PLANNING COMMISSION
Staff Report
Scenic Pacifica
Incorporated Nov. 22, 1957
DATE: October 3, 2022 FILE: CAP-8-18
ITEM: 1
PUBLIC NOTICE: Notice of Public Hearing was published in the San Mateo Daily Journal on September 22, 2022 and mailed to approximately 120 surrounding property owners and occupants.
APPLICANT/
OPERATOR:
Ana Leaño Williams
Seaweed Holistics, LLC
450 Dondee Way, Suite 2
Pacifica, CA 94044
PROPERTY
OWNER:
Ronald E. Grindrod Trust
450 Dondee Way, Suite 15
Pacifica, CA 94044
PROJECT LOCATION: 450 Dondee Way, Suite 2 (APN 022-021-640) – Rockaway Beach PROJECT DESCRIPTION:File Nos. 2018-029 and 2020-020 – Consideration of revocation of Cannabis Activity Permit CAP-8-18 which authorizes the operation of a cannabis retail operation, Seaweed Holistics, LLC, for the sale of medicinal and adult use cannabis.
SITE DESIGNATIONS: General Plan/Local Coastal Plan: Commercial Zoning: C-1 (Neighborhood Commercial) / C-Z (Coastal Zone Combining District) / CO-RB (Cannabis Operation, Rockaway Beach Overlay District) Rockaway Beach Specific Plan: Mixed Use
RECOMMENDED CEQA STATUS: Exempt under the “Common Sense” exemption per CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
ADDITIONAL REQUIRED APPROVALS: Subject to appeal to the City Council.
RECOMMENDED ACTION: Adopt the attached Resolution.
PREPARED BY: Bonny O’Connor, AICP, Senior Planner
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PC Staff Report
Revocation of Seaweed Holistic CAP
October 3, 2022
A. BACKGROUND
On September 16, 2019, the Planning Commission approved Cannabis Activity Permit CAP-8-18 with the adoption of Planning Commission Resolution No. 2019-031 (Attachment B) to establish and operate a Cannabis Retail Operation with adult use and medicinal cannabis sales at 450 Dondee Way, Suite 2 (“Seaweed Holistics”) (File No. 2018-029). Exhibit A to Resolution No. 2019-031 included conditions of the approval (“COAs”) applicable to CAP-8-18. Many of these COAs were required to be met prior to the commencement of operations. While the Applicant made progress towards completion of some of the COAs, the Applicant indicated that two COAs were infeasible to satisfy prior to commencement of operations. The Applicant explained that they had to commence operations to generate revenue through cannabis retail sales to be able to satisfy COA No. 9 and COA No. 18 (Attachment B).
Given the Applicant’s request, the City temporarily deferred compliance with COA No. 9 and COA No. 18 through the Agreement Regarding Deferral of Specified Conditions of Approval Relating to the Operation of Seaweed Holistics (“Agreement”) executed on September 21, 2020 (Attachment C), to allow the Applicant to commence operations to generate the revenue necessary to satisfy COA No. 9 and COA No. 18 provided that the Applicant expeditiously process an application to modify these COAs. On February 16, 2021, the Planning Commission approved Resolution No. 2021-001 which amended COA No. 9 and COA No. 18 of CAP-8-18 to defer the timing of compliance with those conditions until after commencement of operations (File No. 2020-020) (Attachment D).
In accordance with Pacifica Municipal Code (PMC) Section 9-4.4806(e) and COA No. 19, the Planning Commission conducted an annual review of the cannabis retail operation at the August 15, 2022, Planning Commission meeting. After receiving a report prepared by staff and testimony, the Planning Commission found that operation of Seaweed Holistics is being conducted in a manner that is not in compliance the requirements of Article 48 of Title 9, Chapter 4 of the PMC and the requirements of Planning Commission Resolution Nos. 2019-031 and 2021-001 and therefore constitutes a public nuisance in accordance with PMC sec. 9-4.4806 and PMC sec. 9-4.48071 . The Planning Commission also
directed staff to schedule a public hearing within 60 days2 to consider suspension or revocation of
Cannabis Activity Permit CAP-8-18 in accordance with PMC sec. 9- 4.4806.
B. DISCUSSION
1. Compliance Status
As presented during the annual report to the Planning Commission on August 15, 2022, staff found that the applicant was out of compliance with COA No. 9 (as amended by Resolution No. 2021-001), COA No. 18 (as amended by Resolution No. 2021-001) and COA No. 20 of Resolution No. 2019-031. Status of each of these conditions are discussed below.
