Sacramento City Council
February 15, 2022

Susana Alcala Wood, City Attorney Jorge Oseguera, City Auditor Mindy Cuppy, City Clerk Howard Chan, City Manager John Colville, City Treasurer City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org

File ID: 2022-00217 February 15, 2022 Public Hearing Item 18

Title: Ordinance Amending Chapter 5.150 and Section 8.132.050 of the Sacramento City Code Relating to Cannabis Businesses and the Illegal Cultivation of Cannabis [Noticed 02/04/2022 & 02/10/2022] [In Lieu of Pass for Publication Ordinance to be Published in its Entirety]

Location: Citywide

Recommendation: 1) Adopt an ordinance amending chapter 5.150 and section 8.132.050 of the Sacramento City Code relating to cannabis businesses and the illegal cultivation of cannabis to be published in its entirety in lieu of pass for publication per City Charter section 32(d); and 2) adopt a Resolution establishing an extension fee for the continuation of cannabis Business Operating Permit (BOP) applications through the permitting process and an appeal fee for administrative penalties issued for illegal cannabis cultivation.

Contact: Davina Smith, Cannabis Manager (916) 808-4772, [email protected] ;
Zarah Cruz, Program Specialist, (916) 808-8925, [email protected], Office of Cannabis Management, Office of the City Manager

Presenter: Davina Smith, Cannabis Manager (916) 808-4772, [email protected] ,
Office of the City Manager

Attachments:
1-Description/Analysis
2-Ordinance (Clean)
3-Ordinance (Redline)
4-Resolution

File ID: 2022-00217 Public Hearing Item 18
February 15, 2022
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City of Sacramento

Description/Analysis

Issue Detail: Chapter 5.150 of the Sacramento City Code (SCC) outlines the regulations for commercial cannabis businesses in the city of Sacramento. As of November 28, 2018, the Council established regulations addressing commercial cannabis businesses (i.e., storefront dispensaries, cultivators, manufacturers, testing laboratories, distributors, non-storefront dispensaries, and microbusinesses). In February of 2020, the Council approved the expansion of cannabis manufacturing to include volatile manufacturing. With the exception of onsite consumption, the City has a permitting process in place for all commercial cannabis business activities currently allowed under state law.

In July of 2021, the three state agencies that regulate cannabis businesses, the Bureau of Cannabis Control (BCC), the Department of Food and Agriculture (CDFA/CalCannabis) and the California Department of Public Health (CDPH) merged into the Department of Cannabis Control (DCC). Since the formation of DCC, a regulatory framework covering all cannabis business types under one set of regulations has been approved and implemented.

Periodically, staff brings forward a proposed cleanup ordinance that seeks to amend, add or delete various sections of SCC chapter 5.150. The purpose of this cleanup ordinance is to create consistency with state regulations by reflecting changes in state law and to codify certain policies and practices necessary to regulate a continuously evolving industry. In addition, the proposed ordinance seeks to provide clarity and uniformity in procedures across the different permit types and to promote a more efficient regulatory and licensing process (Attachments 2 and 3).

The table below summarizes the proposed changes to SCC chapter 5.150:

Proposed Change Purpose
Delete employee managers and delivery and
distribution drivers from the definition of
interested parties and transfer the background
check requirement to the business owners,
officers, and similar persons.

Reduces the permit review backlog and
increase the efficiency in processing
permits by shifting requirement to the
business owners, officers, and similar
persons.

Addition of inspection authority for electronic
databases (including the state’s track-and-
trace system).

Allows City officials to verify products on
site against electronic databases including
track-and-trace (seed-to-sale) and reduce
the potential of diversion.

Delete “printed format” by which business
records must be maintained.

Allows businesses to provide
electronic/digital records, as the City and
most businesses move away from
printed/paper documents.

File ID: 2022-00217 Public Hearing Item 18
February 15, 2022
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City of Sacramento

Increase the limit a delivery vehicle can carry
to $5,000 worth of cannabis products with no
more than $3,000 worth of pre-ordered and no
more than $2,000 worth of un-ordered
products.

Align with State regulations.

Delete the local requirement for delivery
vehicles to be no older than 10 years old.

Align with State regulations.

Delete the local requirement for distributors to
have a Motor Carrier Permit.

Default to the State to determine whether
one is required.

Add a requirement in the Business Operating
Permit (BOP) applications for businesses with
20 employees or more to have a Labor Peace
Agreement in place.

Allows local verification of a State
requirement for cannabis businesses with
20 or more employees.

Revise requirements of security plans
submitted with BOP applications to protect the
physical security of cannabis facilities.

Allow greater flexibility for PD to update
and modify cannabis facility security
requirements as needed.

Add “abandoned application” section to
address applications with no activity for 180
days or more and establish process to extend
applications about to be deemed abandoned.

Align with State regulations; discourage
“parking” of an application on a location.

Add process for cessation of business
operations.

Establish a documented process that
promotes better coordination across
departments and with State for products on
site.

Remove square footage limits for buildings
and size of display area for non-cannabis
accessories for storefront dispensaries.

Obsolete.

Also proposed in the ordinance is an amendment relating to the amount of an appeal fee for illegal cultivation of cannabis, which is currently set at “Level B”. The “Level B” administrative appeal amount is $250 and is listed at SCC Section 1.28.010(D)(4)(b). However, each administrative appeal hearing costs the City $1,500 on average for hearing examiners, court reporters, and related hearing expenses. The proposed amendment seeks to remove the reference to “Level B” as the appeal fee and instead allow the administrative appeal fee for illegal cultivation to be set by resolution.

On January 4, 2022, the Law and Legislation Committee reviewed the proposed ordinance amending various sections of SCC Chapter 5.150 relating to the regulations for cannabis businesses and SCC section 8.132.020 relating to appeal fees for illegal cannabis cultivation.

On February 1, 2022, the Budget and Audit Committee reviewed the proposed fees associated

File ID: 2022-00217 Public Hearing Item 18
February 15, 2022
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City of Sacramento

with the proposed ordinance and is contained in this report as a Resolution (Attachment 4).

Specifically, the fee resolution:

• Establishes a Fee to Extend an Expiring BOP Application Applicants who are actively pursuing the steps towards obtaining their BOP can request that their application be reactivated for another 180 days by submitting a request and submitting a fee in the amount of $500, which will cover staff time to review, evaluate and update the application.

• Establishes an Appeal Fee for Administrative Penalties for Illegal Cultivation The appeal fee is set at $500 to cover the fees for hearing examiners, court reporters and other related expenses.

Policy Considerations: With the exception of deleting employee managers and delivery and distribution drivers from the definition of interested parties, all proposed items either already exist in State law, are required as conditions placed on BOPs or are current practices that are proposed to be codified to promote consistency and strengthen enforceability. In addition, some of the amendments are a result of policies that have now become obsolete as a result of the changes in State law and the evolution of the cannabis industry over the past few years.

While there are also other sections of SCC chapter 5.150 that may need amendment, many are related to topics that are covered in the Economic & Planning Systems (EPS) study which will be presented before Council in the near future and thus not included in the proposed cleanup ordinance.

The resolution will set the fees for certain components of the ordinance, including the extension fee for expiring BOP applications before they are deemed abandoned and a separate appeal fee for illegal cultivation in order to cover the costs associated with the appeal process.

Economic Impacts: None.

Environmental Considerations: This action is not a project subject to CEQA because it involves the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies which the public agency finds are for the purpose of meeting operating expenses; and because it is an administrative activity that will not result in direct or indirect physical changes in the environment. (Pub. Res. Code §21080; CEQA Guidelines §15378(b)(5).)

Sustainability: Not applicable.

File ID: 2022-00217 Public Hearing Item 18
February 15, 2022
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City of Sacramento

Commission/Committee Action: On January 4, 2022, the Law and Legislation Committee considered the proposed ordinance amending chapter 5.150 and section 8.132.050 of the Sacramento City Code and voted to forward the ordinance to City Council approval. On February 1, 2022, the Budget and Audit Committee considered the proposed fees and voted to recommend them for City Council approval.

Rationale for Recommendation: The rapidly evolving cannabis regulatory landscape requires frequent modifications to City Code to ensure that it remains consistent with Council intent and State law. From 2016 through 2018, SCC chapter 5.150 was added and amended, creating a regulatory structure for the entire cannabis supply chain. In 2019 and 2020, Council approved two SCC cleanups to adapt to the changes in State law and industry practices.

