City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00916 9/16/2025
Ordinance and Resolution Relating to Cannabis Consumption Lounges [In Lieu of Pass for Publication Ordinance to be Published in its Entirety]
File ID: 2025-00916
Location: Citywide
Recommendation: 1) Adopt an Ordinance removing Section 5.150.235 and adding Section
5.150.1365 of the Sacramento City Code, relating to call-up review and the geographic distribution of cannabis consumption lounges; and 2) Adopt a Resolution to establish the process to authorize cannabis consumption lounges.
Contact: Peter Coletto, Director of Finance, (916) 808-5416, [email protected], Office of the City Manager; Al 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-Resolution
6-Exhibit A - First-In-Line Process
7-Presentation
Description/Analysis
Issue Detail:
On November 19, 2024, Council adopted Ordinance 2024-0044 establishing a five-year pilot program for cannabis social consumption (Attachment 2). This pilot program creates two types of cannabis consumption lounges:
File ID: 2025-00916 9/16/2025
· 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.
· 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 may only be operated by permitted storefront cannabis dispensaries and must be operated to meet additional health and safety requirements, including updated HVAC standards for Type 2 lounges.
As part of the approval of Ordinance 2024-0044, Council directed staff to return with regulations that address the “geographical inequities” distribution of consumption lounges across Council districts, as well as the ability for a call-up review of business operating permits (BOPs) issued to lounges.
Geographic distribution across districts
As of September 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 one or more sensitive use buffers. Of the six respondents not within a sensitive use buffer, the survey results are as follows:
· 4 respondents have space for Type 2 lounge permit (with available space ranging from 1,200 - 1,500 sq.ft.)
· 1 respondent has space for a Type 1 lounge permit
File ID: 2025-00916 9/16/2025
· 1 respondent does 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 respondents are Cannabis Opportunity Reinvestment and Equity (CORE) program participants
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 one or more sensitive use buffers) · 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 address the geographic inequities as directed by Council (Attachments 3 and 4).
Call-up provision for cannabis consumption lounges
In the approval of Ordinance 2024-0044, Council directed staff to establish a call-up review process to allow a Councilmember to have the option of calling up an application for a lounge to Council for review to determine if it should be authorized. The application for a lounge will include additional health and safety requirements and the standard business cannabis operating requirements, including obtaining a conditional use permit. Due to the significant investment that cannabis businesses must make to obtain a business operating permit, staff are recommending that the call-up review process for all cannabis business’, including lounges, be performed earlier through the conditional use permit process. As a result, the proposed Ordinance removes call-up review from the business permitting regulations. The conditional use permit process includes a call-up review process.
Cannabis Consumption Lounge Authorization Process
In light of the proposed limit of lounges for Council districts and current level of interest, staff recommends adopting a first-in-line (also known as “first-come-first-served”) process to authorize permitted storefront cannabis dispensaries to operate a lounge, described in the proposed Resolution and Exhibit A (Attachment 5 and 6). The application for a lounge will include, but is not limited to, the following:
File ID: 2025-00916 9/16/2025
· Property owner’s statement of consent to modify the building · Conditional Use Permit
· Security and lighting plan
· Floor plan
· Certificate of liability insurance
· Odor control plan
· Certificate of Occupancy
· Current State license issued by DCC for a storefront
· Consumption Lounge Operation Plan - This document would describe in detail, including but not limited to, patron and product flow, employee training, emergency plans, patron time and dosing limitations, and hours of operation.
· Impaired Driving Prevention Plan - This document would describe in detail how the business would ensure patrons leave the consumption lounge and have access to safe transportation (i.e. over consumption educational components, access to regional transit, ridesharing options).
· Ventilation Plan (Type 2 only) - This document would describe in detail the HVAC/ventilation system that is implemented, maintained and complies with the California Mechanical Code.
Economic & Planning Systems, Inc. is conducting a study to determine the appropriate lounge application fee. A fee resolution will be brought to Council for consideration of adoption. Consistent with Council approved CORE program benefits, the fee will be waived for CORE program participants.