1 Planning Commission Resolution No. 2022-016 (Attachment E) 2 The October 3, 2022 Planning Commission Meeting is the last regularly scheduled Planning Commission meeting that occurs within the prescribed 60 day timeline which ends on October 14, 2022. 1 Packet Pg. 49
PC Staff Report
Revocation of Seaweed Holistic CAP
October 3, 2022
Condition of Approval No. 9
This condition was initially included in Resolution No. 2019-031 to bring the existing storefront window into the glazing requirements for the Security Plan standards of PMC sec. 4-16.03(c)(1)(ii), which states, “Windows and window coverings. Storefronts (front facade of the cannabis operation) shall be primarily glass with glass occupying at least forty-five (45%) percent of the entire store front and sixty (60%) percent of the horizontal length of the store. Window and door areas shall not be covered, tinted, or made opaque in any way, or obscured in any way by landscaping, floor displays, equipment, or the like.” Planning Commission’s findings in Resolution No. 2019-031 detail “The first floor of the proposed storefront is 24’ wide and 8‘ high for a total of 192 sf. The first floor of the existing storefront currently has a 10’ by 6’ window and a door with a 2’ by 5’-6” glass panel for a total of 71 sf of glass. Therefore, the existing glass along the first story storefront does not occupy at least 45 percent (86.4 sf minimum) of the storefront nor does the 10’ wide window plus the 2’ wide glass panel door meet the 60 percent of horizontal length of the store (14’-3” minimum). A COA would require modification of the front window to comply with the Security Plan standards of PMC Section 4-16.03(c)(1)(ii).” COA No. 9 initially required the Applicant to modify the storefront window prior to commencement of operations. However, in response to the Applicant’s claims that revenue from the operation of the cannabis operation was necessary to generate the funds for the window modifications, the City worked with the Applicant to establish a mutually agreed upon schedule that would delay the window modifications until after the commencement of operations. The City entered into a deferral agreement with the applicant and the Planning Commission later amended the condition to be consistent with the deferral agreement. The Applicant’s progress on this condition, and the associated milestone deadlines contained in the condition, is detailed in Table 1.
Table 1. Applicant’s Progress with COA No. 9, as revised by Resolution No. 2021-001 Summary of Milestone Deadlines Applicant’s progress
The Applicant shall apply for a building permit within
two weeks of approval of Resolution No. 2021-001
(March 2, 2021) to modify the first-floor storefront to increase the horizontal and overall measurements of
the glass on the first floor storefront to meet or exceed the requirements of PMC sec. 4-16.03(c)(1)(ii).
Applicant submitted building permit application
materials on March 1, 2021. Engineering, Building and
Planning had comments on the submittal, which were
provided to the Applicant by March 29, 2021. The
applicant has not resubmitted a response to the City’s
plan check comments issued in March 2021.
Within three working days of notice from City that
building permit is ready to be issued, the Applicant shall pay all building permit fees.
The City has been unable to provide notice that the
building permit is ready to be issued because the
applicant has not made diligent efforts to process the
building permit application in response to City plan
check comments, as noted above.
Within two weeks of building permit issuance, Applicant shall complete the store front modification and window
installation and request a building final inspection.
Additional time may be granted by Planning Director
due to a special order of materials.
The applicant has not completed a final building permit inspection because the applicant has not obtained the
building permit as required.
On April 26, 2021, the Applicant requested additional time from the City due to a personal loss related to COVID-19. In response, staff did suspend its regular reminders and check-ins to the applicant for 1 Packet Pg. 50
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Revocation of Seaweed Holistic CAP
October 3, 2022
approximately one year, other than an email to update the Applicant on the total of outstanding funds as discussed under COA No. 18, below. Staff was unable to grant additional time to comply with the requirements of this COA because it was enacted by the Planning Commission. Thereafter, staff followed up with the Applicant in March 2022 to remind the Applicant of the outstanding window modification requirement (and outstanding fees as further discussed below), informed the Applicant that the annual report was upcoming, and encouraged resolution of these items before the report to Planning Commission. The Applicant responded stating that they were working with their landlord on next steps. On April 20, 2022, staff informed the Applicant the annual report has been scheduled for August 15, 2022 and further encouraged the Applicant to complete the window modification by July 27, 2022, so staff would have time to note satisfaction of the COA in the annual report. No progress was made on the window modification before July 27, 2022. Since the annual report to the Planning Commission on August 15, 2022, no progress has been made on the window modification. Therefore, the Applicant is not compliant with COA No. 9.
Condition of Approval No. 18
This condition in Resolution No. 2019-031 is standard language that is generally included in all Planning Commission resolutions. The condition required that all outstanding and applicable fees associated with the processing of this project shall be paid within 30 days of the approval of Cannabis Activity Permit CAP-8-18 and that cannabis retail operations shall not commence operation until such fees are paid.