However, some sections of the SCC have remained static or have become obsolete, inconsistent with recently revised State law, require clarification, or have become counterproductive to ensuring an efficient regulatory process. The proposed changes will ensure a consistent policy across all permit types, a more effective application review process and tighter controls over permitted businesses.

The extension fee for a BOP application set in the resolution will cover the staff costs in reviewing, evaluating and updating an application instead of deeming it abandoned 180 days after submission if it is incomplete. The extension fee is also intended to serve as an incentive to applicants to take the necessary steps to complete a project and to discourage applicants from submitting an application before location requirements are completed or “parking” an application for an extended period.

Establishing separate appeal fees for administrative penalties for illegal cultivation, instead of defaulting to the existing Level B appeal fees will allow the City to recover more of the costs associated with conducting a hearing, including the fees for a hearing examiner, a court reporter and other expenses related to conducting the appeal hearing. The appeal fee does not exceed the reasonable costs of handling the appeal, it is not cost prohibitive, and a fee waiver process for those who cannot afford the appeal fee remains in City code.

Financial Considerations: The extension fee for a BOP application will cover the staff costs in reviewing, evaluating and updating an application instead of deeming it abandoned 180 days after submission when a BOP has not been issued. The appeal fees will help cover the administrative costs of holding an appeal hearing before a hearing examiner.

Local Business Enterprise (LBE): Not applicable.

1 ORDINANCE NO.

Adopted by the Sacramento City Council
[Date Adopted]
AN ORDINANCE AMENDING CHAPTER 5.150 AND SECTION 8.132.050 OF THE SACRAMENTO

CITY CODE, RELATING TO CANNABIS BUSINESSES AND THE ILLEGAL CULTIVATION OF

CANNABIS
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:

SECTION 1.

A. Section 5.150.020 of the Sacramento City Code is hereby amended as follows:

1. The definition of “hold-up alarm” is hereby added to read as follows:

“Hold-up alarm” means a silent alarm that alerts a monitoring company that criminal activity is in progress and causes the dispatch of law enforcement.

2. The definition of “limited liability company manager” is hereby added to read as follows:

“Limited liability company manager” means a person that, under the operating agreement of a manager-managed limited liability company, is responsible for performing the management functions stated in subdivision (c) of California Corporations Code section 17704.07.

3. The definition of “lobby” is hereby added to read as follows:

“Lobby” means a space that is accessible to the public inside the entrance of a building.

4. The definition of “qualified professional” is hereby added to read as follows:

“Qualified professional” means a person who holds a valid private patrol operator license under California Business and Professions Code section 7582, a valid alarm company operator license under California Business and Professions Code section 7593, a valid certificate from the American Society for Industrial Security International, or equivalent licensure or certification.

2 B. Except as amended by subsection A above, all provisions of section 5.150.020 remain unchanged and in full effect.

SECTION 2.

A. Section 5.150.070 of the Sacramento City Code is hereby amended as follows:

1. Subsection A is hereby amended to read as follows:

A. A cannabis business must provide the city with names and addresses of all of the following interested parties of the business:

1. Each person with an aggregate ownership interest of 20% or more, unless the interest is solely a security, lien, or encumbrance; and

2. All officers, members of the board of directors, limited liability company managers, and other persons with similar responsibilities.

2. Subsection E is hereby amended to read as follows:

E. The offenses that are substantially related to the qualifications, functions, or duties of a cannabis business include:

1. A violent felony, as specified in California Penal Code section 667.5(c).

2. A serious felony, as specified in California Penal Code section 1192.7(c).

3. A felony involving fraud, deceit, or embezzlement.

4. A felony involving the hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor.

5. A felony for drug trafficking with enhancements pursuant to California Health and Safety Code sections 11370.4 or 11379.8.

B. Except as amended by subsection A above, all provisions of section 5.150.070 remain unchanged and in full effect.

SECTION 3.

3 A. Subsection 5.150.160.A of the Sacramento City Code is hereby amended to read as follows:

A. A cannabis business must maintain the following business records for at least three years on the site and must produce them to the city within 24 hours of receipt of the city’s request:

1. The name, address, and telephone numbers of the owner and landlord of the property.

2. The name, date of birth, address, and telephone number of each manager and staff of the cannabis business; the date each was hired; and the nature of each manager’s and staff’s participation in the cannabis business.

3. A written accounting of all income and expenditures of the cannabis business, including, but not limited to, cash and in-kind transactions.

4. A copy of the cannabis business’ commercial general liability insurance policy and all other insurance policies related to the operation of the business.

5. A copy of the cannabis business’ most recent year’s financial statement and tax return.

6. An inventory record documenting the dates and amounts of cannabis received at the site, the daily amounts of cannabis on the site, and the daily amounts of cannabis sold, distributed, and transported from the site.

7. The name, address, and telephone numbers of the owners and officers of the cannabis business; and the nature of the ownership interest in, and control of, the cannabis business.

8. A log detailing the arming and disarming of its alarm system, including the dates and times the alarm is armed and disarmed, the individuals who armed and disarmed the alarm, and the reasons the alarm was armed or disarmed.

B. Except as amended by subsection A above, all provisions of section 5.150.160 remain unchanged and in full effect.

SECTION 4.

4 A. Section 5.150.180 of the Sacramento City Code is hereby amended as follows:

1. Subsection C is hereby amended to read as follows:

C. Permittees shall provide the city with a read-only account to access their records on the track and trace program established by the state pursuant to California Business and Professions Code section 26067.

2. Subsection D is hereby added to read as follows:

D. No person shall refuse, impede, obstruct, or interfere with an inspection pursuant to this chapter.

B. Except as amended by subsection A above, all provisions of section 5.150.180 remain unchanged and in full effect.

SECTION 5.

Section 5.150.185 is hereby added to the Sacramento City Code to read as follows:

5.150.185 Cessation of cannabis business operations.

No cannabis business may cease operations for more than 30 consecutive days without first obtaining the city manager’s approval of the following:

A. A written plan that:

1. Describes the process and timeline to restart operations;

2. Describes the process and timeline to dispose of all cannabis and cannabis products on the site in accordance with section 5.150.130.C; or

3. Includes state authorization in accordance with section 15024.1 of title 4 of the California Code of Regulations to have a permitted cannabis business purchase, transport, and store all cannabis and cannabis products on the site and a written timeline of the purchase and transport.

B. A written payment plan for any unpaid business operation tax; and C. The name, mailing address, primary and secondary telephone numbers, and email address of at least one manager who is managing the cessation of the

5 operations.

SECTION 6.

A. Section 5.150.210 of the Sacramento City Code is hereby amended as follows:

1. Subsection A is hereby amended to read as follows:

A. A person may apply for a cannabis business permit by filing an application with the city manager. The application must be on a form approved by the city manager and may require any information or documentation consistent with the provisions of this code and state law, including the following:

1. Applicant.

a. A description of the statutory entity or business form that will serve as the legal structure for the applicant and a copy of its formation and organizing documents, including, but not limited to, articles of incorporation, certificate of amendment, statement of information, articles of association, bylaws, partnership agreement, operating agreement, and fictitious business name statement.

b. The phone number and address to which notice of action on the application and correspondence is to be mailed.

2. Interested parties. The name, address, telephone number, title, and function of each of the interested parties described in section 5.150.070.

3. Background checks. For each of the interested parties identified pursuant to subsection A.2:

a. A legible copy of one valid government-issued form of photo identification, such as a state driver’s license, a passport issued by the United States, or a permanent resident card.

b. A list of their misdemeanor and felony convictions, if any. For each conviction, the list must set forth the date of arrest, the offense charged, the offense convicted, the jurisdiction of the court, and whether the conviction was by verdict, plea of guilty, or plea of nolo contendere.

c. Consent to fingerprinting and a criminal background investigation.

6 4. Business site.

a. Description. A general description of the proposed business site, including the street address, parcel number, and the total square footage of the site.

b. Floor plan. A scaled floor plan for each level of each building that makes up the business site, including the entrances, exits, walls, and operating areas. The floor plan must be professionally prepared by a licensed civil engineer or architect.

c. Compliance with the Planning and Development Code. The date of issuance and the file number of the conditional use permit that was approved by the city for the proposed location.

d. Statement of owner’s consent. Written consent of the owner or landlord of the proposed site to operate a cannabis business, specifying the street address and parcel number.

