Economic Development,
Placemaking and Branding/
Marketing Committee
TO: ECONOMIC DEVELOPMENT, PLACEMAKING DATE: OCTOBER 20, 2022
AND BRANDING/MARKETING COMMITTEE
FROM: CITY ATTORNEY’S OFFICE WARDS: ALL
CITY CLERK
COMMUNITY & ECONOMIC DEVELOPMENT DEPARTMENT
DEPARTMENT OF FINANCE
RIVERSIDE FIRE DEPARTMENT
RIVERSIDE POLICE DEPARTMENT
SUBJECT: REVIEW AND PROVIDE DIRECTION FOR THE PROPOSED RIVERSIDE
MUNICIPAL CODE AMENDMENTS RELATED TO LEGALIZING CANNABIS USES: TITLE 5 – BUSINESS TAXES, LICENSES AND REGULATIONS; TITLE 9 – PEACE, SAFETY AND MORALS; AND TITLE 19 – ZONING
ISSUE:
Review and provide direction for the proposed Riverside Municipal Code Amendments related to legalizing cannabis uses: Title 5 – Business Taxes, Licenses and Regulations; Title 9 – Peace, Safety and Morals; and Title 19 – Zoning.
RECOMMENDATION:
That the Economic Development, Placemaking and Branding/Marketing Committee review and provide direction on the proposed Riverside Municipal Code Amendments related to legalizing cannabis uses: Title 5 – Business Taxes, Licenses and Regulations; Title 9 – Peace, Safety and Morals; and Title 19 – Zoning.
BACKGROUND:
In 2016, California voters passed Proposition 64 (The Adult Use of Marijuana Act) which allowed for adults 21 or older to legally grow, possess and use cannabis for recreational purposes and legalized the sale and distribution of cannabis statewide. Shortly thereafter, Governor Brown signed Senate Bill 94 (The Medicinal Adult -Use Cannabis Regulation and Safety Act or MAUCRSA) into law. While the MAUCRSA created minimum requirements for licensees statewide, Proposition 64 and Senate Bill 94 gave local governments the flexibility to implement local regulatory frameworks for land-use entitlements, building permits and business/operating licenses for cannabis related uses.
Riverside Municipal Code Changes Related to Cannabis and Ballot Initiative Page 2
Following the passage of Proposition 64, ac tions related to cannabis in the City of Riverside included:
• July 25th, 2017 - Prepared a moratorium on commercial marijuana activity (excluding testing laboratory facilities)
• September 12, 2017 - Adopted an interim moratorium, followed by a ten- month fifteen- day moratorium extension on October 24, 2017
• November 7, 2017 - Adopted Ordinance No. 7398 to amend Title 5 of the RMC to permit and regulate Cannabis Testing Laboratories in industrial zones, subject to permit requirements (effective December 28, 2017
• January 9, 2018 - Continued the discussion of a regulatory framework for 45 days to follow a visit to Denver, Colorado to better understand the cannabis industry • March 27, 2018 - Directed staff to immediately prepare an ordinance prohibiting (a) the retail and commercial sale of cannabis; (b) commercial agricultural cultivation of marijuana, (c) the manufacturing and sale of marijuana extractable and consumable products, ( d) distribution of all marijuana and cannabis associated products, (e) the establishment of microbusinesses such as boutique lounges; and (f) outdoor cultivation of all marijuana plants, including medical marijuana
• May 31, 2018 – Amended Title 19 – Zoning – heard by Planning Commission at a public hearing (Planning Commission denied by a vote of 2 ayes, 5 noes and 1 abstention) • July 10, 2018 – Appealed Planning Commission decision ( Councilmember Conder ) – heard by City Council who voted to approve the amendments to Title 5 and Title 19 of the RMC, codifying a prohibition of commercial cannabis uses within City limits On Tuesday, September 28, 2021, the City of Riverside received a Notice of Intent to Circulate Petition for the Riverside Cannabis Taxation and Regulation Act , then amended on November 5, 2021. The City Attorney prepared and provided a Ballot Title and Summary to the proponents on November 18, 2021.
