities occur. "Cannabis cultivation space" includes, without limitation, areas used for growing, planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering, irrigating, tipping, pinching, cropping, curing or drying cannabis, and areas used for storing products, supplies or equipment related to any such activities. "Cannabis cultivation space" does not include any part of a building, facility or site where cannabis cultivation and related activities occur that is used for cannabis business activities that are separately taxed under this chapter.
"Cannabis-infused product" means a product infused with cannabis that is intended for use or consumption other than by smoking, including, but not limited to, edible products, oils, waxes, ointments, salves, tinctures, capsules, suppositories, dermal patches, cartridges or other product containing cannabis concentrate or usable cannabis that has been processed so that the dried leaves and flowers are integrated into other material. "City manager" means the city manager or their designee. "Dispensary" means a facility where cannabis, cannabis concentrate, cannabis extracts, and cannabis-infused products are sold, either individually or in any combination, for retail sale, and may also include the sale of devices for the use of cannabis, cannabis concentrate, cannabis extracts, and cannabis-infused products, including an establishment that delivers cannabis and cannabis products as part of a retail sale. “Gross receipts," except as otherwise specifically provided, means the total amount actually received or receivable from:
1. all sales;
2. membership dues;
3. reimbursements;
4. the total amount or compensation actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of cannabis and cannabis products;
5. compensation received by a cannabis distributor for subdivision, repackaging, or redistribution services performed for cannabis or cannabis products received in a single wholesale shipment or acquisition event, where such activities result in the subsequent distribution of such cannabis or cannabis products in smaller quantities to multiple cannabis businesses; and
6. the monetary value of in-kind contributions;
7. discounts, rents, royalties, fees, commissions, dividends, and gains realized from trading in stocks or bonds, however designated.
Included in "gross receipts" shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever, except that the following shall be excluded therefrom: (1) cash discounts allowed and taken on sales; (2) credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as gross receipts; (3) any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser; (4) such part of the sale price of any property returned by purchasers to the seller as refunded by the seller by way of cash or credit allowances or return of refundable deposits previously included in gross receipts; (5) receipts from investments where the holder of the investment receives only interest and/or dividends, royalties, annuities and gains from the sale or exchange of stock or securities, provided such items are directly derived exclusively from the investment of capital and not from the sale of property other than financial instruments, or from the provision of services, to any person; (6) receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the cannabis business in the regular course of the cannabis business' business; (7) whenever there are included within the gross receipts amounts which reflect sales for which credit is extended and such amount proved uncollectible in a subsequent year, those amounts may be excluded from the gross receipts in the year they prove to be uncollectible; provided, however, if the whole or portion of such amounts excluded as uncollectible are subsequently collected, they shall be included in the amount of gross receipts for the period when they are recovered; (8) receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of one dollar; (9) amounts collected for others where the business is acting as an agent or trustee and to the extent that such amounts are paid to those for whom collected; (10) credit and debit card processing fees, provided such fees are separately stated and not retained by the cannabis business. These agents or trustees must provide the finance department with the names and the addresses of the others and the amounts paid to them.
This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustees.
“Local licensing authority” means the city manager.
"Medicinal and Adult-Use Cannabis Regulation and Safety Act" or "MAUCRSA" means Division 10 of the California Business and Professions Code. "Person" means an individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit and includes the plural as well as the singular number.
§ 3.48.030 Payment obligation.
All cannabis businesses subject to this chapter must pay the full tax imposed by this chapter regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in this code, except as enacted pursuant to Section 3.48.040 of this code or as required by California or federal law. Failure to pay the tax shall be subject to penalties, interest charges, and assessments as the city council may establish and the city may use any or all other code compliance remedies provided in the Charter and this code, including enforcement through Chapter 5.88 as it relates to the renewal, modification, suspension, revocation, or transfer of any local cannabis license. No provision in this code can lower the tax rate set forth in this chapter or otherwise reduce the amount of taxes paid hereunder unless the provision, e.g., resolution, specifically states that the reduction applies.
§ 3.48.040 City council authorization to adjust rates.
The city council may impose the tax authorized by this chapter at a lower rate and, notwithstanding Section 3.48.030 of this code, may establish exemptions, incentives, or other reductions, and penalties and interest charges or assessments for failure to pay the tax in a timely manner, as otherwise allowed by the code and California law. No action by the city council under this section shall prevent it from later increasing the tax or removing any exemption, incentive, or reduction, and restoring the maximum tax specified in this chapter.
§ 3.48.050 Payment of tax does not authorize activity.
The payment of the tax required pursuant to this chapter shall not be construed as authorizing the conduct or continuance of any illegal business or of a legal business in an illegal manner. Nothing in this chapter shall be applied or construed as authorizing the sale of cannabis by any illegal or unlawful business, or any business in violation of any ordinance of the city.
§ 3.48.060 Cannabis tax is not a sales tax.
The cannabis tax provided for under the provisions of this chapter is not a sales or use tax and shall not be calculated or assessed as such. The cannabis tax shall not be separately identified or otherwise specifically assessed or charged to any purchaser. § 3.48.070 Amendments and administration.
Any amendment to Section 3.48.010 to increase the tax above the rate expressly provided in such section shall not become effective until such amendment is approved by the voters. The voters expressly authorize the city council to amend, modify, change, or revise any other provision of this chapter as the city council deems in the best interest of the city.
The city manager may promulgate rules, regulations, and procedures to implement and administer this chapter to ensure the efficient and timely collection of the tax imposed by this chapter, including, without limitation, formulation and implementation of penalties and interest to be assessed for failure to pay the tax as provided.
The city manager shall review the cannabis taxes imposed by this chapter on a quarterly basis and convene a meeting and/or publish a report/minutes detailing the total amount of revenue raised from the cannabis tax.
Pursuant to California Constitution Article XIIIB, the appropriation limit for the city is increased to the maximum extent over the maximum period of time allowed under law consistent with the revenues generated by the cannabis tax. § 3.48.080 Returns and remittances.
The tax shall be due and payable as follows:
A. All cannabis businesses subject to this chapter shall, on or before the last day of the month following the close of each calendar month, or such different reporting period as may be established by the city manager, file a tax return with the city manager on forms provided by the city manager, of the amount of tax owed for the reporting period. If the due date falls on a Saturday, Sunday, or federal holiday, the due date for both the tax return and payment is extended to the next business day. A return filed and taxes paid by that extended due date are timely, and no penalty or interest shall accrue solely because of the extension.
B. The return shall be filed whether or not taxes are owed during the month.
C. Each such return shall contain a declaration under penalty of perjury, executed by the cannabis business or authorized agent, that to the best of the signatory's knowledge, the statements in the return are true, correct and complete.
D. At the time the return is filed, the full amount of the tax owed for the reporting period shall be remitted to the city manager.
E. Returns and accrued tax payments are due immediately upon cessation of business for any reason.
F. Returns and taxes not received by the city manager on or before the due date as provided in this section are delinquent and subject to the penalties imposed under Section 3.48.090.
G. Returns filed and taxes remitted by mail shall be deemed timely filed only if the envelope or similar container enclosing the returns and taxes is addressed to the city manager, has sufficient postage, and bears a United States postmark or a postage meter imprint before midnight on the last day for reporting and remitting without penalty. If the envelope or other container bears a postage meter imprint as well as a United States Post Office cancellation mark, the latter shall govern in determining whether the filing and remittance are timely. If the city manager is provided with credible evidence that a return or payment was deposited in the United States mail on or before the required due date, the city manager may, at their discretion, consider the filing or remittance to have been made on time.
H. The city manager is not required to send a delinquency or other notice or bill to any person subject to the provisions of this chapter; and failure to send such notice or bill shall not affect the validity of any tax or penalty due under the provisions of this chapter.
§ 3.48.090 Failure to pay tax.
A. Any person who fails or refuses to pay any tax required to be paid pursuant to this chapter on or before the due date shall pay penalties and interest as follows:
1. A penalty equal to twenty-five percent of the amount of the tax in addition to the amount of the tax, plus interest at the rate of one-half percent per month, or fraction thereof, calculated from the due date on the total unpaid balance, including tax and penalty, until paid.
B. Whenever a check is submitted in payment of a tax and the check is subsequently returned unpaid by the bank upon which the check is drawn, and the check is not redeemed before the due date, the cannabis business will be liable for the tax amount due plus penalties and interest as provided for in this section plus any additional banking fees or charges allowed under state law.
C. The tax due shall be that amount due and payable from January 1, 2014, or the first date on which the cannabis business first operated in the city, whichever date occurred last, together with applicable penalties and interest calculated in accordance with subsection A of this section.
D. The city manager may waive the first penalty of twenty-five percent each imposed upon any person if:
1. The person provides evidence satisfactory to the city manager that failure to pay timely was due to circumstances beyond the control of the person and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, and the person paid the delinquent business tax and accrued interest owed the city before applying to the city manager for a waiver.
2. The waiver provisions specified in this subsection shall not apply to interest accrued on the delinquent tax and a waiver shall be granted only once to the same person or entity during any twenty-four-month period.
E. A failure to pay taxes imposed under this chapter is a violation subject to enforcement action under Chapter 5.88, including denial of renewal, transfer, or modification, as well as the potential of a suspension or revocation of a local license.
§ 3.48.100 Refunds.
A. No refund shall be made of any tax collected pursuant to this chapter, except as provided in this section.
B. No refund of any tax collected pursuant to this chapter shall be made because of the discontinuation, dissolution, or other termination of a cannabis business.
C. Any person entitled to a refund of taxes paid pursuant to this chapter may elect in writing to have such refund applied as a credit against the cannabis business' taxes for the next calendar month.
D. Whenever the amount of any tax, penalty, or interest has been overpaid, paid more than once, or has been erroneously or improperly collected or received by the city under this chapter, the overpayment may be refunded as provided in subsections E and F, provided a claim in writing under penalty of perjury stating the specific grounds upon which the claim is founded is filed with the city manager within three years of the date of payment.