5. Security.

a. Security plan. A detailed security plan outlining the measures that will be taken to ensure the safety of persons and property on the business site.

The security plan must be prepared by a qualified professional.

b. Lighting plan. A lighting plan showing existing and proposed exterior and interior lights that will provide adequate security lighting for the use.

6. Odor control. A detailed plan describing the air treatment system, or other methods that will be implemented to prevent cannabis odors from being detected outside the buildings on the business site.

7. Business operations.

a. Business plan. A plan describing how the cannabis business will operate in accordance with this code, state law, and other applicable regulations.

The business plan must include plans for handling all cash and transporting all cannabis and all cannabis products to and from the site.

b. Community relations contact. The contact information of the person

7 designated as being responsible for outreach and communication with the surrounding community, including the neighborhood and businesses.

c. Tax compliance. The city business operations tax certificate number; a copy of the applicant’s most recent financial statements; a copy of the applicant’s most recent state and federal signed tax returns; and proof of filing the tax returns with the applicable government agency.

d. Insurance. The applicant’s certificate of commercial general liability insurance and endorsements.

e. Budget. A copy of the applicant’s most recent annual budget for operations.

8. City authorization. Authorization and consent for the city manager to seek verification of the information contained within the application.

9. Applicant’s certification. A statement dated and signed by the applicant, under penalty of perjury, that the applicant has personal knowledge of the information contained in the application, that the information contained therein is true and correct, and that the application has been completed under the applicant’s supervision.

10. Indemnification. An agreement, in a form approved by the city attorney, whereby the applicant: (1) releases the city, and its agents, officers, elected officials, and employees from any and all claims, injuries, damages, or liabilities of any kind arising from: (a) any repeal or amendment of this chapter or any provision of the Planning and Development Code relating to cannabis, and (b) any arrest or prosecution of the applicant or its managers, employees, or members for violation of state or federal laws; and (2) defends, indemnifies, and holds harmless the city and its agents, officers, elected officials, and employees from and against any and all claims or actions: (a) brought by adjacent or nearby property owners or any other parties for any damages, injuries, or other liabilities of any kind arising from operations at the cultivation site, and (b) brought by any party for any problems, injuries, damages, or other liabilities of any kind arising out of the distribution of cannabis produced or processed at the site or by the business.

11. State labor peace agreement. Proof of compliance with the state’s labor peace agreement requirement under California Business and Professions Code section 26051.5(a)(5) and will maintain a copy of the agreement or notarized statement on

8 site.

B. Except as amended by subsection A above, all provisions of section 5.150.210 remain unchanged and in full effect.

SECTION 7.

Section 5.150.220 of the Sacramento City Code amended to read as follows:

5.150.220 Application process.

The city manager may establish procedures and guidelines to process new and renewal cannabis business permit applications.

SECTION 8.

Section 5.150.225 is hereby added to the Sacramento City Code to read as follows:

5.150.225 Abandoned applications.

A. An application that is filed with the city is abandoned if:

1. The application has been incomplete for 180 days after it was filed, and the applicant has not requested an extension and paid the applicable fee; or

2. The applicant has failed to pay the cannabis business permit program fee within 30 days of filing the application.

B. The city will not process abandoned applications.

SECTION 9.

A. Subsection E of section 5.150.230 of the Sacramento City Code is hereby amended to read as follows:

E. To renew a cannabis business permit, the permittee shall submit a renewal application, renewal fee, and required documents in accordance with section 5.150.210. The permittee shall submit the application no later than 30 days prior to the permit expiration date. Untimely applications are subject to a late penalty in the amount established by resolution of the city council.

9 B. Except as amended by subsection A above, all provisions of section 5.150.230 remain unchanged and in full effect.

SECTION 10.

Section 5.150.240 of the Sacramento City Code is hereby amended to read as follows:

5.150.240 Grounds for denial of a cannabis business permit.

The city manager may deny a cannabis business permit if the city manager determines that one or more of the following circumstances exist:

A. The application received is not responsive to the requirements of this article.

B. The application contains a false or misleading statement or omission of a material fact.

C. The operation of a cannabis business described in the application fails to comply with any of the requirements in this code, state law, or any other regulation.

D. The applicant or any of its managers has any unpaid and overdue administrative penalties imposed for violations of this chapter.

E. The applicant has not paid the applicable business operations tax pursuant to chapter 3.08.

F. Within 12 months of the filing date of the application: (1) the applicant has had its cannabis business permit suspended more than once, revoked, or had two or more administrative penalties issued to it; or (2) any of its owners, officers, directors, partners, agents, or any persons vested with the authority to manage or direct the affairs of the business were associated with another business that had its cannabis business permit suspended more than once, revoked, or had two or more administrative penalties issued to them.

G. The applicant or any of its managers has violated a provision of this chapter.

H. Within 12 months of the filing date of the application, the applicant, the cannabis business’ manager, or property owner has violated a provision of the CBC, CEC, CFC, CPC, CMC, or chapters 8.04, 8.08, 8.96, or 8.100 of this code, in connection with developing or operating the cannabis business or the site.

I. The application to renew a permit is filed with the city after the permit has expired.

10 J. The applicant for renewal of a permit has violated one or more conditions on the permit.

K. Operation of the cannabis business is a threat to the public health, safety, or welfare.

SECTION 11.

A. Subsection 5.150.250.A of the Sacramento City Code is hereby amended to read as follows:

A. If the city manager denies a cannabis business permit or renewal thereof after the application is accepted as complete, written notice of denial shall be served on the applicant. The notice must contain:

1. A brief statement of the grounds for the denial.

2. A statement that the applicant may request reconsideration of the denial, in writing to the city manager, within 10 days of the date of service of the notice.

3. A statement that the failure to timely request reconsideration of the denial will constitute a waiver of all rights to reconsideration, and the denial will be final.

B. Except as amended by subsection A above, all provisions of section 5.150.250 remain unchanged and in full effect.

SECTION 12.

Section 5.150.260 of the Sacramento City Code is hereby amended to read as follows:

5.150.260 Grounds for suspending, modifying, or revoking a cannabis business permit.

The city manager may suspend, modify, or revoke a cannabis business permit issued pursuant to the provisions of this chapter for any of the following reasons:

A. One or more of the circumstances upon which a cannabis business permit could be denied, as described in section 5.150.240, exists or has occurred.

B. One or more conditions of the cannabis business permit has been violated.

11 C. The permittee, its owners, officers, directors, partners, agents, or other persons vested with the authority to manage or direct the affairs of the business have violated any provision of this chapter.

SECTION 13.

A. Section 5.150.270 of the Sacramento City Code is hereby amended as follows:

1. Subsection A.2 is hereby amended to read as follows:

2. A statement that the permittee may appeal the action in accordance with section 5.150.290.

2. Subsection B.2 of is hereby amended to read as follows:

2. A permitted cannabis business ceases operation for 90 consecutive days or longer and does not have city approved plans pursuant to section 5.150.185;

B. Except as amended by subsection A above, all provisions of section 5.150.270 remain unchanged and in full effect.

SECTION 14.

A. Subsection D of section 5.150.380 of the Sacramento City Code is hereby amended to read as follows:

D. No storefront cannabis dispensary permittee shall allow any violation of subsections A, B, or C.

B. Except as amended by subsection A above, all provisions of section 5.150.380 remain unchanged and in full effect.

SECTION 15.

Section 5.150.415 of the Sacramento City Code is hereby amended to read as follows:

5.150.415 Cannabis accessories.

A cannabis business that is expressly authorized to sell cannabis pursuant to this chapter, whether medical cannabis or adult-use cannabis, may also display and sell cannabis accessories.

12 SECTION 16.

Section 5.150.460 of the Sacramento City Code is hereby amended to read as follows:

5.150.460 Storefront cannabis dispensary buildings.

A. Floor Plan. A storefront cannabis dispensary must have a main entrance that is clear of barriers, landscaping, and similar obstructions so that it is clearly visible from public streets or sidewalks. A dispensary must also have a lobby that is used only to receive persons to verify that they are allowed on the site.

The lobby must be secure and restrict access to any other area of the dispensary. A dispensary must also have a separate and secure area designated for selling cannabis, cannabis products, and cannabis accessories to its customers.

