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1 ORDINANCE NO. ____
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF MERCED, CALIFORNIA, AMENDING
SECTION 20.44.170, "REGULATION OF
COMMERCIAL CANNABIS ACTIVITIES -
COMMERCIAL CANNABIS BUSINESS PERMIT
REQUIRED," OF THE MERCED MUNICIPAL CODE
TO ALLOW CITY COUNCIL CONSIDERATION OF
ALTERNATIVE SITES FOR RETAIL CANNABIS
BUSINESS APPLICATIONS UNDER APPEAL, AND
INCLUDE A LOCAL OWNERSHIP ELEMENT FOR
CANNABIS RETAIL PERMITS ISSUED AFTER
NOVEMBER 3, 2021.
THE CITY COUNCIL OF THE CITY OF MERCED DOES ORDAIN AS
FOLLOWS:
SECTION 1. AMENDMENT TO CODE. Section 20.44.170,
"Regulation of Commercial Cannabis Activities - Commercial Cannabis Permit Required," of the Merced Municipal Code is hereby amended to read as follows:
"20.44.170 -REGULATION OF COMMERCIAL
CANNABIS ACTIVITIES - COMMERCIAL
CANNABIS BUSINESS PERMIT REQUIRED
A. Zoning Compliance and Commercial Cannabis
Business Permit Requirements
Specific commercial cannabis businesses are allowed as a special use in the C-C, C-O, C-G, C-N, C-T, B-P, I-L, and I-H Zoning Districts and Planned Developments which have the equivalent General Plan land use designations of those zones.
Commercial cannabis activities are expressly prohibited in all other zones in the City of Merced. Commercial cannabis
businesses shall apply for and conduct business only in the appropriate zones as described in Table 20.44-1 and the City of Merced's zoning ordinance as a requisite for obtaining a Commercial Cannabis Business Permit (CCBP). No
commercial cannabis business may operate in the City of Merced without a Commercial Cannabis Business Permit.
Attachment 2
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2 1
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1 This Land Use Table 20.44-1 shall be used to determine whether a cannabis business is not permitted - 'X', or permitted - 'P'. Any Commercial Cannabis business in the City of Merced shall also operate in compliance with the City's zoning ordinance. If a Zoning District is not listed in the Land Use Table in this section, then the use is expressly not permitted.
Commercial
Cannabis
Business
Activities Use
Type
City of Merced Municipal Code Table 20.44-1 Additional
Specific Use
Standards
Land Use
Classification [4]
[5]
C-C
Zone
C-O
Zone
C-G
Zone
C-N
Zone
C-
T
Zone
B-P
Zone
I-L
Zone
I-H
Zone
Cultivator Greenhouse, Type
A X X X X X P P P Sec.
20.44.170(i)
Cultivator Greenhouse, Type
B X X X X X P P P Sec.
20.44.170(i)
Cultivator Greenhouse, Type
C X X X X X P P P Sec.
20.44.170(i)
Nursery Greenhouse, Type
D X X X X X P P P Sec.
20.44.170(i)
Manufacturing Manufacturing,
non-volatile X X X X X P P P Sec.
20.44.170(h)
Manufacturing Manufacturing,
volatile X X X X X P P P Sec.
20.44.170(h)
Dispensary [1]
[2]
Pharmaceutical,
medical P P P P P P P X Sec.
20.44.170(f)
Dispensary [1]
[2]
Retail, non-
medical/combined P P P P P P P X Sec.
20.44.170(f)
Testing
Laboratory No Retail P P P X X P P P Sec.
20.44.170(j)
Distribution
[3] Freight/Transport X X P X X P P P Sec.
20.44.170(k)
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2 Footnotes
1. Only five (5) dispensaries shall operate within the
Merced City Limits. At least one (1) of those dispensaries shall also dispense medicinal cannabis goods. If State law allows medical and adult use dispensaries on the same
premises, the City of Merced would allow a combined use, but in no case shall more than five (5) dispensaries of any kind be allowed within the City of Merced at any one
time.
2. Dispensaries (medical or adult use) are prohibited in the City Center area between 19th and 16th Streets and O Street and Martin Luther King Jr. Way, including properties fronting on either side of each of the above streets.
3. Only allowed in General Commercial (C-G) zones if
it meets the provisions of Section 20.44.170 (K)(10).
4. If listed as 'Permitted' in a specific zone above, then that use is also 'Permitted' in Planned Development (P-D) zones that have the equivalent General Plan land use
designation as that zone.
5. No cannabis dispensary may be located within a
1,000-foot radius from a school or within a 600-foot radius from a day care center, youth center, library or public park that is in existence at the time the Application for a
Commercial Cannabis Business Permit is submitted to
the City , as required in Merced Municipal Code Section
20.44.l 70(E)(3)(f). No cultivation facility, manufacturing facility, testing facility or any other commercial cannabis business facility may be located within a 600-foot radius from a school, day care center, youth center, library, or public park that is in existence at the time the
Application for a Commercial Cannabis Business
Permit is submitted to the City , as required in Merced Municipal Code Section 20.44.170(E)(3)(f).
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3 Land Use Classifications:
Greenhouse, Commercial A - Permitted cultivation area: 0 to 5,000 square feet
Greenhouse, Commercial B - Permitted cultivation area: 5,000 to 10,000 square feet
Greenhouse, Commercial C - Permitted cultivation area: 10,000 to 22,000 square feet
Greenhouse, Commercial D - Permitted cultivation area: 22,000 square feet
B. Cultivation of Cannabis for Personal Use in
Residential Zones
1. When authorized by State regulations, an authorized
resident shall be allowed to cultivate cannabis only in a private residence in a residential zone, only indoors, and only for personal use, subject to the following regulations:
a. The cannabis cultivation area shall be located
indoors within a residential structure and shall not exceed fifty square feet and not exceed ten feet in height, nor shall it come within twelve (12) inches of the ceiling or any cultivation lighting, nor shall it exceed the limits set forth in Section
20.44.170(8)(I)(i) below. Cultivation in a greenhouse or other legal accessory structure on the property of the residence, but not physically part of the home, is permitted as long as it is fully enclosed, secure, not visible from a public right-of-way, and meeting all requirements in this Chapter. Additionally, all structures must meet setback, height limitations, and be constructed in accordance with all local requirements as well as all applicable Building Codes.
b. If the resident is not the property owner, they
must have the property owner's express written authorization to conduct cannabis cultivation. Nothing contained herein shall limit the property owners right to deny or revoke permission to allow cannabis cultivation as set forth by State law.
c. The use of gas products such as, but not limited
to CO2, butane, methane, or any other flammable or non- flammable gas for marijuana or cannabis cultivation or
processing is prohibited.
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4 d. There shall be no exterior visibility or evidence of cannabis cultivation outside the private residence from the public right-of-way, including but not limited to any marijuana or cannabis plants, equipment used in the growing and Cultivation operation, and any light emanating from cultivation lighting.
e. The authorized resident shall reside full-time on
the property where the cannabis cultivation occurs.
f. The residence shall include fully functional and
usable kitchen, bathroom, and bedroom areas for their intended use by the resident authorized grower, and the premises shall not be used primarily or exclusively for cannabis cultivation.
g. The cannabis cultivation area shall be in
compliance with the current adopted edition of the California Building Code including§ 1203.4 Natural Ventilation or§ 402.3 Mechanical Ventilation (or equivalent), as amended from time to time.
h. The Building Official may require additional
specific standards to meet the California Building Code and Fire Code, including but not limited to, installation of fire suppression sprinklers.
i. The cannabis cultivation area shall not result in a
nuisance or adversely affect the health, welfare, or safety of the resident or nearby residents by creating dust, glare, heat, noise, noxious gasses, odors, smoke, traffic, vibration, or other impacts, or be hazardous due to use or storage of materials, processes, products or wastes.
j. No more than six (6) cannabis plants, mature or
immature, for personal use, are permitted per
residence for indoor personal cultivation under this Chapter, unless permitted under State regulations.
k. Cannabis in excess of twenty-eight and one- half
(28.5) grams produced by plants kept for indoor personal cultivation under this Chapter must be kept in a locked space on the grounds of the private residence not visible from the public right-of-way.
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5 i. The authorized grower shall not provide any
cannabis in any form to animals or any minors
that are not authorized users under Medical
Marijuana Regulation and Safety Act or the Adult
Use of Marijuana Act. Anyone found in violation
shall be prosecuted pursuant to State regulations.
ii. Outdoor cultivation of cannabis is expressly
prohibited in all zones and districts of the City of
Merced.
C. Definitions
The definitions are incorporated herein as fully set forth and are applicable to this ordinance. All definitions are intended to comply with those set forth by the State of California for all commercial cannabis activities.
1. 'Applicant' means a person who is required to file an application for a permit under this chapter, including an individual owner, managing partner, officer of a corporation, or any other operator, manager, employee, or agent of a
dispensary.
2. 'Cannabis' means all parts of the 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 California Health and Safety Code as enacted by Chapter 14017 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. For the purpose of this chapter, 'cannabis' does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
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6 3. 'Cannabis waste' means waste that is not hazardous waste, as defined in Public Resources Code section 40191, that contains cannabis and that has been made unusable and
unrecognizable in the manner prescribed by the State.
4. 'Canopy' means all of the following:
a. The designated area(s) at a licensed premises
that will contain mature plants at any point in time;
b. Canopy shall be calculated in square feet and
measured using clearly identifiable boundaries of all area(s) that will contain mature plants at any point in time, including all of the space(s) within the boundaries;
c. Canopy may be noncontiguousnoncontiguous, but
each unique area included in the total canopy calculation shall be separated by an identifiable boundary such as an interior wall or by at least 10 feet of open space; and
d. If mature plants are being cultivated using a
shelving system, the surface area of each level shall be included in the total canopy calculation.
5. 'City' means the City of Merced.
6. 'Commercial cannabis business permit (CCBP)' means a permit issued by the City pursuant to this chapter to a commercial cannabis business.