E. The city manager shall have the right to examine and audit all the books and business records of the claimant in order to determine the eligibility of the claimant to the claimed refund. No claim for refund shall be allowed if the claimant therefor refuses to allow such examination of claimant's books and business records after request by the city manager to do so.
F. The city manager shall initiate a refund of any tax that has been overpaid or erroneously collected whenever the overpayment or erroneous collection is uncovered by a city audit of tax receipts. In the event that the tax was erroneously paid and the error is attributable to the city, the entire amount of the tax erroneously paid shall be refunded to the claimant. If the error is attributable to the claimant, the city shall retain the amount set forth by resolution of the city council from the amount to be refunded to cover expenses.
§ 3.48.110 Enforcement.
A. It shall be the duty of the city manager to enforce each and all of the provisions of this chapter. The police department or code enforcement shall render such assistance in the enforcement of this chapter as may from time to time be required by the city manager.
B. For purposes of administration and enforcement of this chapter generally, the city manager, with the concurrence of the city attorney, may from time to time promulgate administrative rules and regulations.
C. The city manager has the power to audit and examine all books and records of cannabis businesses as well as persons engaged in the operation of a cannabis business, including both state and federal income tax returns, California sales tax returns, or other evidence documenting the gross receipts of a cannabis business or persons engaged in the operation of a cannabis business, for the purpose of ascertaining the amount of tax, if any, required to be paid by the provisions of this chapter, and for the purpose of verifying any statements or any item thereof when filed by any person pursuant to the provisions of this chapter. If such cannabis business or person, after written demand by the city manager, refuses to make available for audit, examination or verification such books, records, or equipment as the city manager requests, the city manager may, after full consideration of all information within the city manager's knowledge concerning the cannabis business and its business and activities of the person so refusing, make an assessment in the manner provided in Section 3.48.120.
D. The conviction and punishment of any person for failure to pay the required tax shall not excuse or exempt such person from any civil action for the tax debt unpaid at the time of such conviction. No civil action shall prevent a criminal prosecution for any violation of the provisions of this chapter or of any state law requiring the payment of all taxes.
E. Any person violating this chapter or any rules promulgated pursuant to this chapter, or knowingly or intentionally misrepresenting to any officer or employee of the city any material fact in procuring a certificate or document from the city shall be guilty of an infraction violation and upon conviction thereof shall be punishable by a fine not more than five hundred dollars, in addition to any other penalties or fees imposed pursuant to this chapter.
F. For purposes of administration and enforcement of this chapter, audit findings or tax delinquency status may be shared with the local licensing authority for purposes of administration and enforcement of Chapter 5.88, including licensing approval, renewal, suspension, revocation, or transfer of any local cannabis license.
§ 3.48.120 Debts—Deficiencies—Assessments.
A. The amount of any tax, penalties, and interest imposed by the provisions of this chapter shall be deemed a debt to the city and any person operating a cannabis business without first having procured a business license pursuant to Chapter
3.28, local license pursuant to Chapter 5.88, and conditional use permit pursuant to Chapter 9.108 of this code shall be liable in an action in the name of the city in any court of competent jurisdiction for the amount of the tax, and penalties and interest imposed on such cannabis business.
B. Any and all alleged deficiencies identified by the city manager shall be addressed in accordance with Section 3.26.150 of this code; except that the city manager may engage in any of the privileges or assume any of the duties delegated to the tax administrator.
§ 3.48.130 Exemptions.
The tax imposed in Section 3.48.010.A of this chapter shall not apply to any nonprofit organization that is exempted from taxes by Revenue and Taxation Code Chapter 4 (commencing with Section 23701) of Part 11 of Division 2, or of Internal Revenue Code of 1986, Chapter 1 of Subtitle A, Subchapter F (commencing with Section 501), or the successor of either, or to any minister, clergyman, Christian Science practitioner, rabbi, or priest of any religious organization that has been granted an exemption from federal income tax by the United States Commissioner of Internal Revenue as an organization described in Internal Revenue Code Section 501(c)(3) or a successor to that section.
§ 3.48.140 Tax payment arrangements.
The city finds that authorizing tax payment arrangement agreements ("agreements") with individuals or entities delinquent in cannabis-related tax payments serves the best interests of the city. These agreements offer a practical means of enhancing tax recovery efforts while also affording taxpayers a pathway to financial recovery and future compliance.
A. The city manager may offer tax payment arrangements to individuals or businesses with outstanding cannabis-related tax obligations.
B. The city manager shall have the sole authority to negotiate, execute and bind the city into a tax payment arrangement agreement, and any amendments thereto, for the full amount of the taxes owed.
C. The tax payment arrangement agreement shall be prepared to the satisfaction of the city manager. The city attorney shall review and approve the agreement and any amendments as to form.
D. Entering into a payment agreement does not prevent the city from pursuing any other methods it deems necessary to recover unpaid taxes.
E. A single tax payment arrangement agreement may be authorized and maintained per ownership associated with a cannabis license. In the event of a change in ownership, any existing agreement may be deemed void at the sole discretion of the city manager.”
SECTION 4. AMENDMENT OF CHAPTER 5.88
Chapter 5.88 (Cannabis Businesses) of the Cathedral City Municipal Code is amended to read in full as follows:
Ҥ 5.88.010 Purpose and intent.
A. This chapter provides for the regulation and licensing of medicinal and adult-use cannabis businesses throughout the city in conformance with applicable State and local laws and regulations pertaining to medicinal and adult-use cannabis.
B. The city council finds that it is necessary for Cathedral City to adopt local licensing standards for medicinal and adult-use cannabis businesses for the purpose of controlling and regulating the cultivation, distribution, transport, storage, manufacturing, processing, and sale of medicinal cannabis and medicinal cannabis products to qualified patients, and commercial cannabis activity for nonmedical uses by adults twenty-one years of age and over.
C. The purpose of this chapter is to regulate all commercial cannabis activity in Cathedral City, as defined in the MAUCRSA, to the extent authorized by State law and in a manner designed to minimize negative impacts on the city and neighboring uses, and promote the health, safety, morals, and general welfare of residents and businesses within the city.
§ 5.88.015 Findings.
The city council finds and determines that local licensing standards pertaining to cannabis business activities are necessary to protect the public health and safety. The city council further finds that public health and safety is best served by the adoption of the ordinance codified in this chapter.
§ 5.88.020 Relationship to other laws.
Except as otherwise specifically provided herein, this chapter incorporates the requirements and procedures set forth in the MAUCRSA. In the event of any conflict between the provisions of this chapter and the provisions of the MAUCRSA or any other applicable state or local law, the more restrictive provision shall control.
Except as expressly stated herein, cannabis businesses must comply with all other city codes and regulations. Nothing in this chapter shall be construed as permitting a cannabis business to operate at any time in a manner that is in violation of any other applicable state and local law.
§ 5.88.025 Definitions.
Unless otherwise defined herein, the terms in this chapter have the same meaning as set forth in the MAUCRSA and any rules promulgated pursuant thereto. In addition, the following terms are defined as follows:
"Cannabis business" means any person engaged in commercial cannabis activity. "Cannabis tax" means any tax, penalty, interest, or other amount due under Chapter 3.48 of this code in connection with commercial cannabis activity. "Certificate of accreditation" means a certificate issued by an accrediting body to a licensed testing laboratory, entity, or site to be registered in the state. "City" means Cathedral City, California.
"City manager" means the city manager of the city or the city manager’s duly authorized designee.
"Commercial cannabis activity" means any activity, recreational or medicinal, including the cultivation, possession, manufacturing, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and/or cannabis products as provided in this chapter.
"Community development director" means the community development director of the city or duly authorized designee.
"Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
"Delivery" means the commercial transfer of cannabis or cannabis products to a customer.
"Dispensary" means a cannabis business that engages in the retail sale and delivery of cannabis or cannabis products to customers. A dispensary, as that term is used in this code, includes a "retailer" and a "microbusiness" authorized to engage in retail sale under the MAUCRSA.
"Distribution" means the procurement, wholesale, and transport of cannabis and cannabis products between licensees, and may include the storage of packaged goods, coordination of compliance testing, packaging, re-packaging, labeling, and re-labeling. "Distributor" means a cannabis business that engages in the distribution and transportation of cannabis and cannabis products to other cannabis businesses. "Good cause" means:
1. The applicant or licensee has been cited for violating any of the terms, conditions or provisions of this chapter, of state law, of any regulations and rules promulgated pursuant to state law, any applicable local rules and regulations, or any special terms or conditions placed upon its conditional use permit, state license, or local license;
2. The premises has been or is proposed to be operated in a manner that adversely affects the public health, safety or welfare or the safety of the immediate neighborhood in which the establishment is located;
3. The applicant or licensee has knowingly made false statements, misrepresentations or material omissions on a submitted application or any other document submitted to the city;
4. The criminal history of an owner or manager of the applicant or licensee indicates that the owner or manager lacks good moral character;
5. An owner of the applicant or licensee is a licensed physician providing physician's recommendation to qualified patients for medicinal cannabis;
6. The applicant, licensee, or any owner or manager of the applicant or licensee, is a person who is prohibited from holding the license under this chapter;
7. The premises proposed to be licensed or the licensed premises is located on land that is owned by the United States and held in trust for any federallyrecognized Indian tribe or any member of the tribe, or that is subject to a restriction on alienation imposed by the United States;
8. For renewals, suspensions and revocations, the licensee has allowed a person whose criminal history indicates that person is not of good moral character to work within the premises as an employee, independent contractor, or volunteer;
9. For renewals, suspensions and revocations, the licensee fails to allow inspection of the security recordings, activity logs, or business records of the licensed premises by city officials; or
10.For renewals, suspensions, and revocations, the licensee is considered noncompliant with Chapter 3.48 of this code due to failure to remit cannabis business taxes owed from dispensary, cultivation, manufacturing, or any other cannabis business operations.