If the proponents continue through the initiative process and gather enough signatures required within 180 days (May 17, 2022) , then City Council could choose one of two options : Call an election to place the ballot measure on the ballot during an election (special or regular); or Adopt the proposed Ordinance without revision.
If passed by voters or accepted by the City Council , it would create a regulatory framework for all cannabis uses within the City, largely without City Council, staff , or community input. Unlike ordinances passed by City Council, regulations established through a voter -initiated ballot cannot be amended or modified by sole action of the City Council. If an alternative third party- initiated ballot measure is passed by the voters, any future amendments must go through a ballot process during a general election for approval.
On November 18, 2021, the Economic D evelopment, Placemaking and Branding/Marketing Committee discussed the need to develop an ordinance with the legal and regulatory framework for the permitting, licensing, enforcement, taxation, and legal operations of commercial cannabis storefronts within the City limits and directed staff to return to the Committee with Ordinance options.
On March 24, 2022 , the Economic Development, Placemaking and Branding/Marketing Committee (Committee) directed staff to prepare amendments for the Riverside Municipal Code (RMC): 1) Title 5 – Business Taxes, Licenses and Regulations amendments related to licensing of cannabis business uses; 2) Title 9 – Peace, Safety and Morals amendments to clean up and Riverside Municipal Code Changes Related to Cannabis and Ballot Initiative Page 3
provide consistency in cannabis regulations and terminology; and 3) Title 19 - Zoning amendments related to land use regulations for cannabis related uses and microbusinesses .
Staff was also directed to conduct a financial analysis on potential revenue and move forward with a cannabis tax ballot measure in 2024 with the type of tax, language, and percentage to be determined at a later date.
DISCUSSION:
Since the Committee meeting in March 2022, a team of City staff have worked with a consultant to draft RMC amendments (Draft Amendments) for Title 5, Title 9 and Title 19 (Attachment 1).
The City team includes staff from the City Manager’s Office, City At torney’s Office, City Clerk, Community & Economic Development Department, Finance Department, Riverside Fire Department and Riverside Police Department. In preparing the amendments, several decisions points were identified where further direction was needed from the Committee.
Draft Riverside Municipal Code Amendments
The following summarizes the decision points and the City team’s recommended way forward for Committee discussion and direction. If appropriate, the page number i n the Draft Amendments is included to facilitate the Committee’s review.
1) Ownership Definition (Title 5 - Page 4)
Decision Point – What is the percentage of ownership the City wants to include in defining the owner of the Commercial Cannabis Business?
A. The State defines an “owner” as a person with an aggregate interest of 20% or more in the Commercial Cannabis Business.
B. The Draft Amendments follow the State definition and includes a percentage of 20% in the definition of “owner.”
C. A lower percentage (e.g., 10%) would require that more investors may have to follow the responsibilities of a defined owner.
2) Criminal Background Checks (Title 5 - Page 6)
Decision Point – Does the City want to require employee background checks? A. Employee background checks are not required by the State.
B. The Draft Amendments would require City background checks for employees.
C. Riverside Police Department indicates this is current practice in the City and conduct similar background checks for violent felony crimes for employees of other businesses requiring special operating permits such as massage parlors.
3) Number of Various Uses Allowed ( Title 5 - Page 7) and Storefront Delivery (Title 5 -
Decision Point – Does the total number of Commercial Cannabis Businesses includ e both storefront and non-storefront retail uses?
Decision Point – Should Manufacturing, Distribution, and Testing Laboratories not be limited? Decision Point – Should storefront retailers be allowed to deliver?
Riverside Municipal Code Changes Related to Cannabis and Ballot Initiative Page 4
A. The Committee directed staff to allow up to 14 Commercial Cannabis businesses (2 per Ward) in the Draft Amendments.
B. Clarification is needed if this includes both storefront and non- storefront (essentially delivery retail) businesses.
C. Separate from the 14 retail businesses are Manufacturing, D istribution and T esting Laboratories, which are not limited in the Draft Amendments.