B. Storage. A storefront cannabis dispensary must have adequate locked storage on the site, identified and approved as a part of the security plan, for after- hours storage of all cannabis and all cannabis products. All cannabis and all cannabis products must be stored in secured rooms that are completely enclosed or in a safe that is bolted to the floor.

SECTION 17.

Section 5.150.470 of the Sacramento City Code is hereby amended to read as follows:

5.150.470 Storefront cannabis dispensary security.

Storefront cannabis dispensaries must comply with the following security provisions at all times:

A. Licensed Security Personnel. A dispensary must have adequate state-licensed security personnel to patrol the site and the area within 100 feet of the site to preserve the safety of persons and to protect the dispensary from theft.

B. Security Cameras. The dispensary must have security surveillance cameras and a video recording system that monitors the interior, main entrance, storage, areas of ingress and egress, parking lot, and exterior sides of the site including the areas not clearly visible from the public streets to discourage illegal or nuisance activities. The system must be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the site. The system must

13 also be capable of exporting the recording in standard MPEG formats to another common medium, such as a DVD or USB drive.

C. Security Video Retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained by the dispensary for a period of not less than 90 days. The recording must be made available to the city upon request.

D. Alarm System. A dispensary must have professionally and centrally-monitored fire, robbery, and burglar alarm systems that are maintained in good working condition. The alarm system must be monitored by a private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

E. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 18.

Section 5.150.500 of the Sacramento City Code is hereby amended to read as follows:

5.150.500 Display of storefront cannabis dispensary permit.

The storefront cannabis dispensary permittee shall display at all times during business hours, its current valid storefront dispensary permit issued pursuant to this chapter. The permit shall be displayed in a conspicuous place so that it may be readily seen by all persons entering the dispensary.

SECTION 19.

Section 5.150.525 of the Sacramento City Code is hereby amended to read as follows:

5.150.525 Delivery of cannabis.

A cannabis business that is expressly authorized to deliver cannabis pursuant to this chapter may deliver cannabis and cannabis products subject to the following provisions:

A. All cannabis and all cannabis products being delivered must be obtained from the site of the cannabis business that is authorized to deliver cannabis. No cannabis or cannabis products may be delivered from any other facility, such as a

14 separate storage facility or a cannabis product manufacturing facility. Loading and unloading of cannabis products must only take place within the designated and approved secured loading area. All cannabis and all cannabis products must be kept in a secured container that is attached to the delivery vehicle.

B. No person delivering cannabis or cannabis products shall possess more than $5,000 worth of cannabis and cannabis products at any time, including no more than $3,000 worth of cannabis and cannabis products that are purchased by customers.

C. No person shall deliver cannabis or cannabis products in a vehicle that has any markings identifying it as a vehicle in which cannabis may be contained.

D. The cannabis business must use and maintain computer software to record the following information relating to each delivery:

1. A delivery request that includes the date of the request, the full name of the person requesting the delivery, a specific description of the items requested, whether each item is a medical cannabis or adult-use cannabis product, and the address to which the items are to be delivered;

2. The name of the person who delivered the items; and

3. The date and time of the delivery.

E. A person delivering cannabis or cannabis products on behalf of a dispensary shall carry the following items:

1. A copy of the dispensary’s current dispensary permit;

2. The person’s government-issued identification; and

3. A copy of the delivery request as described in subsection D.1.

F. Upon demand of a peace officer or city employee authorized to enforce this chapter, a person delivering cannabis or cannabis products pursuant to this section shall present the items listed in subsection E for examination.

G. Notwithstanding any provision of this chapter to the contrary, a cannabis delivery- only dispensary permittee may sell cannabis or cannabis products at an event that is approved by city council resolution and licensed by the state in accordance with California Business and Professions Code section 26200(e).

15 H. A cannabis business must maintain the information described in subsection D for at least three years on the site and must produce the information to the city upon request.

SECTION 20.

A. Subsection A.4 of section 5.150.540 of the Sacramento City Code is hereby added to read as follows:

4. Class D cannabis cultivation permit program fee.

B. Except as amended by subsection A above, all provisions of section 5.150.540 remain unchanged and in full effect.

SECTION 21.

A. Section 5.150.570 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The cultivation site must have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance must be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there must be a lobby that is used only to receive persons into the site and to verify whether they are allowed in the cultivation areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

E. Storage area. Each building with a cultivation area must have adequate storage space for all cannabis and all cannabis products that have completed the cultivation process or is otherwise not being cultivated. The storage areas must be separated from the main entrance and lobby, and must be secured by a lock accessible only to managers and staff of the cannabis cultivation permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.570 remain unchanged and in full effect.

SECTION 22.

16 Section 5.150.580 of the Sacramento City Code is hereby amended to read as follows:

5.150.580 Cultivation site security.

Each cultivation site must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into and out of the buildings on the cultivation site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the cultivation site. The system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained by the permittee for at least 90 days. The video recordings must be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 23.

A. Section 5.150.700 of the Sacramento City Code is amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The laboratory site must have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance must be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there must be a lobby that is used only to receive persons into the site and to verify whether they are

17 allowed in the testing areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

E. Storage area. Each building with a testing area must have adequate storage space for all cannabis and all cannabis products that have been tested or is waiting to be tested. The storage areas must be separated from the main entrance and lobby and must be secured by a lock accessible only to managers and staff of the cannabis testing laboratory permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.700 remain unchanged and in full effect.

SECTION 24.

Section 5.150.710 of the Sacramento City Code is hereby amended to read as follows:

5.150.710 Cannabis testing laboratory site security.

Each laboratory site must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the site. The system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained for at least 90 days. The video recordings must be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

18 D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 25.

A. Section 5.150.840 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The manufacturing site must have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance must be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there must be a lobby that is used only to receive persons into the site and to verify whether they are allowed in the manufacturing areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

E. Storage area. Each building with a manufacturing area must have adequate storage space for all cannabis and all cannabis products that have been manufactured or is waiting to be manufactured. The storage areas must be separated from the main entrance and lobby and must be secured by a lock accessible only to managers and staff of the cannabis manufacturing permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.840 remain unchanged and in full effect.

SECTION 26.

Section 5.150.850 of the Sacramento City Code is hereby amended to read as follows:

5.150.850 Cannabis manufacturing site security.

Each manufacturing site must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the site, the parking lot, storage and loading areas, areas not clearly visible from the

19 public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the site. The system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained for at least 90 days. The video recordings must be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 27.

Section 5.150.950 of the Sacramento City Code is hereby deleted.

SECTION 28.

A. Section 5.150.970 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The dispensary site must have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance must be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there must be a lobby that must be used only to receive persons into the site and to verify whether they are allowed in the restricted areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

20 E. Storage area. Each delivery-only permittee shall have adequate storage space in a building for its all cannabis and cannabis products. The storage areas must not be shared with another delivery-only cannabis dispensary permittee, must be separated from the main entrance and lobby and must be secured by a lock accessible only to managers and staff of the delivery- only cannabis dispensary permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.970 remain unchanged and in full effect.

SECTION 29.

Section 5.150.980 of the Sacramento City Code is hereby amended to read as follows:

5.150.980 Delivery-only cannabis dispensary site security.

Each delivery-only cannabis dispensary site must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the site. The system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained for at least 90 days. The video recordings must be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24

21 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 30.

A. Section 5.150.1130 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The distribution site must have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance must be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there must be a lobby that must be used only to receive persons into the site and to verify whether they are allowed in the areas where cannabis or cannabis products are stored. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection C is hereby amended to read as follows:

C. Storage area. The distribution site must have adequate storage space for all cannabis and all cannabis products being distributed. All storage areas in any building on the distribution site must be separated from the main entrance and lobby and must be secured by a lock accessible only to managers and staff of the cannabis distribution permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.1130 remain unchanged and in full effect.

SECTION 31.

Section 5.150.1140 of the Sacramento City Code is hereby amended to read as follows:

5.150.1140 Cannabis distribution site security.

Type-D or type-S cannabis distribution permittee must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the distribution site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The system must also be of adequate

22 quality, color rendition, and resolution to allow the identification of any individual present on the distribution site. The system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. Video from the security surveillance cameras must be recording at all times (24 hours a day, seven days a week) and the recording must be maintained for at least 90 days. The video recordings shall be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 32.