Policy Considerations: All cannabis consumption lounges will require a conditional use permit under the proposed amendments to Title 17. Proposed Title 17 amendments, if passed by the Council, will be effective by summer 2025. Thereafter, a fee resolution will be brought to Council for consideration of adoption and the Office of Cannabis Management will make applications for consumption lounges available.
Economic Impacts: The addition of cannabis consumption lounges may increase economic activity in the commercial 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 and because it does not have the potential for causing a significant effect on the environment ((California Business and Professions Code section 26055(h), CEQA Guidelines section 15061(b)(3)).
File ID: 2025-00916 9/16/2025
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 the geographical inequities of consumption lounges across Council districts, as well as the ability for call-up review process for cannabis consumption lounges.
· On April 8, 2025, the Committee forwarded an ordinance limiting the number of lounges per district to address the geographical inequities and removing the call-up review process of cannabis businesses so that it will occur earlier in the overall process through the conditional use permit process.
File ID: 2025-00916 9/16/2025
Rationale for Recommendation: Staff is fulfilling Council direction by returning with a plan to address geographical inequities and a call-up review process for lounges to implement the five-year consumption lounge pilot program. Given the varying number of storefront cannabis dispensaries in each district and the current level of interest in operating lounges, staff proposes an equal limit of lounges per district and a first-in-line process to authorize the operation of a lounge. Additionally, since all cannabis businesses, including lounges, will need to obtain a conditional use permit before obtaining a business operating permit or authorization and the overall process requires significant financial investment, staff proposes that the Council call-up review process occur during the conditional use permit process.
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.
Ordinance 2024-0044 November 19, 2024 Page 1 of 12
ORDINANCE 2024-0044
A
dopted by the Sacramento City Council
November 19, 2024
An Ordinance Amending Various Sections of Chapter 5.150 of, Amending Section
8.04.110 of, Adding Chapter 8.133 to, and Deleting Chapter 9.08 of the Sacramento City Code, Relating to the Consumption of Cannabis and Cannabis Products 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. A definition for “cannabis consumption lounge” or “lounge” is hereby added to read as follows:
“
Cannabis consumption lounge” or “lounge” means an area on any property, other than in a private residence or at an event held pursuant to section
5.150.360.C, where cannabis or cannabis products are consumed; or any private residence where cannabis or cannabis products are allowed to be consumed for commercial gain.
2. A
definition for “cannabis consumption lounge operator” is hereby added to read as follows:
“
Cannabis consumption lounge operator” means a storefront cannabis dispensary permittee who is authorized to operate a cannabis consumption lounge in accordance with this chapter.
3. A
definition for “smoking” is hereby added to read as follows:
“Smoking” has the same meaning as in section 8.80.030.
4. A definition for “vaping” is hereby added to read as follows:
“
Vaping” means to inhale vapor from a device that heats up and vaporizes a liquid or solid.
B. E
xcept as amended by subsection A above, all provisions of section 5.150.020 remain unchanged and in full effect.
Attachment 2
Ordinance 2024-0044 November 19, 2024 Page 2 of 12
SECTION 2.
Section 5.150.130 of the Sacramento City Code is hereby amended to read as follows:
5.150.130 Site management.
Notwithstanding any other provision of this code, a cannabis business permittee shall—
A. Prevent and eliminate nuisances on its site, including the unlawful consumption of cannabis or cannabis products;
B. Maintain the exterior of the site, including any parking lots under the control of the permittee, free of litter, debris, and trash;
C. Properly store and dispose of all waste generated on the site, including chemical and organic waste, in accordance with all applicable laws and regulations;
D. Make cannabis and cannabis products unusable and unrecognizable before discarding them; and
E. Remove all graffiti from the site and parking lots under the control of the permittee within 72 hours of its application.
SECTION 3.
Section 5.150.145 is hereby added to the Sacramento City Code to read as follows:
5.150.145 Consumption of cannabis in violation of the code.
A. No cannabis business, its managers, or persons with an ownership interest, shall allow any person to smoke, ingest, or otherwise consume cannabis or cannabis products on its site, except as described in this chapter.