"Good moral character." In determining good moral character, the following standards will apply:
1. A person who has been convicted of any of the following offenses is not considered to be of good moral character:
a. A violent felony, as specified in Penal Code Section 667.5(c); b. A serious felony, as specified in Penal Code Section 1192.7(c); c. A felony or misdemeanor conviction involving fraud, deceit, or embezzlement;
d. A felony or misdemeanor conviction for hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; e. A felony or misdemeanor conviction for selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor;
f. A felony conviction for drug trafficking with enhancements pursuant to Section 11370.4 or 11379.8 of the Health and Safety Code. g. A misdemeanor conviction described in subparagraphs c, d, or e disqualifies a person under this paragraph only if the conviction, or the person’s release from incarceration for that conviction, whichever is later, occurred within seven years before the city receives the application under review, including a renewal application. An older misdemeanor conviction described in those subparagraphs does not disqualify the person under this paragraph.
2. The city may find that a person lacks good moral character if, within the three years before the application, the person, or a business in which the person was an owner or manager, had a cannabis license revoked, or denied for cause, by any government agency. Surrendering a license during revocation proceedings counts as a revocation. In deciding, the city must consider: a. the seriousness of the conduct; b. the person's role in it; c. whether the problem has been corrected; and d. whether the agency later allowed the person to reapply.
3. Except as provided in paragraph 1 of this definition, and notwithstanding Chapter 2 of Division 1.5 of the California Business and Professions Code, a prior conviction where the sentence, including any term of probation, incarceration, or supervised release is completed for possession of, possession for sale, sale, manufacture, transportation, or cultivation of cannabis shall not be the sole ground for a determination that a person lacks good moral character.
4. An owner or manager of a licensee who is convicted of any controlled substance felony subsequent to issuance of a local license shall be deemed to lack good moral character.
"Licensed premises" means a premises for which a local license has been issued pursuant to this chapter.
"Licensee" means a person who has been issued a local license pursuant to this chapter. "Limited access area" means a building, room or other area that is part of the licensed premises where cannabis is grown, cultivated, stored, weighed, displayed, packaged, or sold to other cannabis businesses with limited access to only authorized personnel. "Local license" means a license granted by the local licensing authority, pursuant to this chapter.
"Local licensing authority" means the city manager.
"Manager" means an individual who has day-to-day operational control over a commercial cannabis business or over commercial cannabis activity conducted on the licensed premises, whether that individual acts as an employee, an independent contractor, or in another capacity.
"Manufacturing" means a cannabis operation that engages in extraction and/ or infusion processes, including processing, preparing, holding, storing, packaging, or labeling of cannabis products. "Manufacturing" also includes any processing, preparing, holding, or storing of components and ingredients. Manufacturing operations may involve the use of chemical solvents, heating, mixing, or other processes. "Medicinal and Adult-Use Cannabis Regulation and Safety Act" or "MAUCRSA" means Division 10 of the California Business and Professions Code. "Medicinal cannabis patient" means both a qualified patient without an identification card and an ID card holder.
"Non-supervisorial employee" means an individual employed by the licensee that does not have the authority to hire, fire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment. For the purposes of this definition, an individual shall not be considered an employee of a licensee if the individual is working for the licensee pursuant to a written agreement that expressly states the individual is an independent contractor.
"Odor control equipment" means any equipment utilized to counteract the distinguishable odor of the cannabis plant.
"Odor control plan" means a written plan prepared by a licensed professional engineer or certified industrial hygienist that describes the odor emitting activities or processes specific to a cannabis business together with a description of the methods used for odor control to ensure that odors are not detected off site. "Owner" means any of the following:
1. A person with an aggregate ownership interest of 20 percent or more in the cannabis business applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance. For purposes of this section, “aggregate” means the total ownership interest held by a single person through any combination of individually held ownership interests in a commercial cannabis business and ownership interests in an entity that has an ownership interest in the same commercial cannabis business. For example, a person who owns 10 percent of the stock in a commercial cannabis business as an individual shareholder and 100 percent of the stock in an entity that owns 10 percent of the stock in the same commercial cannabis business has a 20 percent aggregate ownership interest in the commercial cannabis business.
2. An individual who manages, directs, or controls the operations of the commercial cannabis business, including but not limited to:
a. A member of the board of directors of a nonprofit.
b. A general partner of a commercial cannabis business that is organized as a partnership.
c. A non-member manager or managing member of a commercial cannabis business that is organized as a limited liability company. d. The trustee(s) and all persons who have control of the trust and/or the commercial cannabis business that is held in trust.
e. The chief executive officer, president or their equivalent, or an officer, director, vice president, general manager or their equivalent. "Physician" means an individual who possesses a license in good standing to practice medicine or osteopathy from the state of California.
"Primary caregiver" has the meaning set forth in Section 11362.7(d) of the California Health and Safety Code.
"Qualified patient" has the meaning set forth in Section 11362.7(f) of the California Health and Safety Code.
"Seed to sale software" means METRC, the statewide track and trace system that the Department of Cannabis Control has designated under Business and Professions Code Section 26067 to record the movement of cannabis and cannabis products from cultivation through sale using the unique identifiers issued under Business and Professions Code Section 26069.
"State law(s)" means and includes California Health and Safety Code Section 11362.5 (Compassionate Use Act of 1996); California Health and Safety Code Sections 11362.7 to 11362.85 (Medicinal Marijuana Program Act); the MAUCRSA, and all other applicable laws and regulations of the state of California.
"State license" means a state license issued under MAUCRSA, and includes both an Alicense and an M-license, as well as a testing laboratory license. "State licensing authority" means the state agency responsible for the issuance, renewal, or reinstatement of a state license, or the state agency authorized to take disciplinary action against a state licensee.
"Tax return" means any return, report, or filing required pursuant to Chapter 3.48 of this code that is submitted to the city for the purpose of reporting and remitting cannabis business taxes. A “tax return” includes documentation of gross receipts and taxable activity from cannabis dispensary, cultivation, or manufacturing operations, and is used to determine compliance with the cannabis tax obligations imposed by that chapter. "Testing laboratory" means a facility, laboratory, entity, or site that: (i) offers or performs tests of cannabis or cannabis products; (ii) offers no service other than such tests; (iii) sells no products, excepting only testing supplies and materials; (iv) is accredited by any necessary accrediting body that is independent from all other persons involved in the cannabis industry in the state; and (v) is registered with any necessary state agency required by law.
§ 5.88.030 Local license in addition to business license or other permit.
The local license required by this chapter shall be in addition and supplemental to any other business license or any permit required by any ordinance of the city. § 5.88.035 Local license required.
It is unlawful to operate any cannabis business in Cathedral City without first having obtained a local license under this chapter. Notwithstanding the foregoing, a temporary cannabis event organizer and cannabis businesses participating in a temporary cannabis event put on by a temporary cannabis event organizer are not required to obtain a license under this chapter provided that the organizer and participants comply with subsection D below.
It is unlawful for a cannabis business to operate in the city unless it has been granted the appropriate temporary or permanent state license(s) for its commercial cannabis activities. If the state denies the application for a temporary or permanent license(s) for any reason, the cannabis business must cease operations until such time as it obtains the appropriate temporary or permanent state license(s).
The city may grant a local license before the applicant has obtained a state license. A cannabis business must possess the requisite state and local licenses before receiving a certificate of occupancy from the city.
The city may permit temporary cannabis events by granting the applicant a special use permit for the event in accordance with the procedures for special use permits established in Chapter 9.68 of this code. Notwithstanding any provision in Chapter 9.68 to the contrary, the city council shall have the authority to approve, conditionally approve or deny a special use permit for a temporary cannabis event. A special use permit for a temporary cannabis event shall only be granted to a person who holds a cannabis event organizer license issued by the Department of Cannabis Control, a copy of which must be submitted with the special use permit application. The applicant shall provide the city with a copy of the temporary cannabis event license approved by the state before the commencement of the temporary cannabis event. Temporary cannabis events shall comply with all regulations set forth in Title 4 of the California Code of Regulations, Sections 15600 through 15604, as they may be amended from time to time. Temporary cannabis event organizers and cannabis businesses participating in a temporary cannabis event shall not be subject to the cannabis business operational requirements in Sections 5.88.065 through 5.88.100, inclusive, of this chapter or Sections 9.108.070 and 9.108.080 of this code, but the city council may apply appropriate conditions of approval on the operation of the temporary cannabis event pursuant to Section 9.28.060. Cannabis event organizers and cannabis businesses that participate in temporary cannabis events are subject to the tax imposed in Section 3.48.010 of this code. § 5.88.040 Local license application process.
A. The local licensing authority shall not accept an application for a dispensary proposed to be located south of Interstate 10 after November 23, 2016.
B. All applications for local licenses required pursuant to this chapter shall be submitted online. All applications for local licenses must be accompanied by the application fee as established by resolution of the city council as amended from time to time.
C. An applicant shall file with the local licensing authority the following at the time of application for a local license:
1. An operating plan for the proposed cannabis business including the following information:
a. A general description of the types of products and services to be provided by the facility;
b. A floor plan designating all interior dimensions of the licensed premises and the layout of the cannabis business, including all limited access areas, areas of ingress and egress, and all security cameras. Such floor plan shall also show the principal uses of the floor area depicted therein. For cultivation sites, such floor plan shall distinguish all dimensions of areas in which plants are located;
c. An employee, independent contractor, and volunteer list, if one exists; and d. For a dispensary, a statement confirming whether delivery service of cannabis to any location outside the premises will be provided and the extent of such service, and in the event delivery is provided, a detailed delivery plan detailing how the dispensary will comply with all requirements of this chapter, MAUCRSA, and any other applicable state or local laws.
2. Authorization for the local licensing authority to seek verification of the information contained within the application and authorization for the chief of police to conduct background checks of the owner(s).
3. Proof of the nature of the cannabis business's organizational status, such as articles of incorporation, by-laws, organizational minutes, partnership agreements, and other documentation may be required by the city.