The City’s master fee schedule establishes a time and materials billing system for planning applications.
While staff collects an initial lump sum deposit and requires the Applicant to sign a reimbursement agreement form as part of the application, this standard condition provides an additional layer of authority for the City to collect any outstanding fees or payments prior to the commencement of the project.
The City calculated the outstanding fees associated with the permit to be $4,080.56. On January 31, 2020, the City sent the Applicant a written request for the funds within 30 days consistent with the payment terms in the reimbursement agreement. In February 2020, the Applicant requested to pay the amount in $1,000 monthly installments, which staff agreed to and established a payment plan over the next four months. The first payment was due March 31, 2020, however no payments for the outstanding fees were made.
In June 2020, staff began conversations with the Applicant of the option to enter a deferral agreement.
The Applicant agreed to pay the cost of preparing the deferral agreement and processing the amendments to the conditions of approval. Staff worked with the Applicant to establish a mutually agreed upon payment deadline that would occur after the commencement of operations. The Planning Commission amended the condition to incorporate the deadline as established in the deferral agreement by adopting Resolution No. 2021-001 on February 16, 2021. The revised condition required the permittee to pay all outstanding fees within 60 days of Planning Commission approval of the revised conditions (i.e., April 17, 2021). Staff calculated costs at the time and informed the Applicant of the outstanding fees of to be paid by March 10, 2021. No payment for the outstanding fees was made.
On April 26, 2021, the Applicant requested additional time from the City due to a personal loss related to COVID-19. Staff followed-up again with the Applicant on June 10, 2021 and informed the Applicant that the final invoice for the processing of the amendment was received and updated the final total outstanding costs for the processing of the CAP, preparation and execution of the deferral agreement 1 Packet Pg. 51
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Revocation of Seaweed Holistic CAP
October 3, 2022
and processing the amendments of the CAP to $25,952.893. The City received no response from the Applicant. Staff followed up with the Applicant again in March 2022 to remind the Applicant of the outstanding fees (and window modification requirement as discussed above), informed the Applicant that the annual report was upcoming, and encouraged resolution of these items before the report to Planning Commission. The Applicant responded with a written request for a payment plan. On April 20, 2022, staff denied the Applicant’s request for the payment plan, and informed the Applicant the annual report had been scheduled for August 15, 2022 and further encouraged the Applicant to pay the outstanding fees by July 27, 2022, so staff would have time to note satisfaction of the COA in the annual report. No payment for the outstanding fees was made before July 27, 2022. Since the annual report to the Planning Commission on August 15, 2022, no progress has been made on the outstanding fees before publication of this report. Therefore, the Applicant is not compliant with COA No. 18.
Condition of Approval No. 20
This condition was initially included in Resolution No. 2019-031 in response to concerns that the Police Chief had regarding the Applicant’s ability to comply with all PMC requirements and conditions of approval imposed on this permit, in particular the lack of completion of the storefront window modifications. The Planning Commission included this condition to require:
i) The Applicant to permit inspection of its cannabis operation by City officials during normal operating hours without advanced notice;
ii) The Applicant to submit quarterly compliance reports to the Chief of Police outlining how the operation is complying with all applicable laws and conditions of approval; and iii) The Applicant to provide a live stream of the Applicant’s video surveillance system which is accessible to the Chief of Police via remote access 24 hours per day.
There have been no compliance issues with the Applicant permitting inspection of its cannabis operation by City officials during normal operating hours without advance notice or providing access to the Applicant’s live stream video surveillance system 24 hours per as day.
At the time of the annual review on August 15, 2022, it was presented that the Applicant did inform Planning staff that they have not submitted the quarterly compliance reports to the Chief of Police since March 2021. Since that time, the applicant has submitted the missing reports and Police staff have found the reports adequate. At the time of the writing of this report the applicant is now considered to be in compliance with this condition of approval. The next quarterly report is due September 30, 2022, which is after the publication deadline for this report and prior to the hearing.