B. No cannabis business, its managers, or persons with an ownership interest, shall permit, aid, abet, or conceal the smoking, ingesting, or other consumption of cannabis or cannabis products on its site in violation of this code.
SECTION 4.
Section 5.150.430 of the Sacramento City Code is hereby amended to read as follows:
5.150.430 Limit on cannabis consumption on site.
Ordinance 2024-0044 November 19, 2024 Page 3 of 12
No storefront cannabis dispensary shall allow any person to smoke, ingest, or otherwise consume cannabis or cannabis products in any form on, or within 20 feet of, the site, except as described in this chapter.
SECTION 5.
A. Subsection A of section 5.150.470 of the Sacramento City Code is hereby amended to read as follows:
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 site from theft. All security personnel must possess a valid California Department of Consumer Affairs security guard license while on duty on the site.
B. Except as amended by subsection A above, all provisions of section 5.150.470 remain unchanged and in full effect.
SECTION
6. A. Subsection A of section 5.150.480 of the Sacramento City Code is hereby amended to read as follows:
A. Each storefront cannabis dispensary that is not authorized to operate a cannabis consumption lounge must have a sign stating, "Smoking, ingesting, or consuming cannabis or cannabis products on this site or in a public place is prohibited."
B. Except as amended by subsection A above, all provisions of section 5.150.480 remain unchanged and in full effect.
SECTION 7.
Section 5.150.510 of the Sacramento City Code is hereby amended to read as follows:
5.150.510 Alcoholic beverages and tobacco.
No storefront cannabis dispensary or manager shall cause or allow the sale, distribution, or consumption of alcoholic beverages, tobacco, or tobacco products on the site; hold or maintain a license from the State Division of Alcoholic Beverage Control for the sale of alcoholic beverages for the site; or operate a business on or adjacent to the site that sells alcoholic beverages, tobacco, or tobacco products. No person shall possess or store alcoholic beverages, tobacco, or tobacco products on the site.
Ordinance 2024-0044 November 19, 2024 Page 4 of 12
SECTION 8.
Section 5.150.1200 of the Sacramento City Code is hereby amended to read as follows:
5.150.1200 Cannabis consumption prohibited.
No person shall smoke, ingest, or otherwise consume cannabis or cannabis products in any form on, or within 20 feet of, the cannabis distribution business site.
SECTION 9.
Article XI is hereby added to chapter 5.150 of the Sacramento City Code to read as follows:
Article XI. Cannabis Consumption Lounges
5.150.1360 Cannabis consumption lounge authorization required to operate.
A. No person shall operate a cannabis consumption lounge without having a valid storefront cannabis dispensary permit with a condition that authorizes the operation of a lounge in accordance with this article.
B. A storefront cannabis dispensary permit may be authorized to allow the operation of a cannabis consumption lounge with one of the following types of conditions:
1. Type 1 condition (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, subject to the provisions of this chapter.
2. Type 2 condition (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, subject to the provisions of this chapter.
5.150.1370 Cannabis consumption lounge fees.
A. The following fees are established and imposed pursuant to the provisions of this section:
1. Cannabis consumption lounge program fee;
Ordinance 2024-0044 November 19, 2024 Page 5 of 12
2. Type 1 condition fee; and
3. Type 2 condition fee.
B. When applying for a new or renewal of a cannabis consumption lounge condition pursuant to this chapter, the applicant shall submit the cannabis consumption lounge program fee, plus the applicable fee for the condition that the applicant is seeking to obtain.
C. The city council shall establish by resolution the amounts of the fees specified in subsection A, and any related penalties.
D. The fees established and imposed in this section are separate and in addition to any storefront cannabis dispensary permit fees that apply pursuant to section
5.150.340.
5.150.1380 Cannabis consumption lounge premise restrictions -- generally.
All cannabis consumption lounges must comply with the following:
A. Size. A cannabis consumption lounge must be no larger than 1,500 square feet or 50% of the total floor area of the storefront cannabis dispensary site, whichever is smaller.
B. Not visible to the public. The interior of the cannabis consumption lounge must not be visible from the public right -of-way, non-age-restricted areas, the unsecured areas surrounding the buildings on the site, or the site's main entrance and lobby.