4. Proof that the applicant is, or will be, entitled to possession of the premises for which application is made. Evidence of lawful possession consists of properly executed deeds of trust, leases, evidence of ownership of the licensed premises, or other written documents acceptable to the local licensing authority. The applicant must disclose whether, to the applicant's knowledge, the premises is located on land that is owned by the United States and held in trust for any federally-recognized Indian tribe or any member of the tribe, or that is subject to a restriction on alienation imposed by the United States.
5. The applicant shall provide any additional information that the local licensing authority may request to process and fully investigate the application. Failure to provide such additional information may result in denial of the application.
D. If the application is incomplete, the applicant shall have an opportunity to cure the incompleteness within thirty days of written notice of incompleteness by the local licensing authority.
E. Each owner and each manager must submit fingerprints and any other information the City requires to complete a background check. The police department will conduct a background check of each owner and manager and will prepare a report to the local licensing authority on the acceptability of each background.
F. The local licensing authority must issue a license to any applicant who has submitted a complete application and paid the application fee unless the local licensing authority finds that good cause exists to deny the license. A local license may not be issued to a dispensary that is proposed to be located south of Interstate 10 unless the application for the license was made on or before November 23, 2016.
G. Upon the approval of a local license, and as a condition of the license becoming effective, the applicant must pay to the city the regulatory licensing fee, if any, established by resolution of the city council.
H. A local license issued pursuant to this chapter shall specify the date of issuance, the period of licensure, the name of the licensee, the address of the licensed premises, and the nature of the cannabis business licensed. All local licenses are valid for one year, except that an initial local license shall automatically expire if the commercial cannabis activities authorized by the license have not commenced at the premises within eleven months of the date of issuance. If the licensee has not submitted a tax return showing that commercial cannabis activity is occurring on the premises before the start of the twelfth month of the license term, the city will notify the licensee in writing that their license has been rendered null and void due to the failure to commence commercial cannabis activity. The licensee is not precluded from applying for a new cannabis license except as provided in Section
5.88.040(A).
I. Applicants must acknowledge the tax obligations imposed under Chapter 3.48 of this code, including the timely filing of required tax returns and payment of all cannabis taxes due from dispensary, cultivation, or manufacturing operations, and further acknowledge that compliance with Chapter 3.48 is a continuing condition of local licensure.
§ 5.88.045 Conditions of approval, administrative rules.
A. The local licensing authority may place conditions upon the approval of any local license which are, in the opinion of the local licensing authority, reasonably related to the protection of the health, safety and welfare of the neighborhood in which the proposed licensed premises is to be located and of the general public.
B. The local licensing authority is authorized to make rules, policies and procedures consistent with the intent and spirit of this chapter concerning the applications, the application process, the information required of applicants, the application procedures, and the administration and procedures to be used and followed in the application process.
§ 5.88.050 Changes and modifications of local licenses.
In addition to any requirements in Chapters 9.108 and 9.72 of this code, the following requirements apply for transfers of or changes to the ownership or management of a licensee, modifications to a licensed premises, and changes of location of a cannabis business.
A. Change of Ownership or Management. Subsequent to the issuance of a local license, the licensee shall report any transfer of ownership or management of the cannabis business to the local licensing authority and pay the processing fee established by resolution of the city council. A change that solely involves a previously approved person no longer being an owner or manager of the cannabis business shall be reported to the local licensing authority within thirty days of the change. A change in ownership that involves adding a new owner or manager must be approved by the local licensing authority in advance. Any proposed new owner or manager must submit to a background check conducted by the chief of police or designee. The local licensing authority shall approve the change unless there is good cause to deny the change. The licensee shall also demonstrate that all cannabis business taxes, penalties, and interest due under Chapter 3.48 of this code have been paid in full.
B. Modification of Licensed Premises. A licensee shall not make physical changes, alterations, or modifications to the licensed premises that materially or substantially alters the licensed premises from the plans approved by the local licensing authority without the prior written approval of the local licensing authority. Material changes include, but are not limited to: an increase or decrease in the total square footage of the licensed premises or the addition, sealing off, or relocation of a wall, common entryway, doorway, or other means of public ingress and/or egress.
Applications for modifications of licensed premises shall be made on forms prescribed by the local licensing authority and shall be accompanied by the processing fee established by resolution of the city council. The local licensing authority shall approve the proposed modification if it meets all requirements of this chapter and all other applicable state laws and city codes and ordinances, and will not present a threat to the public health, safety or welfare.
C. Change of Location.
1. A licensee may apply to the local licensing authority to change the location previously approved for such local license to any other place in Cathedral City, but it is unlawful to cultivate, manufacture, distribute, test, store or sell cannabis at any such place or location until express permission to do so is granted by local licensing authority and the city has issued a conditional use permit to the licensee at the new location. Applications for changes of location will be made to the local licensing authority and be accompanied by the processing fee established by resolution of the city council.
2. In permitting a change of location, the local licensing authority may change any existing conditions of approval on the license and/or add new conditions of approval as determined appropriate by the local licensing authority.
3. The local licensing authority may permit a dispensary that is located south of Interstate 10 to relocate to a new location north or south of Interstate 10. A dispensary that is located north of Interstate 10 may only relocate to a new location that is north of Interstate 10.
§ 5.88.055 Renewal of a local license.
A. A cannabis business that desires to renew its license shall apply for the renewal no less than 30 days before the local license's expiration date. If the cannabis business files a renewal application within 30 days before expiration, the cannabis business must provide a written explanation detailing the circumstances surrounding the late filing. The local licensing authority may accept or reject such late filing in its discretion. The local licensing authority may elect to administratively continue a local license past its expiration date, provided that the licensee has submitted a renewal application that is pending final action.
B. An application for renewal shall be submitted online by providing all required information and documentation, accompanied by the processing fee established by resolution of the city council. The following information shall be submitted as a part of the renewal application:
1. A current list of the employees, independent contractors, and volunteers working at the licensed premises.
2. Proof that no changes to the ownership of the licensee have occurred since last approved by the local licensing authority.
3. Proof that the licensee is still entitled to the possession and use of the licensed premises.
4. For dispensaries, proof that commercial cannabis activity is occurring on the premises in accordance with the following:
a. For a first renewal application, proof that commercial cannabis activity permitted by the license has been occurring on the premises for the 30 days before the cannabis license expiration date. A tax return showing that taxable commercial cannabis activity occurred on the premises is necessary evidence of this fact but does not by itself establish sufficient proof. The local licensing authority may require additional evidence, including point-of-sale transaction records, posted hours of operation, and staffing schedules, to confirm that the dispensary was genuinely open to the public and conducting sales on a regular and continuous basis.
b. For a second and subsequent renewal application, proof that commercial cannabis activity permitted by the license has been occurring on the premises for the previous twelve consecutive months.
Tax returns showing that taxable commercial cannabis activity occurred on the premises are necessary evidence of this fact but do not by themselves establish sufficient proof. The local licensing authority may require the additional evidence described in subsection a. c. The local licensing authority may renew a license not meeting the requirements of subparagraphs a or b above if the renewal application demonstrates unique or extraordinary circumstances that have impacted the ability of the cannabis business to conduct commercial cannabis activity on the premises, including, but not limited to, fire, flood or other act of God resulting in substantial damage to the premises, or a delay in the issuance of necessary licenses, permits or other approvals necessary to conduct the commercial cannabis activity at no fault of the applicant.
d. Isolated, sporadic, or token sales transactions conducted primarily to generate a qualifying tax return, rather than as part of genuine and sustained retail operations open to the public, do not satisfy the requirements of subsection a or b.
5. For licensees that have ten or more full-time equivalent non-supervisorial employees, proof that the licensee has entered into and abided by the terms of a labor peace agreement.
6. Proof that the cannabis business is not delinquent on the submission of any tax returns or the payment of any cannabis taxes. If a business has entered into a tax payment agreement, it is not considered to be current with their tax obligations until the agreement has been fully paid.
7. Any other information that the local licensing authority deems necessary to determine whether to renew the local license.
C. All owners of the cannabis business must be fingerprinted each year at renewal if required in the discretion of the local licensing authority.
D. The local licensing authority shall renew a local license if the licensee has submitted a complete application and paid the application processing fee, unless the local licensing authority finds that good cause exists to deny the license renewal.
E. Local cannabis taxes must be current before renewing licensees' local cannabis license. Should a licensee hold multiple licenses within Cathedral City, their taxes for all licenses must be current to renew any one of their licenses.
F. Licensees seeking renewal of a dispensary license must demonstrate actual and continuous operations in accordance with subsection B.4 of this section. A paid tax return alone does not establish compliance with those operational requirements.
G. Unless administratively continued pursuant to subsection A, a local license is immediately invalid upon expiration and the cannabis business shall cease operations. If a local license expires, the local licensing authority may approve a renewal of the expired license at any time up to three months from the expiration date of the license. After the license has been expired for three months, the license may not be renewed by the local licensing authority, and the holder of the expired license must apply for and obtain a new cannabis license to resume operations.
H. Licenses initially issued on or before January 22, 2025, shall obtain approval of an odor control plan conforming with the requirements of this chapter and Chapter
9.108 of the Cathedral City Municipal Code as a requirement of local license renewal beginning on January 1, 2026. Any additionally required odor control equipment to meet the requirements of this chapter shall be installed and operational within six months of the approval of an odor control plan and no later than March 31, 2027. Thereafter, the renewal of any local license shall annually certify the performance of its odor control plan to the requirements of this chapter and Chapter 9.108 of the Cathedral City Municipal Code. § 5.88.060 Appeal of decision on local license.
If the local licensing authority denies or conditionally approves an initial local license, declines to renew a local license, or denies a change requested under Section
5.88.050, the licensee or applicant may appeal the decision to the city council in accordance with the provisions of Section 2.04.100 et seq., of this code. A decision to deny or not renew a cannabis industry worker identification card under Section
5.88.065(D) may be appealed to the city council through the same procedures.
Proceedings to suspend, modify, or revoke a local license for good cause are governed by Chapter 13.150, as provided in Section 5.88.115.
