City of Sacramento
Law and Legislation Committee Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01523 8/30/2022 Discussion Item 02.
Workshop on Cannabis Onsite Consumption
File ID: 2022-01523
Location: Citywide
Recommendation: Conduct a workshop on cannabis onsite consumption and provide direction to staff.
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 Cannabis Management, Office of the City Manager; panelists from various jurisdictions Attachments:
1-Description/Analysis
Description/Analysis
Issue Detail: State law authorizes local jurisdictions, within certain limitations, to allow onsite consumption of cannabis for cannabis businesses that hold a storefront dispensary permit (including a microbusiness). (California Business and Professions Code section 26200(g).) Consumption is also allowed for certain temporary cannabis events, with local authorization, at county fairs, district agricultural association events, or other venues approved by the local jurisdiction.(California Business and Professions Code section 26200(e).)
Because Council has not adopted a policy on onsite consumption of cannabis, permitted storefront dispensaries are explicitly prohibited from having onsite consumption and the only location where onsite consumption can take place in the City currently is at State-licensed events at Cal-Expo that hold a local event authorization from the City. State regulations for onsite consumption include the following:
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File ID: 2022-01523 8/30/2022 Discussion Item 02.
· For a licensed cannabis retailer premises or a State-licensed cannabis temporary event:
o Local authorization required;
o Access to the consumption areas is restricted to persons who are 21 years of age or older;
o Consumption is not visible from any public place or nonage-restricted area; o Sale and the consumption of alcohol or tobacco prohibited; and o Free cannabis goods (samples) are prohibited.
· At a State-licensed cannabis temporary event:
o All participants who offer cannabis or cannabis products for sale must hold a retail license;
o The activities are otherwise consistent with State regulations for these events; o The event licensee provides a list of all licensees who will provide onsite cannabis/cannabis product sales for the event (including any changes that occur); and o Must occur at a site where smoking is not prohibited. o All products must comply with the same daily limits, packaging and testing requirements for cannabis and cannabis products sold at dispensaries o There are no options for restaurants/food businesses to infuse cannabis into the food on site as manufacturing may only take place on the premises licensed for that activity In December 2021, at the request of cannabis stakeholders, the Office of Cannabis Management (OCM) hosted a discussion on onsite consumption, at which stakeholders shared different ideas on how they envisioned onsite consumption in the City. Stakeholders suggestions included a lounge attached to a permitted storefront dispensary, a standalone lounge with its own permit, or at other event venues in addition to Cal-Expo. Stakeholders commented that onsite consumption lounges would create additional tax revenue for the City and provide a new cannabis business opportunity for entrepreneurs. Many participants of the Cannabis Opportunity Reinvestment and Equity (CORE) Program advocated for onsite consumption permits to be made exclusive to CORE.
OCM staff then visited two onsite consumption lounges in San Francisco that were in operation and met with San Francisco cannabis regulatory staff. Pursuant to San Francisco environmental health regulations, the lounges had air systems with frequent air exchanges, which meant that no smoke could be detected outside the consumption room and once inside the consumption room, the smell of burning cannabis was faint. Customers were allowed to be in the lounge area for a maximum of 30 minutes, and lounge staff monitored patrons via camera and by walking through the lounge area regularly to engage verbally with patrons. The only cannabis products that could be consumed in the lounge were those purchased on-site. The two lounges train their retail staff to customize their product recommendations for the customers experience with cannabis and desired effects. Retail staff communicated with lounge staff so that inexperienced cannabis users could be monitored more closely.
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File ID: 2022-01523 8/30/2022 Discussion Item 02.
Earlier this year, EPS concluded its comprehensive study on the cannabis industry in Sacramento.
OCM brought forward a set of recommendations to the Law and Legislation Committee (Committee) from the EPS Study, including the option to consider the addition of cannabis consumption lounges to the authorized cannabis operating permit types. However, a majority of the Committee expressed safety concerns with onsite consumption, particularly over the potential of lounge customers driving under the influence of cannabis. As a result, onsite consumption was not forwarded to Council for further consideration. Subsequently, utilizing Council Rule of Procedure section 7.A.2, Councilmember Katie Valenzuela placed the following request on the Council’s log on May 31, 2022, “Asked that the Office of Cannabis Management work with stakeholders on a proposal to allow cannabis consumption lounges in Sacramento.”
In response to that request, this workshop will facilitate a clear understanding of cannabis onsite consumption, clarify onsite consumption that is and is not allowed under State law, learn about experiences of other jurisdictions that currently allow onsite consumption, and provide stakeholders and the general public the opportunity to share their views. To provide the Committee with local regulator’s experiences in developing and implementing cannabis consumption regulations, panelists from City and County of San Francisco, City of West Hollywood, City of Oakland, and City of Palm Springs have agreed to appear virtually to share:
· Overview of the jurisdiction’s onsite consumption regulations for lounges/events · Community concerns and how they were addressed
· Revenues
· Enforcement challenges
· Insights and lessons learned
At the conclusion of the Workshop, the Committee could:
1. Request OCM return with additional information or workshops on consumption lounges and/or expanded consumption events.
2. Request OCM return with draft ordinances for consumption lounges, subject to the same land use restrictions and zoning regulations as a bar that serves alcohol.
3. Request OCM return with draft ordinances to expand the places where onsite consumption events can take place (with required event permitting), which may include parks, event venues, and rented commercial spaces.
4. Take no action.
Policy Considerations: None at this time, but should the Committee direct staff to return at a future meeting with a proposal for consumption, Title 5 (Business and Tax Regulations), Title 17 (Planning Code), and Title 8 (Health and Safety Code) will need to be amended to establish regulations for cannabis onsite consumption at lounges and/or at events.
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File ID: 2022-01523 8/30/2022 Discussion Item 02.
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): This action is exempt from the California Environmental Quality Act (CEQA) because it is the adoption of an ordinance, rule, or regulation that requires discretionary review, including environmental review, and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity (CEQA Guidelines sections 15061(B)(1), California Business and Professions Code section 26055(h)) and because it does not have the potential for causing a significant effect on the environment (CEQA Guidelines section15061(b)(3)).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: None, as the item is a Committee workshop to provide the opportunity to receive information from panelists and stakeholders. The Committee may choose to provide direction or not take any action on the item.
Financial Considerations: None at this time.
Local Business Enterprise (LBE): Not applicable.
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