DATE: JUNE 5, 2024
TO: PLANNING COMMISSION
FROM: COURTNEY GROSSMAN, PLANNING MANAGER
BY: LISA BRINTON, COMMUNITY DEVELOPMENT DIRECTOR
CHRISTOPHER A. CALLIHAN, CITY ATTORNEY
TITLE: COMMERCIAL CANNABIS PERMIT 2023-007; APPEAL OF SELECTION COMMITTEE DETERMINATION RECOMMENDATION:
Consider the appeal of CannaCruz, Inc. from the Selection Committee’s denial of CannaCruz’s application for a major amendment to Commercial Cannabis Permit 2023-007 to relocate an existing Cannabis Dispensary with accessory Delivery and Distribution from 1156 Abbott Street to 1228 South Main Street.
EXECUTIVE SUMMARY:
On April 29, 2024, CannaCruz, Inc. (“CannaCruz”) submitted an application for a major amendment (“Amendment Application”) to Commercial Cannabis Permit 2023-007 (“CCP 2023-007”) to relocate an existing Cannabis Dispensary with accessory Delivery and Distribution from 1156 Abbott Street to 1228 South Main Street. Following the City Attorney’s determination that the Amendment Application contained all the required information, the Amendment Application was forwarded to the Selection Committee appointed by the Interim City Manager for their review in accordance with Article VII of Chapter 5 of the Salinas Municipal Code. On May 14, 2024, the Selection Committee met to consider the Amendment Application and at that meeting denied the Amendment Application. On May 16, 2024, CannaCruz submitted the present appeal of the Selection Committee’s denial of the Amendment Application.
DISCUSSION:
Background:
DISCUSSION
On January 26, 2016, the Salinas City Council adopted Ordinance No. 2566 allowing for the establishment, operation, and regulation of commercial cannabis businesses for the dispensing, distribution, cultivation, and manufacturing of medical marijuana and medical marijuana products. (A copy of the City Council’s January 26, 2016, Report to the City Council and of Ordinance No. 2566 (N.C.S.) are attached to this report for reference. Ordinance No. 2566 repealed a prohibition on the establishment and operation of medical marijuana cultivation facilities and manufacturing facilities, allowed for a limited number of commercial cannabis businesses to open and to operate, provided for a competitive process for the limited number of commercial cannabis permits, and imposed operating restrictions on such businesses in order to protect neighboring properties and businesses from the negative effects of commercial cannabis businesses and in order to protect the health, safety, and welfare of the general public. In adopting the ordinance, the City Council found that reasonable regulations on commercial cannabis businesses were necessary to address the negative impacts and nuisance impacts of such businesses. At the time of the City Council’s adoption of Ordinance No. 2566, one medical marijuana edible manufacturing and wholesale distribution facility had begun operating in the city prior to the City’s having established any land use controls or requirements on the operation of such businesses. Included among the regulations included in Ordinance No. 2566 were restrictions on the proximity of commercial cannabis businesses to sensitive uses. The City Council also found that without regulations on the operation of commercial cannabis businesses, there would be an immediate threat to the public health, safety, and welfare from the establishment of commercial cannabis businesses in the City.