Section 5.150.1230 of the Sacramento City Code is hereby amended to read as follows:

5.150.1230 Transportation of cannabis.

A.  The cannabis distribution business shall use and maintain computer software to record the following information relating to the transportation of all cannabis and all cannabis products.

1. A shipping manifest that includes a specific description of the items being transported, whether each item is a medical cannabis or adult-use cannabis product, and the name and address of the cannabis business to which the items are to be transported;

2. The name of the person who transported the items;

3. The date and time of the transport; and

4. The name of the manager of the cannabis business who confirmed receipt of the items.

23 B. A person transporting cannabis or cannabis products on behalf of a cannabis distribution business shall carry the following items:

1. A copy of the distributor’s current cannabis distribution business permit;

2. The person’s government-issued identification; and

3. A copy of the shipping manifest as described in subsection A.1.

C. Upon demand of a peace officer or city employee authorized to enforce this chapter, a person transporting cannabis or cannabis products pursuant to this section shall present the items listed in subsection B for examination.

D. No person shall transport cannabis or cannabis products to anyone except a lawfully operated cannabis business. The person transporting the cannabis or cannabis products shall obtain a signature from a manager of the cannabis business confirming receipt of the items listed in the shipping manifest, before leaving the items.

E. A cannabis business must maintain the information described in subsection A for at least three years on the site and must produce the information to the city upon request.

SECTION 33.

A. Subsection E of section 8.132.050 of the Sacramento City Code is amended to read as follows:

E. Administrative penalties for violations of this chapter are governed by chapter 1.28, except for the following:

1. The amount of the administrative penalty is an aggregate amount calculated at $500 per plant that is in excess of the number of plants allowed.

2. The amount of the appeal fee is set by city council resolution.

B. Except as amended by subsection A above, all provisions of section 8.132.050 remain unchanged and in full effect.

1 ORDINANCE NO.

Adopted by the Sacramento City Council
[Date Adopted]
AN ORDINANCE AMENDING CHAPTER 5.150 AND SECTION 8.132.050 OF THE SACRAMENTO

CITY CODE, RELATING TO CANNABIS BUSINESSES AND THE ILLEGAL CULTIVATION OF

CANNABIS
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:

SECTION 1.

A. Section 5.150.020 of the Sacramento City Code is hereby amended as follows:

1. The definition of “hold-up alarm” is hereby added to read as follows:

“Hold-up alarm” means a silent alarm that alerts a monitoring company that criminal activity is in progress and causes the dispatch of law enforcement.

2. The definition of “limited liability company manager” is hereby added to read as follows:

“Limited liability company manager” means a person that, under the operating agreement of a manager-managed limited liability company, is responsible for performing the management functions stated in subdivision (c) of California Corporations Code section 17704.07.

3. The definition of “lobby” is hereby added to read as follows:

“Lobby” means a space that is accessible to the public inside the entrance of a building.

4. The definition of “qualified professional” is hereby added to read as follows:

“Qualified professional” means a person who holds a valid private patrol operator license under California Business and Professions Code section 7582, a valid alarm company operator license under California Business and Professions Code section 7593, a valid certificate from the American Society for Industrial Security International, or equivalent licensure or certification.

2 B. Except as amended by subsection A above, all provisions of section 5.150.020 remain unchanged and in full effect.

SECTION 2.

A. Section 5.150.070 of the Sacramento City Code is hereby amended as follows:

1. Subsection A is hereby amended to read as follows:

A. A cannabis business shallmust provide the city with names and addresses of all of the following interested parties of the business:

1. Each pPerson with an aggregate ownership interest of 20% or more in the entity engaging in the cannabis business, unless the interest is solely a security, lien, or encumbrance.; and

2. The chief executiveAll officers, and the members of the board of directors, limited liability company managers, and other persons with similar responsibilitiesof the entity engaging in the cannabis business.

3. The managers of the cannabis business.

4. Person who delivers cannabis or cannabis products for the cannabis business.

5. Person who transports cannabis or cannabis products for the cannabis business.

2. Subsection E is hereby amended to read as follows:

E. The offenses that are substantially related to the qualifications, functions, or duties of a cannabis business include, but are not be limited to, the following:

1. A violent felony, as specified in California Penal Code section 667.5(c).

2. A serious felony, as specified in California Penal Code section 1192.7(c).

3. A felony involving fraud, deceit, or embezzlement.

4. A felony involving the hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to

3 furnish, administering, or giving any controlled substance to a minor.

5. A felony for drug trafficking with enhancements pursuant to California Health and Safety Code sections 11370.4 or 11379.8.

B. Except as amended by subsection A above, all provisions of section 5.150.070 remain unchanged and in full effect.

SECTION 3.

A. Subsection 5.150.160.A of the Sacramento City Code is hereby amended to read as follows:

A. A cannabis business shallmust maintain the following business records in printed format for at least three years on the site and shallmust produce them to the city within 24 hours afterof receipt of the city’s request:

1. The name, address, and telephone numbers of the owner and landlord of the property.

2. The name, date of birth, address, and telephone number of each manager and staff of the cannabis business; the date each was hired; and the nature of each manager’s and staff’s participation in the cannabis business.

3. A written accounting of all income and expenditures of the cannabis business, including, but not limited to, cash and in-kind transactions.

4. A copy of the cannabis business’ commercial general liability insurance policy and all other insurance policies related to the operation of the business.

5. A copy of the cannabis business’ most recent year’s financial statement and tax return.

6. An inventory record documenting the dates and amounts of cannabis received at the site, the daily amounts of cannabis on the site, and the daily amounts of cannabis sold, distributed, and transported from the site.

7. The name, address, and telephone numbers of the owners and officers of the cannabis business; and the nature of the ownership interest in, and control of, the cannabis business.

4 8. A log detailing the arming and disarming of its alarm system, including the dates and times the alarm is armed and disarmed, the individuals who armed and disarmed the alarm, and the reasons the alarm was armed or disarmed.

B. Except as amended by subsection A above, all provisions of section 5.150.160 remain unchanged and in full effect.

SECTION 4.

A. Section 5.150.180 of the Sacramento City Code is hereby amended a s follows:

1. Subsection C is hereby amended to read as follows:

C. No person shall refuse, impede, obstruct, or interfere with an inspection pursuant to this chapter. Permittees shall provide the city with a read-only account to access their records on the track and trace program established by the state pursuant to California Business and Professions Code section 26067.

2. Subsection D is hereby added to read as follows:

D. No person shall refuse, impede, obstruct, or interfere with an inspection pursuant to this chapter.

B. Except as amended by subsection A above, all provisions of section 5.150.180 remain unchanged and in full effect.

SECTION 5.

Section 5.150.185 is hereby added to the Sacramento City Code to read as follows:

5.150.185 Cessation of cannabis business operations.

No cannabis business may cease operations for more than 30 consecutive days without first obtaining the city manager’s approval of the following:

A. A written plan that:

1. Describes the process and timeline to restart operations;

5 2. Describes the process and timeline to dispose of all cannabis and cannabis products on the site in accordance with section 5.150.130.C; or

3. Includes state authorization in accordance with section 15024.1 of title 4 of the California Code of Regulations to have a permitted cannabis business purchase, transport, and store all cannabis and cannabis products on the site and a written timeline of the purchase and transport.

B. A written payment plan for any unpaid business operation tax; and C. The name, mailing address, primary and secondary telephone numbers, and email address of at least one manager who is managing the cessation of the operations.

SECTION 6.

A. Section 5.150.210 of the Sacramento City Code is hereby amended as follows:

1. Subsection A is hereby amended to read as follows:

A. A person may apply for a cannabis business permit, or a permit renewal, by filing an application with the city manager. The application shallmust be on a form approved by the city manager and may require any information or documentation consistent with the provisions of this code and state law, including the following:

1. Applicant.

a. A description of the statutory entity or business form that will serve as the legal structure for the applicant and a copy of its formation and organizing documents, including, but not limited to, articles of incorporation, certificate of amendment, statement of information, articles of association, bylaws, partnership agreement, operating agreement, and fictitious business name statement.

b. The phone number and address to which notice of action on the application and correspondence is to be mailed.

2. Interested parties. The name, address, telephone number, title, and function of each of the interested parties described in section 5.150.070.

