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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/17/2010 - ITEMS RELATING TO THE LICENSING OF MEDICAL MARIJUA DATE: August 17, 2010 AGENDA ITEM SUMMARY STAFF: Darin Atteberry FORT COLLINSCOUNCIL Items Relating to the Licensing.of Medical Marijuana Businesses. A. Resolution 2010-056 Postponing the City Council's Decisions as to Whether Existing Medical Marijuana Businesses Should Be Allowed to Remain in Their Current Locations and as to When, If at All, Applications for New Medical Marijuana Businesses Should Be Accepted by the City. B. First Reading of Ordinance No. 095,2010, Making Certain Amendments to Chapter 15,Article XVI of the City Code Governing the Licensing, Location and Operation of Medical Marijuana Businesses. EXECUTIVE SUMMARY The Resolution postpones a decision as to whether location requirements enacted in Chapter 15 of the City Code should be made applicable to existing medical marijuana dispensaries,thereby allowing them to remain in theircurrent locations. In addition, the Resolution postpones a decision as to when, if at all, the City should begin accepting applications for new medical marijuana businesses. The Ordinance amends Article XVI,Chapter 15,of the City Code to address certain inconsistencies between the City's local regulations and the Colorado Medical Marijuana Code so as to facilitate the licensing of existing medical marijuana businesses in Fort Collins. Other inconsistencies will be further studied with recommended changes brought back to Council prior to full implementation of the Colorado Medical Marijuana Code in July 2011. BACKGROUND / DISCUSSION Application of Location Requirements to Existing Businesses ("Grandfathering") On March 16,2010, City Council adopted Ordinance No.025,2010, adding a new Article XVI to Chapter 15 of the City Code,governing the licensing, location and operation of medical marijuana businesses. Section 9 of that Ordinance directed the City Manager to make recommendations to the Council on or before September 1, 2010 as to whether the location requirements for medical marijuana dispensaries should be made applicable to existing medical marijuana businesses. The location requirements state that no dispensary shall be located within 1000 feet of: • another dispensary • a preschool, elementary, secondary, vocational, or trade school or within 500 feet of: • a college or university • a child care center • a place of worship or religious assembly a park, pool, playground, or recreational facility • a halfway house, correctional facility or substance abuse or treatment facility • the boundary of a residential zone On June 7, 2010, the governor signed House Bill 10-1284 into law enacting Title 12, Article 43.3 of the Colorado, Revised Statutes(the"Colorado Medical Marijuana Code"),which regulates the cultivation, manufacture,distribution, and sale of medical marijuana as a matter of state-wide concern. The Colorado Medical Marijuana Code includes a State application deadline of August 1, 2010 for existing medical marijuana businesses that have applied for a local license prior to July 1,2010. Depending upon the number of local applicants that have applied for a State license, and the number that are ultimately approved by the State, the number of medical marijuana businesses in the City could decrease. Staff believes it would be beneficial to know the actual number of existing businesses that are actually August 17, 2010 -2- ITEM 22 eligible for local licenses before making a recommendation as to the application of.location requirements to existing businesses. Amendments to City Code Provisions Governing Medical Marijuana Businesses There are several inconsistencies between the City's local regulations regarding medical marijuana businesses and the provisions of the Colorado Medical Marijuana Code, many of which will require further study in order for staff to be able to recommend changes in the local regulations. Some inconsistencies, identified during the process of reviewing applications, are sufficiently problematic that staff believes they should be immediately addressed. This Ordinance makes the following amendments to the local regulations: • Amends the definition of medical marijuana cultivation facilityto include facilities associated not only with locally licensed dispensaries but also with dispensaries owned and lawfully operated by a licensee in another Colorado jurisdiction, as well as those that are part of a medical marijuana delivery business that delivers medical marijuana solely within the city limits. This allows applicants to meet the State's "vertical integration" model, which requires dispensaries and cultivation facility to operate together, under the same ownership. Under the State law, a cultivation facility cannot exist alone— it must be tied to a dispensary or medical marijuana infused products manfacturer. • Provides for the issuance of a license for each dispensary or cultivation facility included in a medical marijuana business license application. This allows one type of facility to receive a license(typically the dispensary),while anotherfacility (typically the cultivation facility)is working through zoning and building code compliance issues. It also allows for enforcement of the