C. Partitioned. A cannabis consumption lounge must be separated from all other areas of the storefront dispensary by solid walls and doors. The wall may include glass to provide visibility between the dispensary and the lounge.
5.150.1390 Cannabis consumption lounge premise restrictions – type 2.
A type 2 cannabis consumption lounge must comply with the following:
A. Enclosed. The lounge must be indoors and fully enclosed.
B. Soundproofed. The lounge must be adequately soundproofed so that the interior noise does not violate chapter 8.68 (Noise Control).
Ordinance 2024-0044 November 19, 2024 Page 6 of 12
C. Negative pressure. The lounge must be designed to have negative pressure to limit, to the extent possible, leakage of smoke and particulate matter into the non- smoking areas of the site.
D. HVAC. The lounge must have an HVAC system that does not recirculate air and that has a high rate of air exchange.
E. Odor prevention. The lounge must have an odor-absorbing ventilation and exhaust system that prevents the odor generated from inside of the lounge from being detected outside of the site or within any other area located within the same building as the lounge.
5.150.1400 Cannabis consumption lounge authorization to operate must be displayed.
A cannabis consumption lounge operator shall display a valid storefront cannabis dispensary permit with a condition that authorizes the operation of a lounge in a conspicuous place inside of the lounge so that all persons inside of the lounge may readily see it.
5.150.1410 Cannabis consumption lounge – type 1 signage.
A cannabis consumption lounge operator authorized to operate a type 1 cannabis consumption lounge shall display at each entrance of the lounge a sign that states, “Cannabis consumption, except smoking and vaping, is allowed inside of this lounge. No person under 21 years of age shall be in the lounge.” The sign must be in a conspicuous place so that all persons entering the lounge may readily see it. The sign must be clearly legible and not less than 8 inches by 10 inches in size.
5.150.1420 Cannabis consumption lounge – type 2 signage.
A cannabis consumption lounge operator authorized to operate a type 2 cannabis consumption lounge shall display at each entrance of the lounge a sign that states, “Cannabis consumption, including smoking and vaping, is allowed inside of this lounge.
No person under 21 years of age shall be in the lounge.” The sign must be in a conspicuous place so that all persons entering the lounge may readily see it. The sign must be clearly legible and not less than 8 inches by 10 inches in size.
5.150.1430 Cannabis consumption lounge – health warnings.
A cannabis consumption lounge operator shall display signs designated by the city that address the health impacts of the consumption of cannabis. The signs must be displayed Ordinance 2024-0044 November 19, 2024 Page 7 of 12
at the entrance to the lounge in a conspicuous place so that all persons may readily see it.
5.150.1440 Cannabis consumption lounge – parking area signage.
A cannabis consumption lounge operator shall display in all on- and off-site parking areas of the lounge, a sign that states, “Please be respectful of neighboring residents and businesses by leaving the area quietly;” and, where applicable, a sign that states “Notice:
A permit may be required to park within the adjacent neighborhoods.” The sign must be in a conspicuous place so that all persons entering and exiting the parking areas may readily see it. The sign must be clearly legible and not less than 8 inches by 10 inches in size.
5.150.1450 Cannabis consumption lounge – waste containers.
Cannabis consumption lounge operators shall include properly maintained solid waste, organic waste, and recycling containers in sufficient numbers and locations to service the needs of the lounge.
5.150.1460 Cannabis consumption lounge operating hours.
No cannabis consumption lounge operator shall operate a lounge between 11:00 p.m. and 7:00 a.m. The city manager may impose more restrictive hours as a condition on the permit.
5.150.1470 Cannabis consumption lounge age restriction.
A. No person under 21 years of age shall enter or remain in a cannabis consumption lounge.
B. No cannabis consumption lounge operator shall allow any violation of this section.
5.150.1480 Cannabis consumption lounge personnel requirements.
A. Operator age limit. No person under 21 years of age shall operate a cannabis consumption lounge in any capacity, including as a manager, employee, contractor, or volunteer.
