TO: HONORABLE MAYOR FROM: Planning Commission
AND CITY COUNCIL
SUBJECT: CANNABIS ORDINANCE UPDATE DATE: February 11, 2022
SUBJECT: AN ORDINANCE OF THE CITY OF SAN JOSÉ AMENDING PART 9.75 AND 9.76 OF CHAPTER 20.80; TABLE 20-90 OF CHAPTER 20.40, TABLE 20-110 OF CHAPTER 20.50, TABLE 20-138 OF CHAPTER 20.55, TABLE 20- 140 OF CHAPTER 20.70, AND TABLE 20-156 OF CHAPTER 20.75; PART 13 OF CHAPTER 20.100; AND TO MAKE OTHER TECHNICAL, NON-
SUBSTANTIVE, OR FORMATTING CHANGES WITHIN THOSE
SECTIONS OF TITLE 20 OF THE SAN JOSÉ MUNICIPAL CODE
(ZONING ORDINANCE) TO ALLOW CANNABIS RETAIL STOREFRONT
(DISPENSARY) IN THE COMMERCIAL ZONING DISTRICTS,
DISALLOW NEW CANNABIS DISPENSARIES IN INDUSTRIAL ZONING
DISTRICTS, CHANGE DISTANCE REQUIREMENTS FROM CANNABIS
BUSINESSES TO SENSITIVE USES WITH SPECIAL CONSIDERATION
FOR THE DOWNTOWN AND URBAN VILLAGE AREAS, ALLOW A
ZONING CODE VERIFICATION CERTIFICATE LETTER TO EXPIRE,
AND MAKE OTHER TECHNICAL, NON-SUBSTANTIVE, OR
FORMATTING CHANGES WITHIN THOSE SECTIONS OF TITLE 20 OF THE SAN JOSÉ MUNICIPAL CODE.
RECOMMENDATION
The Planning Commission voted 8-3 (Garcia, Ornelas-Wise, and Torrens opposed) to recommend the City Council take the following actions:
1. Adopt a Resolution approving the Cannabis Business Ordinance Update Initial Study and Negative Declaration in accordance with the California Environmental Quality Act (CEQA).
2. Adopt an ordinance of the City of San José amending the following sections of Title 20: part
9.75 and 9.76 of Chapter 20.80; Table 20-90 of Chapter 20.40, Table 20-110 of Chapter
20.50, Table 20-138 of Chapter 20.55, Table 20-140 of Chapter 20.70, and Table 20-156 of Chapter 20.75; Part 13 of Chapter 20.100; with the following modifications from the draft ordinance posted on the Planning Commission agenda:
a. Modify “Non-medical Cannabis Dispensary” to “Cannabis Retail Storefront” in the Ordinance.
COUNCIL AGENDA: 02/15/22
FILE: 22-152
ITEM: 10.2(a)(b)
HONORABLE MAYOR AND CITY COUNCIL
February 11, 2022
Subject: Cannabis Ordinance Update
b. Modify “Medical Cannabis Regulation and Safety Act and the Adult Use of Marijuana Act” to “Medicinal and Adult Use Cannabis Regulation and Safety Act” in the Ordinance.
OUTCOME
If adopted, this ordinance would allow delivery-only Cannabis uses in industrial zoning districts, allow cannabis retailers (storefronts/dispensaries) in the commercial zoning districts, disallow new cannabis retailers in industrial zoning districts, change distance requirements from cannabis retailers to sensitive uses with special consideration for Downtown and Urban Village areas, allow a Zoning Code Verification Certificate to expire, allow a Zoning Code Verification Certificate to exclude other cannabis retailers if within the prohibited distance from another valid Zoning Code Verification Certificate, and make other technical, non-substantive, or formatting changes within Title 20 of the San José municipal code.
BACKGROUND
The City Council conducted priority setting on March 5, 2019, from which Council directed staff to analyze and return with updates to the Zoning Ordinance and Cannabis Regulatory Program to allow an increase in the number of cannabis businesses in the city, to allow cannabis dispensing (retail) in more locations, and to address the concentration of cannabis businesses in Council District 7.
Upon receiving this direction from City Council, Planning staff began to work with the City Manager’s Office and the Police Department’s Division of Cannabis Regulation to evaluate potential updates. By early 2020, staff had formed an initial policy proposal and was beginning to conduct outreach, then work was greatly slowed due to the onset of the pandemic. Staff began outreach, including an online survey, a community meeting, an informational video, and provided updates to the CED Committee in April and June of 2021.
On February 9, 2022, the Planning Commission held a public hearing on the proposed ordinance to amend the zoning requirements for cannabis uses. Planning staff provided an overview of the proposed amendments and was available to respond to questions from the Commission. Staff from the Police Department’s Division of Cannabis Regulation and the City Manager’s Office were also present to respond to questions. The Planning Commission’s comments and questions are summarized within the “Commission Recommendation/Input” section below.
Public Testimony
Three speakers provided public comments. The San José Downtown Association and the Silicon Valley Cannabis Alliance spoke in favor of the ordinance. The San Jose Downtown Association also spoke in favor of allowing social consumption events, which is not in the scope of this
HONORABLE MAYOR AND CITY COUNCIL
February 11, 2022
Subject: Cannabis Ordinance Update
ordinance. One member of the public expressed concern about trips generated from outside of San José to new cannabis retailers as well as possible negative environmental impacts from cannabis cultivation.
ANALYSIS
A complete analysis of the issues regarding the Zoning Ordinance amendments is contained in the Planning Commission staff report dated February 9, 2022 (attached).