D. The Draft Amendment recommends allowing storefront retailers to deliver (requirements for delivery are included).
4) Labor Peace Agreement (Title 5 - Page 9)
Decision Point – How many employees should trigger a labor peace agreement for the owner? A. Labor Peace Agreements are required by the State for 20 or more employees.
B. Beginning July 1, 2024, a Labor Peace Agreement will be required by the State for all applicants/licensees with 10 or more employees.
C. The Draft Amendment recommends 5 employees based on recent policy direction from the City Council.
5) Appeal Officer (Title 5 - Page 13)
Decision Point – Who should hear appeals related to Commercial Cannabis Businesses? A. Appeals can be heard by a variety of parties: City Council, City Manager, Appointed Hearing Officer, City Board or Commission.
B. The Draft Amendment recommends that an Appointed Hearing Officer hear appeals related to denial of permit applications and other appeals of citations and violations once a Commercial Cannabis Business is operational.
C. This is consistent with current Code related cases in the City of Riverside. i. Currently hears appeals for numerous City Departments. ii. Includes, but is not limited to, code enforcement citation appeals, Fire Prevention cases, RPD cit ations pertaining to fireworks and entertainment permits, massage parlor appeals for PD.
iii. Current Appointed Hearing Officer is an attorney.
6) Distance from Sensitive Receptors (Title 5 - Page 16) Decision Point – What distance separation from sensitive receptors should be included? A. The State law grants local jurisdictions the authority to “specify a different radius” than the 600-foot requirement for schools, daycare centers, and/or youth centers.
B. State law also grants local jurisdictions authority to impose additional requirements beyond rules/regulations mandated by the State (e.g. , recognizing additional sensitive use buffers beyond state default of schools, day-care centers, and youth-centers).
C. The Draft Amendment recommends a 600- foot separation for schools, daycare centers and community centers. These uses can be tracked by the City when applications are submitted.
D. The Draft Amendment includes no distance separation from “youth centers” as they are too broadly defined by the State for the City to be able to track the locations.
E. Riverside Unified School District requested a minimum distance of 1, 000 feet from schools.
F. A map has been included to illustrate a 600-foot and 1, 000-foot buffer to the sensitive receptors (Attachment 2).
Riverside Municipal Code Changes Related to Cannabis and Ballot Initiative Page 5
7) Equity Application and License Standards
Decision Point – Should the City study the potential for Equity Application and License Standards?
A. The State provides financial support to cannabis business es by waiving licensing fees if applicants and licensees meet the equity eligibility criteria set in the proposed regulation such as past cannabis convictions or arrests, reduced income or residence in an area disproportionately impacted by past criminal justice policies, as well as other criteria.
B. Pursuant to Business and Professions Code Section 26249(c), a local j urisdiction may implement “equity application and license” standards which require verification from the State.
C. Local agencies are not required to establish local equity programs to provide waiver or deferral of application or license fees.
D. At this time, staff has not yet received policy direction from the Committee to establish a local cannabis equity program. Therefore, the Draft Amendment does not include Equity Application and License Standards.
E. Should the Committee, and ultimately City Council, wish to consider adopting Equity and License Standards , the first step in the process would be to direct staff to prepare a Cannabis Equity Study, which would form the basis of equity eligibility criteria and program benefits (study costs typically range from $10,000 to $100,000).
8) Public Outreach
Decision Point – Should additional outreach be completed for the RMC changes? A. To date, the Committee has heard the item in November 2021, March 2022 and at this meeting.
B. Committee members have also made presentations, upon request, on the item.
C. For the Draft Amendments, additional outreach has not been conducted.
D. A public outreach program will be developed for the ballot measure moving forward.
There are no outstanding decisions for Titles 9 and 19 as these RMC changes are clean-up items and reflect the Title 5 proposed changes.
Future Actions
The next steps for the RMC changes include finalizing the Draft Amendments per the Committee direction for City Council consideration.