The City Council subsequently amended Ordinance No. 2566 (the City’s commercial cannabis business regulations) on three occasions:
Ordinance No. 2597 (N.C.S.) adopted on August 15, 2017, increased the maximum number of permits which may be issued in the dispensary, manufacturing, and cultivation categories; provided for an administrative process for cannabis testing facilities; and included administrative revisions to the City’s commercial cannabis regulations to reflect changes in state law and changes in the City’s implementation of the commercial cannabis business regulations. (A copy of Ordinance No. 2597 and the associated Report to the City Council are attached to this report for reference.) Ordinance No. 2598 (N.C.S.) adopted on September 5, 2017, recodified several chapters and articles of the Salinas Municipal Code, including those related to the regulations on commercial cannabis businesses. No changes were made to the content of those provisions outlining the regulations on commercial cannabis businesses. (A copy of Ordinance No. 2598 (N.C.S.) and the associated Report to the City Council are attached to this report for reference.) Ordinance No. 2600 (N.C.S.) adopted on November 29, 2017, updated the regulations on commercial cannabis businesses codified at Article VII of Chapter 5 of the Salinas Municipal Code. Specifically, Ordinance No. 2600 specified that businesses involving adult-use cannabis and cannabis products may operate within the city. Ordinance No. 2600 also clarified the City’s permitting structure for commercial cannabis businesses, clarified the operating requirements of various types of commercial cannabis businesses, established reasonable regulations relating to the growing of cannabis within a private residence for personal use, and included administrative changes to the regulations to reflect changes in state law and in the City’s implementation of the Salinas Municipal Code. (A copy of Ordinance No. 2600 (N.C.S.) and the associated Staff Report to the City Council are attached to this report for reference.) CannaCruz’s Proposed Relocation to 1228 South Main Street In the context of the above-described commercial cannabis regulations, in late 2021, CannaCruz began the process of attempting to relocate from its current location at 1156 Abbott Street to its proposed location at 1228 South Main Street. In response to CannaCruz’s request for zoning information related to the 1228 South Main Street location, in a Zoning Information Letter dated December 15, 2021, the City identified that the proposed location was within 1,000 feet of six sensitive uses identified in the Salinas Municipal Code (section 5-07.27) including five alcohol-related uses and one church. (A copy of the City’s December 15, 2021, letter is attached to this report for reference.) The Zoning Information Letter did not identify the proposed location’s adjacency to a residential use as an issue of concern.
Based on this information, CannaCruz continued the process of relocating to the proposed location and on August 23, 2022, submitted an application for Conditional Use Permit 2022-048 (CUP 2022-048) to change the use at 1228 South Main Street from Retail to a proposed two-tenant Shopping Center within an existing 20,162 square-foot building. The two tenant uses include a 9,413 square-foot retail furniture store in the front portion (Unit “A”) of the building and a 10,749 square-foot Cannabis Dispensary with accessory Delivery and Distribution retail use in the rear portion (Unit “B”). CUP 2022-048 also includes the allowance of a 41-space (51%) Parking Reduction per Zoning Code Table 37-50.100, exception from the requirements of Zoning Code Section 37-50.200 to allow for internal waste storage to be located within the existing structure, and Alternative Means of Compliance for landscaping Planning Commission consideration is required for Parking Reductions exceeding 30%. On August 24, 2023, an application was submitted for an amendment to their Commercial Cannabis Permit to relocate to the proposed location.
April 3, 2024, Planning Commission Meeting
On April 3, 2024, the Planning Commission considered CUP 2022-048. CCP 2023-007 was also originally scheduled to be considered by the Planning Commission on April 3, 2024, however, due to concerns from the City Attorney and the Community Development Director with the completeness of the application, CCP 2023-007 was not presented to the Planning Commission for consideration.
On April 3, 2024, the Planning Commission denied CannaCruz’s application for CUP 2022-048. Planning Commissioners expressed concern that the amendment to CCP 2023-007 should be considered concurrently with CUP 2022-048. Planning Commissioners also commented that consideration of amendments to CCP 2023-007 should be deferred to the City Council as a policy consideration. In a letter dated April 17, 2024, CannaCruz appealed the Planning Commission’s April 3, 2024, decision to deny CannaCruz’s application for a Conditional Use Permit (CUP 2022-048). (A copy of CannaCruz’s April 17, 2024, letter is attached to this report for reference.) The appeal was originally scheduled for City Council consideration on June 11, 2024, in order to meet the sixty-day period required by Salinas Municipal Code section 37-60.1300; however, CannaCruz agreed to continue the appeal before the Salinas City Council to June 18, 2024. (A copy of CannaCruz’s May 21, 2024, email agreeing to continue the appeal to June 18, 2024, is attached to this report for reference.) Commercial Cannabis Permits—Amendment Procedures
The holder of a Commercial Cannabis Permit issued by the City may request amendments to their permits pursuant to the procedures outlined in Salinas Municipal Code section 5-07.09. Pursuant to section 5-07.09, the holder of a Commercial Cannabis Permit may request a change to the business location by submitting all items normally required for a new application, except that information related to the principals or operations that will remain unchanged and are not directly related to the site may be excluded. The application for a change to the business location must submit all items normally required for a new application as outlined on section 5-07.07.