B. Education and training. The cannabis consumption lounge operator shall educate their managers, employees, and volunteers about the various types of cannabis and cannabis products allowed in the consumption lounge, including the potency, absorption time, and effects; and shall train their managers, employees, and volunteers to likewise educate customers on their purchases. The cannabis Ordinance 2024-0044 November 19, 2024 Page 8 of 12
consumption lounge operator shall also train their employees to recognize signs of impairment in their customers.
C. Community-relations employee. The cannabis consumption lounge operator shall designate an employee as their onsite community -relations contact; provide their name and phone number by certified mail to all neighboring properties within 100 feet of the site; and advise them to notify the community -relations contact if there are operational problems with the lounge that impact the neighborhood. The cannabis consumption lounge operator shall also provide the name and phone number of the onsite community -relations contact to the Sacramento Police Department.
D. Manager. The cannabis consumption lounge operator’s manager shall be in the lounge whenever there is a customer in the lounge.
5.150.1490 Consumption of cannabis and cannabis products on site.
A. Consumption in lounge only. No person shall consume cannabis or cannabis products on a storefront cannabis dispensary site in any area other than the cannabis consumption lounge.
B. No cannabis consumption lounge operator shall allow any person to consume in the lounge any cannabis or cannabis product that was not purchased from the associated dispensary.
5.150.1500 Cannabis consumption lounge – prepackaged food and beverages.
A. No cannabis consumption lounge operator shall sell or provide for free any cannabis or cannabis products inside the lounge.
B. No cannabis consumption lounge operator may sell or provide for free any food or beverages in the lounge, unless it is prepackaged and does not contain cannabis or alcohol.
C. No cannabis consumption lounge operator shall store, display, contaminate, or commingle any prepackaged food or beverage with any cannabis or cannabis product on the site.
5.150.1510 Cannabis consumption lounge – customer conduct.
A. Closing announcement. One hour before the closing time of the lounge and at the closing time, the cannabis consumption lounge operator or their manager shall Ordinance 2024-0044 November 19, 2024 Page 9 of 12
announce the closing time of the lounge and request that customers respect the residents of the adjacent neighbors by being quiet when leaving.
B. Retail limit. No cannabis consumption lounge operator or its manager, employee, or volunteer shall provide cannabis or cannabis products to obviously impaired customers.
C. Car services. A cannabis consumption lounge operator shall provide written information on ridesharing and ride-hailing car services for their customers.
D. Entry and exit of the lounge. A cannabis consumption lounge operator or its manager, employee, or volunteer shall escort customers in and out of the lounge.
5.150.1520 Repeal of article.
This article remains in effect until January 1, 2030, and on that date this article is repealed and all permit conditions that authorize the operation of a cannabis consumption lounge are void.
SECTION 10.
A. Subsection O of section 8.04.110 of the Sacramento City Code is hereby amended to read as follows:
O. Any condition in violation of section 5.150.1360.A (cannabis consumption lounge authorization), chapter 8.132 (cultivation of cannabis), or chapter 8.133 (places where cannabis consumption is prohibited); and
B. Except as amended by subsection A above, all provisions of section 8.04.110 remain unchanged and in full effect.
SECTION 11.
Chapter 8.133 is hereby added to the Sacramento City Code to read as follows:
Chapter 8.133 PLACES WHERE CONSUMPTION OF CANNABIS IS PROHIBITED
8.133.010 Findings and purposes.
While recognizing a person’s right to obtain and consume cannabis and cannabis products, the city council believes that consumption should be restricted from certain places. Consuming cannabis and cannabis products in those places is a nuisance and presents a real and imminent threat to the public health, safety, and welfare.
Ordinance 2024-0044 November 19, 2024 Page 10 of 12
Specifically, the open and public consumption of cannabis or cannabis products increases the public’s exposure of secondhand smoke, similar to tobacco. In or near schools and playgrounds, consumption increases the exposure of cannabis use to developing youths.
In addition, consumption within nonresidential buildings that are not regulated to safely manage such activity exposes the public to some of the public safety and welfare concerns of unpermitted cannabis businesses and illegal cultivation of cannabis. These buildings often have fire and safety hazards created by either the lack of ventilation or unpermitted installation of air -filtration systems to conceal the odor of both cannabis flower and smoked cannabis. These buildings also often lack the security protocols necessary for the possession or storage of cannabis in large quantities, thereby substantially increasing the chance that violent criminal activity will occur.