Because staff finds that the operation remains out of compliance with COA No. 9 and COA No. 18, staff also finds that the operation is also not compliant with COA No. 1 (requiring development to be substantially in accordance with approved plans modified by the conditions of approval), COA No. 5 (requiring compliance with all conditions of approval and all standards and regulations in Article 48 and applicable state laws) and COA No. 6 (requiring the operation to refrain from creating a public nuisance) as further detailed in the August 15, 2022 annual report to the Planning Commission (Attachment F). 3 This amount is the sum of the outstanding $4,080.56 for the original processing of CAP-8-18 and the outstanding $21,872.33 for the processing of the deferral agreement and the amendment to CAP-8-18. 1 Packet Pg. 52
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Revocation of Seaweed Holistic CAP
October 3, 2022
2. Criteria for Suspension or Revocation
In accordance with PMC sec. 9-4.4806, the Planning Commission may suspend or revoke a Cannabis Activity Permit if any of the following are found to apply:
(i) If any of the conditions or terms of such permit are violated4; (ii) If any law is violated in connection there with5;
(iii) If it appears to the Commission that the cannabis operation has violated any of the requirements of Article 48;
(iv) If the cannabis operation is being operated in a manner which violates the operational requirements or security plan required by the Code;
(v) If the cannabis operation is being operated in a manner which constitutes a nuisance; (vi) If the cannabis operation has ceased to operate for thirty (30) days or more; or (vii)If the cannabis operation is being operated in a manner which conflicts with or violates state cannabis law.
The Planning Commission found in Resolution No. 2022-016 (Attachment E), that Cannabis Activity Permit CAP-8-18 was in violation of conditions of the permit [Criterion (i)], that the cannabis retail operation is being conducted in a manner that is not in full compliance with the requirements of Article 48 of Title 9, Chapter 4 of the PMC [Criteria (ii) and (iii)]and that the cannabis retail operation is being operated in a manner which constitutes a nuisance [Criterion (v)]. Staff finds that the Compliance Status updates noted in the Section A.1 of this staff report does not change the non-compliant finding the Planning Commission made during the annual review process when it adopted Resolution No. 2022-016 on August 15, 2022. Therefore, staff has identified at least four criteria that justify suspension or revocation of Cannabis Activity Permit CAP-8-18 pursuant to PMC sec. 9-4.4806.
C. STAFF ANALYSIS
As detailed in this staff report, the Applicant’s cannabis retail operation has notable and continuing areas of non-compliance with COA No. 9 and COA No. 18. Because of the compliance status of COA No. 9 and COA No. 18, the operation is also not compliant with COA No. 1, COA No. 5 and COA No. 6.
As discussed above, PMC sec. 9-4.4806 provides that the Planning Commission may suspend or revoke a Cannabis Activity Permit. Although there is no specific requirements regarding when a suspension should be utilized rather than revocation, generally suspensions are used when a suspension is likely to allow the applicant time to achieve compliance in a particular case. In this case, the City has provided several accommodations to this Applicant to assist with achieving compliance related to COA No. 9 and COA No. 18 and the Applicant remains non-complaint. Some of these accommodations include establishment of a payment plan, an agreement to defer conditions, providing additional time due to personal matters, and scheduling the annual report at the latest meeting opportunity to confirm compliance status. These accommodations are in addition to the several email reminders and extra guidance that staff has provided the Applicant. Staff has provided this assistance with the intention of helping the Applicant succeed and to be a business-friendly resource. However, the Applicant’s lack of progress on COA Nos. 9 and 18 and has left staff with no indication that further extensions for compliance, such as a temporary suspension of their permit would result in completion of the applicable 4 As detailed in PMC sec. 9-4.3309(a) per PMC sec. 9-4.4806(a). 5 ibid.
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Revocation of Seaweed Holistic CAP
October 3, 2022
requirements by the Applicant.
For all the reasons provided in this staff report, staff recommends that the Planning Commission revoke CAP-8-18 to be effective immediately upon final determination of this action (i.e., expiration of the 10- day City Council appeal period). Revocation of CAP-8-18 would remove the Applicant’s ability to operate, engage in, conduct or carry out any cannabis operation at 450 Dondee Way, Suite 2, and prevent the Applicant from dispensing, selling, and/or delivering cannabis and/or cannabis products.
Staff notes that the Applicant’s Cannabis Public Safety License (CPSL) is set to expire on October 16, 2022 and actions that the Application must take before their CPSL expires includes payment of $23,577 for the Cannabis Public Safety License yearly license renewal fee.
D. COMMISSION ACTION
Move to ADOPT the attached resolution to FIND that action is exempt from the California Environmental Quality Act; REVOKE Cannabis Activity Permit CAP-8-18 (File Nos. 2018-029 and 2020- 020) associated with the cannabis retail operation at 450 Dondee Way, Suite 2 (APN 022-021-640); and, incorporate all maps and testimony into the record by reference.
ATTACHMENT LIST:
Attachment A - Draft Resolution (DOCX)
Attachment B - Planning Commission Resolution No. 2019-031 (PDF) Attachment C - Agreement Regarding Deferral of Specified Conditions (PDF) Attachment D - Planning Commission Resolution No. 2021-001 (PDF) Attachment E - Planning Commission Resolution No. 2022-016 (PDF) Attachment F - Planning Commission agenda packet, August 15, 2022 (PDF) 1 Packet Pg. 54