Adult-Use Cannabis
City Council
September 9, 2025
Item 12-A
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Purpose
Create new Adult-Use Cannabis program
• Allows cannabis retailers in non-residential zones with some locational restrictions
Incorporate social equity component
• Review of cannabis equity assessment
• Core social equity program augmented with potential options for future consideration
• Cannabis retailer employing best practices hiring from equity eligible operations
• Cannabis retailers carrying products from equity applicants • Reinvestment into entrepreneurship programs
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Previous Council Direction
• Permit legal adult-use cannabis uses of all types in all nonresidential zones with locational buffers • 600’ from sensitive uses (schools, daycare facilities, youth centers) • 300’ between other cannabis uses
• No more than one cannabis use per block
• Pursue a standard equity program that would prioritize individuals who qualify for the equity program and not
require additional staffing
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Cannabis Background
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September 9, 2025
Item 12-A
September 9, 2025
Background
• 2015 - Council authorized 2 medicinal cannabis retailers • 2017 – SMMC Article 6 commercial cannabis regulations and definitions adopted
• 2021/2022 – Conditional Use Permits approved for 2 medicinal retailers
• 2022 (November) – Measure HMP approved by voters
establishing cannabis tax
• 2023
• June - City Council Study Session on allowing adult-use cannabis • November - IZO permitting medicinal retailers to sell adult-use cannabis
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Background
• 2024
• January - Award of $40,000 State grant for equity assessment • April - City Council Study Session on equity and locational requirements
• September – Planning Commission Study Session on equity and locational requirements
• 2025
• March – Award of $35,000 State grant for development of cannabis equity program
• June – Planning Commission recommendation of Zoning Ordinance amendments
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Adult-Use Cannabis as a Permitted Land Use
Licensed Commercial Cannabis Retailers in the Santa Monica Area (2025) Two medicinal cannabis
retailers permitted to sell
adult-use cannabis
products:
• 925 Wilshire Blvd
(Local)
• 1418 Wilshire Blvd
(Harvest)
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Proposed
Text Amendments
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Proposed Zoning Ordinance Text Amendments
• Delete Medicinal Cannabis Section (SMMC 9.31.185)
• Add new Cannabis Retailers Section (SMMC 9.31.095) • Locational requirements: • 600’ from sensitive uses • 300’ between cannabis uses • No more than one cannabis business per block • Allow cannabis retail in all non-residential zoning districts • Downtown Districts • Mixed-Use and Commercial Districts • Bergamot Districts • Employment Districts • Oceanfront District • Add as an Active Use [SMMC 9.11.030(A)(1)]
• Amend land use classification for Cannabis Retailer [SMMC 9.51.030(B)] Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Proposed Zoning Ordinance Text Amendments
Potential issues with locational requirements: • 300’ between cannabis uses • No more than one cannabis business per block • Creates uncertainty for cannabis retailer applicants and staff • Opens City to litigation risks
• Potentially delays implementation of cannabis program Policy Question:
In order to simplify the cannabis permit process, should the 300’ buffer requirement between cannabis uses and maximum of one cannabis use per block be removed?
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Planning Commission Recommendation
• June 4, 2025 – Planning Commission adopted Resolution recommending Council adopt Ordinance amending Article 9 to authorize cannabis retailers
• Suggested a broader equity program and elements that
would benefit non-cannabis-related local businesses
• Equity program should not result in processes and
barriers that delay commencement of cannabis program
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Revise SMMC Chapter 6.200
• Application and permit process
• Addition of Cannabis Delivery Permit
• Restrictions on transfers, changes, or alterations
• Annual renewal and compliance
• City oversight and enforcement
• Indemnification agreement
Delete SMMC Chapters 6.201-6.203
Proposed Article 6 Text Amendments
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September 9, 2025
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Retailer
Permitting
Process w/
Buffer Req.
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September 9, 2025
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Retailer
Permitting
Process w/out
Buffer Req.
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September 9, 2025
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September 9, 2025
Cannabis Permit Fees
• Cannabis Retailer Permit: $1,991.84
• Plus: Cannabis tax, State fee, Business license review, and processing fees
• Maintains current retailer permit fee to allow more informed assessment of time and costs required
• Non-City-Based Cannabis Delivery Retailer Permit: $65.74 • Plus: Cannabis tax, State fee, Business license processing fee Item 12-A
September 9, 2025
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September 9, 2025
Cannabis Social Equity
Assessment and
Program
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September 9, 2025
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What is Cannabis Social Equity?