Accordingly, the purpose of this chapter is to prohibit the open and public consumption of cannabis or cannabis products in or near schools, playgrounds, and unregulated nonresidential buildings except buildings or facilities as prescribed in chapter 5.150, including events in accordance with section 5.150.360.C.
8.133.020 Definitions.
The following definitions apply in this chapter:
“Cannabis” has the same meaning as in California Business and Professions Code section 26001.
"Cannabis business” has the same meaning as in section 5.150.010.
“Cannabis product” has the same meaning as in California Business and Professions Code section 26001, subdivision (k).
"Commercial cannabis activity” has the same meaning as in California Business and Professions Code section 26001, subdivision (m).
"Consumption” means the act of smoking, vaping, or ingesting. “Smoking” has the same meaning as in section 8.80.030.
8.133.030 Consumption of cannabis and cannabis products prohibited in nonresidential buildings.
A. No person shall consume cannabis or cannabis products in any nonresidential building or facility, or any nonresidential portion of a building or facility, except as Ordinance 2024-0044 November 19, 2024 Page 11 of 12
part of a commercial cannabis activity of a permitted cannabis business pursuant to chapter 5.150.
B. No person shall aid or abet the consumption of cannabis or cannabis products in violation of subsection A.
8.133.040 Violation—Penalty.
A. In addition to any other remedy allowed by law, any person who violates a provision of this chapter is subject to criminal sanctions, civil actions, and administrative penalties.
B. Civil penalties for violations of this chapter.
1. Any person who violates a provision of this chapter is liable for civil penalties of not less than $250 or more than $25,000 for each day the violation continues, except as provided in subsection B.2.
2. Any person who violates section 8.133.030.B is liable for civil penalties of an aggregate amount calculated at $1,000 per occurrence.
C. Any person who violates any provision of this chapter is guilty of a misdemeanor, punishable by a fine not to exceed $1,000, imprisonment in the county jail for a term not to exceed six months, or both.
D. Administrative penalties for a violation of a provision 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 $1,000 per day that the violation exists; and
2. The amount of the appeal fee is set by city council resolution.
E. All remedies prescribed under this chapter are cumulative and the election of one or more remedies does not bar the city from the pursuit of any other remedy to enforce this chapter.
SECTION 12.
Chapter 9.08 of the Sacramento City Code is hereby deleted.
Ordinance 2024-0044 November 19, 2024 Page 12 of 12
_______________________
Adopted by the City of Sacramento City Council on November 19, 2024, by the following vote:
Ayes: Members Jennings, Kaplan, Maple, Valenzuela, and Mayor Steinberg Noes: None
Abstain: None
Absent: Members Guerra, Talamantes, Thao, and Vang
Attest:
Mindy Cuppy, City Clerk
The presence of an electronic signature certifies that the foregoing is a true and correct copy as approved by the Sacramento City Council.
Passed for Publication: Not applicable.
Published: Published in full pursuant to Sacramento City Charter, § 32(d).
Effective: December 19, 2024
11/25/2024
Attachment 3
1 ORDINANCE NO.
Adopted by the Sacramento City Council
[Date Adopted]
AN ORDINANCE DELETING SECTION 5.150.235 OF AND ADDING SECTION 5.150.1365 TO THE
SACRAMENTO CITY CODE, RELATING TO CANNABIS CONSUMPTION LOUNGES BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
SECTION 1.
Section 5.150.235 of the Sacramento City Code is hereby deleted.
SECTION 2.
Section 5.150.1365 is hereby added to the Sacramento City Code to read as follows:
5.150.1365 Limit on cannabis consumption lounges.
A. Notwithstanding any contrary provision of this chapter, the city shall not authorize a storefront cannabis dispensary to operate a cannabis consumption lounge if there are a total of five authorized lounges in the city council district where the dispensary operates.
B. Whenever the total number of authorized cannabis consumption lounges in a council district is less than five, the city manager may authorize a dispensary located in that district to operate a lounge through a process that is established by city council resolution.
