City of Sacramento Page 1
LAW AND LEGISLATION COMMITTEE
Caity Maple, Chair, District 5
Roger Dickinson, District 2
Phil Pluckebaum, District 4
Rick Jennings, II, District 7
COMMITTEE STAFF
Mindy Cuppy,
City Clerk
Steve Itagaki,
Supervising Deputy City Attorney
Consuelo Hernandez,
Director of Governmental Affairs
Law and Legislation
Committee
City Hall Complex
915 I Street, Sacramento, CA 95814
Published by the Office of the City Clerk
(916) 80
8-7200
SUPPLEMENTAL MATERIAL
D
escription of Attached: Attached is supplemental material received after publishing the For
the Meeting of:
Agenda Item:
agenda, the addition of attachment 5.
Tuesday, April 8, 2025 at 11:00 a.m.
Item 5
5. P
olicy Direction Relating to Cannabis Consumption Lounges File ID: 2025-00635
Location: Citywide
R
ecommendation: 1) Review an ordinance removing Section 5.150.235 and adding Section 5.150.1365 of the Sacramento City Code, relating to call-up review of cannabis business permit issuance and the geographic distribution of cannabis consumption lounges, respectively; 2) pass a Motion forwarding the Ordinance to City Council for consideration.
C
ontact: Peter Coletto, Director of Finance, [email protected], (916) 808-5416, Office of the City Manager, Alvaro Romero-Gibu, Cannabis Manager, (916) 808-4772, [email protected], Fiona Mattson, Program Manager, (916) 808-8925, [email protected]; Office of Cannabis Management
City of Sacramento
Law and Legislation Committee Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00635 4/8/2025 Item 5.
Policy Direction Relating to Cannabis Consumption Lounges File ID: 2025-00635
Location: Citywide
Recommendation: 1) Review an ordinance removing Section 5.150.235 and adding Section
5.150.1365 of the Sacramento City Code, relating to call-up review of cannabis business permit issuance and the geographic distribution of cannabis consumption lounges, respectively; 2) pass a Motion forwarding the ordinance to City Council for consideration.
Contact: Peter Coletto, Director of Finance, [email protected], (916) 808-5416, Office of the City Manager, Alvaro Romero-Gibu, Cannabis Manager, (916) 808-4772, [email protected], Fiona Mattson, Program Manager, (916) 808-8925, [email protected]; Office of Cannabis Management Presenter: Fiona Mattson, Program Manager, (916) 808-8925, [email protected]; Office of Cannabis Management
Attachments:
1-Description/Analysis
2-Ordinance No. 2024-0044
3-Ordinance (Clean)
4-Ordinance (Redline)
5-Presentation
Description/Analysis
Issue Detail:
On November 19, 2024, Council adopted Ordinance 2024-0044 establishing a five-year cannabis social consumption pilot program (Attachment 2). This pilot program creates two permit add-on types to allow storefront dispensaries to operate consumption lounges:
· Type 1 (Non-smoking Consumption) - A type 1 condition on a valid storefront cannabis dispensary permit authorizes a storefront cannabis dispensary permittee to allow persons to consume cannabis and cannabis products, other than by smoking or vaping, in a cannabis consumption lounge on the site
File ID: 2025-00635 4/8/2025 Item 5.
· Type 2 (All Consumption) - A type 2 condition on a valid storefront cannabis dispensary permit authorizes storefront cannabis dispensary permittee to allow persons to consume cannabis and cannabis products, including by smoking or vaping, in a cannabis consumption lounge on the site
Consumption lounges can only operate in permitted storefront dispensaries, and the permit add-ons also require businesses to meet additional health and safety requirements, including updated HVAC standards for Type 2 permits.
Council directed staff to return with an ordinance addressing the equitable geographic distribution of consumption lounges across Council districts, as well as the ability for call-up review for business operating permits (BOPs) in relation to lounges.
Geographic distribution across districts
As of March 1, 2025, there are 36 permitted storefront dispensaries, and the district distribution is as follows:
· District 1 - 0
· District 2 - 8
· District 3 - 1
· District 4 - 11
· District 5 - 5
· District 6 - 8
· District 7 - 2
· District 8 - 1
Staff conducted a survey of the 36 storefront dispensaries to gauge the interest and feasibility of opening and operating a consumption lounge. Eight responses were received and all respondents were interested in the Type 2 add-on; however, two are located within a sensitive use buffer. Of the six respondents not within a sensitive use buffer, the survey results are as follows:
· 4 respondents have space for a Type 2 lounge (square footage ranging from 1,200 sq.ft. -1,500 sq.ft.)