7. 'Commercial cannabis activity' includes the
cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, distribution, delivery, or sale of cannabis or a cannabis product, except as set forth in Section 19319 of the Business and Professions Code, related to
qualifying patients and primary caregivers.
8. 'Commercial vehicle' means a vehicle as defined in
Vehicle Code section 260.
9. 'Concentrated cannabis product' means a
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7 consolidation of cannabinoids made by dissolving
cannabis in its plant form into a solvent.
10. 'Cultivation' means any activity involving the
propagation, planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
11. 'Customer' means a natural person 21 years of age
or over or a natural person 18 years of age or older who possesses a physician's recommendation.
12. 'Day Care Center' means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and school age child care centers as defined in Health and Safety Code Sections 1596.76, 1596.7915, 1576.750, and 1596.78.
13. 'Delivery' means the commercial transfer of cannabis or cannabis products to a customer. 'Delivery' also includes the use by a retailer of any technology platform owned and controlled by the retailer, or independently licensed under this division, that enables customers to arrange for or facilitate the commercial transfer by a licensed retailer of cannabis or cannabis products.
14. 'Delivery employee' means an individual employed by a licensed dispensary who delivers cannabis goods from the permitted dispensary premises to a medical cannabis patient or primary caregiver or qualified purchaser at a physical address.
15. 'Dispensary' means a premises where cannabis,
cannabis products, or devices for the use of cannabis or cannabis products are offered, either individually or in any combination for retail sale, including an establishment that delivers cannabis or cannabis products as part of a retail sale.
16. 'Display' means cannabis goods that are stored in the licensed dispensary's retail area during the hours of operation.
I 7. 'Display case' means container in the licensed
dispensary retail area where cannabis goods are stored and visible to customers.
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8 18. 'Distribution' means the procurement, sale, and
transport of cannabis or cannabis products between entities licensed pursuant to the Medical and Adult Use of Cannabis Regulation and Safety Act and any subsequent State of
California legislation regarding the same.
19. 'Edible cannabis product' means manufactured cannabis that is intended to be used, in whole or in part, for human consumption. An edible cannabis product is not considered food as defined by Section 109935 of the California Health and Safety Code or a drug as defined by Section 109925 of the California Health and Safety Code.
20. 'Fully Enclosed and Secure Structure' means a fully- enclosed space within a building that complies with the California Building Code ('CBSC'), as adopted in the City of Merced, or if exempt from the permit requirements of the CBSC, that has a complete roof, a foundation, slab or equivalent base to which the floor is secured by bolts or similar attachments, is secure against unauthorized entry, is accessible only through one or more lockable doors, and is not visible from a public right-of- way. Walls and roofs must be constructed of solid materials that cannot be easily broken through such as two-inch by four-inch nominal or thicker studs overlaid with three-eighths inch or thicker plywood or the equivalent. Plastic sheeting, regardless of gauge, or similar products do not satisfy this requirement. If indoor lighting or air filtration systems are used, they must comply with the California building, electrical, and fire codes as adopted in the City of Merced.
21. 'Free sample' means any amount of cannabis goods
provided to any person without cost or payment or exchange of any other thing of value.
22. 'Greenhouse' means a facility in which plants are
grown and is inclusive of facilities using solely artificial light and facilities using mixed-light. In order to be lawful and permitted in the City of Merced, a greenhouse must be a 'Fully Enclosed and Secure Structure' as defined above in 20.44.170(C), Subsection 20.
23. 'Indoors' means within a fully enclosed and
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9 secure structure as that structure is defined above in
20.44.170(C), Subsection 20.
24. ‘Labor Peace Agreement’ means an agreement
between a licensee and any bona fide labor organization that, at a minimum, protects the City’s proprietary interests by prohibiting labor organizations and members from
engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant’s business.
This agreement means that the applicant has agreed not to disrupt efforts by the bona fide labor organization to
communicate with, and attempt to organize and represent, the applicant’s employees. The agreement shall provide a bona fide labor organization access at reasonable times to areas in which the applicant’s employees work, for the
purpose of meeting with employees to discuss their right to representation, employment rights under state law, and
terms and conditions of employment. This type of
agreement shall not mandate a particular method of election or certification of the bona fide labor organization.
25. 'License' means a state license issued under this
division and includes both an A-license and an M license, as well as a testing laboratory license.
26. 'Limited-access area' means an area in which
cannabis goods are stored or held and which is only accessible to a licensee and the licensee's employees and contractors.
27. 'Medical' or 'Medicinal' have the same meaning under the terms of this ordinance.
28. 'Medical cannabis goods' means cannabis,
including dried flower, and manufactured cannabis
products.
29. 'Medical cannabis patient' is a person whose physician has recommended the use of cannabis to treat a serious illness, including cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which cannabis provides relief.
30. 'Manufacturer' means a licensee that conducts the
production, preparation, propagation, or compounding of
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10 cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of
chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container.
31. 'Manufacturing' or 'manufacturing operation' means
all aspects of the 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.
32. 'Nonvolatile solvent' means any solvent used in the extraction process that is not a volatile solvent. For purposes of this chapter, a nonvolatile solvent includes carbon dioxide used for extraction, or as it may be defined and amended by the State.
33. 'Operating hours' means the hours within a day during which a permitted retail sales outlet may allow qualified cannabis purchasers and primary caregivers to enter the dispensary premises and purchase cannabis goods.
34. 'Owner' or 'Ownership interest' means an interest
held by a person or entity who is an owner as defined by State of California commercial cannabis regulations or who has a financial interest in the commercial cannabis business of 5% or more. In the event an entity holds a financial interest in the commercial cannabis business of 5% or more, any person who holds a financial interest in said entity of 5% or more is also considered an ' owner' of the commercial cannabis business.
35. 'Package' and 'Packaging' means any container or
wrapper that may be used for enclosing or containing any cannabis goods for final retail sale. 'Package' and
' packaging' does not include a shipping container or outer wrapping used solely for the transport of cannabis goods in bulk quantity to a licensee.
36. 'Patient or qualified patient' shall have the meaning given that term by California Health and Safety Code and
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11 possesses a valid physician's recommendation.
37. 'Person' includes any 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 the plural as well as the singular.
38. 'Pest' means undesired insect, rodent, nematode,
fungus, bird, vertebrate, invertebrate, weed, virus, bacteria, or other microorganism that is injurious to human health.
39. 'Physician's recommendation' means a
recommendation by a physician and surgeon that a patient use cannabis provided in accordance with the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code.
40. 'Premises' means the designated structure(s) and land specified in the application that are in possession of and used by the applicant or licensee to conduct the commercial cannabis activity.
41. 'Pre-roll' means dried cannabis flower rolled in paper prior to retail sale.
42. 'Primary Caregiver' has the same meaning as that term is defined in Section 11362.7 of the Health and Safety Code.
43. 'Private security officer' has the same meaning as that term as defined in the State of California Business and Professions Code section 7574.01.
44. 'Publicly owned land' means any building or real property that is owned by a city, county, state, federal, or other government entity.
45. 'Purchase' means obtaining cannabis goods in
exchange for consideration.
46. 'Purchaser' means a person who is engaged in a
transaction with a licensee for purposes of obtaining cannabis goods.
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12 47. 'Quarantine' means the storage or identification of cannabis goods, to prevent distribution or transfer of the cannabis goods, in a physically separate area clearly identified for such use.
48. 'Retail area' means a building, room, or other area upon the licensed dispensary premises in which cannabis or other goods are sold or displayed.
49. 'School' means those sites upon which full-time
instruction in any of grades K through 12 is provided where the primary purpose is education, as determined in the sole discretion of the City Council, and which are identified as a school on the City's official List of Schools' as provided in Section
20.44.170(E)(3)(f)(i). 'School ' does not include any private site upon which education is primarily conducted in private homes.
50. 'Security monitoring' means the continuous and
uninterrupted attention to potential alarm signals that can be transmitted from a security alarm system for the purpose of summoning law enforcement.
51. 'Selection Panel' means the group consisting of the City Manager, Chief of Police, and Director of Development Services, or their designees, convened for the purpose of evaluating applicants based on the merit based scoring system, and making recommendations to the Planning Commission
with respect to issuance of Commercial Cannabis Business Permits.
52. 'Sell,' 'sale,' and 'to sell' include any transaction whereby, for any consideration, title to cannabis is transferred from one person to another, and includes the delivery of cannabis goods pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of cannabis goods by a licensee to the licensee from whom such cannabis goods were purchased.
53. 'Sublet' means to lease or rent all or part of a
leased or rented property.
54. 'State' means the State of California.
55. 'Testing Laboratory' means a facility, entity, or site
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13 that offers or performs tests of cannabis or cannabis products, and that is accredited as operating to ISO standard 17025 by an accrediting body, and registered with the State Department of Public Health.
56. 'Vehicle alarm system' is a device or series of devices installed to discourage theft of the commercial vehicle or its contents and is intended to summon general attention or to summon law enforcement as a result of an indication of an attempted breach of the commercial vehicle.
57. 'Volatile solvent' means any solvent that is or produces a flammable gas or vapor that, when present in the air in sufficient quantities, will create explosive or ignitable mixtures. Examples of volatile solvents include but are not limited to, butane, hexane, propane, and ethanol, or as it may be defined and amended by the State.
58. 'Wholesale' means the sale of cannabis goods to a
distributor for resale to one or more dispensaries.
59. 'Youth Center' means any public or private facility that is primarily used to host recreational or social a ctivities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club activities, video arcades with over 10 or more video games on the premises, or similar amusement park facilities, or as otherwise described in Health and Safety Code Section 11353.l(e)(2).