§ 5.88.065 Cannabis business operational requirements.
All cannabis business must comply with the requirements set forth in this section.
A. General Obligation to Operate in Compliance. A cannabis business must operate in compliance with all applicable state and local laws and regulations governing cannabis businesses. To be considered operational, a cannabis business must represent to the City and the public that it is actively conducting commercial cannabis activity authorized by its local license and is in compliance with the applicable operational requirements of this chapter.
B. General Obligation to Pay Taxes. A cannabis business must pay all applicable taxes pursuant to federal, state, and local law, including but not limited to, the cannabis tax, state and local sales and use taxes, and state excise taxes. A cannabis business shall timely file all required tax returns, maintain complete and accurate records necessary to determine cannabis tax liability, cooperate with any tax audit authorized by the City, and timely pay any taxes, penalties, interest, or other amounts, e.g., NSF fees, lawfully imposed or assessed. Failure to comply with the requirements of Chapter 3.48 may constitute grounds for enforcement action under this chapter.
C. General Obligation for Compliant Facilities. The licensed premises must fully comply with all applicable rules, regulations, and laws including, but not limited to, building and safety codes, and the Americans with Disabilities Act.
D. Background Checks. Before commencing any work within a cannabis business, any individual who will work within a licensed premises or have access to cannabis or cannabis products must submit to a background check that demonstrates they are of good moral character and receive a cannabis industry worker identification card from the city. The background check must include fingerprinting for criminal history conducted by the Cathedral City police department or any other entity determined to be satisfactory by the Cathedral City police department. Each cannabis industry worker identification card issued shall expire after two years unless renewed. A decision to deny or not renew a cannabis industry worker identification card may be appealed in accordance with Section 5.88.060. A cannabis industry worker identification card may be revoked or suspended by the city at any time, in accordance with the procedures in Chapter 13.150 of this code, if it is determined that the card holder is no longer of good moral character. A cannabis business shall not employ or utilize the services of any individual who is required to have a city-issued cannabis industry worker identification card unless that individual possesses a valid city-issued cannabis industry worker identification card at all times, regardless of whether the individual is an employee, independent contractor, or volunteer. The city may charge a fee to recover its reasonable costs of processing and issuing cannabis industry worker identification cards in an amount established by resolution of the city council.
E. Worker Register. Cannabis businesses must maintain a complete register of all persons that work at the licensed premises or have access to cannabis or cannabis products, whether as an employee, independent contractor, or volunteer. This register must include:
1. The individual's complete name, address, and last known telephone number;
2. The individual's hire date and, if applicable date of termination.
The register and required records must be made available for inspection by any city officer or official for purposes of determining compliance with the requirements of this chapter during standard business hours of the licensed facility or at any other reasonable time.
F. Employees and Volunteers Age Requirement. A cannabis business shall not employ an individual less than twenty-one years of age, nor may a cannabis business permit an individual less than twenty-one years of age to volunteer at the cannabis business. Notwithstanding the foregoing, a cannabis business may employ and allow persons eighteen years of age or older to volunteer at the cannabis business if the business holds an M-license from the state and the state expressly permits such persons to work within the business.
G. Age Restrictions. A cannabis business may not permit an individual less than twenty-one years of age to enter, or be within, its licensed premises, except that a cannabis business with an M-license from the state may allow persons eighteen years of age or older within the licensed premises if they are an ID card holder or qualified patient with physician's recommendation from a licensed physician.
H. Secure Storage of Product. Cannabis and cannabis products possessed by a cannabis business shall be kept and stored in a secured manner at all times.
I. Cannabis Consumption on Licensed Premises. Smoking, vaporizing, ingesting, or otherwise consuming cannabis and cannabis products at a licensed premises is prohibited, except on the premises of a licensed dispensary in accordance with Section 5.88.070(J). "Licensed premises" as used in this subsection includes the actual building, as well as any accessory structures, common areas and parking areas. A sign shall be posted at each entrance to a licensed premises that clearly and legibly states: "Smoking, vaporizing, ingesting, or otherwise consuming cannabis or cannabis products on these premises or in their vicinity is prohibited and a violation of the Cathedral City Municipal Code."
J. Prohibition on Alcohol and Tobacco Sales, Distribution, or Consumption on Licensed Premises. A cannabis business shall not sell, provide, store, or distribute any alcoholic beverages or tobacco products, or allow such products to be consumed on the licensed premises.
K. On-Site Signage. On-site signage for a cannabis business that is viewable from the exterior of the cannabis business shall comply with all local signage laws applicable to the licensed premises, including Chapter 9.62 of this code. Signage may not be designed to appeal to children, or contain any false or misleading statements, or make any misrepresentations.
L. Advertising. A cannabis business shall not advertise in a manner intended to encourage persons under twenty-one years of age to consume cannabis or cannabis products. It shall be unlawful for any cannabis business to make any claims that a product is safe because it is tested. All advertisements, including offsite advertising signs, shall comply with Chapter 15 of MAUCRSA. A cannabis business must maintain at least one publicly accessible means of informing the public that the business is operational. Such means may include, but are not limited to, a business website, social media page, online business directory, or other publicly accessible platform. The information shall accurately identify the business name, address, hours of operation, and contact information, and shall be kept current.
M. Display of License. A cannabis business shall display a copy of its local license issued pursuant to this chapter in a conspicuous place at or near the entrance to the licensed premises.
N. No Physician Evaluations on Licensed Premises. A cannabis business shall not permit a physician to evaluate potential medicinal cannabis patients or to provide a physician's recommendation for medicinal cannabis within its licensed premises.
Cannabis businesses shall not offer or provide any form of remuneration to a physician who provides physician's recommendations for medicinal cannabis.
O. Community Relations Designee. A cannabis business must provide the local license authority with the name, phone number, facsimile number, and email address of an on-site community relations representative or staff member or other representative to whom the city can provide notice if there are operating problems associated with the cannabis business or refer members of the public who may have complaints or concerns regarding the cannabis business. The cannabis business shall also provide this contact information to all neighboring businesses located within one hundred feet of the cannabis business, as measured in a straight line without regard to intervening structures, between the front doors of each establishment.
P. Accurate Weights and Measures. Scales and weighing mechanisms used by a cannabis business to weigh non-waste products must be able to weigh to within 1/100th of a gram, shall be maintained in good working order and shall be subject to annual inspection by either a Riverside County agricultural commissioner's office weights and measures official or a licensed scale company.
Q. Waste Disposal.
1. Chemical, Dangerous and Hazardous Waste. Disposal of chemical, dangerous or hazardous waste must be conducted in a manner consistent with federal, state and local laws, regulations, rules or other requirements. This may include, but is not limited to, the disposal of all pesticide or other chemicals used in the cultivation process, certain solvents or other chemicals used in the production of cannabis concentrate.
2. Cannabis Waste. Cannabis waste must be made unusable and unrecognizable before leaving the licensed premises by grinding it and incorporating it with fifty percent non-medicinal cannabis waste. If necessary to protect the health and safety of individuals working on a licensed premises, a cannabis business may grind the stalk of a cannabis plant outside of its licensed premises provided all grinding activities occur within twenty feet of the licensed premises and cannot be seen from any public street.
3. Composting. A cannabis business may compost cannabis waste onsite, in accordance with this provision and all other applicable laws, rules, and regulations.
4. Odor. Disposal of cannabis waste shall be done in a manner consistent with the conditional use permit for the business. The conditional use permit may include conditions to minimize odor generated by cannabis waste, including, but not limited to, the placement of waste containers and the imposition of odor control requirements.
R. General Sanitary Requirements. A cannabis business must ensure that its licensed premises are maintained in a sanitary manner and activities on its licensed premises are conducted in a sanitary manner.
1. All facilities of a cannabis business must have adequate and sufficient access to bathrooms and hand-washing facilities with running water at a suitable temperature.
2. Hand-washing facilities shall be located where good sanitary practices require workers to wash or sanitize their hands, and provide effective hand-cleaning and sanitizing preparations and sanitary towel service or suitable drying devices.
3. All workers that engage in the preparation or dispensing of edible cannabis products must comply with the provisions of all relevant state and local laws regarding the preparation, distribution, and sale of food.
S. Security Requirements. The licensed premises of a cannabis business must comply with all of the following security requirements:
1. Video Surveillance. The licensed premises must be equipped with a video surveillance system that meets all of the requirements set forth in this subsection.
a. Security cameras and digital storage of recordings shall be maintained in good condition and used in an on-going manner, twenty-four hours per day, seven days per week.
b. The security system must maintain at least one hundred twenty concurrent hours of digitally recorded video for each security camera in the licensed premises. Security footage should be stored in an MPEG4, MJPEG, H.264, or another format approved by the local licensing authority in writing.
c. Security cameras must provide adequate and sufficient coverage for the facility, which must include, but need to be limited to, all limited access areas, all areas of ingress and egress, point of sale, the public areas, storage areas, and any other areas as required by this chapter and the MAUCRSA.
d. The video surveillance system must be equipped with a failure notification system that provides prompt notification to the manager of record of the licensed premises of the cannabis business of any surveillance interruption or complete failure of the surveillance system that lasts longer than fifteen minutes.
e. The video surveillance system shall have sufficient battery backup to support a minimum of fifteen minutes of recording in the event of a power outage.
2. Alarm System. The licensed premises shall have an audible interior and exterior security alarm system installed on all perimeter entry points and perimeter windows, operated, and monitored by a security company licensed by the Department of Consumer Affairs, Bureau of Security and Investigative Services.
3. Signage Requirement. The licensed premises must comply with the following signage requirements.
a. A sign shall be posted in a conspicuous place near each point of public access which shall be not less than twelve inches wide and twelve inches long, composed of letters not less than one inch in height, stating:
"All Activities Monitored by Video Camera."
b. Limited access areas shall be clearly identified by the posting of a sign which shall be not less than twelve inches wide and twelve inches long, composed of letters not less than one-half inch in height, which shall state: "Limited Access Area—Authorized Personnel Only."