local regulations for those facilities that are operational. • Amends the local security requirements to eliminate the requirement to have deadbolt locks on all exterior doors and to vest more discretion in the City Manager or his designee as to the kinds of security measures that are necessary. The intent of the existing requirement is to ensure that the licensed premises are adequately secured. However,the deadbolt requirement,as worded,is in conflict with the International Fire Code. Therefore, the proposed amendment requires locking systems for exterior doors designed and reasonably secured to deter unlawful entry, while providing safe emergency egress. • Amends language that currently limits to four ounces the amount of medical marijuana that may be sold or distributed to, or purchased from,another licensee in any seven-day period. The new language would allow greater quantities to be exchanged between a licensee's local facility and a medical marijuana business owned by the same licensee in another Colorado county or city. The existing prohibition creates a conflict with the State law requirement that a dispensary grow 70%of its own medical marijuana. Although a cultivation facility in Fort Collins could legitimately be growing medical marijuana for a dispensary in another j urisd iction, the four-ounce limitation makes it virtually impossible to provide that product to the dispensary. • Adds a new section authorizing the City Manager to promulgate such rules and regulations as are necessary to effectuate the implementation and enforcement of local regulations. The complexities involved in implementing the City's regulations and integrating them with the new State regulations have created a recurring need for interpretation of the City's local regulations. This new Code provision would vest in the City Manager the authority to promulgate rules and regulations that are consistent with the intent of the Code, just as certain State departments and agencies have been authorized to do with regard to the new Colorado Medical Marijuana Code. This authority to develop administrative rules and regulations will help ensure August 17, 2010 -3- ITEM 22 consistency in the way that the Code provisions are administered and should also minimize the need for Code amendments that are intended only to clarify existing Code language. STAFF RECOMMENDATION Staff recommends adoption of the Resolution and the Ordinance on First Reading. ATTACHMENTS 1. Powerpoint presentation ATTACHMENT 1 Proposed Rec Land Ordinance ed to the Co Oper n Gty of �F�t Background Since March 2010 , Council has adopted a local licensing system and regulations , and has established a process for existing businesses to be licensed , pending Council ' decision on grandfathering . Existing Medical Marijuana Businesses ( " MMBs " ) had until June 30 , 2010 to submit an application to the City for an MMB license . 2 The City received 36 applications . As of August there are 31 applicants . 26 of these have store-front operations . Only 2 meet all license and location requirements . LYVI Fo' tl` 3 Background By ordinance the City Manager is to make a recommendation to Council on or before September 1 , 2010 as to whether to apply location requirements to existing businesses (grandfathering . ) Background Since the passing of our local regulations the State has enacted House Bill 10- 1284 which : • Regulates medical marijuana as a state-wide concern ; • Establishes deadlines for MMBs to apply to the State ; • Sets a moratorium on applications for new MMBs until July 1 , 2011 . tolls 5 Proposed Resolution The proposed resolution will postpone any grandfathering decision until : • our local applicants have completed any deficiencies in their applications ; and • there is more certainty from the State as to which local businesses are eligible for local licensing . Fo' tryc �s 6 The Resolution also postpones a decision as to when the City should begin accepting applications for new MMBs . ctY or 7All Fit , rdin This ordinance addresses inconsistencies and concerns that have come to light as a result of House Bill 10 - 1284 and from our local licensing process . `rc��s 8 Lsed Ordinance • Expands definition of a Cultivation Facility to allow association with any other lawful dispensary within Colorado owned by the licensee or with a delivery business within the City . • Allows for separate licensing of each facility associated with a MMB license . tolls 9 Proposed Ordinance • Eliminates the requirement to have deadbolt locks o exterior doors . • Allows for exchange of more than 4 oz . of medical marijuana per week between local businesses and other businesses owned by same licensee in another jurisdiction . City of ort Collins 10 d0 ' Adds a new section allowing the City Manager to create rules and regulations to increase the efficiency and effectiveness of the implementation of our local regulations . �t�l=5 11 Discussion RESOLUTION 2010-056 OF THE COUNCIL OF THE CITY OF FORT COLLINS POSTPONING THE CITY COUNCIL'S DECISIONS AS TO WHETHER EXISTING MEDICAL MARIJUANA BUSINESSES SHOULD BE ALLOWED TO REMAIN IN THEIR CURRENT LOCATIONS AND AS TO WHEN, IF AT ALL, APPLICATIONS FOR NEW MEDICAL MARIJUANA BUSINESSES SHOULD BE ACCEPTED BY THE CITY WHEREAS,on March 16,2010,the City Council