• Recognize the long-term and
disproportionate impacts of the
criminalization of cannabis upon
minority communities
• Promote equitable ownership and
employment opportunities in the
cannabis industry
• Decrease disparities and improve
outcome among identified groups
that have been most affected by
the war on drugs
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September 9, 2025
Item 12-A
September 9, 2025
Development of Cannabis Equity Program
Analyzed
Quantitative
and
Qualitative
Data to
Determine
Most
Impacted
Groups
Equity
Assessment
Informs
Eligibility
Criteria and
Program
Components
Assessment
Findings
Adopt and
Implement
the Equity
Program
Equity
Program
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September 9, 2025
Item 12-A
September 9, 2025
Equity Assessment Analysis
Qualitative Data:
Community outreach and stakeholder interview to understand community- and personallevel impacts of cannabis criminalization, including: • Two (2) Community Workshops • Online Survey with 170 Responses • Nine (9) Community Stakeholder One-on-One Interviews • Seven (7) Community-Led Discussions through Micro-Grant Program Quantitative Data:
Analysis of cannabis-related conviction and arrest data from 1993-2023 in conjunction with census tract demographic data to identify most impacted communities based on cannabis criminalization.
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September 9, 2025
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Equity Assessment Findings
1. Unrestricted Permitting and Licensing May Have Consequences
2. Program Eligibility Criteria Should Prioritize Those Most Harmed by Cannabis Enforcement
3. Application and Permitting Processes Present Barriers to Entry
4. Systemic Barriers Limit Access to the Regulated Marketplace
5. Equity Applicants are Vulnerable to Exploitative Partnerships
6. Stakeholder Engagement and Education are Crucial to Program Success
7. Past Convictions Have Long-Term Consequences
8. Lack of Workforce Development Limits Equitable Participation
9. Sustainable Program Funding is Critical to Success and Long-Term Effectiveness of the Program
10. Community Reinvestment is Key to Providing Communitywide Equity Program Benefits
11. Ongoing Data Collection and Program Evaluation are Essential to Program Success Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Proposed Cannabis Equity Program
Eligibility Criteria:
• Conviction History • Individuals who have been or have immediate family members who have been arrested or convicted for a cannabis-related offenses
• Low-Income Status • At or below 80% of Area Median Income (AMI) • Residency Consideration • Applicants should be current or previous residents, students, or business owners in Santa Monica, for at least three years, cumulatively
• Ownership Consideration • Requires ownership majority which allows flexibility while ensuring equity applicants maintain decision-making power
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Proposed Cannabis Equity Program
Core Program Elements and Services: • Financial • Application and permit fee waivers or deferrals • Application and Licensing • Expedited application processing and review • Exemption from minimum distance requirement from other cannabis uses and limits to number of cannabis uses per block • Provisional approval of licenses before securing business location, with time-limited window to finalize site selection and obtain full approval • Disclosure of ownership and profit-sharing agreements during license review • Administrative, Legal, and Technical Assistance • Connect with existing business development and cannabis industry resources • Refer to groups and assistance providers to administer direct services • Collaborate with the County DA’s Office and Public Defender for expungement workshops • Outreach and Program Information • Continue to update and utilize City’s cannabis equity webpage • Targeted outreach to historically impacted communities Item 12-A
September 9, 2025
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September 9, 2025
Expanded Equity Program Services
Expanded Program Services with Potential State Grant Funding:
• Direct Financial Assistance • Start-up grants or fee waivers ($5,000-$25,000) to equity applicants to cover licensing fees, professional services, or first-year operating expenses • Lease assistance or rent subsidies for a limited-term to help equity applicants secure compliant locations
• Expanded Legal and Technical Support • One-on-one professional services vouchers to subsidize access to vetted legal, financial, and technical consultants • Funding for compliance readiness checks pre-inspection walkthroughs to help applicants meet local and state requirements before final inspections Item 12-A
September 9, 2025
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September 9, 2025
Other Ways to Support Equity
Promoting Equity Across All Cannabis Businesses:
• Employment and Product Inclusion • Encourage cannabis businesses to employ best practices in hiring equity-eligible populations (conviction history, low-income status, community ties to eligibility criteria) to promote economic inclusion • Offer incentives to cannabis businesses that meet or exceed equity hiring benchmarks • Encourage cannabis retail businesses to sell cannabis products from licensed cannabis equity businesses
• Community Reinvestment (subject to future Council budget decisions) • Dedicate a percentage of local cannabis tax revenue specially for community reinvestment in disproportionally impacted areas • Establish a Community Reinvestment Fund to finance long-term social equity initiatives and economic empowerment programs • Explore other state and federal grant opportunities that support economic development and social equity initiatives
Item 12-A
September 9, 2025
Item 12-A
September 9, 2025
Recommendation
• Adopt an Ordinance amending SMMC Article 6
• Adopt an Ordinance amending SMMC Article 9
(with possible removal of buffer between and per block requirement) • Authorize the City Manager to execute documents accepting the cannabis equity assessment
• Adopt a Resolution establishing a cannabis equity program • Adopt a Resolution establishing Cannabis Retailer Permit fees and Non-City-Based Cannabis Delivery Permit Fee
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September 9, 2025
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Recommendation
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Eligible Parcels
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September 9, 2025