Attachment 4
1 ORDINANCE NO.
Adopted by the Sacramento City Council
[Date Adopted]
AN ORDINANCE DELETING SECTION 5.150.235 OF AND ADDING SECTION 5.150.1365 TO THE
SACRAMENTO CITY CODE, RELATING TO CANNABIS CONSUMPTION LOUNGES BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
SECTION 1.
Section 5.150.235 of the Sacramento City Code is hereby deleted.
5.150.235 Call-up review of cannabis business permit issuance.
If the city manager issues a cannabis business permit for a business that does not require a conditional use permit pursuant to article IX of chapter 17.228, the following procedure applies:
A. Notice to city council. As soon as reasonably practicable after the city manager issues the cannabis business permit, the city manager shall report that decision to the city council by sending the report by electronic mail and confirming that each member of the city council received it.
B. Procedures for call-up review. The mayor or the councilmember in whose district the business is located may call up for city council review the decision by filing a written request with the city manager within 15 business days of the city manager's decision.
Once the request is filed, the council shall notice and set the matter for hearing before it. Notice of the hearing shall be given in the manner provided in section 17.812.010.A.2.a. The city council shall hear the matter in the same manner that the city manager heard the matter.
C. Withdrawal of request for review. The requester under subsection B may withdraw that request. The withdrawal shall be noted on the next regularly scheduled meeting of the city council and shall be considered to have occurred on that date. Any other member of the city council shall have 10 days thereafter to file a request for call- up review. If the tenth day is a non-business day, the last day to file the request is the next business day. Noticing and consideration of the matter shall be as set forth in subsection B.
SECTION 2.
Section 5.150.1365 is hereby added to the Sacramento City Code to read as follows:
Attachment 4
2 5.150.1365 Limit on cannabis consumption lounges.
A. Notwithstanding any contrary provision of this chapter, the city shall not authorize a storefront cannabis dispensary to operate a cannabis consumption lounge if there are a total of five authorized lounges in the council district where the dispensary operates.
B. Whenever the total number of authorized cannabis consumption lounges in a council district is less than five, the city manager may authorize a dispensary located in that district to operate a lounge through a process that is established by city council resolution.
Resolution ________ June ____, 2025 Page 1 of 2
Attachment 5
RESOLUTION NO. ____________
Adopted by the Sacramento City Council
June __, 2025
Adopting a First-In-Line Process to Authorize a Storefront Cannabis Dispensary Permittee to Operate a Cannabis Consumption Lounge
BACKGROUND
A. On November 19, 2024, city council adopted an ordinance amending Sacramento City Code chapter 5.150 to establish a five-year pilot program for the operation of cannabis consumption lounges.
B. As part of its approval, council directed staff to bring back regulations that include, among other things, a method to address the “geographical inequities” of cannabis consumption lounges citywide.
C. One method to address “geographical inequities” of cannabis consumption lounges within the city includes limiting the number of lounges that may operate within a council district.
D. The city may authorize no more than five cannabis consumption lounges to operate within a council district. (Sacramento City Code, § 5.150.1365.A)
E. The city manager may authorize a storefront cannabis dispensary permittee (“storefront permittee”) to operate a cannabis consumption lounge through a process that is established by resolution of the city council. (Sacramento City Code, §
5.150.1365.B)
F. Only storefront permittees may operate cannabis consumption lounges, and most permittees have operated their businesses since the beginning of the city’s commercial cannabis regulatory program. Other permittees were selected and deemed “business- ready” through a competitive request-for-qualifications process (Resolution No. 2020- 0338). However, a competitive process to authorize storefront permittees to operate a cannabis consumption lounge is unnecessary because, unlike new cannabis businesses, storefront permittees have already established their business structures and operations.
G. As such, a fair and equitable way to authorize storefront permittees to operate cannabis consumption lounges is through a first-in-line (a.k.a. ”first-come-first- served”) process.
Resolution ________ June ___, 2025 Page 7 of 8
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section1. The First-In-Line Process for authorizing a storefront cannabis dispensary permittee to operate a cannabis consumption lounge, as set forth in Exhibit A, is hereby adopted.