On April 29, 2024, CannaCruz submitted an Amendment Application to relocate its existing Cannabis Dispensary with accessory Delivery and Distribution from 1156 Abbott Street to 1228 South Main Street. (A copy of CannaCruz’s Amendment Application is attached to this report for reference.) On May 7, 2024, the City Attorney determined the Amendment Application to contain all of the required information and forwarded the Amendment Application to the Selection Committee for their review. (A copy of the City Attorney’s May 7, 2024, letter is attached to this report for reference.) Selection Committee’s Determination and Findings
As outlined in section 5-07.09(a)(2) the Selection Committee is required to review the proposed new location and may approve an amendment to the new location if it can make the following findings:
The new site would not be located within the distances specified in section 5-07.27, unless an exception is approved pursuant that section; The relocation to the new site would not create any significant negative impacts greater than those that existed at the original site; The proposed location is located in an appropriate zoning district for the proposed use; and Owners of real property located within three hundred feet of the proposed site have been notified and have had an opportunity to provide information to the City regarding the proposed site.
On May 14, 2024, the Selection Committee met to consider the Amendment Application and at that meeting denied the Amendment Application. During that meeting, the Selection Committee conveyed their reasons for the denial and the findings of fact upon which their decision was based to the City Attorney. In a letter to Trinh Retterer and Peter D. Brazil dated May 15, 2024, the City Attorney informed CannaCruz that the Selection Committee had denied CannaCruz’s Amendment Application and also informed CannaCruz of the reasons for the denial. (A copy of the City Attorney’s May 15, 2024, letter is attached to this Report for reference.) As described in the May 15, 2024, letter, the Selection Committee denied CannaCruz’s Amendment Application for the following reasons:
The proposed location (1228 South Main Street) is located within 1,000 feet of two sensitive uses listed in section 5-07.27: a smoke-shop (Clout Nine Smoke Shop) located at 1152 South Main Street and a location where alcohol is sold or served for individual consumption on the premises (Ellis’ Restaurant) located at 1250 South Main Street; the proposed location is immediately adjacent to the alcohol related use. The Selection Committee did not find that the intent of Article VII of Chapter 5 of the Salinas Municipal Code, as outlined in section 5-07.01, could otherwise be met.
The proposed location (1228 South Main Street) is located adjacent to a residential use and, therefore, a determination must be made by either the Police Chief or the Community Development Director as to whether the operation of a commercial cannabis business at this location would tend to cause a public nuisance or a situation which may result in repeated police department response or a negative impact on the adjacent residential uses as required by section 5-07.27(d).
Article VII of Chapter 5 of the Salinas Municipal Code reflects the City’s policy and intent that commercial cannabis businesses should not be located in proximity to sensitive uses and reflects the City’s overall master planning perspective that commercial cannabis businesses are best suited for industrial or commercial areas that are not in proximity to sensitive uses, including residential areas.
On May 16, 2024, pursuant to Salinas Municipal Code section 5-07.10 CannaCruz timely submitted the present appeal of the Selection Committee’s denial of the Amendment Application. (A copy of CannaCruz’s May 16, 2024, appeal of the Selection Committee’s denial is attached to this report for reference.) Police Department Considerations
The Salinas Police Department issued three memoranda related to CannaCruz’s Amendment Application: February 26, 2024; March 16, 2024; and March 19, 2024. (The Police Department memoranda are attached to this report for reference.) The February 26, 2024, Memorandum specifically addressed only the proposed parking layout at the 1228 South Main Street location and concluded there are “no issues with the parking lot layout.” The February 26, 2024, Memorandum did not address any other issues related to the proposed relocation, including the findings of the Police Chief pursuant to section 5-07.27(d) due to the proposed location’s adjacency to a residential use.
