HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/20/2018 - ITEMS RELATING TO MARIJUANA LICENSINGAgenda Item 17
Item # 17 Page 1
AGENDA ITEM SUMMARY February 20, 2018
City Council
STAFF
Ginny Sawyer, Policy and Project Manager
Bronwyn Scurlock, Legal
SUBJECT
Items Relating to Marijuana Licensing.
EXECUTIVE SUMMARY
A. First Reading of Ordinance No. 034, 2018, Amending Article XVI of Chapter 15 of the Code of the City of
Fort Collins Regulating Medical Marijuana Businesses to Align Medical Marijuana Code Provisions to State
Law, Rules and Regulations.
B. First Reading of Ordinance No. 035, 2018, Amending Article XVII of Chapter 15 of the Code of the City of
Fort Collins Regulating Retail Marijuana Businesses to Align Retail Marijuana Code Provisions to State
Law, Rules and Regulations.
The purpose of this item is to amend the City Code to align medical marijuana provisions in the City Code to
the state regulations and make similar updates to the retail marijuana licensing provisions.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinances on First Reading.
BACKGROUND / DISCUSSION
The City first started discussing the regulation of medical marijuana in 2010. Since that time voters approved,
and the City enacted, medical marijuana regulations resulting in the licensing of 10 medical marijuana centers
(aka stores). Per the voter-approved licensing provisions, medical marijuana centers are restricted to one per
every 500 registered patients within Larimer County.
When Colorado voters approved Amendment 64 allowing the regulation of retail (recreational) marijuana, the
City opted in and enacted regulations by City Council adoption. Local regulations limit retail marijuana store
licenses to existing medical marijuana center licensees. The City currently has 10 retail stores.
As mentioned above, voters approved a citizen-initiated ordinance regulating medical marijuana businesses in
November 2012. As such, those regulations and provisions can only be amended by the voters. However,
since 2012, state laws concerning medical marijuana businesses have changed considerably, and will
continue to do so for some time. On November 7, 2017, voters considered and approved a Council-initiated
ballot measure permitting Council to make amendments or additions to the City Code that are not contrary to
and do not eliminate any of the 2012 citizen-initiated provisions, except as provided in Section 15-491(b)
(which allows the Council to lessen any restrictions contained in Article XVI of Chapter 15), and that are
current with the state laws, rules, and regulations,
Pursuant to this new voter-approved authorization, staff is proposing the following amendments to Article XVI
of Chapter 15 relating to medical marijuana:
Agenda Item 17
Item # 17 Page 2
Definition of Medical Marijuana Business
The definition of “medical marijuana business” has been amended to add the following new types of local
licenses to be consistent with current state licenses:
• Medical Marijuana Testing Facility License
• Medical Marijuana Research and Development Facility License
• Medical Marijuana Research and Development Cultivation License
• Medical Marijuana Operator License
A Medical Marijuana Testing Facility is a public or private laboratory licensed and certified to conduct testing
and research on medical marijuana, medical marijuana concentrate, and medical marijuana-infused products.
Testing facilities are testing for microbials, pesticides, residuals solvents, potency, and homogeneity, among
other things.
A Medical Marijuana Research and Development Facility License allows a person to possess marijuana
for the following limited research purposes:
• To test chemical potency and composition levels;
• To conduct clinical investigations of marijuana-derived medicinal products;
• To conduct research on the efficacy and safety of administering marijuana as part of medical
treatment;
• To conduct genomic, horticultural, or agricultural research; and
• To conduct research on marijuana-affiliated products or systems.
A Medical Marijuana Research and Development Cultivation License allows a person to grow, cultivate,
possess, and transfer, by sale or donation, marijuana for the limited research purposes above.
These licenses do not have any connection to other licensed businesses.
A Medical Marijuana Establishment Operator License may be issued to an entity or person who operates
(but does not own) a licensed medical marijuana establishment and who may receive a portion of the profits as
compensation.