4. Lighting. The business entrance(s) and all window areas shall be illuminated during evening hours. The cannabis business shall comply with the city's lighting standards regarding fixture type, wattage, illumination levels, and shielding.
5. Commercial-Grade Locks. All points of ingress and egress to a licensed premises shall ensure the use of commercial-grade, nonresidential door locks or window locks.
6. Notification of Local Licensing Authority and Law Enforcement. A cannabis business shall notify the local licensing authority and the appropriate law enforcement authorities within twenty-four hours after discovering any of the following:
a. Significant discrepancies identified during inventory; b. Diversion, theft, loss, or any criminal activity involving the dispensary or any employee or agent of the dispensary;
c. The loss or unauthorized alteration of records related to cannabis, cannabis patients, primary caregivers, or dispensary employees or agents; or
d. Any other breach of security.
T. Subletting Prohibited. Licensees are not authorized to sublet any portion of a licensed premises for any purpose, unless all necessary applications to modify the existing licensed premises to accomplish any subletting have been approved by the local licensing authority.
U. Recordkeeping. Cannabis businesses shall keep and maintain all records specified in Chapter 16 of the MAUCRSA and shall make the same available for inspection and examination of the local licensing authority or its duly authorized representatives during standard business hours of the licensed facility or at any other reasonable time. Cannabis businesses are required to exercise due diligence in preserving and maintaining all required records.
V. Transactions. Licensees shall only do business with cannabis businesses that are licensed or permitted to do business in their respective jurisdictions.
W. Odor Control Plan. A cannabis business shall obtain approval of an odor control plan pursuant to the requirements of Section 5.88.125. All required odor control equipment shall be installed and operational before the commencement of operations and shall be maintained in good working order. The licensee shall certify the performance of an odor control plan to the requirements of this chapter annually with the renewal of a cannabis license.
X. Licensee Responsibility. At all times, a licensee is responsible for ensuring that its cannabis business complies with all applicable state and local laws, and any regulations promulgated thereunder. In construing and enforcing this chapter and any rules or regulations promulgated under this chapter, the act, omission, or failure of an agent, officer, representative, employee, independent contractor, or volunteer acting for or on behalf of a licensee, within the scope of his or her employment or engagement, shall in every case be deemed the act, omission, or failure of the licensee.
§ 5.88.070 Dispensary operational requirements.
In addition to the operation requirements in Section 5.88.065, a dispensary must comply with the requirements set forth in this section.
A. Limited Hours of Operation. A dispensary may only be open to the public and engage in sales between the hours of six a.m. and ten p.m. The dispensary must clearly post its hours of operation at each publicly accessible entrance and must be open to the public during those posted hours.
B. Product Displays. A dispensary must maintain retail shelves and display areas in a stocked and commercially operable condition, with all products offered for sale clearly displaying accurate and current pricing. Inventory must be sufficient to support continuous retail operations. The display of cannabis and cannabis products for sale shall not include cartoon characters or other images designed to appeal to children.
C. Age Restricted Entry. A dispensary may not permit an individual less than twentyone years of age into the licensed premises, except a dispensary with an M-license from the state may permit an individual aged eighteen years or older into the licensed premises if the dispensary verifies the individual is an ID card holder or qualified patient with a physician's recommendation.
D. Cannabis Paraphernalia Sales. Dispensaries may sell or otherwise provide equipment, supplies, and paraphernalia used to consume cannabis and cannabis products.
E. Electronic Point-of-Sale System Required. Dispensaries must have an electronic point of sale system that is either part of their seed to sale software or integrates with their seed to sale software. The electronic point of sale system must be capable of producing an electronic or automatic paper record for all transactions associated with any product sold, rented, or otherwise provided to the customer.
F. No Sales of Expired Product. A dispensary may not sell any expired products, cannabis or cannabis products. A dispensary shall not alter, edit, or adjust in any manner an expiration date on any item or product once affixed by its manufacturer.
G. Acceptable Forms of Payment. The local licensing authority may adopt regulations that prohibit a dispensary from accepting certain forms of payment from customers for cannabis and cannabis products. A dispensary may accept cash payments unless the local licensing authority has adopted a regulation prohibiting the acceptance of cash.
H. Handling of Edible Cannabis Products. A dispensary that possesses edible cannabis products shall comply with the provisions of all relevant state and local laws regarding the storage, handling, and sale of food.
I. Delivery of Cannabis and Cannabis Products. A dispensary that provides delivery service shall comply with the following requirements:
1. The dispensary shall not deliver cannabis or cannabis products to any location outside of California or to any location within California where the delivery of cannabis or cannabis products has been prohibited by the city or county.
2. The delivery service must be approved by the local licensing authority as a part of the licensing process. The deliveries must be conducted in accordance with any relevant state laws, this code, any applicable local laws in the delivery location, and any conditions imposed upon the license.
3. The dispensary must keep in place standard operating procedures that ensure the safety and security of those individuals engaging in delivery and the safety and security of all cannabis being delivered, including procedures to prevent diversion.
4. A dispensary may only deliver cannabis to a specific street address requested by the purchaser. Deliveries to public parks and schools are expressly prohibited.
5. Upon arrival at the delivery address and before transferring any cannabis or cannabis products, the delivery person must verify and confirm that the identity of the recipient is the same as the person who requested the delivery and that the person is either twenty-one years of age or a qualified patient or primary caregiver.
6. A dispensary shall report to the local licensing authority and local law enforcement any vehicle accidents, diversions, losses, or other reportable incidents such as thefts or suspicious activity, that occur during transportation and delivery, within twenty-four hours.
7. The delivery shall keep a delivery manifest that includes the following information:
a. All cannabis that will be transported, accurately inventoried; b. Departure date and approximate time of departure;
c. Arrival date and approximate time of arrival;
d. Name, address, local license number and CUP number of the originating cannabis business;
e. Name and address of the individual requesting the delivery; f. Delivery vehicle make, model, and license plate number; and g. Name and signature of the individual transporting the cannabis.
J. Consumption of Cannabis and Cannabis Products on Premises. Cannabis and cannabis products may be smoked, vaporized, ingested or otherwise consumed on the licensed premises of a dispensary, subject to the following regulations:
1. Access to the area where cannabis consumption is allowed must be restricted to persons twenty-one years of age and older. The dispensary shall be responsible for checking identification and ensuring that underaged individuals do not enter.
2. Cannabis consumption shall not be visible from any place where persons under the age of 21 are permitted.
3. Cannabis consumption must occur only within the areas designated for consumption by the license.
4. The cannabis business shall specifically address odors caused by the consumption of cannabis in the odor control plan required in Section 5.88.125.
5. Cannabis consumption shall occur in a space within the licensed premises that is separate from the space that is used to sell cannabis and cannabis products for on-site or off-site consumption.
6. Only cannabis and cannabis products purchased from the dispensary during the same visit by the customer may be consumed within the dispensary.
Individuals may not bring cannabis or cannabis products into a dispensary for the purposes of consumption.
7. Cannabis and cannabis products that are only partially consumed on the premises of the dispensary must be repackaged in accordance with Section
5.88.095 before leaving the dispensary.
8. Representatives of the city, including, but not limited to, police officers, must be permitted to enter the licensed premises, including all areas where consumption is allowed, at any time during the regular business hours of the cannabis business and/or whenever consumption is occurring on site.
K. Noncannabis Food and Beverage Service; Live Performances. Within the consumption area authorized under Section 5.88.070(J), a dispensary may prepare and sell noncannabis food and beverage products, sell prepackaged noncannabis food and beverage products, host live musical or other performances, and sell tickets for those performances, subject to the following regulations:
1. A dispensary must conduct each activity authorized by this subsection only within the approved indoor consumption area. Nothing in this subsection authorizes any activity, cannabis consumption, or event in an outdoor area, including a parking lot, patio, sidewalk, or adjacent property.
2. A dispensary authorized under this subsection may allow customers to bring in or receive noncannabis, nonalcoholic food and beverage products from a restaurant or food delivery service for consumption within the consumption area.
3. A dispensary conducting an activity authorized by this subsection shall comply with all conditions in Business and Professions Code Section 26200, as may be amended from time to time, and with the following:
a. Access to the area where cannabis consumption is allowed must be restricted to persons 21 years of age or older;
b. Each entrance to the cannabis consumption area must prominently post a warning that cannabis consumption, including smoking of cannabis, is permitted inside;
c. Cannabis consumption may not be visible from any public place or nonage-restricted area; d. Sale or consumption of alcohol or tobacco may not be allowed on the premises;
e. Noncannabis food or beverage products may not be contaminated by or commingled with any cannabis products sold or served on the premises where cannabis consumption is allowed;
f. Smoking or vaporizing of any cannabis or cannabis product by an employee or customer may not be allowed in the food preparation, food storage, or warewashing area of a food facility located on the premises; g. The cannabis business must maintain adequate ventilation and filtration systems as required by the City or applicable law. Ventilation and filtration systems may be required to prevent smoke and odors from migrating to any other part of the building hosting the consumption lounge or any neighboring building or grounds;
h. Employees must be permitted, at their discretion and without penalty or sanction, to wear a mask for respiration, including N95 or NIOSH N95 rated masks, in any area where cannabis is smoked, and the employer shall pay for the mask as required by State law;
i. Employees who will be working where cannabis or cannabis products are smoked shall be provided in writing the Department of Public Health or successor agency guidance regarding secondhand cannabis smoke when hired;
j. A cannabis consumption lounge that offers onsite consumption of cannabis products shall include secondhand smoke in its analysis of potential work hazards for purposes of any injury and illness prevention program required by State law;
k. Loitering in or around the business is prohibited, and the cannabis business must ensure the absence of loitering;
l. If a State retail or microbusiness license is suspended, the licensee may not engage in activities authorized under this section for the duration of the State license suspension;
m. All noncannabis food and beverages present on the premises must be stored and displayed separately and distinctly from all cannabis and cannabis products present on the premises; and
n. This section does not authorize the preparation, sale, service, or consumption of industrial hemp or any product containing industrial hemp.