6 3. Background checks. For each of the applicants and managers of a medical

cannabis dispensary; or for each of the interested parties, identified pursuant to subsection A.2, of any other cannabis business:

a. A legible copy of one valid government-issued form of photo identification, such as a state driver’s license, a passport issued by the United States, or a permanent resident card.

b. A list of their misdemeanor and felony convictions, if any. For each conviction, the list must set forth the date of arrest, the offense charged, the offense convicted, the jurisdiction of the court, and whether the conviction was by verdict, plea of guilty, or plea of nolo contendere.

c. Consent to fingerprinting and a criminal background investigation.

4. Business site.

a. Description. A general description of the proposed business site, including the street address, parcel number, and the total square footage of the site, and the characteristics of the surrounding area.

b. Floor plan. A scaled floor plan for each level of each building that makes up the business site, including the entrances, exits, walls, and operating areas. The floor plan must be professionally prepared by a licensed civil engineer or architect.

c. Compliance with the Planning and Development Code. The date of issuance and the file number of the conditional use permit that was approved by the city for the proposed location.

d. Statement of owner’s consent. Written consent of the owner or landlord of the proposed site to operate a cannabis business, specifying the street address and parcel number.

5. Security.

a. Security plan. A detailed security plan outlining the measures that will be taken to ensure the safety of persons and property on the business site.

The security plan must be prepared by a qualified professional.

7 b. Lighting plan. A lighting plan showing existing and proposed exterior and interior lights that will provide adequate security lighting for the use.

6. Odor control. A detailed plan describing the air treatment system, or other methods that will be implemented to prevent cannabis odors from being detected outside the buildings on the business site.

7. Business operations.

a. Business plan. A plan describing how the cannabis business will operate in accordance with this code, state law, and other applicable regulations.

The business plan must include plans for handling all cash and transporting all cannabis and all cannabis products to and from the site.

b. Community relations contact. The contact information of the person designated as being responsible for outreach and communication with the surrounding community, including the neighborhood and businesses.

c. State licenses. Copies of the state licenses relating to cannabis that the applicant holds.

dc. Tax compliance. The city business operations tax certificate number; a copy of the applicant’s most recent financial statements; a copy of the applicant’s most recent state and federal signed tax returns; and proof of filing the tax returns with the applicable government agency.

ed. Insurance. The applicant’s certificate of commercial general liability insurance and endorsements.

fe. Budget. A copy of the applicant’s most recent annual budget for operations.

8. City authorization. Authorization and consent for the city manager to seek verification of the information contained within the application.

9. Applicant’s certification. A statement dated and signed by the applicant, under penalty of perjury, that the applicant has personal knowledge of the information contained in the application, that the information contained therein is true and correct, and that the application has been completed under the applicant’s supervision.

8 10. Indemnification. An agreement, in a form approved by the city attorney, whereby the applicant: (1) releases the city, and its agents, officers, elected officials, and employees from any and all claims, injuries, damages, or liabilities of any kind arising from: (a) any repeal or amendment of this chapter or any provision of the Planning and Development Code relating to cannabis, and (b) any arrest or prosecution of the applicant or its managers, employees, or members for violation of state or federal laws; and (2) defends, indemnifies, and holds harmless the city and its agents, officers, elected officials, and employees from and against any and all claims or actions: (a) brought by adjacent or nearby property owners or any other parties for any damages, injuries, or other liabilities of any kind arising from operations at the cultivation site, and (b) brought by any party for any problems, injuries, damages, or other liabilities of any kind arising out of the distribution of cannabis produced or processed at the site or by the business.

11. State labor peace agreement. Proof of compliance with the state’s labor peace agreement requirement under California Business and Professions Code section 26051.5(a)(5) and will maintain a copy of the agreement or notarized statement on site.

B. Except as amended by subsection A above, all provisions of section 5.150.210 remain unchanged and in full effect.

SECTION 7.

Section 5.150.220 of the Sacramento City Code amended to read as follows:

5.150.220 Application process.

The city manager is authorized to may establish procedures and guidelines to process new and renewal cannabis business permit applications.

SECTION 8.

Section 5.150.225 is hereby added to the Sacramento City Code to read as follows:

5.150.225 Abandoned applications.

A. An application that is filed with the city is abandoned if:

9 1. The application has been incomplete for 180 days after it was filed, and the applicant has not requested an extension and paid the applicable fee; or

2. The applicant has failed to pay the cannabis business permit program fee within 30 days of filing the application.

B. The city will not process abandoned applications.

SECTION 9.

A. Subsection E of section 5.150.230 of the Sacramento City Code is hereby amended to read as follows:

E. To renew a cannabis business permit, the permittee shall submit an renewal application, renewal fee, and required documents in accordance with section 5.150.210. The permittee shall submit the application no later than 30 days prior to the permit expiration date. Untimely applications are subject to a late penalty in the amount established by resolution of the city council.

B. Except as amended by subsection A above, all provisions of section 5.150.230 remain unchanged and in full effect.

SECTION 10.

Section 5.150.240 of the Sacramento City Code is hereby amended to read as follows:

5.150.240 Grounds for denial of a cannabis business permit.

The city manager may deny a cannabis business permit if the city manager determines that one or more of the following circumstances exist:

A. The application received is has been incomplete for 180 days after it was filed with the city or not responsive to the requirements of this article;.

B. The application contains a false or misleading statement or omission of a material fact;.

C. The operation of a cannabis business described in the application fails to comply with any of the requirements in this code, state law, or any other regulation;.

D. The applicant or any of its managers has any unpaid and overdue administrative penalties imposed for violations of this chapter;.

10 E. The applicant has not paid the applicable business operations tax pursuant to chapter 3.08.

F. Within 12 months of the filing date of the application,: either (1) the applicant has had its cannabis business permit suspended more than once, revoked, or had two or more administrative penalties issued to it; or (2) any of its owners, officers, directors, partners, agents, or any persons vested with the authority to managers or direct the affairs of the business were associated with another business that had its cannabis business permit suspended more than once, revoked, or had two or more administrative penalties issued to itthem;.

G. The applicant or any of its managers has violated a provision of this chapter;.

H. Within 12 months of the filing date of the application, the applicant, the cannabis business’ manager, or property owner has violated a provision of the CBC, CEC, CFC, CPC, CMC, or chapters 8.04, 8.08, 8.96, or 8.100 of this code, in connection with developing or operating the cannabis business or the site;. or

I. Operation of the cannabis business is a threat to the public health, safety, or welfare.The application to renew a permit is filed with the city after the permit has expired.

J. The applicant for renewal of a permit has violated one or more conditions on the permit.

K. Operation of the cannabis business is a threat to the public health, safety, or welfare.

SECTION 11.

A. Subsection 5.150.250.A of the Sacramento City Code is hereby amended to read as follows:

A. If the city manager denies a cannabis business permit or renewal thereof after the application is accepted as complete, written notice of denial shall be served on the applicant. The notice shallmust contain:

1. A brief statement of the grounds for the denial.

2. A statement that the applicant may request reconsideration of the denial, in writing to the city manager, within 10 days of the date of service of the notice.

11 3. A statement that the failure to timely request reconsideration of the denial will constitute a waiver of all rights to reconsideration, and the denial will be final.

B. Except as amended by subsection A above, all provisions of section 5.150.250 remain unchanged and in full effect.

SECTION 12.

Section 5.150.260 of the Sacramento City Code is hereby amended to read as follows:

5.150.260 Grounds for suspending, modifying, or revoking a cannabis business permit.

The city manager may suspend, modify, or revoke a cannabis business permit issued pursuant to the provisions of this chapter for any of the following reasons:

A. One or more of the circumstances upon which a cannabis business permit could be denied, as described in section 5.150.240, exists or has occurred;.

B. One or more conditions of the cannabis business permit has been violated;.or

C. The permittee, its owners, officers, directors, partners, agents, or other persons vested with the authority to manage or direct the affairs of the business have violated any provision of this chapter.

SECTION 13.

A. Section 5.150.270 of the Sacramento City Code is hereby amended as follows:

1. Subsection A.2 is hereby amended to read as follows:

2. A statement that the dispensarypermittee may appeal the action in accordance with section 5.150.290.

2. Subsection B.2 of is hereby amended to read as follows:

2. A permitted cannabis business holding a valid cannabis business permit issued pursuant to this chapter ceases operation for 90 consecutive days or longer and does not have city approved plans pursuant to section 5.150.185;

12 B. Except as amended by subsection A above, all provisions of section 5.150.270 remain unchanged and in full effect.

SECTION 14.