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14 D. Compliance with State and Local Licensing
Requirements
Any dispensary, cultivation facility, manufacturing facility, testing facility or any other commercial cannabis activity as defined by the State of California or the City of Merced shall operate in conformance with all regulations and standards set forth in this Section of the Municipal Code to assure that the operations of the dispensary, cultivation facility, manufacturing facility, distribution facility, testing facility or any other commercial cannabis activity as defined by the State of California or allowed by the City of Merced are in compliance with local and State law and are established to mitigate any adverse secondary effects from its operations.
Cannabis operators shall be required to obtain a State license once they become available, and shall comply with any
applicable State licensing requirements, such as operational standards and locational criteria.
Multiple cannabis uses and licenses proposed on any one site shall occur only if authorized by the State and the City of Merced and only if all uses proposed are allowed pursuant to the City's Zoning Code.
E. General Provisions for Commercial Cannabis
Activities in the City of Merced
1. Commercial Cannabis Business Permit Required
a. Each business shall have a Commercial Cannabis
Business Permit specific to the business activity defined by the State pertaining to that activity and whether the activity is medical or non-medical or any other commercial cannabis activity the State may define and as they may be amended.
Following is a list of current license types:
i. Cultivation
ii. Distribution
iii. Manufacturing
iv. Retail sales (Dispensary)
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15 v. Testing
b. It shall be unlawful for any person, association,
partnership, corporation, or other entity to engage in, conduct or carry on, in or upon any premises within the City of Merced, any commercial cannabis business without a Commercial
Cannabis Business Permit. A cannabis business shall register and obtain a Commercial Cannabis Business Permit from the City of Merced prior to operation. The Commercial Cannabis Business Permit applicant shall pay an annual nonrefundable regulatory fee in an amount and at a frequency established by the City Council by resolution.
c. A copy of the Commercial Cannabis Business
Permit shall be displayed at all times in a place visible to the public.
d. A Commercial Cannabis Business Permit shall
be valid for one (1) year or until December 31 of each year, unless sooner revoked. In the event a Commercial Cannabis Business Permit is issued on or after October 1, said permit shall be valid until December 31 of the following calendar year.
No permit granted herein shall confer any vested right to any person or business for more than the above-referenced period.
e. A Commercial Cannabis Business Permit shall not
be issued to an individual or a business entity owned or managed in whole or in part by an individual or a business entity employing an individual who has a previous conviction for or has entered a plea of nolo contendere/no contest to any of the following:
i. A felony offense listed in California Health and
Safety Code Section 11590.
ii. A felony offense listed in California Penal
Code Section 667.S(c).
iii. A felony offense listed in California Penal
Code Sections l 197.2(c) or Section 1192.8.
iv. A felony or misdemeanor offense that
substantially relate to the qualifications,
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16 functions, or duties of the business or
profession.
v. A felony conviction involving fraud, deceit, or
embezzlement.
vi. A felony or misdemeanor offense involving the
sale or giving to a minor of controlled
substances, cannabis, alcohol, or tobacco.
A Commercial Cannabis Business Permit may be issued, at the discretion of the City, to an individual with a conviction listed above provided a period of ten (10) years has elapsed in which the individual has remained free of criminal convictions or violations of parole or probation, and the individual has either obtained a certificate of rehabilitation pursuant to Penal Code Section 4852.01 or received expungement pursuant to California Penal Code Section 1203.4.
f. The Commercial Cannabis Business Permit
shall be issued to the specific person/persons/entity listed on the Cannabis Permit Application.
g. A Commercial Cannabis Business Permit is
not transferable except under the terms of Merced Municipal Code Section 20.44.170(L)(7), and does not run with the land or with the business.
1. Maintenance of Records and Reporting
All records for the commercial cannabis business of the following activities shall be maintained and available to the City of Merced for at least 7 years. Records shall be produced within 24 hours of a request by an authorized City of Merced
representative:
a. The business shall obtain and maintain a valid
Seller's Permit from the State Board of Equalization.
b. Financial records include, but are not limited to:
bank statements, sales invoices, receipts, tax records, and all
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17 records required by the California State Board of Equalization under Title 18 California Code of Regulations Section 1968.
c. Personnel records, including each employee's
full name, address, phone number, social security, or individual tax payertaxpayer identification number, date of beginning employment, and date of termination of employment if
applicable.
d. Training records, including but not limited to the
content of the training provided and the names of the employees that received the training.
e. Contracts with other licensees regarding
commercial cannabis activity.
f. Permits, licenses, and other local
authorizations to conduct the licensee's commercial
cannabis activity, including BOE sellers permit.
g. Security records.
h. Records shall be kept in a manner that allows
the records to be produced for the City in either hard copy or electronic form, whichever the City requests.
i. Proof of building ownership or landlord
letter acknowledging business type.
J. Proof of insurance.
2. Operational Standards for All Commercial
Cannabis Business Activities
a. Interior and exterior locations of the business
property shall be monitored at all times by closed circuit cameras for security purposes. The cameras and recording system shall be of adequate quality, color rendition and resolution to allow the sufficient identification of any individual committing a crime on the location premises.
Cameras shall record 24 hours a day at a minimum of 20
frames per second.
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18 b. The applicant shall conduct and pay for any
required CEQA reviews and analyses, and pay for all costs, including those of the City, associated with project review under CEQA.
c. The surveillance system storage device or
cameras shall be transmission control protocol/TCP capable of being accessed through the internet by the Merced Police Department or their designee on request.
d. All controlled access areas, security rooms and
all points of ingress/egress to limited access areas and all point of sale (POS) areas shall have fixed camera coverage capable of identifying activity occurring within a minimum of twenty (20) feet. Camera video recordings shall be maintained unaltered in a secure location for a period of not less than thirty (30) calendar days, and be available for inspection at any time. The City of Merced or law enforcement may request the recordings in connection with an investigation. If the recordings are not voluntarily provided, the City or law enforcement may seek a warrant or court order for the recordings.
e. All commercial cannabis businesses shall create
and maintain an active account within the State's track and trace system prior to commencing any commercial cannabis activity.
In the event of system failure, the business shall keep a hard copy record and transfer the information to the track and trace system within 24 hours of the system being available.
f. No cannabis dispensary may be located within a
1,000-foot radius from a school or within a 600- foot radius from a day care center, youth center, library or public park that is in existence at the time the Application for a Commercial Cannabis Business Permit is submitted to the City. No cultivation facility, manufacturing facility, testing facility or any other commercial cannabis business facility may be located within a 600-foot radius from a school, day care center, youth center, library, or public park that is in existence at the time the Application for Commercial Cannabis Business Permit is submitted to the City.
For purposes of this subsection only, a public park shall not include any park designated in Merced Municipal Code Section
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19 9.70.030 as a bike path. The distance specified in this section shall be the horizontal distance measured in a straight line from the property line of the sensitive use noted above to the closest property line of the lot on which the commercial cannabis business shall be located without regard to intervening structures.
(i) The City shall establish an official "List of
Schools" which are located within the City of Merced
by resolution of the City Council after a public
hearing. Said list shall be reviewed on an annual basis on or before January 31st of each year, and/or whenever a commercial cannabis business permit for a dispensary
becomes available. If amendments are needed, the
amendments shall be considered by the City Council at a public hearing.
g. No physical modification of the permitted
premises is allowed without written prior permission by the City of Merced and payment of any additional fees required by the City.
h. All commercial cannabis activities shall provide
adequate off-street parking and comply with the City of Merced Municipal Code requirements in Chapter 20.38
Parking and Loading, to service customers without causing negative impact.
i. The commercial cannabis business shall
provide adequate handicapped parking per the
requirements in the California Building Code.
J. The commercial cannabis business shall provide
adequate interior and exterior lighting for safety and security as determined by the Police Chief or designee.
k. The commercial cannabis business shall
minimize nuisances such as trash, litter, and graffiti.
1. Any and all signage, packaging, and facilities
shall not be 'attractive', as it is defined by the State, to minors.
m. All commercial cannabis facilities shall be
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20 required to provide an air treatment system that ensures off- site odors shall not result from its operations. This
requirement at a minimum means that the facility shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location is not detected outside the building, on adjacent properties or public rights-of-way, or within any other unit located within the same building as the facility if the use occupies only a portion of a building. The air treatment system must also prevent the build-up of mold within the facility.
n. A permitted commercial cannabis business entity
shall have 180 days after permit issuance by the City of Merced to begin initial operations, unless otherwise approved by the Development Services Director or designee. A permitted
commercial cannabis business entity that remains inoperative for more than 60 calendar days after initial operations begin shall be deemed 'abandoned' and the permit shall be forfeited. A business may temporarily suspend operations for a period of time as may be reasonably required to affect upgrades,
modifications, repairs, or other property issue mitigations as approved by the Development Services Director or designee.
o. The cannabis business shall comply with all State
and City of Merced regulations regarding testing, labeling and storage of all cannabis products.
p. The cannabis business shall meet all State and
local regulations for the disposal of all cannabis materials and materials used in conjunction with processing, distributing and cultivating of cannabis as well as any unsold cannabis or cannabis products.
q. The cannabis business shall conform to all
State regulations regarding the use of appropriate weighing devices.
r. The cannabis business shall conform to all State
and local regulations regarding water usage. No liquids of any kind shall be discharged into a public or private sewage or drainage system, watercourse, body of water or into the ground, except in compliance with applicable regulations of the California Regional Water Quality Control Board (California
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21 Administrative Code, Title 23, Chapter 3).
s. The cannabis businesses' electrical and plumbing
shall comply with State and local regulations.
t. The cannabis business shall maintain a
comprehensive general liability combined single occurrence insurance policy issued by an 'A' rated insurance carrier in an amount no less than two million dollars and naming the City of Merced as additional insured.
u. No free samples of any cannabis or cannabis
product may be distributed at any time.
v. All agents, private security officers or other
persons acting for or employed by a licensee shall display a laminated identification badge at least 2" X 2" in size, issued by the licensee. The badge, at a minimum, shall include the licensee's 'doing business as' name and license number, the employees first and last name, and a color photo of the employee that shows the full front of the employee’s face.
w. The commercial cannabis business shall have a
centrally monitored fire and burglar alarm system which shall include all perimeter entry points and perimeter windows.
x. A licensee shall ensure a licensed alarm
company operator or one or more of its registered alarm agents installs, maintains, monitors, and responds to the alarm system.