4. A dispensary that prepares, sells, serves, stores, or allows noncannabis food or beverage products within a cannabis consumption lounge shall comply with the California Retail Food Code, Riverside County Environmental Health requirements, and all other applicable State, County, and local laws and regulations. No onsite food preparation shall occur unless all required approvals, permits, or authorizations have been obtained.
5. A dispensary that hosts a live performance on the licensed premises must comply with all applicable state and local requirements, including:
a. Approved occupancy limits;
b. Fire and life safety requirements;
c. Building Code requirements;
d. Business license and cannabis license conditions;
e. Security plan requirements;
f. Odor control and ventilation requirements;
g. Noise regulations;
h. Parking and traffic requirements;
i. Loitering prohibitions;
j. Employee safety requirements;
k. Riverside County Environmental Health requirements, where applicable; and
l. Any other condition imposed by the local licensing authority, fire department, building official, code compliance division, police department, or other city department or official with applicable authority.
6. A dispensary operating a consumption area on the effective date of the ordinance codifying this subsection may continue on-site cannabis consumption authorized under Section 5.88.070(J). The dispensary shall not prepare or sell noncannabis food or beverage products, allow carry-in or delivered food, or host a live performance until it satisfies the applicable requirements of this subsection.
7. The authorization in this subsection is in addition to, and does not excuse compliance with or the need to obtain, any other license, permit, or approval required by this code or state law. A dispensary conducting an activity authorized by this subsection remains subject to all otherwise applicable requirements, including any special event permit, temporary use permit, state license, or other approval.
§ 5.88.075 Manufacturing site operational requirements.
In addition to the operational requirements in Section 5.88.065, manufacturers must comply with the requirements set forth in this section.
A. Edible Cannabis Products. Edible cannabis products shall be manufactured, packaged and labeled in compliance with MAUCRSA and any implementing regulations adopted by the state.
1. Edible cannabis products must be individually packaged and ready for sale by the manufacturer before sale or transfer to another cannabis business.
2. Any person that is involved in the manufacture of edible cannabis products must be a state certified food handler. The valid certificate number of such person must be on record at the manufacturing site where that individual produces edible cannabis products.
3. Any facility used by a cannabis business to manufacture edible cannabis products shall be constructed, operated and inspected in accordance with the applicable building code and applicable food safety requirements.
4. A cannabis business that manufactures edible cannabis products must comply with the provisions of all relevant state and local laws regarding the preparation, distribution, and sale of food; which shall include, but not be limited to, handwashing requirements, use of gloves for packaging, and policies prohibiting individuals suffering from symptoms associated with communicable diseases or infections from engaging the production of edible cannabis products.
5. All cannabis manufacturing facilities shall ensure that cannabis is obtained from permitted and licensed cultivation sources and shall implement best practices to ensure that all manufactured cannabis is properly stored, labeled, transported, and inspected before distribution at a legally permitted and licensed retailer.
B. Expiration Date. A cannabis business engaged in the manufacture of cannabis products, including an edible cannabis product, that is perishable shall assign an expiration-date or use-by date, whichever is appropriate, to all perishable cannabis products. Once an expiration date or use-by date is assigned to cannabis products, it shall be unlawful for a person to alter that date or affix a new label with a later use-by or expiration date.
C. Extraction Requirements.
1. A manufacturer engaged in extraction may only engage in type of extraction approved by the local licensing authority in its application for a local license.
The licensee shall not make any modifications to the method of extraction without first obtaining a modification of its local license.
2. Within the limitations set forth by state law, a cannabis business that extracts cannabis or produces cannabis concentrate using a solvent must use a professional-grade, closed-loop extraction system capable of recovering the solvent used and must only use a solvent that is permissible under the MAUCRSA and the manufacturer's state license.
§ 5.88.080 Cultivation operational requirements.
In addition to the operational requirements in Section 5.88.065, a cultivator must comply with the requirements set forth in this section.
A. Cultivators must comply with the Federal Worker Protection Standard (40 CFR 170).
B. The cultivation of cannabis must be conducted in accordance with all applicable federal, state, and local laws and regulations governing the use of pesticides.
C. The use of pesticides must be recorded in a log in accordance with 16 CCR Section 1970.
D. The cultivation of cannabis shall be conducted in a secure manner and shall not be visible from a public right-of-way. As used in this subsection D, the term "visible" means capable of being seen without visual aid by an individual of normal acuity.
E. A licensee may not distribute, sell, dispense, or administer cannabis on the licensed premises of a cultivation site except for as authorized by the MAUCRSA and other applicable state law.
F. Cultivation facilities must comply with all applicable National Pollutant Discharge Elimination System (NPDES) requirements under the Clean Water Act and its implementing regulations, including 40 Code of Federal Regulations Part 122. § 5.88.085 Distribution operational requirements.
In addition to the operational requirements in Section 5.88.065, distributors shall comply with the requirements of this section.
A. Quality Assurance and Testing.
1. Before distribution, the distributor shall inspect cannabis for quality assurance as required by MAUCRSA and to ensure the labeling and packaging of the cannabis and cannabis products conforms to the requirements of this chapter and MAUCRSA.
2. Distributors shall ensure that cannabis and cannabis products in its custody are tested by a licensed testing laboratory in accordance with MAUCRSA before distributing the cannabis and cannabis products to a dispensary.
B. Transportation.
1. A distributor may not transport cannabis to or from another cannabis business outside the state of California.
2. An individual may only transport cannabis on behalf of a distributor if the individual:
a. Is an employee of the distributor and is listed on the distributor's employee list;
b. Possesses a copy of the distributor's local license; and c. Possesses a copy of a transportation manifest that meets all the requirements of MAUCRSA and subsection (B)(3).
3. Transportation Manifest.
a. A cannabis business must create a transportation manifest in accordance with this chapter for every transport and delivery of cannabis. A cannabis business must ensure that a copy of the appropriate transportation manifest accompanies every transport and delivery of cannabis and is kept for retention by the originating cannabis business.
b. If a cannabis business makes multiple pick-ups or deliveries during a single trip, then a separate transportation manifest shall be required for each pick-up or delivery.
c. A transportation manifest will be deemed sufficient if it accurately reflects:
i. All cannabis that will be transported to the address reflected on the manifest, accurately inventoried to include the weight of any raw cannabis or cannabis concentrate and the number of
individual cannabis products;
ii. Departure date and approximate time of departure;
iii. Arrival date and approximate time of arrival;
iv. Name, address, local license number and CUP number (or, for cannabis businesses outside of Cathedral City, a similar number issued by the cannabis business's local jurisdiction) of the originating cannabis business;
v. Name, address, local license and CUP number (or, for cannabis businesses outside of Cathedral City, a similar number issued by the cannabis business's local jurisdiction) of the receiving cannabis business;
vi. Delivery vehicle make, model, and license plate number; and vii. Name and signature of the individual transporting the cannabis.
4. A cannabis business with a local license may only transport cannabis between licensed premises by way of motor vehicle, unless the transport is between two licensed premises that are within the same building or at the same street address.
5. A cannabis business with a local license shall transport cannabis in a manner that is secure and not visible from outside the vehicle.
6. An employee transporting cannabis pursuant to this chapter must take a direct route from the distributor to the destination of the other cannabis business(es) and may not make any stops other than those necessary in the ordinary course of business.
C. Bonding. Transporters shall comply with applicable state laws and regulations, if any, requiring that they be bonded and insured.
D. Preparation of Cannabis and Cannabis Products for Transportation.
1. All cannabis and cannabis products must be appropriately and completely tracked in a cannabis business's inventory tracking system before transportation to another cannabis business. This must include verifying and documenting the weight of any raw cannabis or cannabis concentrate and the number of individual cannabis products being transported.
2. Preparations for the transport of cannabis and cannabis products must be conducted in a limited access area on camera.
E. Receiving Cannabis and Cannabis Products.
1. A distributor may not receive cannabis or cannabis products unless accompanied by a transportation manifest that meets all of the requirements set forth in subsection (B)(3). The distributor must retain copies of transportation manifests associated with all deliveries of cannabis.
2. Immediately upon receipt, all cannabis and cannabis products must be appropriately and completely tracked in the distributor's inventory tracking system. This must include verifying and documenting the weight of any raw cannabis or cannabis concentrate and the number of individual cannabis products being transported.
F. Perishable Cannabis Products. A cannabis business must provide adequate refrigeration when engaged in the transportation of perishable cannabis products. § 5.88.090 Testing laboratory operational requirements.
In addition to the operational requirements in Section 5.88.065, a testing laboratory shall comply with the requirements of this section.
A. No Other Ownership. An owner of a testing laboratory may not have an ownership or other direct financial interest in any other commercial cannabis business license type.
B. Accreditation. A testing laboratory shall obtain and maintain ISO/IEC 17025 accreditation.
C. Operating Procedures. A testing laboratory shall adopt and adhere to standard operating procedures to ensure the reporting of accurate test results, including, but not limited to, equipment, calibration, and methodology standards, that are consistent with its ISO/IEC 17025 accreditation.
1. A testing laboratory shall obtain samples of cannabis and cannabis products for testing in accordance with a statistically valid method designed to ensure that a sample is representative of the whole. Sampling methods should have at least a ninety-five percent confidence rate.
2. A testing laboratory shall destroy and safely dispose of the remains of any samples of cannabis or cannabis products tested upon completion of the analysis and the expiration of any retention time pursuant its standard operating procedures.
3. A testing laboratory shall maintain all testing results as a part of their respective business records and must keep such records pursuant to Section 5.88.065(U). § 5.88.095 Packaging and labeling.
A. Compliance with State Law. All packaging and labeling of cannabis and cannabis products by a cannabis business must, at a minimum meet the requirements of Chapter 12 of MAUCRSA and any implementing regulations, as the same may be amended from time to time or superseded or replaced by subsequent state legislation or by any state department or division.