A. Subsection D of section 5.150.380 of the Sacramento City Code is hereby amended to read as follows:

D. No storefront cannabis dispensary permittee shall allow any violation of subsections A, B, or C.

B. Except as amended by subsection A above, all provisions of section 5.150.380 remain unchanged and in full effect.

SECTION 15.

Section 5.150.415 of the Sacramento City Code is hereby amended to read as follows:

5.150.415 Cannabis accessories .

A cannabis business that is expressly authorized to sell cannabis pursuant to this chapter, whether medical cannabis or adult-use cannabis, may also display and sell cannabis accessories and display cannabis accessories on up to 150 square feet of their site.

SECTION 16.

Section 5.150.460 of the Sacramento City Code is hereby amended to read as follows:

5.150.460 Storefront cannabis dispensary buildings.

A. The storefront cannabis dispensary building must not exceed 8,000 square feet.

BA. Floor Plan. A storefront cannabis dispensary must have a main entrance that is clear of barriers, landscaping, and similar obstructions so that it is clearly visible from public streets or sidewalks. A dispensary must also have a lobby waiting area at the entrance that is used only to receive persons to verify that they are members of that dispensary or are otherwise allowed to be on the dispensary site.

The lobby must be secure and restrict access to any other area of the dispensary. A dispensary must also have a separate and secure area designated for selling cannabis, cannabis products, and cannabis accessories to its customers. The main entrance must be located and maintained clear of barriers, landscaping, and similar obstructions so that it is clearly visible from public streets or sidewalks.

13 CB. Storage. A storefront cannabis dispensary must have adequate locked storage on the dispensary site, identified and approved as a part of the security plan, for after- hours storage of all cannabis and all cannabis products. All Ccannabis and all cannabis products must be stored at the dispensary site in secured rooms that are completely enclosed or in a safe that is bolted to the floor.

SECTION 17.

Section 5.150.470 of the Sacramento City Code is hereby amended to read as follows:

5.150.470 Storefront cannabis dispensary security.

Storefront cannabis dispensaries shallmust comply with the following security provisions at all times:

A. Licensed Security Personnel. A dispensary must have adequate state-licensed security personnel to patrol the dispensary site and the area within 100 feet of the site, in order to preserve the safety of persons and to protect the dispensary from theft.

B. Security Cameras. The dispensary must have security surveillance cameras and a video recording system that monitors the interior, main entrance, storage, areas of ingress and egress, parking lot, and exterior sides of the dispensary site including the areas not clearly visible from the public streets to discourage loitering, crime, and illegal or nuisance activities. The camera and recording system must be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the dispensary site. The system must also be capable of exporting the recording in standard MPEG formats to another common medium, such as a DVD or USB drive.

C. Security Video Retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained by the dispensary for a period of not less than 90 days. The recording shallmust be made available to the city upon request.

D. Alarm System. A dispensary must have professionally and centrally-monitored fire, robbery, and burglar alarm systems that are maintained in good working condition. The alarm system must be monitored by a private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area,

14 manager’s office, lobby, and storage areas.

E. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 18.

Section 5.150.500 of the Sacramento City Code is hereby amended to read as follows:

5.150.500 Display of storefront cannabis dispensary permit.

The storefront cannabis dispensary permittee shall display at all times during business hours, its current valid storefront dispensary permit issued pursuant to this chapter. The permit shall be displayed in a conspicuous place so that it may be readily seen by all persons entering the dispensary.

SECTION 19.

Section 5.150.525 of the Sacramento City Code is hereby amended to read as follows:

5.150.525 Delivery of cannabis.

A cannabis business that is expressly authorized to deliver cannabis pursuant to this chapter may deliver cannabis and cannabis products subject to the following provisions:

A. All cannabis and all cannabis products being delivered shallmust be obtained from the site of the cannabis business that is authorized to deliver cannabis. No cannabis or cannabis products may be delivered from any other facility, such as a separate storage facility or a cannabis product manufacturing facility. Loading and unloading of cannabis products must only take place within the designated and approved secured loading area. All cannabis and all cannabis products must be kept in a secured container that is attached to the delivery vehicle.

B. No person delivering cannabis or cannabis products shall possess more than $35,000 worth of cannabis and cannabis products at any time, including no more than $3,000 worth of cannabis and cannabis products that are purchased by customers.

C. No person shall deliver cannabis or cannabis products in a vehicle that has any markings identifying it as a vehicle in which cannabis may be contained, or that is more than 10 years old. The age of the vehicle is measured by using January 1st of the model year of the vehicle as the starting date.

15 D. The cannabis business shallmust use and maintain computer software to record the following information relating to each delivery:

1. A delivery request that includes the date of the request, the full name of the person requesting the delivery, a specific description of the items requested, whether each item is a medical cannabis or adult-use cannabis product, and the address to which the items are to be delivered;

2. The name of the person who delivered the items; and

3. The date and time of the delivery.

E. A person delivering cannabis or cannabis products on behalf of a dispensary shall carry the following items:

1. A copy of the dispensary’s current dispensary permit;

2. The person’s government-issued identification; and

3. A copy of the delivery request as described in subsection CD.1.

F. Upon demand of a peace officer or city employee authorized to enforce this chapter, a person delivering cannabis or cannabis products pursuant to this section shall present the items listed in subsection E for examination.

G. Notwithstanding any provision of this chapter to the contrary, a cannabis delivery- only dispensary permittee may sell cannabis or cannabis products at an event that is approved by city council resolution and licensed by the state in accordance with California Business and Professions Code section 26200(e).

H. A cannabis business shallmust maintain the information described in subsection D for at least three years on the site and shallmust produce the information to the city upon request.

SECTION 20.

A. Subsection A.4 of section 5.150.540 of the Sacramento City Code is hereby added to read as follows:

4. Class D cannabis cultivation permit program fee.

16 B. Except as amended by subsection A above, all provisions of section 5.150.540 remain unchanged and in full effect.

SECTION 21.

A. Section 5.150.570 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The cultivation site shallmust have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance shallmust be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there shallmust be a lobby that is used only to receive persons into the site and to verify whether they are allowed in the cultivation areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

E. Storage area. Each building with a cultivation area shallmust have adequate storage space for all cannabis and all cannabis products that hasve completed the cultivation process or is otherwise not being cultivated. The storage areas shallmust be separated from the main entrance and lobby, and shallmust be secured by a lock accessible only to managers and staff of the cannabis cultivation permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.570 remain unchanged and in full effect.

SECTION 22.

Section 5.150.580 of the Sacramento City Code is hereby amended to read as follows:

5.150.580 Cultivation site security.

Each cultivation site security plan approved by the city manager must include must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into and out of the buildings on the cultivation site, the parking lot, storage and loading areas, areas not clearly visible

17 from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The cameras and recording system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the cultivation site. The recording system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained by the permittee for at least 90 days. The video recordings shallmust be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by include a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 23.

A. Section 5.150.700 of the Sacramento City Code is amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The laboratory site shallmust have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance shallmust be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there shallmust be a lobby that is used only to receive persons into the site and to verify whether they are allowed in the testing areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

E. Storage area. Each building with a testing area shallmust have adequate storage space for all cannabis and all cannabis products that hasve been tested or is waiting to be tested. The storage areas shallmust be separated from the main

18 entrance and lobby, and shallmust be secured by a lock accessible only to managers and staff of the cannabis testing laboratory permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.700 remain unchanged and in full effect.

SECTION 24.

Section 5.150.710 of the Sacramento City Code is hereby amended to read as follows:

5.150.710 Cannabis testing laboratory site security.

Each laboratory site security plan approved by the city manager must includemust comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the laboratory site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The cameras and recording system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the laboratory site. The recording system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained for at least 90 days. The video recordings shallmust be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by include a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 25.

19 A. Section 5.150.840 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The manufacturing site shallmust have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance shallmust be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there shallmust be a lobby that is used only to receive persons into the site and to verify whether they are allowed in the manufacturing areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

E. Storage area. Each building with a manufacturing area shallmust have adequate storage space for all cannabis and all cannabis products that hasve been manufactured or is waiting to be manufactured. The storage areas shallmust be separated from the main entrance and lobby, and shallmust be secured by a lock accessible only to managers and staff of the cannabis manufacturing permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.840 remain unchanged and in full effect.