The alarm company shall obtain a City of Merced business license.
y. Meet all State deadlines for applying for a State
license and receive a State license within six (6) months after the date the State begins issuing licenses. This may be waived if the State has longer delays in issuing licenses of the type the commercial cannabis business seeks. The permittee must inform the City in writing within 10 days of receipt of a State license.
Said notification shall be addressed to the Director of Development Services or designee at 678 W. 18th St., Merced, CA 95340.
z. All persons hiring employees to engage in
commercial cannabis activities shall document compliance with
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22 the following employee safety practices:
i. Emergency action response planning as
necessary
ii. Employee accident reporting and
investigation policies
iii. Fire prevention
iv. Hazard communication policies, including
maintenance of material safety data sheets
v. Materials storage and handling policies
vi. Personal protective equipment policies
vii. Operation manager contacts
viii. Emergency responder contacts
ix. Poison control contacts
aa. All persons with ownership interest; and all
employees agents, officers or other persons acting for or employed by a permittee must be at least 21 (twenty-one) years of age.
F. Additional Regulations for Dispensary and Retail
Sales of Cannabis
1. Only five (5) dispensaries shall operate within the
Merced City Limits, regardless of the location's compliance with any other Section specified in this ordinance. At least one (1) of those dispensaries shall also dispense medicinal cannabis goods. If State law allows medical and adult use dispensaries on the same premises, the City of Merced would allow a
combined use, but in no case shall more than five (5)
dispensaries of any kind be allowed within the City of
Merced.
2. No retail cannabis facility may engage in check
cashing activities at any time.
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23 3. Only one dispensary permit per person with ownership interest is allowed in the City of Merced. Any person with community property rights of an ownership interest is
considered a person with ownership interest in this section.
4. Restrooms shall remain locked during business
hours and not open to the public.
5. The total number of dispensaries in operation shall be determined based on the number of locations which have been issued a Commercial Cannabis Business Permit for a
dispensary by the City.
6. Display of cannabis products shall be limited to only an amount necessary to provide a visual sample for
customers.
7. At all times, when the cannabis dispensary is open to the public, the dispensary shall provide at least one security guard who is registered with Bureau of Security and
Investigative Services, and possesses a valid and current security guard registration card on their person while on-duty.
8. Security guards are permitted, but not mandated, to
carry firearms.
9. All cannabis products available for sale shall be
securely locked and stored
10. The security guard and cannabis dispensary personnel shall monitor the site and the immediate vicinity of the site to ensure that patrons immediately leave the site and do not consume cannabis in the vicinity of the dispensary or on the property or in the parking lot.
11. Medical Cannabis Dispensaries shall maintain the full name, address, and telephone number(s) of all patient
members to whom the business provides medical cannabis, and a copy of a physician-issued recommendation card or State-issued card for all patient members.
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24 12. Dispensaries shall also record on the video
survei11ance system point-of-sale areas and areas where cannabis goods are displayed for sale.
13. Any commercial cannabis retail or medical retail sales facility shall be open to the public a minimum of 40 hours per week, unless otherwise specified in the Commercial Cannabis Business Permit.
14. Hours of operation in Commercial Office (C-O) zones shall be limited to no earlier than 8 a.m. Pacific Time and no later than 7 p.m. Pacific Time. Hours of operation in all other zones shall be limited to no earlier than 8 a.m. Pacific Time and no later than 10 p.m. Pacific Time, unless zoning
regulations specify more restrictive hours.
15. Exterior signage shall be limited to one wall sign not to exceed twenty (20) square feet in area. Interior signage or advertising may not be visible from the exterior. No
temporary signs (banners, A-frames, etc.) or window signs are allowed.
16. On-site consumption of cannabis or cannabis products is specifically prohibited on the premises at all times. The following information shall be provided on a sign posted in a conspicuous location inside the cannabis dispensary:
'Smoking, ingesting or consuming cannabis on this property or within 100 feet of the business is prohibited.'
17. An adult use license shall not sell cannabis products to persons under 21 years of age or allow any person under 21 years of age on its premises, unless such licensee a1so holds a medicinal license and the licensee holds a CCBP for both adult use and medicinal cannabis. A medicinal licensee may sell cannabis products to and allow on the premises, any person 18 years of age or older who possesses a valid government issued identification card, and either a valid county-issued
identification card under Section 11362.712 of the Health and Safety Code or a valid physician's recommendation for himself or herself or for a person for whom he or she is a primary caregiver.
.
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25 18. Adequate signage shall clearly state that the City of Merced has not tested or inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location.
19. No recommendations from a doctor for medical
cannabis shall be issued on-site.
20. Shipments of cannabis goods may only be
accepted during regular business hours.
21. There shall be no on-site sales of alcohol or tobacco products, and no on-site consumption of food, alcohol, or tobacco by patrons.
22. Inventory shall be secured and locked in a room, safe, or vault, and in a manner reasonably designed to prevent diversion, theft, and loss during non-business hours.
23. No cannabis product shall be visible from the exterior of the business.
24. All required labelling shall be maintained on all
product, as required by State regulations, at all times.
24.25. The business shall post signs that spell out the 'Prohibited Conduct Involving Marijuana and Marijuana Products' contained in Health and Safety Code Section 11362.3 in a conspicuous manner on the business premises for the education of patrons. The City shal1 develop a standard format and content for such signs.
25.26. The use of vending machines (i.e., a machine that dispenses articles when a coin, bill, or token is inserted) to dispense cannabis is strictly prohibited.
26.27. No drive-through facilities shall be allowed, and no cannabis shall be sold through a drive-through facility.
G. Additional Regulations for Commercial
Cannabis Delivery Services
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26 1 . Commercial cannabis deliveries may be made only from a commercial cannabis dispensary permitted by the City in compliance with this ordinance, and in compliance with all State regulations.
2. All employees who deliver cannabis shall have valid
identification and a copy of the dispensary's Commercial Cannabis Business Permit at all times while making deliveries.
3. All commercial cannabis businesses shall provide proof of insurance in a minimum amount of $1,000,000 for any and all vehicles being used to transport cannabis goods.
4. Deliveries may only take place during the hours of 8:00 a.m. and 7:00 p.m. daily.
5. A customer requesting delivery shall maintain a
physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers, only as required by State regulations.
6. The following applies to all deliveries of cannabis
products:
a. May only be made to a physical address in
California; and
b. A licensed delivery employee shall not leave the
State of California while possessing cannabis products.
7. A dispensary shall maintain a list of all deliveries, including the address delivered to, the amount and type of product delivered, and any other information and for the duration of time required by State regulations.
8. A cannabis business shall only deliver cannabis in
aggregate amounts as ordered by the customer. A cannabis business shall ensure compliance with State delivery limits as they regard the amount of cannabis and cannabis products.
9. A manifest with all information required in this
section shall accompany any delivery person at all times
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27 during the delivery process and delivery hours.
10. Any delivery method shall be made in compliance
with State regulations and as it may be amended, including use of a vehicle that has a dedicated GPS device for
identifying the location of the vehicle (cell phones and tablets are not sufficient).
11. The maximum limit of any cannabis goods carried by
the delivery vehicle may not exceed $3,000 at any time.
12. Each delivery request shall have a receipt prepared by the dispensary with the following information:
a. Name and address of the licensed
dispensary;
b. The name of the employee who delivered
the order;
c. The date and time the delivery request was
made;
d. The complete delivery address;
e. A detailed description of the cannabis goods
requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested;
f. The total amount paid for the delivery
including any fees or taxes; and
g. At the time of the delivery, the date and time
delivery was made, and the signature of the person who
received the delivery.
13. The delivery business shall provide a flyer that spells out the 'Prohibited Conduct Involving Marijuana and
Marijuana Products' contained in Health and Safety Code Section 11362.3 to all delivery customers. The City shall
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28 develop a standard format and content for such flyers.
H. Additional Requirements for Manufactured
Cannabis Businesses
1. A licensed cannabis manufacturing facility may
conduct all activities permitted by the State. This includes, but is not limited to, volatile and non-volatile extractions, repackaging and relabeling, and infusions.
2. Any manufacturing activity that will be conducted by the licensee shall be included on the application. No additional manufacturing activity can be conducted without applying for and receiving written permission from the City of Merced for that additional activity.
3. At all times, the cannabis manufacturing facility will be compliant with all State regulations for cannabis
manufacturing including Health and Safety Code 11362.775 and as it may be amended.
4. Inspections by the City Fire Chief or designee may be conducted anytime during the business’ regular business hours.
5. Cannabis manufacturing facilities shall not contain an exhibition or product sales area or allow for retail distribution of products at that location.
6. All cannabis manufacturing activities shall occur
indoors within a fully enclosed and secured structure and also within a secure fence at least eight (8) feet in height that fully encloses the premises. The fence must include a lockable gate(s) that is locked at all times, except for during times of active ingress/egress. Said fence shall not violate any other ordinance, code section, or provision of law regarding the height, location, materials, or other fencing restrictions and shall not be constructed or covered with plastic or cloth. All screening shall conform to the requirements of applicable area, community, specific and design plans. Notwithstanding the
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29 foregoing fencing requirements, the Director of Development Services shall have the discretion to grant an exception in the event fencing which fully encloses the premises is impossible or impractical, and there are other appropriate security measures in place on the premises. Outdoor manufacturing of cannabis is expressly prohibited.
I. Additional Requirements for Cannabis
Cultivation Businesses
1. The cannabis business shall register with the
Department of Pesticide Regulation if using any pesticides.
2. From a public right-of-way, there shall be no
exterior evidence of marijuana cultivation.
3. The Building Official may require additional specific standards to meet the California Building Code and Fire Code, including but not limited to installation of fire suppression sprinklers.