The March 16, 2024, Memorandum addressed the proposed parking reduction and proposed relocation of CannaCruz to 1228 South Main Street and concluded there are “no issues with the parking reduction or relocation of the dispensary.” The March 16, 2024, Memorandum further concluded that “[a]lthough the subject site is located adjacent to a residential areas, it is the opinion of the Chief of Police that the operation of a Commercial Cannabis business in such location would not tend to cause a public nuisance or a situation which may result in repeated police department response or a negative impact on the adjacent residential units as stipulated by Municipal Code Section 5-07.27(d).” Release of the March 16, 2024, Memorandum was an administrative error: The Memorandum was not a final draft intended for distribution.
The March 19, 2024, Memorandum replaced the March 16, 2024, Memorandum and addressed the proposed parking reduction and relocation of CannaCruz to 1228 South Main Street location and concluded that there “are no issues with the parking reduction or relocation of the dispensary.” (emphasis in original) The March 19, 2024, Memorandum additionally, however, raised concerns with traffic volumes and a nearby intersection and driveway location which has had approximately eighteen traffic collisions, one being fatal. The March 19, 2024, Memorandum also raised concerns with criminal activity at other cannabis dispensaries in Salinas and elsewhere in Monterey County. With respect to the proposed location’s adjacency to a residential use, the March 19. 2924, Memorandum concludes that in “the opinion of the Chief of Police…the operation of the Commercial Cannabis business in such location would tend to cause a public nuisance or a situation which may result in repeated police department response or a negative impact on the adjacent residential units as stipulated by Municipal Code Section 5-07.27(d).” Of concern to the Salinas Police Department is the proximity of the proposed location to two sensitive uses identified in the Salinas Municipal Code and the proposed location’s adjacency to a residential use. Elli’s Restaurant is immediately adjacent to the proposed location and includes a bar where alcoholic beverages are served. Elli’s Restaurant is a popular location for customers to gather in the bar area to drink alcohol, socialize, and watch sporting events. Alcoholic beverages are also served in the dining portion of the restaurant. The combination of an alcohol related use immediately adjacent to a commercial cannabis business creates the potential for foot traffic between the two locations, including foot traffic from intoxicated individuals along the sidewalk on South Main Street and through the driveway of the proposed location in order to gain access to the proposed location at the rear of the building. As discussed below, this portion of South Main Street contains a high-volume of vehicular traffic regularly traveling at speeds above the posted speed limit. Clout Nine Smoke Shop, a second sensitive use, is located within 1,000 feet of the proposed location.
The proposed location is directly adjacent to a residential apartment complex with ten second floor windows with a direct line of sight to the parking lot of the proposed commercial cannabis business. Customers are anticipated to each take approximately six minutes to complete their transactions which would result in vehicles potentially entering and exiting the parking lot each seven to eight minutes throughout the business’s hours of operation, driving along the fence separating the proposed location from the adjacent residential use. Depending on the hours of operation, this could mean that vehicles would be entering and exiting the proposed location during the nighttime hours which would require the use of vehicle headlights. This could result in light from the vehicles’ headlights shining into the apartment windows each time a vehicle entered of existed the parking lot. There is also other potential for customers entering and exiting their vehicles to create noise and other impacts on the adjacent residential use including, potentially, the use of cannabis projects in their vehicles and/or the parking lot of the proposed location. These conditions have the potential to create noise impacts on the adjacent residential use and the occupants of the residential units, some of which may be families with children.
There is only one narrow driveway entrance and exit to the proposed location; the narrow width of the driveway makes it difficult for two cars to fit and safely pass each other as they enter and exit the parking located at the rear of the building. The driveway to the proposed location is accessible only by way of southbound South Main Street (a high volume major arterial roadway that leads in one direction to Highway 68) and immediately south of the intersection of South Main Street and Plaza Circle. This location has had seven vehicle collisions in the last four years, one of which was a fatal collision between a vehicle and a cyclist. In the broader area from South Main Street at San Joaquin Street to South Main Street and Blanco Road, there have been eighteen collisions.
Customers of the proposed location would turn over in six-minute increments; customers are anticipated to each take approximately six minutes to complete their transactions. With the proposed location anticipated to be a high-volume business (a higher volume business than the previous furniture store use), that would mean that more customers/vehicles than have been present in the past would be entering and exiting the proposed location through a narrow driveway and narrow driveway entrance onto South Main Street every seven to eight minutes. This area of South Main Street has high volumes of traffic which regularly moves at speeds in excess of the posted speed limit.