On a parallel path, the City is working on items required for implementation if the Draft Amendments are adopted by City Council. This includes but is not limited to:
• October 2022 - February 2023
o Finalize the Draft Amendments
o City Council Consideration
• January 2023 – June 2023
o Financial analysis on potential revenue
o Implementation
Application Submission and Review process
Application Criteria and Application
Community Benefit Agreement template
Tracking, Monitoring and Reporting structure
Riverside Municipal Code Changes Related to Cannabis and Ballot Initiative Page 6
Fee Schedule
• 2023-2024 - Ballot Measure
STRATEGIC PLAN ALIGNMENT:
This item contributes to the Envision Riverside 2025 City Council Strategic Plan:
• Priority 3 – Economic Opportunity
o Goal 3.3 – Cultivate a business climate that welcomes innovation, entrepreneurship, and investment.
• Priority 5 – High Performing Government
o G oal 5.4 Achieve and maintain financial health by addressing gaps between revenues and expenditures and aligning resources with strategic priorities to yield the greatest impact.
This item aligns with each of the five Cross-Cutting Threads as follows:
1. Community Trust – The City continues to be transparent in studying the potential for Riverside Municipal Code changes and a ballot measure. A community outreach program will be developed as part of the process and ultimately, residents will decide on the ballot measure an any potential business tax.
2. Equity – The draft Riverside Municipal Code amendments will provide opportunities for those impacted in the past because cannabis was illegal. The review process, open to all, would include criteria to choose those businesses that would best fit and operate in the City of Riverside.
3. Fiscal Responsibility – With the collection of a business tax, voted on by the residents of the City, the City would realize additional revenues that is lost because these businesses are not permitted in Riverside.
4. Innovation – The changes to the Riverside Municipal Code and ballot measure would be prepared using an expert consultant that fully understands the State laws ensuring that the best and a creative approach will be used to regulate cannabis businesses.
5. Sustainability & Resiliency – The proposed changes to the Riverside Municipal Code and ballot measure will help the City to realize additional business tax that will ensure its sustainability and resiliency.
FISCAL IMPACT:
There is no fiscal impact associated with this staff report.
The City Attorney’s Office, City Clerk, Department of Finance, Riverside Fire Department and Riverside Police Department concur with this staff report.
Prepared by: Chris Christopoulos , Acting Community & Economic Development Director
Certified as to
Riverside Municipal Code Changes Related to Cannabis and Ballot Initiative Page 7
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/Treasurer
Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
1. Draft Riverside Municipal Code Amendments – Title 5, Title 9 and Title 19
2. 600-foot and 1000-foot Radius Map – Sensitive Receptors
3. Presentation
1 3
7 6
5 4
2 City of Riverside, County of Riverside, California State Parks, Esri, HERE, Garmin, SafeGraph, GeoTechnologies, Inc, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, USDA
0 2 41
Miles
KEY
Sensitive Receptors
600ft Buffer
1000ft Buffer
Commercial Zones
City Limit
Wards
µ
Attachment 2 - Retail Cannabis and Sensitive Receptor Buffers 1 11/22/2022
RiversideCA.gov
1 RiversideCA.gov
Economic Development, Placemaking
and Branding/Marketing Committee
October 20, 2022
Cannabis Update
CITY ATTORNEY'S OFFICE
CITY CLERK’S OFFICE
COMMUNITY & ECONOMIC DEVELOPMENT DEPARTMENT
FINANCE DEPARTMENT
FIRE DEPARTMENT
POLICE DEPARTMENT
RiversideCA.gov
2 1. 2017
A. Moratorium on commercial marijuana activity (excluding testing laboratory facilities)
B. Adopted Ordinance No. 7398 to am end Title 5 of the Riverside Municipal Code (RMC) to permit and regulate Cannabis Testing Laboratories in industrial zones
2. 2018
A. Continued discussion of a regulatory framework for cannabis businesses
B. Staff directed to prepare an ordinance prohibiting cannabis businesses (except for testing laboratories) and amended RMC C. City Council voted to approve the amendments to RMC codifying a prohibition of commercial cannabis uses within City limits
BACKGROUND
1 2
2 11/22/2022
RiversideCA.gov
3 1. City receives Notice of Intent to Circulate Petition for the Riverside Cannabis Taxation and Regulation Act