4. Compliance with Section 13149 of Water Code as
enforced by the State Water Resources Control Board.
5. All outdoor lighting used for security purposes shall be shielded and downward facing.
6. The use of generators for cultivation is prohibited, except for temporary use in the event of a power outage or emergency.
7. Cannabis plants shall not be visible from offsite or the public right-of-way. All cannabis cultivation activities shall occur within a fully enclosed and secured structure and within a secure fence at least eight (8) feet in height that fully encloses the premises. The fence must include a lockable gate(s) that is locked at all times, except for during times of active
ingress/egress. Said fence shall not violate any other ordinance, code Section, or provision of law regarding the height, location, materials, or other fencing restrictions and shall not be constructed or covered with plastic or cloth. All screening shall conform to the requirements of applicable area, community,
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30 specific and design plans. Notwithstanding the foregoing fencing requirements, the Director of Development Services shall have the discretion to grant an exception in the event fencing which fully encloses the premises is impossible or impractical, and there are other appropriate security measures in place on the premises.
Outdoor cultivation of cannabis is expressly prohibited.
J. Additional Requirements for Cannabis Testing
Laboratory Businesses
1. A licensed cannabis testing facility shall comply with all State regulations.
2. Any cannabis testing facility shall maintain all
certifications required by the State.
3. A licensed cannabis testing facility business, its owners and employees may not hold an interest in any other cannabis business except another testing business.
4. Inspections by the City Fire Chief or designee may be conducted anytime during the business's regular business hours.
K. Additional Requirements for Cannabis
Distribution Businesses
1. A licensed cannabis distribution facility shall
comply with all State regulations.
2. Any cannabis distribution facility shall provide proof of a bond of at least five thousand dollars to cover the costs of destruction of cannabis or cannabis products if necessitated by a violation of licensing requirements.
3. Inspections by the City Police Chief or designee may be conducted anytime during the business's regular business hours.
4. A distributor shall ensure that all cannabis goods
batches are stored separately and distinctly from other cannabis goods batches on the distributor's premises.
5. A distributor shall ensure a label with the following information is physically attached to each container of
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31 each batch:
a. The manufacturer or cultivator's name and
license number;
b. The date of entry into the distributor's
storage area;
c. The unique identifiers and batch number
associated with the batch;
d. A description of the cannabis goods with
enough detail to easily identify the batch; and
e. The weight of or quantity of units in the batch.
6. A distributor shall store harvest batches and edible cannabis products that require refrigeration at 35 to 42 degrees Fahrenheit. In addition, a distributor shall store harvest batches in a darkened area with no more than 60% humidity.
7. A distributor shall store medical cannabis goods in a building designed to permit control of temperature and humidity and shall prevent the entry of environmental contaminants such as smoke and dust. The area in which medical cannabis goods are stored shall not be exposed to direct sunlight. A distributor may not store medical cannabis goods outdoors.
8. Employee breakrooms, eating areas, changing facilities, and bathrooms shall be completely separated from the storage areas.
9. All cannabis distribution activities shall occur within a fully enclosed and secured structure and within a secure fence at least eight (8) feet in height that fully encloses the distribution area. The fence must include a lockable gate(s) that is locked at all times, except for during times of active ingress/egress. Said fence shall not violate any other ordinance, code Section, or provision of law regarding the height, location, materials, or other fencing restrictions and shall not be constructed or covered with plastic or cloth. All screening shall conform to the requirements of applicable area, community, specific and design
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32 plans. Notwithstanding the foregoing fencing requirements, the Director of Development Services shall have the discretion to grant an exception in the event fencing which fully encloses the premises is impossible or impractical, and there are other appropriate security measures in place on the premises.
10. If located in a General Commercial (C-G) zone,
a. The cannabis distribution business shall be
located on a parcel no less than 20,000 square feet in size; and
b. All loading and unloading activities shall take
place within the secured fenced area required above.
L. Commercial Cannabis Business Permit
Selection Process
1. Selection Process for Dispensaries/Retail Sales
(Limited Number of Permits Available)
a. The Commercial Cannabis Business Permit
selection process will be conducted in two phases, Phase 1, and Phase 2. In Phase 1, each Applicant interested in operating a commercial cannabis business will pay an application fee in an amount established by the City Council by resolution. The application will be reviewed for completeness by the Director of Development Services or designee.
b. A pre-application conference with the Director of
Development Services is strongly encouraged. A pre-application conference can be scheduled by calling 209-385-6858 during regular City of Merced business hours.
c. The City of Merced has established a merit-based
scoring system to objectively award permits as described in the application documents in Phase 2 to be used in the event that there are more applications than there are Commercial Cannabis Business Permits for a specific license type, such as for retail dispensaries.
d. The initial application period shall be 21 calendar
days from the date the applications are released. Should the 21st day fall on a day when City Hall is closed, the application
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33 period shall be extended to the next open day at 4:00 p.m.
Following the application period, the Director of Development Services or designee shall stop accepting applications and review all applications received as described in Phase I. The Director of Development Services or designee will evaluate the applications received and determine the eligibility of each application. Each application that is complete and in
compliance with the application requirements in Phase 1 shall be placed on the 'Qualified Commercial Cannabis Business Application List Dispensaries/Retail Sales' and shall be notified in writing that they are a 'Qualified Commercial Cannabis Business Applicant- Dispensaries/Retail Sales'. The qualified applicants will be entered into the Phase 2 review process.
e. If any of the items listed in the application process are not met, the Director of Development Services shall notify the applicant of the deficiency within thirty (30) calendar days, after which the applicant will have 10 calendar days from receipt of notice to correct the deficiency or to amend or supplement the information that addresses the Merit-Based Selection Criteria (to be done solely at the applicant’s discretion as City staff will not be responsible for pointing out any deficiencies in the materials that address the Merit-Based Selection Criteria). Should the 10th day fall on a day when City Hall is closed, the correction period shall be extended to the next open day at 4:00 p.m. If the deficiency is not corrected within 10 calendar days, the Director of Development Services may deny the permit and notify the applicant of this determination in writing within 10 calendar days following the Director of Development Services decision.
f. Commercial Cannabis Business Permit -
Dispensaries/Retail Sales Selection - Phase 1 - Initial Review.
The Director of Development Services or designee(s) shall determine whether each application demonstrates compliance with the minimum requirements and be placed on the
'Qualified Applicant List for Dispensaries/Retail Sales' and entered into the Phase 2 review process. These requirements include but are not limited to:
i. All Application documents required in the
City's Phase 1 application package;
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34 ii. Application was submitted during the
application period.
iii. Application forms are filled out completely;
iv. Business Owner(s)/ Applicant(s) referenced
on the application provide a Live Scan that
was conducted within 14 days prior to submitting
the application;
v. Phase 1 application fee is paid; and
vi. A signed statement that the proposed
location of the commercial cannabis
business on the application meets the zoning
criteria established in this ordinance including,
but not limited to, any and all sensitive use
separation criteria required by this ordinance.
vii. It is the applicant’s responsibility to
include and to clearly label (with the
specific section number and letter of the
selection criteria) in the application any
information that addresses the Merit-
Based Scoring System Selection Criteria
most recently adopted by City Council
Resolution. City staff will not evaluate
this information or point out any
deficiencies in this area of the application
in this initial completeness phase.
g. Commercial Cannabis Business Permit-
Dispensaries/Retail Sales Selection - Phase 2 - Final
Review and Scoring.
Phase 2 requirements include, but are not limited to:
i. Phase 2 application fee is paid and a
comprehensive background check of any person
or entity holding an ownership interest of 5% or
more, is completed to the satisfaction of the
Chief of Police. Upon completion of the
comprehensive background check, the Chief of
Police shall have the discretion to disqualify an
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35 applicant if any of the following are discovered:
a. Any civil judgment(s) against any
owner for torts involving dishonesty,
including, but not limited to, fraud,
embezzlement, theft, and breach of
fiduciary duties;
b. Any outstanding liens and/or
judgments against any owner for unpaid
state, federal, or local taxes; or
c. Any material misrepresentation made by
the applicant in the application for a
Commercial Cannabis Business Permit.
In the event an applicant is disqualified by the Chief of Police as provided herein, the applicant shall be given written notice of the disqualification within (10) ten days of such decision.
Thereafter, the application will be removed from the Phase 2 process. The decision of the Chief of Police shall be final and there shall be no further right to appeal said decision.
ii. The Building Official or designee has inspected
all structures in which the use is located to
determine that all applicable standards and
requirements are met. If a building permit is
required for site improvements, Permit issuance
will be deferred until a certificate of occupancy
or other building permit approval is issued.
Additionally, the Building Official has
determined that there are no notices of nuisance
or other code compliance issues recorded or on
the property.
iii. The Zoning Administrator or designee has issued a Provisional Zoning Clearance documenting
compliance with the following:
a. The use is permitted in the Zoning
District;
b. The location of the cannabis business meets
the distance requirements from sensitive uses;
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36 c. All land use permits, if any, have been
approved and all conditions of approval have
been met or are in good standing;
d. No zoning violations exist on the
property;
e. A planning and/or building permit with a
receipt proving payment for processing from the
City of Merced Planning Department for the
property location the commercial cannabis
business will occupy; and
f. The Provisional Zoning Clearance
shall be subject to final approval by the
Planning Commission.
iv. The Director of Development Services or designee,
after reviewing the applications approved in Phase
1 and the aforementioned information, will convene
a Selection Panel composed of the City Manager,
Chief of Police, and the Director of Development
Services, or their designees. The Selection Panel
will review all application documents required in
the City's Phase 1 application package plus an
additional background check of all owners
conducted to the satisfaction of the Chief of
Police, and individually score each application in
accordance with the merit basedmerit-based
scoring system established by Resolution of the
City Council. A complete description of the
merit-based system and all merit-based
considerations shall be included with the
application forms. An average score for each
applicant based upon the merit-based scoring of
the Selection Panel shall be calculated and the
applications shall be ranked from highest to
lowest in accordance with the average score. The
Director of Development Services may correct any
clerical or mathematical errors in the calculation of
the average score and the rankings within 10 days
of the rankings being released or the rankings
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37 being re-released upon the availability of a permit .