adopted on second reading Ordinance No. 025, 2010, adding a new Article XVI to Chapter 15 of the City Code, which Article governs the licensing, location and operation of medical marijuana businesses (the "Regulations"); and WHEREAS, Ordinance No. 025, 2010, as amended by Ordinance No. 047, 2010, also establishes a process whereby existing medical marijuana businesses may apply for a local license; and WHEREAS, Section 9 of Ordinance No. 025, 2010, directs the City Manager to make recommendations to the City Council on or before September 1, 2010, as to whether the location requirements for medical marijuana dispensaries contained in Section 15-454 of the City Code should be made applicable to existing medical marijuana businesses and when, if at all, the City should begin accepting applications for new medical marijuana businesses; and WHEREAS,on June 7,2010,the governor signed House Bill 10-1284 into law enacting Title 12,Article 43.3 of the Colorado Revised Statutes(the"Colorado Medical Marijuana Code"),which regulates the cultivation, manufacture, distribution, and sale of medical marijuana as a matter of state-wide concern; and WHEREAS, the Colorado Medical Marijuana Code establishes a deadline for existing medical marijuana businesses to apply with the state in order to continue in operation; and WHEREAS, the Colorado Medical Marijuana Code also establishes a moratorium on the filing of applications for new medical marijuana businesses until July 1, 201 1; and WHEREAS, the State application deadline of August 1, 2010, has passed and, depending upon the number of local applicants that have applied for licensing by the State and the number that are ultimately approved by the State,the number of existing medical marijuana businesses in the City that are eligible for local licensing could decrease; and WHEREAS,City staff believes it would be beneficial to gather additional information on the number of local existing businesses that are eligible for licensing under state law before making the recommendations required by Section 9 of Ordinance No. 025, 2010; and WHEREAS, the City Manager has therefore recommended that the City Council postpone the foregoing decision and the City Council agrees with this recommendation. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS that the City Council's decisions as to whether the location requirements for medical marijuana dispensaries should be made applicable to existing medical marijuana businesses, and when, if at all, the City should begin accepting applications for new medical marijuana businesses are hereby postponed until no later than July 1, 2011, or such earlier date as the City Manager may determine is appropriate. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 17th day of August A.D. 2010. Mayor ATTEST: City Clerk ORDINANCE NO. 0951 2010 OF THE COUNCIL OF THE CITY OF FORT COLLINS MAKING CERTAIN AMENDMENTS TO CHAPTER 15 , ARTICLE XVI OF THE CODE OF THE CITY OF FORT COLLINS GOVERNING THE LICENSING, LOCATION AND OPERATION OF MEDICAL MARIJUANA BUSINESSES WHEREAS , on March 16, 2010, the City Council adopted on second reading Ordinance No. 0251 2010, adding a new Article XVI to Chapter 15 of the City Code, which Article governs the licensing, location and operation of medical marijuana businesses (the "Local Regulations"); and WHEREAS , Ordinance No . 025 , 2010, as amended by Ordinance No . 047 , 2010, also establishes a process whereby existing medical marijuana businesses may apply for a local license; and WHEREAS , on June 7, 2010, the governor signed House Bill 10- 1284 into law enacting Title 12, Article 43 . 3 of the Colorado Revised Statutes (the "Colorado Medical Marijuana Code"), which regulates the cultivation, manufacture, distribution, and sale of medical marijuana as a matter of state-wide concern; and WHEREAS , the Colorado Medical Marijuana Code states that on or after July 1 , 2011 , all businesses engaged in the cultivation, manufacture, or sale of medical marijuana or in the processing of medical marijuana-infused products shall be subject to its terms and conditions and any rules promulgated pursuant thereto ; and WHEREAS , the Colorado Medical Marijuana Code also authorizes counties and municipalities in Colorado to prohibit or regulate medical marijuana businesses and to adopt regulations consistent with the intent of the state law that are more restrictive than the State ' s ; and WHEREAS , City staff has extensively reviewed the Local Regulations and has recommended that certain inconsistencies between the Local Regulations and the Colorado Medical Marijuana Code should be immediately addressed so as to facilitate the licensing of local, existing medical marijuana businesses, while certain other inconsistencies should be further studied before changes are made; and WHEREAS , during the process of reviewing applications submitted to the City by existing medical marijuana businesses, City staff has identified some additional issues and concerns that it believes the City Council should immediately address by amending the Local Regulations ; and WHEREAS , the City Council has reviewed these staff recommendations and has concluded that the recommended amendments to the Local Regulations are in the best interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows : Section 1 . That the definition "Medical marijuana cultivation facility or cultivation facility" contained in Section 15-451 of the Code of the City of Fort Collins is hereby amended to read as follows : Medical mariguana cultivation facility or cultivation facility shall mean a building, structure or premises used for the cultivation or storage of medical marijuana that is physically separate and off-sitefrom any medical marijuana dispensary and that is designated as part of the premises of a medical marijuana dispensary licensed pursuant to this Article, or as part of a medical marijuana dispensary owned and lawfully operated by a licensee in another Colorado county or municipality, or as part of a medical marijuana delivery business that delivers medical marijuana solely within the territorial limits of the City. Section 2 . That Section 15 -456 of the Code of the City of Fort Collins is hereby amended to read as follows : Sec. 15-456. Issuance of license ; duration ; renewal. (a) tiport isstiance of a licensk. , original of such license for each dispensary or enitivation site to be operated by the licensee in A license shall be issued for each dispensary or cultivation facility that is included in an application for a medical marijuana business license . Such licenses may be independently issued as each proposed facility is approved by the City. Each such cop license shall show the name and address of the licensee, the physical address for which the license is issued, and the type of facility or business for which it is issued, and the address of the facility at which it is to be displayed-, . The license shall be displayed at the physical address indicated on the license, if any, pursuant to Subsection 15-458(c) below. (b) Except as may otherwise be required bylaw, eEach license issued pursuant to this Article shall be valid for one ( 1 ) year from the date of issuance and may be renewed only as provided in this Article . All renewals of a license shall be for no more than one ( 1 ) year. An application for the renewal of an existing license shall be made to the City Manager not more than sixty (60) days and not less than thirty (30) days prior to the date of expiration of the license. No application for renewal shall be accepted by the City Manager prior to or after such date . The timely filing of a renewal application shall extend the current license until a decision is made on the renewal. Section 3 . That Section 15 -463 ofthe Code ofthe City of Fort Collins is hereby amended to read as follows : Sec. 15463 . Security requirements. (a) Except as may be authorized by the City Manager, Ssecurity measures at dispensaries and cultivation facilities shall include at a minimum the following : -2- ( 1 ) security surveillance cameras installed to monitor all entrances, along with the interior and exterior of the premises, to discourage and facilitate the reporting of criminal acts and nuisance activities occurring at the premises; (2) robbery and burglary alarm systems which are professionally monitored and maintained in good working condition; (3 ) a locking safe permanently affixed to the premises that is suitable for storage of all medical marijuana and cash stored overnight on the licensed premises ; (4) exterior lighting that illuminates the exterior walls of the licensed premises and complies with applicable provisions of this Code and the Land Use Code ; and (5 ) locking systems for exterior doors that are designed and installed in such fashion as to deter unlawful entry and provide safe emergency egress . Section 4 . That Section 15 -469 of the Code of the City of Fort Collins is hereby amended to read as follows : Sec . 15-469. Prohibited acts. It shall be unlawful for any licensee to : (4) sell, give, dispense or otherwise distribute to another licensee, or to any medical marijuana business that is licensed in another jurisdiction in the State, more than four (4) ounces of medical marijuana in any usable form within any seven-day period of time ; provided, however, that this limitation shall not apply to medical marijuana that is distributed to a medical marijuana business owned by the licensee; (6) purchase or otherwise obtain from any licensee or from any medical marijuana business that is licensed in another jurisdiction in the State more than four (4) ounces of medical marijuana in any usable form within any seven-day period of time ; provided, however, that this limitation shall not apply to medical marijuana that is obtained from a medical marijuana business owned by the licensee ; -3 - Section 5 . That Chapter 15 , Article XVI of the Code of the City of Fort Collins is hereby amended by the addition of a new Section 15 -481 which reads in its entirety as follows : Sec. 15-481 . Administrative Regulations. The City Manager is authorized to promulgate such rules and regulations as are necessary to effectuate the implementation, administration and enforcement of this Article . Introduced, considered favorably on first reading, and ordered published this 17th day of August, A.D . 2010, and to be presented for final passage on the 7th day of September, A.D . 2010 . Mayor ATTEST : City Clerk Passed and adopted on final reading on the 7th day of September, A. D . 2010 . Mayor ATTEST : City Clerk -4-