2. Two Options for City Council Consideration on the
Petition
A. Call an election to place the initiative petition on the ballot; or
B. Adopt the proposed initiative petition without revisions.
BACKGROUND – SEPTEMBER 2021
RiversideCA.gov
4 1. Economic Development, Placemaking and Branding/
Marketing Committee (Committee) meeting to consider
legalization
2. City Team assembled - City Manager’s Office, City
Attorney’s Office, City Clerk’s Office, Community &
Economic Development Department, Fire Department, and
Police Department
3. Additional research
A. Legalizing cannabis retail, microbusiness, and distribution uses in the City of Riverside; and
B. Initiate a ballot measure to determine if a business tax should be collected and what that business tax should be for the City.
BACKGROUND – NOVEMBER 2021
3 4
3 11/22/2022
RiversideCA.gov
5 1. Immediate Actions - Prepare amendments for the Riverside Municipal Code (RMC)
A. Title 5 - Business Taxes, Licenses and Regulations amendments related to licensing of cannabis business uses;
B. Title 9 - Peace, Safety and Mora ls amendments to clean up and provide consistency in cannabis regulations and terminology; and C. Title 19 - Zoning amendments related to land use regulations for cannabis related uses and microbusinesses.
2. Future Actions
A. Conduct a financial analysis on potential revenue
B. Cannabis tax ballot measure in 2024 (type of tax, language, and percentage determined at a later date)
BACKGROUND - MARCH 2022
RiversideCA.gov
6 1. Draft Amendments completed (Title 5, Title 9 and Title 19)
2. Direction from Committee – Title 5
3. No further Direction needed for Title 9 and Title 19 A. Clean up items
B. Reflect changes to Title 5
DISCUSSION – RMC CHANGES
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4 11/22/2022
RiversideCA.gov
7 1. Ownership Definition (Title 5 – Page 4)
Decision Point 1 – What is the percentage of ownership the City wants to include in defining the owner of the Commercial Cannabis Business?
A. The State defines “owner” - interest of 20% or more
B. Draft Amendments includes a percentage of 20% in defining owner
C. A lower percentage (e.g., 10%) could be considered - more investors may have to follow the responsibilities of a defined owner
DISCUSSION – DECISION POINT 1
RiversideCA.gov
8 2. Criminal Background Checks (Title 5 - Page 6)
Decision Point 2 – Does the City want to require employee background checks?
A. Employee background checks - not required by the State B. Draft Amendments would requir e City background checks for employees
C. Riverside Police Department
i. current practice in the City
ii. Conduct similar background ch ecks for violent felony crimes for employees of other businesses such as massage parlors DISCUSSION – DECISION POINT 2
7 8
5 11/22/2022
RiversideCA.gov
9 3. Number of Various Uses Allowed (Tit le 5 - Page 7)and Storefront Delivery Title 5 - Page 24)
Decision Point 3A – Does the total number of Commercial Cannabis Businesses include both storefront and non-storefront retail uses? Decision Point 3B – Should Manufacturing and Distribution; and Testing Laboratories not be limited?
Decision Point 3C – Should storefront retailers be allowed to deliver? A. Draft Amendments allow up to 14 Commercial Cannabis Uses (2 per Ward) - both storefront and non-storefront businesses
B. Manufacturing/Distribution and Testing Laboratories not limited in the Draft Amendments
C. Draft Amendment recommends allowing storefront retailers to deliver (requirements for delivery are included).
DISCUSSION – DECISION POINT 3
RiversideCA.gov
10 4. Labor Peace Agreement (Title 5 - Page 9)
Decision Point 4 – How many employees should trigger a labor peace agreement for the owner?
