City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: OCTOBER 28, 2025
FROM: COMMUNITY & ECONOMIC D EVELOPMENT WARD: ALL
DEPARTMENT
SUBJECT: CONSIDER A RESOLUTION TO ESTABLISH THE PROPOSED TESTING
LABORATORY COMMERCIAL CANNABIS PERMIT PROCEDURE
GUIDELINES.
ISSUE:
Adopt a Resolution establishing the proposed Testing Laboratory Commercial Cannabis Business Permit Procedure Guidelines.
RECOMMENDATIONS:
That the City Council:
1. Adopt a Resolution establishing the Te sting Laboratory Commercia l Cannabis Business Permit Procedure Guidelines.
2. Direct staff to schedule a Public Heari ng amending the Fiscal Year 2025/26 Fees and Charges Schedule providing for a Testing Laboratory Commercial Cannabis Business Permit Application Fee.
BACKGROUND:
On February 28, 2023, the City Council in troduced and on March 14, 2023 the City Council adopted Ordinance 7628, amending Title 5 (Business Taxes, Licenses, and Regulations) of the Riverside Municipal Code (RMC), and replacing Chapter 5.77 (Cannabis Business Activities) in its entirety, Ordinance 7629 amending Title 9 (Peac e, Safety, and Morals) of the RMC, and Ordinance 7630 amending Title 19 (Zoning) of the RMC.
Chapter 5.77 of the RMC regul ates Cannabis Business Activities, including the types of businesses and maximum number of businesses per mitted. The RMC allows up to 14 retail storefront commercial cannabis business permits, limited one per wa rd, as well as an unlimited number of manufacturing, distribut ion, and testing laboratories. All commercial cultivation operations and micro businesses are prohibited.
In addition to the types and number of commercial cannabis businesses (CCB) permitted, Chapter CC Date: 10-28-25
Item No.: 37b
Consideration of Cannabis Testing Laboratories ● Page 2
5.77 also includes the following key provisions that apply to all commercial cannabis businesses, including cannabis testing laboratories:
Permittees must hold required State licenses /permits, City business tax certificates, and any required Building Permits or Certificates of Occupancy. The City Council must adopt Procedure Guidel ines to establish an application review process, including timeframes and requirements for permit issuance. The City Council will establish an application f ee by resolution to cover costs to the City. All applicants with five or more empl oyees shall enter into a Labor and Peace Agreement.
All applicants must agree to provide community benefits. Applicants and permittees must agree to indem nify and release City from all liability related to permit issuance, business operations, or legal challenges and must maintain adequate insurance coverage.
Permittees must submit an annual financial audit, report gross revenues, register all owners, managers, employees; must maintain inventory control and reporting system; and must report inventory loss, theft, or security breaches. Cannabis businesses must meet all require d General Plan, Zoning, Specific Plan, and development standards, including location restrictions. Permittees must designate a Security Liai son reporting to the City Manager and Police Chief.
Permittees must designate a community rela tions contact person to meet and discuss issues and concerns with t he City; contact information shall be provided to all businesses and residences within 100 feet of the premises.
In 2019, the City received an entitlement application for a cannabis testing laboratory, which has been working on and off on its building permit s ubmittal and construction. The applicant has expressed a desire to move fo rward with their business operati ons and construction is almost complete. To receive a certificate of occupancy and be eligible to open, the construction must pass a final inspection, and the applicant must obtain a testing laborat ory commercial cannabis permit. While Chapter 5.77 allows for testing laboratories, the City has yet to adopt a procedure for the application or issuance of a permit to operate Testing Laboratory commercial cannabis businesses.
At the October 21, 2025, City Council meeting, a member of the majority requested reconsideration of cannabis testi ng laboratories; theref ore, this item is being brought back for Council’s review.
DISCUSSION:
To develop the framework of the proposed C annabis Testing Laboratory Permit Procedure Guidelines, staff used the existing retail storefront CCB guidelines document as a base, as many of the requirements in Chapter 5.77 of t he RMC apply to all commercial cannabis businesses.
Sections of the retail storefront guidelines that did not apply to testing laboratories were removed and replaced with the operat ing requirements for testing labs in Chapter 5.77.440. Staff also researched the permitting process for cannabis test ing laboratories used by other jurisdictions.
Staff developed the proposed testing laboratory CCB permit procedure guidelines based on this research and the changes to the existing retail storefront guidelines.
Consideration of Cannabis Testing Laboratories ● Page 3
Testing Laboratory CCB Permit Procedure Guidelines
Presented as part of this item are the permit procedure guidelines for cannabis testing laboratories which are summarized below. Full language is included as Attachment 3.
Application Process
Application Period: Applications for testing laboratories CCB permits may be submitted at any time or until which time the City provides written notice on the City’s website that it will no longer be accepting applications.
Application Submittal Process: The applicant will be required to submit:
1. Application Form
2. Premises Information
3. Business Plan
4. Operations Plan
5. Safety/Security Plan
6. Site Details
7. Background Form
8. Defense and Indemnification Form
9. Laboratory Certification
10. Application Fee
Step 1 – Preliminary Approval
Application Review Clearance: All applications will be reviewed as they are received to ensure all required information has been provided and fees have been paid.
Preliminary Approval: Applicat ions and required documents are reviewed for compliance with State law, the Riverside Municipal Code, and the permit procedure gui delines. If an applicant is determined to have met all application require ments, including clearance of the required ownership review and background check, the applicant will be notified they have received preliminary approval.
Step 2 – Provisional Approval
Applicants receiving preliminary approval proceed to Step 2, which requires the applicant to:
1. Demonstrate proof of property control, and
2. Execute a Commercial Cannabis Oper ational Agreement with the City
Once an applicant has submitted satisfactory evidence of property control and has executed, in a manner deemed acceptable by the City Manager and City Atto rney, a commercial cannabis operational agreement, the applicant will be notified they have received provisional approval.
Step 3 – Final Permit Approval
Applicants who receive Provisio nal Approval then proceed to the final step of the permitting process, Final Permit Approval. The City Manager may grant Final Permit Approval if the following Consideration of Cannabis Testing Laboratories ● Page 4
conditions are met:
1. Approval of an operational agreement by City Council
2. Obtain all State licenses
3. Obtain City of Riverside Business Tax Certificate
4. Entitlements (as deemed necessary by the Planning Division)
5. Obtain all required building, fire, and occupancy permits, commence and complete construction, and obtain final permit approvals to be able to open the business to the public.
FISCAL IMPACT:
There is no fiscal impact as a result of this item. On October 22, 2024, City Council approved a tax rate of 8% for all Commercial Cannabis Busine sses, including testing laboratories. Actual revenues will depend on t he number of cannabis testing labora tories in operation and the gross revenues generated by each business.
Prepared by: Simone Sandoval, Project Manager
Approved by: Jennifer A. Lilley, Community & Economic Development Director Certified as to
availability of funds: Kristie Thomas, Finance Director/Assistant Chief Financial Officer Approved by: Mike Futrell, City Manager Approved as to form: Rebecca McK ee-Reimbold, Interim City Attorney
Attachments:
1. Resolution – Approving t he Testing Laboratories CCB Permit Procedure Guidelines and Application Review Criteria
2. Testing Laboratories CCB Pe rmit Procedure Guidelines and Application Review Criteria
3. Presentation