The conditions discussed above present a threat to the public health, safety, and welfare. It is anticipated that under these conditions establishment of the proposed commercial cannabis business at this proposed location would tend to cause a situation which may result in repeated police department response or a negative impact on the adjacent residential uses.
Alternatives Available to the Commission
The City’s Selection Committee denied CannaCruz’s Amendment Application to relocate its commercial cannabis business to 1228 South Main Street. The reasons for the Selection Committee’s denial are described above and in the attached May 15, 2024, letter. CannaCruz has appealed the Selection Committee’s denial.
The Planning Commission is now asked to consider CannaCruz’s appeal. In doing so, the Planning Commission should consider the City’s commercial cannabis regulations, including the regulations related to sensitive uses, and how the commercial cannabis regulations apply to CannaCruz’s application to operate a commercial cannabis business at 1228 South Main Street. The Planning Commission should consider the information presented in this report and the information presented to it during the public hearing on this appeal and should then exercise its discretion and render a decision supported by specifically articulated findings.
The Planning Commission has the following alternatives:
Affirm the determination made by the Selection Committee to deny CannaCruz’s application for a major amendment to Commercial Cannabis Permit 2023-007; Reverse the determination made by the Selection Committee to deny CannaCruz’s application for a major amendment to Commercial Cannabis Permit 2023-007; Modify the determination made by the Selection Committee to deny CannaCruz’s application for a major amendment to Commercial Cannabis Permit 2023-007; or Neither affirm, reverse, or modify the Selection Committee’s determination and refer the Selection Committee’s determination and appeal thereof to the City Council for consideration.
Time Consideration:
As discussed above, CannaCruz’s appeal of the Planning Commission’s denial of Conditional Use Permit 2022-048 is scheduled for consideration by the City Council on June 18, 2024. Any action required by the City Council in relation to CCP 2023-007 will also be scheduled for consideration by the City Council on June 18, 2024.
Public Notice
Public notice of this appeal was mailed to all property owners within 300-feet of 1228 South Main, as well as to all interested parties. The public notice was posted on site at the proposed location (1228 South Main Street) and in City Hall and the Salinas Permit Center on May 21, 2024, and was published in the Monterey Herald on May 25, 2024.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.
ATTACHMENTS:
Ordinance No. 2566 (N.C.S.) and Report to the City Council Ordinance No. 2597 (N.C.S.) and Report to the City Council Ordinance No. 2598 (N.C.S.) and Report to the City Council Ordinance No. 2600 (N.C.S.) and Report to the City Council December 15, 2021, Zoning Information Letter from Adam Garrett to Grant Palmer April 17, 2024, Letter from Peter D. Brazil to Lisa Brinton re Conditional Use Permit CUP2022-048 Appeal of Planning Commission Decision.
May 21, 2024, Email from Trinh Retterer to Christopher Callihan re CCP2023-007 Amendment Appeal Request for Amendment to Commercial Cannabis Permit (CCP) dated April 29, 2024 (with attachments) May 7, 2024, Letter from City Attorney to Trinh Retterer re Commercial Cannabis Permit (CCP 2023-007) Major Amendment May 15, 2024, Letter from City Attorney to Trinh Retterer and Peter D. Brazil re Commercial Cannabis Permit (CCP 2023-007) Major Amendment: Selection Committee Review; Notice of Denial May 16, 2024, Email (with attached Development Review Application) from Trinh Retterer to City Attorney re CCP2023-007 Amendment Appeal Cc: CannaCruz, Inc., Applicant
Trinh Retterer and Peter D. Brazil, JRG Attorneys at Law Samuel and Marguerite Kobrinsky, Trustees, Property Owner Other Interested Parties
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Three grocery stores at which alcohol is sold are also located within 1,000 feet of the proposed location: Star Market, Lucky’s, and Nob Hill.
The six-minute customer turnover times were provided by CannaCruz at a May 8, 2024, meeting with City staff.
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