A. Labor Peace Agreements required by the State for 20 or more employees
B. Beginning July 1, 2024, a Labor Peace Agreement will be required by the State for all applicants/licensees with 10 or more employees
C. Draft Amendments recommends 5 employees based on
recent policy direction from the City Council
DISCUSSION – DECISION POINT 4
9 10
6 11/22/2022
RiversideCA.gov
11 5. Appeal Officer (Title 5 - Page 13)
Decision Point 5 – Who should hear appeals related to Commercial Cannabis Businesses?
A. Appeal person/body is not mandated by State
B. Draft Amendments recommend an Appointed Hearing Officer once a Commercial Cannabis Business is operational.
C. Consistent with current Code related cases in the City of Riverside i. Currently hears appeals for numerous City Departments ii. Includes, but is not limited to, code enforcement citation appeals, Fire Prevention cases, RPD citations pertaining to fireworks and entertainment permits, massage parlor appeals for PD
iii. Current Appointed Hearing Officer is an attorney
DISCUSSION – DECISION POINT 5
RiversideCA.gov
12 6. Distance from Sensitive Receptors (Title 5 - Page 16) Decision Point 6 – What distance separation from sensitive receptors should be included?
A. The State does grant local jurisdictions:
i. Authority to “specify a different radius” than the 600-foot requirement for schools, daycare centers, and/or youth centers
ii. Authority to impose additional requirements for additional sensitive uses B. Draft Amendment recommends 600-foot separation for schools, daycare centers and community centers (Uses that can be tracked by the City)
C. No distance separation from youth centers – broadly defined by the State (Uses cannot be tracked by the City)
D. Riverside Unified School District requested a 1000-foot separation from schools
DISCUSSION – DECISION POINT 6
11 12
7 11/22/2022
RiversideCA.gov
13 DISCUSSION – DECISION POINT 6
RiversideCA.gov
14 7. Equity Application and License Standards
Decision Point – Should the City study the potential for Equity Application and License Standards?
A. The State provides financial support to cannabis business - waiving licensing fees if applicants and licensees meet the equity eligibility criteria B. Pursuant to Business and Professions Code Section 26249(c), a local jurisdiction may implement “equity application and license” standards – State verification required
C. Not required
D. Staff has not received direction to establish a local cannabis equity program - Draft Amendment does not include Equity Application and License Standards.
E. If directed, the first step in the process would be to direct staff to prepare a Cannabis Equity Study (costs typically range from $10,000 to $100,000) DISCUSSION – DECISION POINT 7
13 14
8 11/22/2022
RiversideCA.gov
15 8. Public Outreach
Decision Point – Should additional outreach be completed for the RMC changes?
A. Committee meetings - November 2021, March 2022 and at this meeting
B. Committee members - presentatio ns, upon request, on the item
C. For the Draft Amendments, additional outreach has not been conducted
D. A public outreach program will be developed for the ballot measure moving forward
DISCUSSION – DECISION POINT 8
RiversideCA.gov
16 1. October 2022 - February 2023
A. Finalize the Draft Amendments
B. City Council Consideration
2. January 2023 – June 2023
A. Financial analysis on potential revenue
B. Implementation
i. Application Submission and Review process
ii. Application Criteria and Application
iii. Community Benefit Agreement template
iv. Tracking, Monitoring and Reporting structure
v. Fee Schedule
3. 2023-2024 - Ballot Measure
FUTURE ACTIONS
15 16
9 11/22/2022
RiversideCA.gov
17 That the Economic Development, Placemaking and
Branding/Marketing Committee review and provide
direction on the proposed Riverside Municipal Code
Amendments related to legalizing cannabis uses: Title 5 – Business Taxes, Licenses and Regulations; Title 9 – Peace, Safety and Morals; and Title 19 – Zoning
RECOMMENDATIONS
RiversideCA.gov
18 STRATEGIC PLAN ALIGNMENT
Community Trust
Equity
Fiscal Responsibility
Innovation
Sustainability &
Resiliency
#5 High Performing Government
#3 Economic Opportunity
Envision Riverside 2025 Strategic Plan Priorities
Cross-Cutting Threads
17 18
10 11/22/2022
RiversideCA.gov
19 REFERENCE ONLY SLIDE
19