CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 30, 2026 BUSINESS & LEGISLATIVE
SUBJECT: INTRODUCTION AND FIRST READING OF AN ORDINANCE OF THE
CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA,
AMENDING CHAPTER 5.55.500 OF THE PALM SPRINGS MUNICIPAL
CODE REGARDING CANNABIS CONSUMPTION LOUNGES
FROM: Scott C. Stiles, City Manager
BY: Special Program Compliance
SUMMARY:
This agenda item introduces an ordinance amending Chapter 5.55.500 of the Palm Springs Municipal Code (“PSMC”) to update authorization requirements for operating cannabis consumption lounges. Specifically, the ordinance proposes removing Subsection (C) from PSMC 5.55.500.
RECOMMENDATION:
Waive the reading of text in its entirety, read by title only, and introduce for first reading an Ordinance entitled, “AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING CHAPTER 5.55.500 OF THE PALM SPRINGS MUNICIPAL CODE REGARDING CANNABIS CONSUMPTION LOUNGES.”
BACKGROUND:
At the September 9, 2026, Council Meeting, Ordinance No. 2121 was adopted, establishing local regulatory procedures for expanded activities permitted in cannabis consumption lounges under California Assembly Bill 1775.
The City Council discussed Land Use Permit procedures, their applicability to all commercial businesses, and how current requirements relate to Ordinance No. 2121, particularly Section 5.55.500 Subdivision (C). The proposed language allowed cannabis lounges to host outdoor special events by submitting written verification of compliance with applicable rules, conditions of approval, public safety requirements, and nuisance mitigation standards. Lounges adjacent to businesses selling alcoholic beverages or tobacco could operate outdoor events with a land use permit.
City Council Staff Report
September 30, 2026 -- Page 2
Ordinance Amending Ch. 5.55.500 – Cannabis Consumption Lounges The City Council determined that Subsection (C) was unnecessary, as procedures for outdoor special events are already established under Palm Springs Zoning Code
94.02.01. The City Council adopted Ordinance 2121 with the condition that staff would return with an ordinance to remove Subsection (C) from PSMC 5.55.500.
STAFF ANALYSIS:
Adopting this ordinance will delete Subsection (C) from PSMC 5.55.500. Cannabis lounges may continue to host outdoor special events under the land use procedures outlined in Zoning Code 94.02.01.
The language under 5.55.500 will be amended to read as follows:
5.55.500 Authorization Required to Operate Cannabis Consumption Lounge
A. No person shall operate a cannabis consumption lounge without first having received from the City a valid cannabis dispensary permit with a condition that expressly authorizes the operation of a lounge in accordance with this article.
B. A cannabis dispensary permit may be authorized to allow the operation of a cannabis consumption lounge with one or more of the following conditions:
(a) Preparation and sale of non-cannabis infused food.
(b) Delivery and service of non-cannabis infused food.
(c) Host non-ticketed events and host up to twenty-four (24) ticketed events per year, subject to the provisions of this chapter.
C. Cannabis lounges may host outdoor special events by submitting written verification of the steps that it will take to comply with applicable rules governing the event, completing an application through the Department of Special Programs and shall comply with all applicable conditions of approval, public safety requirements, and nuisance mitigation standards established by the City to operate said events. Cannabis lounges located directly adjacent to a site that sells primarily alcoholic beverages, tobacco, or tobacco products on the site may not operate outdoor events with a land use permit.
D. C. Cannabis Lounges may apply to operate an onsite kitchen facility.
Operators must comply with both State and Riverside County regulations. Additionally, all proposed kitchen facilities must be inspected by the City to determine that the facility is safe to occupy and suitable for the intended use.
City Council Staff Report
September 30, 2026 -- Page 3
Ordinance Amending Ch. 5.55.500 – Cannabis Consumption Lounges ENVIRONMENTAL ASSESSMENT:
This action is exempt from the California Environmental Quality Act (CEQA) because it is the adoption of an ordinance, rule, or regulation that requires discretionary review, including environmental review, and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity (CEQA Guidelines section 15061(B)(1), California Business and Professions Code section 26055(h)) and because it does not have the potential for causing a significant effect on the environment (CEQA Guidelines section 15061(b)(3)).
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Economic Development.
FISCAL IMPACT:
There is no immediate fiscal impact associated with the adoption of the proposed Ordinance. Over time, expanded operational opportunities for licensed cannabis lounges may result in increased sales tax and cannabis tax revenue.
REVIEWED BY:
Acting Department Director: Patrick Clifford
Assistant City Manager: Teresa Gallavan
City Manager: Scott Stiles
ATTACHMENTS:
A. Ordinance