The applications, in order of ranking, shall then be
placed on the Qualified Commercial Cannabis
Business Application List-Dispensaries/Retail
Sales in the order of ranking. The Selection Panel
will recommend the highest ranked applicant(s)
on the Qualified Commercial Cannabis Business
Application List Dispensaries/Retail to the
Planning Commission for the issuance of a
Commercial Cannabis Business Permit -
Dispensaries/Retail Sales. The number of
applicants recommended to the Planning
Commission by the Selection Panel shall be the
same number of Commercial Cannabis Business
Permits - Dispensaries/Retail Sales then
available. Any element of an application that
provided a successful applicant with points on
the merit-based scoring system is subject to
review and inspection by the City, which may
include self-certification by the licensed
business, on-site inspection, or other methods of
enforcement.
a. The Qualified Commercial Cannabis
Business Application List-Dispensaries/Retail
established on September 20, 20182019, shall
have no further force and effect after September
20, 20192019, and the City shall have no further
obligations to applicants on said list. The
Qualified Commercial Cannabis Business
Application List-Dispensaries/Retail approved
on August 19, 2022, shall be subject to the
timelines established in MMC
20.44.170(L)(1)(g)(iv)(c).
b. Should a Commercial Cannabis
Business Permit-Dispensaries/Retail become
available after September 20, 2019, whether by
creation of a new permit or by vacancy of an
existing permit, then a new application period
shall be opened as provided in Section
20.44.170(L)(l).
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38 c. The Qualified Commercial Cannabis
Business Application List-Dispensaries/Retail
shall be valid for a period not to exceed one year
from the date the last available Commercial
Cannabis Business Permit Dispensaries/Retail is
issued by the Planning Commission or issued by
the City Council on appeal becomes operational and
opens for business to the public. . The City shall
have no further obligations to applicants on the
Qualified Commercial Cannabis Business
Application List-Dispensaries/Retail after one year
has elapsed since the last available Commercial
Cannabis Business Permit was issued became
.operational.
c.d. d) If a business with an approved retail
permit fails to become operational within the
time required by (look at MMC 20.44 170
(L)(1)(g)(iv)(c)), and after confirmation by the
Development Services Director, of the
previously-determined average scores and
rankings of the remaining applicants by the
Selection Panel, the top-ranked business on the
Qualified Commercial Cannabis Business
Application List-Dispensaries/Retail will be
considered for the available permit by the
Planning Commission. The considered business
must undergo updated Phase 2 screening prior to
public hearings.
h. Commercial Cannabis Business Permit- Dispensaries/Retail Sales Selection - Phase 2 – Planning Commission
The Planning Commission will review the Commercial Cannabis Business Permit- Dispensaries/Retail Sales application(s) recommended by the Selection Panel as provided herein, and all other relevant information, and determine if a CCBP should be granted, granted with conditions, denied, or modified. Prior to issuing a Commercial Cannabis Business Permit
Dispensaries/Retail Sales, the Planning Commission will provide all public notices and conduct a public hearing as described in the City of Merced Municipal Code Section 20.70.010 through
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39 Sections 20.70.040. No Commercial C annabis Business Permit- Dispensaries/Retails Sales shall be issued otherwise.
2. Selection Process for All Other Commercial Cannabis
Business Permits (No Limits On the Number of Permits
Available)
a. The Commercial Cannabis Business Permit- All
Other Cannabis Businesses selection process will be conducted in two phases, Phase 1 and Phase 2. In Phase 1, each Applicant interested in operating a commercial cannabis business will pay an application fee in an amount established by the City Council by resolution. The application will be reviewed for completeness by the Director of Development Services or designee.
b. A pre-application conference with the
Director of Development Services is strongly
encouraged. A pre-application conference can be
scheduled by calling 209-385-6858 during regular City of Merced business hours.
c. The initial application period shall be 21
calendar days from the date the applications are released.
Should the 21st day fall on a day when City Hall is closed, the application period shall be extended to the next open day at 4:00 p.m. Following the application period, the Director of Development Services or designee shall stop accepting
applications and review all applications received as
described in Phase 1. The Director of Development Services or designee will evaluate the applications received and determine the eligibility of each application. Each
application that is complete and in compliance with the application requirements in Phase 1 shall be placed on the 'Qualified Commercial Cannabis Business Application List- All Other Cannabis Businesses' and shall be notified in writing that they are a 'Qualified Commercial Cannabis
Business Applicant-All Other Cannabis Businesses'. The
qualified applicants will be entered into the Phase 2 review process. The Director of Development Services shall
maintain the 'Qualified Application List for All Other
Cannabis Businesses'.
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40 d. If any of the items listed in the application
process are not met, the Director of Development Services shall notify the applicant of the deficiency within thirty (30) calendar days, after which the applicant will have 10
calendar days from receipt of notice to correct the
deficiency. Should the 10th day fall on a day when City Hall is closed, the correction period shall be extended to the next open day at 4:00 p.m. If the deficiency is not corrected within 10 calendar days, the Director of Development
Services may deny the permit and notify the applicant of this determination in writing within 10 calendar days
following the Director of Development Services’ decision. A new application, with new fees, would then be required for any subsequent consideration of that same or similar proposal at the same location.
e. Commercial Cannabis Business Permit-All Other
Cannabis Businesses Selection - Phase I - Initial Review
The Director of Development Services or designee(s) shall determine whether each application demonstrates compliance with the minimum requirements and be placed on the 'Qualified Applicant List for All Other Cannabis Businesses' and entered into the Phase 2 review process. These requirements include, but are not limited to:
i. All Application documents required in the
City's Phase 1 application package;
ii. Application was submitted during the
application period;
iii. Application forms are filled out completely;
iv. Business Owner(s)/Applicant(s) referenced on the
application provide a Live Scan that was conducted
within 14 days prior to submitting the application;
v. Phase 1 application fee is paid; and
vi. A signed statement that the proposed
location of the commercial cannabis
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41 business on the application meets the zoning
criteria established in this ordinance including, but
not limited to, any and all sensitive use separation
criteria required by this ordinance.
f. Commercial Cannabis Business Permit - All
Other Cannabis Businesses Selection - Phase 2 - Final Review
Phase 2 requirements include, but are not limited to:
i. Phase 2 application fee is paid and a
comprehensive background check of any person or
entity holding an ownership interest of 5% or
more, is completed to the satisfaction of the Chief
of Police. Upon completion of the comprehensive
background check, the Chief of Police shall have
the discretion to disqualify an applicant if any of
the following are discovered:
a. Any civil judgment(s) against any owner
for torts involving dishonesty, including, but not
limited to, fraud, embezzlement, theft, and breach
of fiduciary duties;
b. Any outstanding liens and/or
judgments against any owner for unpaid state,
federal, or local taxes; or
c. Any material misrepresentation by the
applicant in the application for a Commercial
Cannabis Business Permit.
In the event an applicant is disqualified by the
Chief of Police as provided herein, the applicant
shall be given written notice of the disqualification
within ten (10) days of such decision. Thereafter,
the application will be removed from the Phase 2
process. The decision of the Chief of Police shall
be final and there shall be no further right to
appeal said decision.
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42 ii. The Building Official or designee has inspected all structures in which the use is located to
determine that all applicable standards and
requirements are met. If a building permit is
required for site improvements, Permit issuance
will be deferred until a certificate of occupancy
or other building permit approval is issued.
Additionally, the Building Official has
determined that there are no notices of nuisance
or other code compliance issues recorded or on
the property.
iii. The Zoning Administrator or designee has issued
a Provisional Zoning Clearance documenting
compliance with the following:
a. The use is permitted in the Zoning
District;
b. The use meets the distance
requirements from sensitive uses;
c. All land use permits, if any, have been
approved and all conditions of approval have
been met or are in good standing;
d. No zoning violations exist on the
property;
e. A planning and/or building permit with a
receipt proving payment for processing from the
City of Merced Planning Department for the
property location the commercial cannabis
business will occupy; and
f. The Provisional Zoning Clearance
shall be subject to final approval by the
Planning Commission.
iv. The Director of Development Services or
designee, after reviewing the applications
approved in Phase I and reviewing the
foregoing information will make a
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43 recommendation to the Planning
Commission to approve or reject the
application for the Commercial Cannabis
Business Permit for All Other Cannabis
Businesses.
g. Commercial Cannabis Business Permit-All Other
Cannabis Businesses Selection - Phase 2 - Planning Commission
The Planning Commission will review the Commercial Cannabis Business applications for All Other Cannabis Businesses recommended by the Director of Development Services and all other relevant information and determine if a CCBP should be granted, granted with conditions, denied, or modified. Prior to issuing a Commercial Cannabis Business Permit for All Other Cannabis Businesses, the Planning Commission will provide all public notices and conduct a public hearing as described in the City of Merced Municipal Code Section 20.70.010 through Sections 20.70.040. No Commercial Cannabis Business Permit shall be issued otherwise.
3. Minor Modifications to Pending Application for
Commercial Cannabis Business Permit (All Types).
a. Applicants may make a written request to the
Director of Development Services for a minor modification to a Commercial Cannabis Business Permit application at any point in the application process.
b. The Director of Development Services shall have
the discretion to approve minor modifications to the application.