· 1 respondent only has space for a Type 1 lounge
· 1 respondent did not have space for either permit type · 3 respondents believed it would take approximately 6-36 months to complete building improvements and be able to open a lounge
· 2 are Cannabis Opportunity Reinvestment and Equity (CORE) program participants
File ID: 2025-00635 4/8/2025 Item 5.
The geographic representation of respondents is as follows:
· District 1 - 0
· District 2 - 2
· District 3 - 0
· District 4 - 3 (2 respondents located within a sensitive use buffer) · District 5 - 1
· District 6 - 1
· District 7 - 1
· District 8 - 0
Staff recommends no more than five storefront dispensary consumption lounges per district to fulfill the equitable geographic distribution direction provided by Council (Attachments 3 and 4). A fee study for the permit add-ons is underway. Consistent with Council approved CORE benefits, CORE program participants will have add-on permit fees waived.
Call-up review of cannabis business permit issuance
To operate a consumption lounge, a storefront business will need to obtain a Conditional Use Permit (CUP) and then later a BOP after the business has made the investments needed to comply with the additional consumption lounge health and safety requirements. Due to the significant investment needed to meet the requirements to apply for a BOP, staff is recommending a call-up provision be added to the CUP process that would allow a City Councilmember to call-up that approval, prior to the business starting a BOP process and before significant investment is made.
Policy Considerations: All cannabis consumption lounges will require a CUP under the proposed amendments to Title 17. Proposed Title 17 amendments, if passed by the Council, will be effective by summer 2025. BOPs for consumption lounges subsequently will be available for issuance.
Economic Impacts: The addition of cannabis consumption lounges may increase economic activity in the cannabis marketplace, as well as drive cannabis tourism and enhance surrounding businesses to the lounge.
Environmental Considerations: This action is exempt from the California Environmental Quality Act (CEQA) because it is the adoption of an ordinance, rule, or regulation that requires discretionary review, including environmental review, and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity (CEQA Guidelines section 15061(B)(1), California Business and Professions Code section 26055(h)) and because it does not have the potential for causing a
File ID: 2025-00635 4/8/2025 Item 5.
significant effect on the environment (CEQA Guidelines section 15061(b)(3)).
Sustainability: Not applicable.
Commission/Committee Action:
· On September 19, 2023, the Law and Legislation Committee (Committee) directed OCM staff to develop a pilot framework for cannabis social consumption lounges. · On January 23, 2024, Council directed staff to develop a framework to add additional storefront opportunities for CORE participants.
· On May 21, 2024, staff provided an informational update to the Committee regarding a framework for consumption lounge business operating permits with preference to CORE storefront dispensaries. The Committee provided direction to return with a framework to allow consumption business operating permits for all storefront dispensaries. · On August 20, 2024, staff presented a framework to add additional storefront opportunities for CORE participants to the Committee. The Committee directed staff to return to discuss the addition of storefront opportunities if the proposed Title 17 amendments are adopted. · On September 17, 2024, staff presented a cannabis consumption business operating permit framework to the Committee. The Committee forwarded the pilot program concept for social consumption to City Council for consideration but requested a City Council workshop soliciting the expertise of public health experts regarding cannabis consumption statewide public health trends prior to Council consideration of social consumption. · On October 22, 2024, the City Council heard presentations from public health experts discussing statewide public health trends and secondhand smoke in dispensaries. · On November 19, 2024, the City Council adopted an Ordinance 2024-0044 amending Title 5 concerning business regulations for cannabis consumption lounges with the direction to return with an ordinance addressing equitable distribution of consumption lounges across Council districts, as well as the ability for call-up review for cannabis consumption lounges.
Rationale for Recommendation: Staff is fulfilling Council direction by returning with a plan to address call-up review of cannabis business permit issuance and equitable geographic distribution of consumption lounges across districts to implement the five-year consumption lounge pilot program.
Financial Considerations: Social consumption may increase cannabis sales which would increase revenues into the General/Measure U fund and the Measure L Children’s Fund.
Local Business Enterprise (LBE): Not applicable.
Policy Direction – Cannabis Consumption Lounges
Law and Legislation Committee
April 8, 2025
Direction & Recommendations
2 Geographic Distribution
• Survey of 36 storefront
dispensaries conducted to
gauge interest in pilot program
• No more than 5 storefront
dispensary consumption
lounges per district
Call-up Review
• Call-up provision added to the
conditional-use permit process
On November 19, 2024, Council adopted Ordinance 2024-0044 for a five-year cannabis social consumption pilot program.
Questions & Discussion