SECTION 26.

Section 5.150.850 of the Sacramento City Code is hereby amended to read as follows:

5.150.850 Cannabis manufacturing site security.

Each manufacturing site must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the laboratory site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The cameras and recording system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the laboratory site. The recording system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must

20 record at all times (24 hours a day, seven days a week) and the recording must be maintained for at least 90 days. The video recordings shallmust be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by include a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 27.

Section 5.150.950 of the Sacramento City Code is hereby deleted.

5.150.950 Collective or cooperative dispensary.

A. A delivery-only cannabis dispensary must operate as a cooperative or collective of four or more members who associate at a particular location to collectively or cooperatively sell cannabis, and operate on a not-for-profit basis.

B. Each manager and staff of a delivery-only cannabis dispensary must be a member who is registered with that dispensary.

C. This section does not apply to any delivery-only cannabis dispensary that is licensed by the state of California to conduct the commercial sale or transfer of cannabis or cannabis products.

SECTION 28.

A. Section 5.150.970 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The dispensary site must have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance must be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there must be a lobby that must be used only to receive persons into the site and to verify whether they are

21 allowed in the restricted areas. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection E is hereby amended to read as follows:

E. Storage area. Each delivery-only permittee mustshall have adequate storage space in a building for its all cannabis and cannabis products. The storage areas must not be shared with another delivery-only cannabis dispensary permittee, must be separated from the main entrance and lobby and must be secured by a lock accessible only to managers and staff of the delivery- only cannabis dispensary permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.970 remain unchanged and in full effect.

SECTION 29.

Section 5.150.980 of the Sacramento City Code is hereby amended to read as follows:

5.150.980 Delivery-only cannabis dispensary site security.

Each delivery-only cannabis dispensary site must comply with the following security provisions at all times:

A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the laboratory site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The cameras and recording system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the laboratory site. The recording system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. The security surveillance cameras must record at all times (24 hours a day, seven days a week) and the recording must be maintained for at least 90 days. The video recordings shallmust be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by include a properly licensed private security company that is required to respond to every alarm within 20

22 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 30.

A. Section 5.150.1130 of the Sacramento City Code is hereby amended as follows:

1. Subsection B is hereby amended to read as follows:

B. Main entrance and lobby. The distribution site must have a building with a main entrance that is clearly visible from the public street or sidewalk. The main entrance must be maintained clear of barriers, landscaping, and other obstructions. Inside of the main entrance, there must be a lobby that must be used only to receive persons into the site and to verify whether they are allowed in the areas where cannabis or cannabis products are stored. The lobby must be secure and restrict access to any other area of the facility.

2. Subsection C is hereby amended to read as follows:

C. Storage area. The distribution site must have adequate storage space for all cannabis and all cannabis products being distributed. All storage areas in any building on the distribution site must be separated from the main entrance and lobby and must be secured by a lock accessible only to managers and staff of the cannabis distribution permittee.

B. Except as amended by subsection A above, all provisions of section 5.150.1130 remain unchanged and in full effect.

SECTION 31.

Section 5.150.1140 of the Sacramento City Code is hereby amended to read as follows:

5.150.1140 Cannabis distribution site security.

The security plan for a tType-D or type-S cannabis distribution permittee must comply with include the following security provisions at all times:

23 A. Security surveillance cameras. Security surveillance cameras and a video recording system must be installed to monitor all doors into the buildings on the distribution site, the parking lot, storage and loading areas, areas not clearly visible from the public streets, and all exterior sides of the property adjacent to the public rights of way to discourage nuisance or illegal activities. The cameras and recording system must also be of adequate quality, color rendition, and resolution to allow the identification of any individual present on the distribution site. The recording system must be capable of exporting the recorded video in standard MPEG formats to another common medium, such as a DVD or USB drive.

B. Security video recording and retention. Video from the security surveillance cameras must be recording at all times (24 hours a day, seven days a week) and the recording shallmust be maintained for at least 90 days. The video recordings shall be made available to the city upon request.

C. Alarm system. Professionally and centrally-monitored fire, robbery, and burglar alarm systems must be installed and maintained in good working condition. The alarm system must be certified and monitored by include a properly licensed private security company that is required to respond to every alarm within 20 minutes. The system must also include a hold-up alarm that is accessible near the transport area, manager’s office, lobby, and storage areas.

D. Back-up Security System. The security system must be equipped with at least 24 hours of continued operation in case of power failure and equipped with a cellular back-up in case of phone disruption.

SECTION 32.

Section 5.150.1230 of the Sacramento City Code is hereby amended to read as follows:

5.150.1230 Transportation of cannabis.

A.  The cannabis distribution business shall use and maintain computer software to record the following information relating to the transportation of all cannabis and all cannabis products.

1. A shipping manifest that includes a specific description of the items being transported, whether each item is a medical cannabis or adult-use cannabis product, and the name and address of the cannabis business to which the items are to be transported;

2. The name of the person who transported the items;

24 3. The date and time of the transport; and

4. The name of the manager of the cannabis business who confirmed receipt of the items.

B. A person transporting cannabis or cannabis products on behalf of a cannabis distribution business shall carry the following items:

1. A copy of the distributor’s current cannabis distribution business permit;

2. The person’s government-issued identification; and

3. A copy of the shipping manifest as described in subsection A.1.

C. Upon demand of a peace officer or city employee authorized to enforce this chapter, a person transporting cannabis or cannabis products pursuant to this section shall present the items listed in subsection B for examination.

D. No person shall transport cannabis or cannabis products to anyone except a lawfully operated cannabis business. The person transporting the cannabis or cannabis products shall obtain a signature from a manager of the cannabis business confirming receipt of the items listed in the shipping manifest, before leaving the items.

E. A cannabis business shallmust maintain the information described in subsection A for at least three years on the site and shallmust produce the information to the city upon request.

SECTION 33.

A. Subsection E of section 8.132.050 of the Sacramento City Code is amended to read as follows:

E. Administrative penalties for violations of this chapter are governed by chapter 1.28, except for the following:

1. Notwithstanding the provisions of section 1.28.010.D.3, tThe amount of anthe administrative penalty to be imposed for a violation of sections 8.132.030 or 8.132.040 is an aggregate amount calculated at $500 per plant that is in excess of the number of plants allowed.

2. For purposes of establishing the amount of the appeal fee in accordance with section 1.28.010.D.4.b, an administrative penalty imposed for a

25 violation of sections 8.132.030 or 8.132.040 is a Level B violation, regardless of the amount of the penaltyThe amount of the appeal fee is set by city council resolution.

B. Except as amended by subsection A above, all provisions of section 8.132.050 remain unchanged and in full effect.

RESOLUTION NO.

Adopted by the Sacramento City Council

ESTABLISHING THE AMOUNT OF AN EXTENSION FEE FOR A CANNABIS

BUSINESS OPERATION PERMIT APPLICATION AND THE APPEAL FEE FOR

ADMINISTRATIVE PENALTIES FOR THE ILLEGAL CULTIVATION OF CANNABIS

BACKGROUND

A. Chapter 5.150 of the Sacramento City Code contains the regulations for cannabis businesses including procedures to apply for a cannabis Business Operating Permit (“BOP”).

B. Applications for a cannabis BOP are valid for 180 days upon submission. (Sacramento City Code section 5.150.225)

C. An application is abandoned if it is incomplete for 180 days after it was filed, and the applicant has not requested to extend the application and paid an extension fee. (Sacramento City Code section 5.150.225)

D. Sacramento City Code section 8.132.050.E.2 authorizes the Council to establish a separate appeals fee for administrative penalties issued for illegal cultivation of cannabis, instead of defaulting to the appeal of fees of a Level B violation under City Code Section 1.28.010 (D)(4)(b).

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE BUDGET AND AUDIT COMMITTEE RESOLVES AS FOLLOWS:

Section 1. The background statements A through D are true.

Section 2. The amounts of the fee for BOP extension and appeal fees for administrative penalties issued for illegal cultivation are as follows:

Cannabis Business Permit
Application Extension Fee
$500
Appeal Fee for Administrative
Penalties Issued for Illegal
Cultivation of Cannabis
$500

Section 3. This resolution takes effect when adopted.