B. Tamper-Evident, Child-Resistant Packaging Required. Before delivery or sale at a dispensary to a purchaser, cannabis and cannabis products shall be labeled and placed in a resealable, tamper-evident, child resistant package and shall include a unique identifier for the purposes of identifying and tracking cannabis and cannabis products.
C. Cannot Be Attractive to Children. Cannabis packaging and labeling shall not be designed to appeal to children, including, but not limited to, cartoon characters or similar images.
D. State-Mandated Warnings and Information. All cannabis and cannabis product labels and inserts shall include the state-mandated warnings and information contained in Business and Professions Code Section 26120(c). § 5.88.100 Visitor requirements.
A. Visitors. Any individual permitted to enter a limited access area who is not an person that has undergone a background check in accordance with this chapter and is listed on the licensed premises worker list shall be considered a visitor.
Notwithstanding the foregoing, state and local employees, or their official designees, shall not be considered a visitor provided the individual is on the licensed premises for purposes of official government business.
B. Visitors Identification and Record Requirements. Before permitting a visitor into a limited access area, a cannabis business must check the individual's valid government issued identification. The visitor shall be required to sign the cannabis business's visitor log, which must include the individual's name, date of entry, and purpose for entry.
C. Visitors Must Be at Least Twenty-One Years of Age. A cannabis business may not permit a visitor who is less than 21 years of age to enter a limited access area.
D. Visitors Prohibited Conduct. A visitor shall not be permitted to engage in the cultivation, preparation, processing, manufacturing, packaging, labeling, transportation, or sale of cannabis.
§ 5.88.105 Limitations on city's liability.
To the fullest extent permitted by law, the city shall not assume any liability whatsoever, with respect to approving any local license pursuant to this chapter or the operation of any cannabis business approved for such local license pursuant to this chapter. As a condition of approval of a local license granted under this chapter, the applicant or its legal representative shall:
A. Execute an agreement indemnifying and holding the city harmless from any and all claims, damages, legal or enforcement actions, including, but not limited to, any actions or claims associated with violation of federal law associated with the operation of the cannabis business and delivery of cannabis as provided in this chapter; and
B. Maintain insurance in the amounts and of the types that are acceptable to the city pursuant to guidelines and policies set forth by the local licensing authority; and C. Name the city as an additionally insured on all city-required insurance policies; and D. Agree to defend, at its sole expense, any action against the city, its agents, officers, and employees related to the approval of a local license or conditional use permit or the operation of the cannabis business; and
E. Agree to reimburse the city for any court costs and attorney fees that the city may be required to pay as a result of any legal challenge (or federal enforcement action) related to the city's approval of a local license or conditional use permit. The city may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve the operator of its obligation hereunder.
§ 5.88.110 Inspections.
A. Recordings made by security cameras at any cannabis business shall be made immediately available to the local licensing authority upon verbal request for law or regulatory enforcement and criminal investigation purposes. Disclosure of such recordings is governed by the California Public Records Act (Government Code Section 7920.000 et seq.) and other applicable law. Recordings shall be withheld from public disclosure only to the extent authorized or required by applicable law.
B. The local licensing authority shall have the right to enter all cannabis businesses from time to time unannounced for the purpose of making reasonable inspections to observe and enforce compliance with this chapter. Such inspections shall be limited to observing the licensed premises for purposes of determining whether the cannabis business is being operated or maintained in compliance with this code, state law, and other applicable laws and regulations. Any cannabis business licensed pursuant to this chapter may be required to demonstrate, upon demand by the local licensing authority that the source and quantity of any cannabis or cannabis products found upon the licensed premises is in full compliance with any applicable local or state law or regulation.
C. The local licensing authority shall have the right to inspect records of medicinal cannabis patients and primary caregivers that have made purchases of medicinal cannabis or medicinal cannabis products from a dispensary for the sole purpose of determining whether any and all such individuals are qualified to make such purchases. Such inspections of records shall not be used for any other purposes, nor shall the records be removed off site by the city without a court order.
D. The local licensing authority may delegate an act required to be performed pursuant to this section to any code enforcement officer or official of the city, including, without limitation, the chief of police, the fire chief, the building official, the finance director, the city attorney, or any designee of such officers or officials.
E. Applicants and licensees must cooperate with the local licensing authority and its designees who are conducting inspections or investigations relevant to the enforcement of laws and regulations related to this chapter.
F. Licensees must make available for inspection or audit all records reasonably necessary to verify compliance with Chapter 3.48 and must cooperate with the City in the review of such records. Such records may include, but are not limited to, cannabis tax returns, point-of-sale system records, or other documents relevant to the reporting or remittance of cannabis taxes.
§ 5.88.115 Enforcement.
A. The provisions of this chapter may be enforced by the local licensing authority by any means provided for in Title 13 of this code in addition to any and all other remedies, civil, equitable or criminal, afforded to the city under the law.
B. The operation of a cannabis business in violation of this chapter or any conditions of approval placed on a licensee's local license is hereby deemed to be a public nuisance.
C. As provided for in Title 13 of this code, the local licensing authority may issue administrative, infraction or misdemeanor citations, institute a summary abatement of a public nuisance that poses an immediate threat to the public health and safety, and/or institute proceedings to suspend, modify or revoke a local license for good cause in accordance with the procedures in Chapter 13.150 of this code.
D. The city attorney may bring a civil or equitable action to seek the abatement of any violation of this chapter.
E. Whenever in this chapter any act or omission is made unlawful, it shall include causing, permitting, aiding, abetting, suffering, or concealing the fact of such act or omission.
F. Each and every day a violation is maintained, caused, aided, abetted, concealed, suffered, or permitted is a separate offense.
§ 5.88.120 Civil fines.
Any person convicted of an infraction or misdemeanor violation shall, for each separate violation of this chapter, be subject to civil fines in amounts set by resolution of the city council in addition to any infraction or misdemeanor penalties. § 5.88.125 Odor control plan.
A. Purpose and Content. Odor control plans are intended to be prepared and designed as performance-based systems for each cannabis business such that cannabis odors are not detected off site. The odor control plan must specifically identify any administrative controls, engineering controls, process parameters, maintenance requirements, and training necessary to control cannabis odor together with detailed information and specifications on odor control equipment incorporated within the plan.
B. Application. A cannabis business shall submit and obtain approval of an odor control plan in a form acceptable to the community development director.
C. Fee. A fee as determined by resolution of the city council to defray the costs and expenses of the city in processing the application shall be paid before accepting the application for filing, no part of which fee shall be refundable to applicant.
D. Decision Process. Upon receipt of a completed application as determined by the community development director, an odor control plan shall be reviewed for its ability to effectively mitigate odors from odor generating sources or adequately explain why odor control is not warranted. The community development director may request revisions or modifications to an odor control plan before rendering a decision to approve an odor control plan or otherwise place conditions of approval on an application.
E. Appeals. Decisions of the community development director may be appealed by the applicant to the planning commission by filing a written request along with the established city fee within ten business days of the date of the staff determination.
The planning commission shall consider the appeal as a public hearing item. The determination of the planning commission shall be effective ten calendar days after the date of decision unless appealed to the city council, by written appeal filed with the city clerk, whose decision shall be final.
F. Annual Certification. A cannabis business shall certify in a form acceptable to the community development director the performance of its odor control plan to the requirements of this Chapter at the time of its annual license renewal. This annual certification shall further confirm the maintenance of any required odor control equipment.
G. Amendments. Amendments to an odor control plan shall demonstrate continued system effectiveness and compliance with this chapter and Chapter 9.108.
Amendments to an odor control plan may be required as a result of corrective action taken by a cannabis business in response to enforcement action as set forth in Chapter 13.80. Amendments to an odor control plan may also be required to reflect operational or facility changes, including:
1. Modifications to odor control equipment, including the addition or deletion of equipment and changes to the type of odor control equipment; and
2. Facility expansions, process changes, tenant improvements, or other activities that alter the generation of cannabis odors.
H. Installation of Odor Control Equipment. For cannabis businesses established after January 22, 2025, all required odor control equipment shall be installed and operational before the commencement of operations. Cannabis businesses established on or before January 22, 2025, must follow the requirements of Section
5.88.055(H) for the installation of any additionally required odor control equipment.
I. Maintenance. All required odor control equipment must be maintained in good working order.
J. Enforcement. Should an odor control plan fail to adequately mitigate cannabis odors to the standards of this section, the cannabis business may be subject to enforcement action for public nuisance cannabis odors as set forth in Chapter
13.80. Failure to comply with, obtain approval of, or maintain an odor control plan as required by this chapter may be subject to enforcement action.
K. Prohibition. Vapor phase and misting systems are not permitted odor control equipment.”
SECTION 5. LEGISLATIVE INTENT
Except as expressly amended by this ordinance, all provisions of the Cathedral City Municipal Code remain in full force and effect. All existing provisions of the Cathedral City Municipal Code that are repeated herein are repeated only to aid decision-makers and the public in understanding the effect of the proposed changes. Restatement of existing provisions does not constitute a new enactment. This ordinance does not amend the transient occupancy tax, impose a new tax, or increase any tax rate. The amendment to Section 5.88.055.H does not waive odor control plan approval, annual certification, equipment maintenance, or applicable public nuisance and odor performance requirements.
SECTION 6. SEVERABILITY
If any section, subsection, sentence, clause, phrase, or portion of this ordinance is held invalid or unconstitutional by a court of competent jurisdiction, that decision shall not affect the validity of the remaining portions. The City Council declares that it would have adopted this ordinance and each of its provisions irrespective of whether any other provision is declared invalid or unconstitutional.
SECTION 7. EFFECTIVE DATE
This ordinance shall take effect 30 days after its adoption.
SECTION 8. POSTING AND CERTIFICATION
The City Clerk shall, within fifteen days after passage of this ordinance, cause it to be posted in at least three designated public places; shall certify to its adoption and posting; and shall cause this ordinance and its certification, together with proof of posting, to be entered in the Book of Ordinances of the City.