Minor modifications to an application include, but are not limited to, the following:
i. A change to the name of the proposed
business and/or entity;
ii. A change in the organizational
structure of a proposed business;
iii. A change of owner or ownership interest,
provided that any change in ownership
affecting a financial interest of 5% or
more shall require a new and separate
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44 background investigation, payment of
fees for the costs for investigation, and
must m e e t the requirements of Section
20.44.170(E)( 1)(e);
iv. A change in building elevations, floor plans,
or site plans;
v. A change in operational procedures or
security plans or procedures;
vi. Modifications to the parcel upon which
the proposed Commercial Cannabis
Business will be located, provided that the
modifications do not otherwise render the
parcel nonconforming to the underlying
zoning district standards.
c. The Director of Development Services will review
any proposed modifications to the application and shall provide a written determination within thirty (30) days from the day the written request is received by the City. The decision of the Director of Development Services shall be final and there shall be no further right to appeal.
4. Appeal or Approval of Denial of Commercial
Cannabis Business Permit (All Types)
The Planning Commission will review the Commercial
Cannabis Business applications and all other relevant
information, and determine if a CCBP should be granted, as provided in Sections 20.44. l 70(L)(l)(h) and
20.44.170(L)(2)(g) herein. If the Planning Commission
determines that the permit shall not be granted, the reasons for denial shall be provided in writing to the applicant. Any decision of the Planning Commission may be appealed to the City Council.
a. A written appeal shall be filed within five
(5) business days (excluding official City holidays)
following a Planning Commission decision.
b. When an appeal has been filed, the matter shall be scheduled for a public hearing before the City Council. The public hearing should be heard
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45 within ninety (90) calendar days of receiving the appeal, unless otherwise mutually agreed to by the applicant and appellant or continued pursuant to
20.44.170(L)(4)(d).
c. Notice of the hearing of the appeal shall be
provided to the applicant at least ten (10) calendar days prior to the public hearing.
d. Any interested person may appear and be
heard regarding the appeal.
e. A matter being heard on appeal may be
continued for good cause.
f. The City Council's review shall be a de novo
review. At the conclusion of the hearing, the City Council will make its own determination to grant, deny, modify, or hold in abeyance per MMC 20.44.170(L)(4)(g) the permit. The decision of the City Council shall be the City's final decision in this regard and shall be dispositive of the matter subject to judicial review under the provisions of California Code of Civil Procedure Sections 1094.5 and 1094.6.
g. If the City Council wishes to consider a change in
location for a retail cannabis dispensary permit under appeal based on its location only, the City Council may agree to hold the appeal in abeyance while the permit applicant is given an opportunity to submit an application within 120 days to the Director of Development Services at no additional cost for a retail cannabis permit at a new location which meets all the requirements of the City’s ordinance, including the distance from sensitive uses, and would be eligible for at least the same amount of Merit-Based non- discretionary points based on location per MMC
20.44.170(L)(1)(g)(4) per the determination of the Director of Development Services. If no application for the change in location is submitted within 120 days, the appeal shall be returned to the City Council for further action within 30 days. If an application for change in location is submitted, the Director of Development Services shall schedule a public hearing before the Planning Commission to be held within 60 days of the application submittal regarding the change in location only for the Planning
Commission to make a recommendation to the City Council on whether the change in location should be approved. Within 60
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46 days of the Planning Commission hearing on this matter, the change in location and the appeal that has been held in abeyance shall be scheduled and heard at a public hearing before the City Council. At the conclusion of the hearing, the City Council shall make its own determination to grant or deny the appeal, and to approve or deny the permit and/or the change in location. The City shall provide all public notices and conduct all public hearings as described in the City of Merced Municipal Code Section 20.70.010 through 20.70.040.
5. Commercial Cannabis Business Permit Annual
Renewal (All Types)
a. Applications for the renewal of a permit shall be
filed with the Director of Development Services at least sixty (60) calendar days before the expiration of the current permit.
Any permittee allowing their permit to lapse, or which permit expired during a suspension shall be required to submit a new application, pay the corresponding original application fees and be subject to all aspects of the selection process.
b. Any person desiring to obtain a renewal of their
respective permit shall file a written application under penalty of perjury on the required form with the Director of
Development Services who will conduct a review. The
application shall be accompanied by a nonrefundable filing fee established by the City Council to defray the cost of the review required by this Section. An applicant shall be required to update the information contained in their original permit application and provide any new and/or additional information as may be reasonably required by the Director of Development Services in order to determine whether said permit should be renewed. The Development Services Director, in consultation with the Selection Panel if they were involved in the original review, will review all Commercial Cannabis Business
renewal applications and all other relevant information, and determine if a renewal CCBP should be granted.
c. The Director of Development Services or
designee may deny the annual renewal of a Commercial
Cannabis Business Permit if the permittee or the permittee's agent or employee has committed any one of the following acts:
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47 i. Any act which would be considered a
ground for denial of the permit in the first
instance;
ii. Violates any other provi sion of this section
or any City of Merced or State law, statute,
rule, or regulation relating to the business's
permitted activity;
iii. Engages in or permits misconduct
substantially related to the
qualifications, functions, or duties of
the permittee;
iv. Conducts the permitted business in a
manner contrary to the health, safety, or
welfare of the public;
v. Fails to take reasonable measures to
control patron conduct, where applicable,
resulting in disturbances, vandalism, or
crowd control problems occurring inside
of or outside the premises, traffic control
problems, or creation of a public or
private nuisance, or obstruction of the
operation of another business;
vi. Violates or fails to comply with the terms
and conditions of the permit; or
vii. Fails to pay all applicable City, State, or
Federal taxes and fees.
6. Appeal of Denial of Commercial Cannabis
Business Permit Renewal (All Types)
a. The Development Services Director, in
consultation with the Selection Panel if they were involved in the original review, will review all Commercial Cannabis Business renewal applications and all other relevant
information, and determine if a renewal CCBP should be
granted. If the Development Services Director determines
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48 that the permit shall not be granted, the reasons for denial shall be provided in writing to the applicant. The applicant shall have fourteen (14) calendar days from the date of the receipt of the written denial to correct the reasons for denial and request in writing reconsideration of permit issuance.
Following review of the amended permit application, the Development Services Director will approve or deny the
permit by providing written notice to the applicant.
b. Any decision of the Development Services
Director may be appealed to the Planning Commission. An appeal shall be filed within five (5) business days (excluding official City holidays) following a decision by the Director of Development Services.
i. When an appeal has been filed, the
matter shall be scheduled for a public
hearing before the Planning Commission.
The public hearing should be heard
within ninety (90) calendar days of
receiving the appeal, unless otherwise
mutually agreed to by the applicant and
appellant or continued pursuant to
20.44.170(L)(6)(b)(v).
ii. Notice of the hearing shall be provided
to the applicant at least ten
(10) calendar days prior to the public
hearing.
iii. Any interested person may appear and be
heard regarding the appeal.
iv. The Planning Commission's review of the
appeal shall be limited to review of the
Development Services Director decision
and shall not be a de novo review.
v. A matter being heard on appeal may be
continued for good cause.
vi. The decision of the Planning
Commission may be appealed to the
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49 City Council.
a. A written appeal shall be filed
within five (5) business days (excluding
official City holidays) following a
Planning Commission decision.
b. When an appeal has been filed, the
matter shall be scheduled for a public
hearing before the City Council. The
public hearing should be heard within
ninety (90) calendar days of receiving the
appeal, unless otherwise mutually agreed
to by the applicant and appellant or
continued pursuant to
20.44.170(L)(6)(b)(vi)(e).
c. Notice of the hearing of the
appeal shall be provided to the
applicant at least ten (10) calendar
days prior to the public hearing.
d. Any interested person may
appear and be heard regarding the
appeal.
e. A matter being heard on appeal
may be continued for good cause.
f. The City Council's review shall be
a de novo review. At the conclusion of
the hearing, the City Council will make
its own determination to grant or deny the
permit. The decision of the City Council
shall be the City's final decision in this
regard and shall be dispositive of the
matter subject to judicial review under
the provisions of California Code of
Civil Procedure Sections 1094.5 and
1094.6.
7. Modifications to Commercial Cannabis Business
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50 Permit (All Types)
a. A Commercial Cannabis Permit holder may
make a written request to the Director of Development Services for modification of an existing permit at any time.
b. The Director of Development Services shall have
the discretion to approve minor modifications to the permit.
Minor modifications to an application include, but are not limited to, the following:
i. A change to the name of the proposed
business and/or entity;
ii. A change in the organizational structure of a
proposed business;
iii. A change of owner or ownership interest,
provided that any change in ownership affecting
a financial interest of 5% or more shall require a
new and separate background investigation,
payment of fees for the costs for investigation in
accordance with 20.44.170(O)(7), and must
meet the requirements of Section
20.44.l70(E)(1)(e). Any business approved after
November 3, 2021, that is awarded points on the
merit-based selection criteria for local
ownership shall not be approved for any request
for minor modification that proposes to reduce
local ownership below the minimum threshold
for which points were awarded in the first place,
those businesses awarded prior to November 3,
2021, are exempt from these requirements;
iv. A change in building elevations, floor plans, or
site plans;
v. A change in operational procedures or
security plans or procedures;
vi. Modifications to the parcel upon which the
proposed Commercial Cannabis Business will be
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51 located, provided that the modifications do not
otherwise render the parcel nonconforming to the
underlying zoning district standards.
c. Any change to the location of a Commercial
Cannabis Business after issuance of a Commercial Cannabis Business Permit may require a new application with payment of associated fees, at the discretion of the Director of Development Services. Any change to the location of a Commercial Cannabis Business shall be subject to approval by the Planning
Commission. Prior to approval of a change in location of a Commercial Cannabis Business, the Planning Commission will provide all public notices and conduct a public hearing as described in the City of Merced Municipal Code Section
20.70.010 through 20.70.040.
d. The Director of Development Services will
review any requests for modifications to the permit and shall provide a written determination within thirty (30) days from the day the written request is received by the City. The decision of the Director of Development Services shall be final and there shall be no further right to appeal.