Staff supports the addition of these types of licenses to our local Code due to the fact that these businesses do
not provide marijuana to the public and could provide needed testing facilities to the community.
Requirements for an Application
Two amendments to Section 15-472 relating to applications are proposed. The first adds language that will
permit the City to collect information on all persons having a financial and/or ownership interest in a medical
marijuana business. Several new types of interests have been added to state law, including, but not limited to,
indirect beneficial interest owners, direct beneficial interest owners, and qualified limited passive investor and
the City would like the ability to collect information on these interest holders, including conducting background
checks.
The second amendment eliminates a requirement to file a comprehensive business operation plan. Staff has
not found this information to be helpful in the licensing process. Each department evaluates applications
independently in accordance with their own processes and procedures. The provision relating to a security
plan (which is primarily camera-related), has been incorporated in the diagram requirements of this section.
Prohibition of Medical Marijuana Transporter Licenses and Off-premises Storage Permits
Under the local licensing authority provisions in the state law, a local licensing authority shall issue a local
license within a municipality by ordinance, and if no such ordinance is adopted, then a local licensing authority
Agenda Item 17
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shall consider the state’s minimum licensing requirements. Further, issuance of a state transporter license is
not dependent upon local licensure or approval. Therefore, staff recommends adopting prohibitions on
transporter licenses and off-premises storage permits.
Staff recommends prohibiting Medical Marijuana Transporter Licenses, which may be issued to a person to
provide logistics, distribution, and storage of marijuana and product. A licensee may maintain a licensed
premise to temporarily store marijuana and to use as a centralized distribution point.
This activity would permit overnight warehouse storage of marijuana on route from one destination to another.
This type of activity does not benefit the community or the Fort Collins licensed businesses in any way, and
provides an attraction for potential criminal activity.
Off-premises Storage Permits are available, under state rule, to medical marijuana centers, infused products
manufacturers, cultivations, and testing facilities, as well as transporters. Local businesses have indicated
they have no need for off-premises storage facilities, and staff does not recommend allowing transporters
licensed by other jurisdictions to have off-premises storage facilities in Fort Collins. Like transporter licenses,
there appears to be no community benefit derived from these types of facilities.
The amendments listed above complete the staff recommended changes to our local medical marijuana code.
None of the changes are contrary to the voter approved regulations.
Retail Marijuana Licensing Amendments
Changes similar to the medical marijuana code are proposed for retail marijuana:
• Amendment of the definition of “Applicant” to recognize the additional types of financial and/or
ownership interests
• Addition of a Retail Marijuana Establishment Operator License
• Prohibition of Transporter licenses
• Prohibition of Off-premises Storage Permits
If the proposed ordinances are adopted, there will be associated Land Use Code (LUC) changes brought
forward with the annual LUC updates.
PUBLIC OUTREACH
Staff met with representatives of the local marijuana business industry in 2017 to discuss the inability of the
Council to amend the voter-approved marijuana licensing provisions, and to discuss staff’s desire to make it
easier to amend the Code for consistency with State law. Original drafters of the citizen-initiated ordinance
support updating the Code to be consistent with State law and wanted to ensure that the referred ballot
question would not allow Code changes beyond the scope of remaining consistent with State law. The
proposed amendments meet that desire and protect the original intent of the citizen-initiated ordinance.
At a meeting with industry representatives on January 18, 2018, staff reviewed the proposed amendments,
fielded questions, and provided information on how to provide input to City Council. No objections to the
proposed amendments were voiced at this meeting.
Staff does not anticipate any impact to the general public and staff informed TEAM Wellness of the initiative
and impacts. They did not have any concerns.
ATTACHMENTS
1. Medical Marijuana Code Change Decision Chart (DOCX)
2. Proposed and Existing Licenses (PDF)
In November 2012, Fort Collins voters approved a medical marijuana regulatory and licensing
ordinance (the Medical Marijuana Code). The Medical Marijuana Code is in City Code Chapter
15, Article XVI, and it includes provisions for allowing one medical marijuana center for every
500 patients registered in Larimer County, zoning and location restrictions, and licensing rules
and regulations.