CONCLUSION
The Planning Commission voted in favor of recommending that Council approve an amendment to the Zoning Ordinance cannabis provisions to allow delivery-only Cannabis uses in industrial zoning districts, allow cannabis retailers (storefronts/dispensaries) in the commercial zoning districts, disallow new cannabis retailers in industrial zoning districts, change distance requirements from cannabis retailers to sensitive uses with special consideration for Downtown and Urban Village areas, allow a Zoning Code Verification Certificate to expire, allow a Zoning Code Verification Certificate to exclude other Cannabis retailers if within the prohibited distance from another retailer, and make other technical, non-substantive, or formatting changes within Title 20 of the San José municipal code. If adopted, the zoning changes would result in approximately 1,400 compliant locations for retail storefronts and approximately 1,300 compliant locations for delivery-only businesses.
EVALUATION AND FOLLOW UP
Council will concurrently consider this Zoning Ordinance update, an update to the Title 6 cannabis regulatory requirements, and whether to allow registration to open for new cannabis retail and delivery-only locations to equity applicants. Should these items be adopted by Council, staff will update the City Manager Regulations for Medical and Non-Medical Cannabis outlining the registration process for new cannabis retail locations within the newly allowed commercial zoning districts, and for delivery-only locations in industrial zoning districts where other cannabis businesses are already allowed.
CLIMATE SMART SAN JOSE
The recommendation in this memorandum aligns with one or more Climate Smart San José energy, water, or mobility goals.
Relocating cannabis retail businesses into commercial areas and/or the addition of new cannabis businesses would result in a net decrease of Vehicle Miles Traveled (VMT) because it would
HONORABLE MAYOR AND CITY COUNCIL
February 11, 2022
Subject: Cannabis Ordinance Update
give existing cannabis-product consumers options to take shorter trips closer to where they live when shopping compared to the current destination(s). Delivery-only operations would allow for combined trips, further increasing VMT efficiency, compared to existing conditions under the current ordinance. A net decrease of VMT would result in fewer vehicle emissions throughout the City.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the February 15, 2022 Council Meeting.
Staff followed Council Policy 6-30: Public Outreach Policy, in that notices for the public hearings were posted on the City’s website and published in the San Jose Post-Record, and emailed to a list of interested groups and individuals. The staff report and attachments were posted on the City’s website. Staff has been available to respond to questions from the public.
Staff has contacted the six existing pawnbroker businesses in the city to inform them of the proposed ordinance change, as it will affect them should they choose to relocate their businesses.
The attached Planning Commission staff report contains a complete description of community outreach related to this ordinance.
COORDINATION
Preparation of this memorandum has been coordinated with the City Attorney’s Office, the San Jose Police Department, and the Office of the City Manager.
COMMISSION RECOMMENDATION/INPUT
Commissioners asked staff several clarifying questions regarding the Equity Applicant Program and its requirements, questions on exclusion areas like the Police Beat Exclusion and Downtown ground floor criteria, effects of Cannabis and safety, issues of concentration, and if more Police staff would be needed as a result of this work.
Commissioner Ornelas-Wise expressed concern about allowing cannabis businesses in Downtown and that the distance requirements to sensitive uses such as schools may not be adequate. She expressed the need to involve the neighboring community in the processes of opening a cannabis business. Commissioner Ornelas-Wise asked why the Downtown area was not proposed to be subject to the exclusion for being in a Police Beat with 20% or more above average crime rates. Staff responded that the direction from Council and the CED Committee was to allow cannabis businesses opportunities to locate Downtown, and applying the Police Beat exclusion would render Downtown infeasible for cannabis businesses.
HONORABLE MAYOR AND CITY COUNCIL
February 11, 2022
Subject: Cannabis Ordinance Update
Commissioner Garcia was concerned that the crime statistics discussed in the staff report could have been skewed by population density and that Cannabis is still federally illegal.
Commissioner Garcia also echoed comments raised by Ornelas-Wise about the need for public input stating that he felt this work was happening too quickly and neighborhoods are not fully aware of the proposed changes.
Commissioner Young motioned that the Commission recommend that the City Council approve the Resolution and Ordinance with the modifications proposed by staff. Chair Bonilla seconded the motion and spoke in favor of the proposal, stating that the Police Department’s track record administering the Cannabis program was the deciding factor for seconding the motion despite other concerns.
The Planning Commission voted 8-3 (Garcia, Ornelas-Wise, and Torrens opposed).
CEQA
In accordance with the California Environmental Quality Act, an Initial Study and Negative Declaration were prepared for this ordinance (PP21-002). The Initial Study/Negative Declaration (IS/ND), and addenda thereto, was prepared for the Project under the provisions of the California Environmental Quality Act of 1970 (CEQA), as amended, including State and local implementing regulations. The purpose is to document the changes to the project and provide CEQA analysis for the project, which would amend Title 20 and Title 6 of the Municipal Code and related regulations enforced by the City Manager’s Office concerning Cannabis businesses registered in San José. The IS/ND determined the proposed project would result in a less than significant impact on environmental resources because the ordinance facilitates the establishment of commercial uses in areas of the City where similar uses already occur.
The IS/ND were made available on the City’s website for 20 days starting on September 22, 2021. No public comments were received during the 20-day circulation period. Staff has been available to respond to questions and comments from the public.
/s/
Christopher Burton, Secretary
Planning Commission
For questions, please contact Michael Brilliot, Deputy Director, at Michael.Brilliot@sanjosecagov.
Attachment: Planning Commission Staff Report