Section 2. Exhibit A is a part of this Resolution.
Table of Contents
Exhibit A – First-In-Line Process
EXHIBIT A
City Of Sacramento
First-In-Line Process
Cannabis Consumption Lounge Authorization
CITY OF SACRAMENTO
FIRST-IN-LINE PROCESS
CANNABIS CONSUMPTION LOUNGE AUTHORIZATION
This First-In-Line Process establishes how the City of Sacramento (the “City”) authorizes the operation of a cannabis consumption lounge. (Sacramento City Code, §
5.150.1365) The definitions in Sacramento City Code (“SCC”) section 5.150.020 apply herein.
FIRST-IN-LINE PROCESS
1. Applicants. Only a storefront cannabis dispensary (“dispensary”) permittee may apply for an authorization to operate a cannabis consumption lounge (“lounge authorization”). The city manager may grant a lounge authorization when, at the time an application is deemed complete, the total number of authorized lounges in th e same council district is less than five.
2. Application.
a. Application Form. The application for a lounge authorization must be on a form that is approved by the Office of Cannabis Management (the “Office”).
The form may require any information or documentation consistent with the provisions of the Sacramento City Code or state law. Applicants shall submit their applications to: [email protected].
b. Completed Applications. An application is complete when the applicant has (1) filled out the application form fully and accurately, which will be determined by the city in its sole discretion, and (2) paid the applicable fee(s).
The Office will only review applications for completeness, after the applicant has paid the applicable fee(s).
c. Incomplete Applications. If an applicant has paid the applicable fees but has not fully and accurately filled out the application form, the Office will notify the applicant in writing.
3. First-In-Line Order. The complete applications will be reviewed for approval in chronological order based on the application’s timestamp. An application’s timestamp is as follows:
a. If the fully and accurately filled out application form is submitted before payment of the applicable fee(s), the date and time of the applicant’s payment will be that application’s timestamp;
EXHIBIT A
City Of Sacramento
First-In-Line Process
Cannabis Consumption Lounge Authorization
b. If the fully and accurately filled out application form is submitted after payment, the date and time the application was submitted will be the application’s timestamp; or
c. If the Office determined that the application was incomplete, the date and time of the last submission to fill out the application form fully and accurately will be the application’s timestamp.
4. Tied Timestamps. If two or more applications for the same council district have the same timestamp, the Office will review the first application that is selected through a random selection process during a meeting that is accessible to the public.
5. Grounds for Denial of Authorization. The City Manager may deny an application for a lounge authorization if the City Manager determines that one or more of the circumstances in SCC section 5.150.240 exist.
6. Notice and Appeal Rights and Obligations. If the City Manager denies a n application for a lounge authorization, the notice and appeal rights and obligations in SCC sections 5.150.250 and 5.150.280 through 5.150.320 apply.
7. Condition on a Valid Storefront Cannabis Dispensary Permit. The lounge authorization is a condition that may be placed on a valid dispensary permit.
8. Term. A permitted dispensary with a valid lounge authorization may operate a lounge for the duration of the dispensary permit, unless the authorization is removed sooner.
9. Renewal. To renew a lounge authorization, the permitted dispensary shall make the request in its application to renew the associated dispensary permit . A lounge authorization may only be renewed if the associated dispensary permit is renewed.
10. Removal of Authorization. The city manager may remove a lounge authorization by modifying the dispensary permit in accordance with SCC sections 5.150.260 and
5.150.270.
Cannabis Consumption Lounges
Ordinance & Resolution
City Council
September 16, 2025
Direction & Recommendations
2 On November 19, 2024, Council adopted Ordinance 2024-0044 for a five-year cannabis social consumption pilot program.
Geographic
Distribution
• Survey of 36 storefront
dispensaries conducted
to gauge interest in pilot
program
• No more than 5
storefront dispensary
consumption lounges
per district
Permit Process
• First-In-Line process
• Complete application
reviewed in
chronological order
based on timestamp
Call-up Review
• Call-up provision added
to the conditional-use
permit process
Questions & Discussion