In November 2017, Fort Collins voters approved a ballot measure to allow City Council to
make amendments or additions to the Medical Marijuana Code to stay current with applicable
state laws, rules and regulations.
The following should be considered before making any proposed
amendments or additions to the Medical Marijuana Code:
ADDITIONS OR AMENDMENTS TO THE
MEDICAL MARIJUANA CODE
DECISION FLOWCHART
YES NO
Change not allowed
Identify potential amendment or addition
Staff to present to Council for consideration if amendment
requested or recommended.
Does it impact number of allowable centers,
location requirements, or general licensing
requirements as approved by the voters?
Does it conflict with state laws, rules and regulations?
YES
NO
Staff reviews legislation, enacted changes to the
Colorado Medical Marijuana Code, proposed revisions, and any adopted changes
to the Colorado Medical Marijuana Rules and Regulations.
Testing Facility License Research and Development
License
Research and Development
Cultivation License
Establishment Operator
License
Performs testing and research on
medical marijuana for medical
marijuana licensees for microbials,
pesticides, residuals solvents,
potency, homogeneity, etc.
Allows marijuana possession for the
limited research purposes of
conducting:
▪ potency and composition level
tests
▪ clinical investigations of
marijuana-derived medicinal
products
▪ research on efficacy and safety
of administering marijuana as
part of medical treatment
▪ genomic, horticultural, or
agricultural research
▪ research on marijuana-affiliated
products or systems
Grows and cultivates marijuana for
the limited research purposes of a
Research and Development
License.
Issued to an entity or person who
operates a licensed medical
marijuana establishment on behalf
of the owner and who may receive a
portion of the profits as
compensation.
Proposed New License Types
ATTACHMENT 2
The following provides existing marijuana license information current to February 2018
Fort Collins Limitations:
• Medical Marijuana Centers are capped at 1 per every 500 patients registered in Larimer County. The cap does not apply to businesses that were
licensed prior to November 1, 2011 (the date of the election in which voters banned medical marijuana in Fort Collins). The current cap, based on
November 2017 patient counts supplied by the Colorado Department of Public Health & Environment, is nine (9).
• Centers cannot sell to anyone under the age of 21 if co-located with Retail Store.
Fort Collins Limitations:
• Only licensed Medical Marijuana Centers can hold Retail Marijuana Store licenses.
• Retail Store must be located on the same premise as the Medical Marijuana Center.
• Cultivation licenses may only be issued to Retail Marijuana Stores and Products Manufacturing Facilities licensed in Fort Collins (no standalone
cultivations allowed.)
MEDICAL Center Optional Premises Cultivation
Infused Products
Manufacturer
Description
Sells medical marijuana and
marijuana products to registered
patients and primary caregivers
Grows and cultivates medical marijuana
to be sold in Centers or used in the
manufacturing of infused products
Manufactures medical marijuana-
infused products such as edibles,
tinctures, pressed pills and
capsules, and topicals
# of Licenses 10 10 4
Applications Approved-Pending
Issuance of License
1 2 1
Applications Under
Consideration
0 0 0
RETAIL Store Cultivation Facility
Infused Products
Manufacturing
Testing Facility
Description
Sells retail marijuana
and marijuana products
to the general public
Grows and cultivates retail
marijuana to be sold in
Stores or used in the
manufacturing of products
Manufactures retail marijuana
products such as edibles,
tinctures, pressed pills and
capsules, and topicals
Performs testing and
research on retail marijuana
for for microbials,
pesticides, residuals
solvents, potency,
homogeneity, etc.
