DATE:
October 18, 2022
TO:
Mayor and Council Members
FROM:
Nils Bentsen, City Manager
BY:
Pam Lee, City Attorney
SUBJECT:
Repeal of Commercial Cannabis Program
RECOMMENDED ACTION
It is recommended that the City Council review the report and resolution, then consider adopting Resolution No. 2022-75 prohibiting the renewal of any existing cannabis dispensary delivery permits and directing staff to draft ordinances necessary to repeal the commercial cannabis program.
BACKGROUND
The City currently provides for a commercial cannabis program pursuant to Hesperia Municipal Code Chapter 3.18 (Cannabis Business Tax), 5.50 (Business Licenses and Regulations) and Title 16 (Development Code). The program establishes certain limitations on personal cannabis cultivation and prohibits commercial cannabis activities, with the sole exception of medical cannabis delivery operations under state license classification M-9 (Non-Storefront).
Chapter 5.50 provides for review of applications for new delivery dispensary operations. On November 19, 2019, the City Council adopted Urgency Ordinance No. 2019-14 placing a stay on the commercial cannabis program and prohibiting new applications.
On September 20, 2022, the City Council directed staff to bring back items to consider (i) changing the tax rate; and (ii) repealing the commercial cannabis program in its entirety. This report and attached Resolution concern the repeal of the commercial cannabis program.
ISSUES/ANALYSIS
Section 5.50.040(C) provides that delivery dispensary permits shall automatically expire after one year. Section 5.50.040(D) provides that the annual renewal of permits is subject to the same process as new applications. The attached resolution is presented for City Council consideration to prohibit any renewals of existing permits pending the repeal of the commercial cannabis program, and to direct staff to prepare ordinances necessary to repeal the program.
The commercial cannabis program is described in Chapter 3.18, Chapter 5.50, and Title 16. If the attached resolution is adopted staff will prepare ordinances necessary to repeal the commercial cannabis program. The ordinance changing Title 16 will require review and action by the Planning Commission.
Existing dispensaries with valid permits will be allowed to continue operating under their existing permit until the annual permit expires, at which time the permit will not be renewed.
FISCAL IMPACT
Repealing the program will result in a loss of tax revenue from existing businesses, as their permits are not renewed. Moreover, should existing permits not be renewed, on-going expenditures related to administration of the commercial cannabis program will no longer be required to be included in the budget annually.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
Resolution No. 2022-75
01071.0032/825330.1
Page PAGE 2 of NUMPAGES 2
Staff Report to the City Council
Commercial Cannabis Program Update
October 18, 2022
01071.0032/825330.1
City of Hesperia
STAFF REPORT