8. Revocation of Commercial Cannabis Business
Permit (All Types)
a. The Director of Development Services or designee
may suspend or revoke a Commercial Cannabis Business Permit when the permittee or the permittee's agent or employee has committed any one or more of the following acts:
i. Any act which would be considered a ground
for denial of the permit in the first instance.
ii. Violates any other provision of this section or any City of Merced or State law, statute, rule, or
regulation relating to the business's permitted
activity.
iii. Engages in or permits misconduct
substantially related to the qualifications,
functions, or duties of the permittee.
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52 iv. Conducts the permitted business in a manner
contrary to the health, safety, or welfare of the
public.
v. Fails to take reasonable measures to control
patron conduct, where applicable, resulting in
disturbances, vandalism, or crowd control
problems occurring inside of or outside the
premises, traffic control problems, or creation of
a public or private nuisance, or obstruction of
the operation of another business.
vi. Violates or fails to comply with the terms
and conditions of the permit.
vii. Fails to pay all applicable City, State, or
Federal taxes and fees.
b. Prior to suspension or revocation of the applicable
permit, the Director of Development Services shall conduct a hearing. Written notice of the time and place of such hearing shall be served upon the permittee at least ten (10) calendar days prior to the date set for such hearing. The notice shall contain a brief statement of the grounds to be relied upon for revoking or suspending the permit. Notice may be given either by personal delivery or by certified U.S. mail, postage prepaid.
c. Any decision of the Development Services
Director may be appealed to the Planning Commission. An appeal shall be filed within five (5) business days (excluding official City holidays) following a decision by the Director of Development Services.
i. When an appeal has been filed, the matter shall
be scheduled for a public hearing before the
Planning Commission. The public hearing
should be heard within ninety (90) days of
receiving the appeal unless otherwise mutually
agreed to by the applicant and appellant or
continued pursuant to 20.44.170(L)(8)(c)(v).
ii. Notice of the hearing shall be provided to the
applicant at least (ten) 10 calendar days prior
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53 to the public hearing.
iii. Any interested person may appear and be
heard regarding the appeal.
iv. The Planning Commission's review of the appeal
shall be limited to review of the Development
Services Director’s decision and shall not be a de
novo review.
v. A matter being heard on appeal may be
continued for good cause.
vi. The decision of the Planning Commission may
be appealed to the City Council.
a. A written appeal shall be filed
within five (5) business days (excluding
official City holidays) following a
Planning Commission decision.
b. When an appeal has been filed, the
matter shall be scheduled for a public
hearing before the City Council. The
public hearing should be heard within
ninety (90) calendar days of receiving the
appeal, unless otherwise mutually agreed
to by the applicant and appellant or
continued pursuant to
20.44.170(L)(8)(c)(vi)(e).
c. Notice of the hearing of the
appeal shall be provided to the
applicant at least ten (10) calendar
days prior to the public hearing.
d. Any interested person may
appear and be heard regarding the
appeal.
e. A matter being heard on appeal
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54 may be continued for good cause.
f. The City Council’s review shall be
a de novo review. At the conclusion of
the hearing, the City Council will make
its own determination to grant or deny the
permit. The decision of the City Council
shall be the City's final decision in this
regard and shall be dispositive of the
matter subject to judicial review under
the provisions of California Code of
Civil Procedure Sections 1094.5 and
1094.6.
M. Limitations on the City's Liability
To the fullest extent permitted by law, the City shall not assume any liability whatsoever, with respect to approving any Commercial Cannabis Business Permit pursuant to this
ordinance or the operation of any cannabis facility approved pursuant to this chapter. As a condition of approval of a Commercial Cannabis Business Permit as provided in this chapter, the applicant or its legal representative shall:
1. Execute an agreement indemnifying the City from any
claims, damages, injuries, or liabilities of any kind associated with the registration or operation of the commercial cannabis facility or the prosecution of the applicant or permittee or its members for violation of federal or State laws;
2. Maintain insurance in the amounts and types that are acceptable to the City Attorney or designee;
3. Name the City as an additionally insured on all
City required insurance policies;
4. Agree to defend, at its sole expense, any action against the City, its agents, officers, and employees related to the approval of a Commercial Cannabis Business permit; and
5. 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 related to the City's approval of a Commercial
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55 Cannabis Business 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.
N. Enforcement
1. A violation of the regulations in this ordinance by an act, omission, or failure of an agent, owner, officer, or other person acting in concert with or employed by a permittee within the scope of their employment or office, shall be deemed the act, omission, or failure of the permittee.
2. A permitted Commercial Cannabis Business shall notify the Police Chief or designee of the City of Merced upon discovery of any of the following situations:
a. A discrepancy of more than $1,000 in inventory
over a period of 24 hours or $3,000 over a period of 7 days.
b. A reason to suspect diversion, loss, theft or any
other criminal activity pertaining to the operation of the commercial cannabis business.
c. The loss or alteration of records related to
cannabis goods, registered medical cannabis patients,
caregivers or dispensary employees or agents.
d. Any other reason to suspect any other
breach of security.
3. Each and every violation of this Section shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by the Municipal Code.
Additionally, as a nuisance per se, any violation of this article shall be subject to injunctive relief, revocation of the business's Commercial Cannabis Business Permit, disgorgement, and
payment to the City of any and all monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or equity. The City may also pursue any and all remedies and actions available and applicable under local and state laws for any violations committed by the cannabis business and/or any owner, agent, officer, or any other person acting in concert with or employed by the cannabis business.
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56 4. City Officials or their designees may enter and inspect the location of any commercial cannabis business during normal business hours to ensure compliance with this Section. In addition, law enforcement may enter and inspect the location of any cannabis business and the recordings and records maintained as required by this Section, except that the inspection and copying of private medical records shall be made available to law enforcement only pursuant to a properly executed search warrant, subpoena, or court order. A person engaging in commercial cannabis business without a permit and associated unique identifiers required by this chapter shall be subject to civil penalties of up to twice the amount of the permit fee for each violation, and the department, state or local authority, or court may order the destruction of cannabis associated with that violation. A violator shall be responsible for the cost of the destruction of cannabis associated with the violation, in addition to any amount covered by a bond required as a condition of licensure. Each day of operation shall constitute a separate violation of this section.
O. Fees and Taxes
All Cannabis Operations shall pay applicable fees and taxes, which may include one or more of the following:
1. Initial Application Fees. The Business Applicant shall submit a non-refundable fee to cover the cost of processing an initial application for the commercial cannabis business. These fees may be divided into two fees according to Initial Review (Phase 1) and Final Review (Phase 2).
2. Application Renewal Fees. The Business Owner shall
submit a non-refundable fee to cover the cost of processing an application renewal annually.
3. Business License Fee. The Business Owner shall at all times maintain a current and valid business license and pay all business taxes required by the Merced Municipal Code.
4. Commercial Cannabis Regulatory Fee. The Business
Owner shall pay an annual regulatory fee ('Regulatory Fee') to cover the costs of anticipated enforcement relating to the Cannabis Operation. The amount of the fee shall be set by
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57 Resolution of the City Council and be supported by the estimated additional costs of enforcement and monitoring associated with the Cannabis Operation. The Regulatory Fee shall be due and payable prior to opening for business and thereafter on or before the anniversary date. The Regulatory Fee may be amended from time to time based upon actual costs.
5. All required taxes including sales and use taxes,
business, payroll etc.
6. Additional cannabis-specific gross receipts, excise, cultivation, or any other tax approved by the voters of the City of Merced.
7. Fees for background checks for businesses with more than one owner of 5% or more interest in a Commercial Cannabis Business. The application fees approved by City Council in Resolution 2021-43 account for a single owner’s background check. Fees for additional owners shall be determined by the Chief of Police, approved by the Finance Officer, and updated each fiscal year. Requests for minor modifications to permits in accordance with 20.44.170(L)(7)(b)(iii) that propose changes to ownership and require background checks for new owners with 5% or more interest in a Commercial Cannabis Business will be subject to the same fees.
P. Labor Peace Agreements
1. All Commercial Cannabis Businesses with five (5) or more employees applying for a Commercial Cannabis
Business Permit on or after November 3, 2021, shall provide the City with a notarized statement that the business will enter into, or demonstrate to the City that it has already entered into, and abide by the terms of a labor peace agreement. Such statement or demonstration shall be provided to the City as part of the application for a Commercial Cannabis Business Permit.
2. All Commercial Cannabis Business with five (5) or
more employees that received a Commercial Cannabis
Business Permit prior to November 3, 2021, are encouraged to provide to the City a statement or demonstration consistent with 20.44.170(P)(1) above.
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58 3. All Commercial Cannabis Businesses with four (4) or fewer employees that apply for a Commercial Cannabis
Business Permit on or after November 3, 2021, shall provide a notarized statement indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 5th employee. Such statement shall be provided to the City as part of the application for a
Commercial Cannabis Business Permit.
4. All Commercial Cannabis Businesses with four (4) or
fewer employees that received a Commercial Cannabis
Business Permit prior to November 3, 2021, are encouraged to provide to the City with a statement consistent with
20.44.170(P)(3) above.
SECTION 2. EFFECTIVE DATE. This Ordinance shall be in full force and effect thirty (30) days after its adoption.
SECTION 3. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.
SECTION 4. PUBLICATION. The City Clerk is directed to cause a summary of this Ordinance to be published in the official newspaper at least once within fifteen (15) days after its adoption showing the vote thereon.
The foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Merced on the ___ day of _____, 2024, and was passed and adopted at a regular meeting of said City Council held on the ____ day of _____, 2024, by the following called vote:
AYES:
NOES:
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59 ABSTAIN:
ABSENT:
Council Members:
Council Members:
Council Members:
Council Members:
APPROVED:
MATTHEW SERRATTO, MAYOR
_______________________________
Mayor
ATTEST:
SCOTT MCBRIDE, CITY CLERK
BY:_______________________________
Assistant/Deputy City Clerk
(SEAL)
APPROVED AS TO FORM:
CRAIG J. CORNWELL, CITY ATTORNEY
Formatted: Left, Tab stops: 2.6", Left
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60 ____________________________________
City Attorney Date
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61