# of Licenses 10 9 3 0
Applications Approved-Pending
Issuance of License
0 0 0 0
Applications Under
Consideration
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ORDINANCE NO. 034, 2018
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE XVI OF CHAPTER 15 OF THE CODE OF THE CITY OF FORT
COLLINS REGULATING MEDICAL MARIJUANA BUSINESSES TO ALIGN MEDICAL
MARIJUANA CODE PROVISIONS TO STATE LAW, RULES AND REGULATIONS
WHEREAS, in November 2012 voters approved a citizen-initiated ordinance regulating
medical marijuana businesses which can only be amended by the voters; and
WHEREAS, on November 7, 2017, voters considered and approved a council-initiated
ballot measure permitting Council to make amendments or additions to the City Code regulating
medical marijuana businesses; and
WHEREAS, such amendments or additions must be current with the state laws, rules, and
regulations governing medical marijuana businesses, and cannot be contrary to or eliminate any
of the 2012 citizen-initiated provisions, except as provided in Section 15-491(b) (which allows
the Council to lessen any restrictions contained in Article XVI of Chapter 15); and
WHEREAS, since 2012, state laws, rules and regulations regulating medical marijuana
businesses have changed considerably, including the addition of new types of licenses and
business ownership interests; and
WHEREAS, staff recommends updating the City Code provisions governing medical
marijuana businesses to include the new state approved ownership interests, and the new license
types including medical marijuana testing facility, medical marijuana research and development
facility, medical marijuana research and development cultivation, and medical marijuana
business operator; and
WHEREAS, staff also recommends eliminating the requirement to file a comprehensive
business operation plan, instead specifying the elements of the security plan portion of the
comprehensive plan to be added to the diagram of the licensed premises; and
WHEREAS, staff further recommends prohibiting medical marijuana transporter licenses
and medical marijuana off-premises storage permits for public health and safety reasons related
to potential criminal activity; and
WHEREAS, the Council has determined that the proposed amendments are in the best
interest of the City and its citizens.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
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Section 2. That the definition “Medical marijuana business or businesses” contained
in Section 15-452 of the Code of the City of Fort Collins is hereby amended to read as follows:
Medical marijuana business or businesses shall mean a medical marijuana center, optional
premises cultivation operation, or medical marijuana-infused products manufacturer, medical
marijuana testing facility, medical marijuana research and development facility, or medical
marijuana research and development cultivation as defined in the Colorado Medical Marijuana
Code.
Section 3. That Section 15-452 of the Code of the City of Fort Collins is hereby
amended by the addition of a new definition “Medical marijuana business operator” which reads
in its entirety as follows:
Medical marijuana business operator shall mean an entity or a person that is not an owner of a
medical marijuana business and that is licensed to provide professional operational services to a
medical marijuana business for direct remuneration from such business.
Section 4. That Section 15-471 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-471. License required.
It shall be unlawful for any person to be a medical marijuana business operator or establish or
operate a medical marijuana business in the City without first having obtained from the City and
the State a license for each facility to be operated in connection with such business. Such license
shall be kept current at all times, and the failure to maintain a current license shall constitute a
violation of this Section.
Section 5. That Section 15-472 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-472. Requirements of application for license; payment of application fee; denial of
license.
(a) A person seeking a license pursuant to the Colorado Medical Marijuana Code and the
provisions of this Article shall submit an application to the City on forms provided by the State
and City. At the time of application, each applicant shall pay a nonrefundable application fee to
defray the costs incurred by the City for background investigations and inspection of the
proposed premises, as well as any other costs associated with the processing of the application.
In addition, the applicant shall present a suitable form of identification.
The applicant shall also provide the following information on a form approved by, or acceptable
to, the Authority, which information may be required for the applicant, the proposed manager of
the medical marijuana business, and all persons having a financial and/or ownership interest, as
set forth in the Colorado Medical Marijuana Code, in the medical marijuana business, that is the
subject of the application or, if the applicant is an entity, having a financial interest in the entity:
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. . .
(7) a “to scale” diagram of the proposed licensed premises, no larger than eleven (11)
inches by seventeen (17) inches, showing, without limitation, building layout, all entryways and
exits to the proposed licensed premises, loading zones, and all areas in which medical marijuana
will be stored, grown, manufactured or dispensed, and camera locations, directions of camera
coverage, and camera numbers;
(8) a comprehensive business operation plan for the medical marijuana business which
shall contain, at a minimum, the following:
a. a security plan meeting the requirements of § 15-479 of this Article,
b. a description of all products to be sold,
c. a plan for exterior signage that is in compliance with all applicable
requirements of this Code and the Land Use Code, including photographs and/or
illustrations of proposed signage; and
(98) any additional information that the City Manager reasonably determines to be
necessary in connection with the investigation and review of the application.
. . .
(c) Upon receipt of a completed application, the City Manager may circulate the application
to all affected service areas and departments of the City to determine whether the application is
in full compliance with all applicable laws, rules and regulations.
(dc) The City may, prior to issuance of the license, perform an inspection of the proposed
licensed premises to determine compliance with any applicable requirements of this Article or
other provisions of this Code or the Land Use Code.
Section 6. That Article XVI of Chapter 15 of the Code of the City of Fort Collins is
hereby amended by the addition of a new Section 15-473.5 which reads in its entirety as follows:
Sec. 15-473.5. Licenses and permits prohibited.
The following medical marijuana business licenses and permits shall be prohibited in the City.
(1) Medical Marijuana Transporter Licenses; and
(2) Medical Marijuana Off-premises Storage Permits.
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Introduced, considered favorably on first reading, and ordered published this 20th day of
February, A.D. 2018, and to be presented for final passage on the 6th day of March, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 6th day of March, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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ORDINANCE NO. 035, 2018
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE XVII OF CHAPTER 15 OF THE CODE OF THE CITY OF FORT
COLLINS REGULATING RETAIL MARIJUANA ESTABLISHMENTS TO ALIGN RETAIL
MARIJUANA CODE PROVISIONS TO STATE LAW, RULES AND REGULATIONS
WHEREAS, Article XVII of Chapter 15 of the City Code establishes regulations for
retail marijuana establishments; and
WHEREAS, the state law, rules and regulations governing retail marijuana
establishments are ever-evolving; and
WHEREAS staff recommends updating the City Code provisions governing retail
marijuana establishments to include the new state approved ownership interests, and to add the
newly created retail marijuana business operator license; and
WHEREAS, staff further recommends prohibiting retail marijuana transporter licenses
and retail marijuana off-premises storage permits for public health and safety reasons related to
potential criminal activity; and
WHEREAS, the City Council has determined that these proposed amendments to the
City Code are in the best interest of the City.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That Section 15-603 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-603. - Definitions.
(a) The following words, terms and phrases, when used in this Article, shall have the meanings
ascribed to them in this Section:
Applicant shall mean any person or entity, having any financial or ownership interest as set forth
in the Colorado Retail Marijuana Code, who has submitted an application for a license or
renewal of a license issued pursuant to this Article. If the applicant is an entity and not a natural
person, applicant shall include all persons who are the members, managers, officers, directors
and, shareholders, of such entity.
. . .
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Retail marijuana establishment operator shall mean an entity or person that is not an owner of a
retail marijuana establishment and that is licensed to provide professional operational services to
a retail marijuana establishment for direct remuneration from such establishment.
. . .
Section 3. That Section 15-607 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-607. License requirements.
No person may operate a retail marijuana establishment in the City without having obtained a
license under the provisions of this Article. No person shall be a retail marijuana establishment
operator without having obtained a license under the provisions of this Article.
Section 4. That Article XVI of Chapter 15 of the Code of the City of Fort Collins is
hereby amended by the addition of new Section 15-611.2 which reads in its entirety as follows:
Sec. 15-611.2 Retail marijuana establishment operator license.
Any person who is not an owner of a retail marijuana establishment, and who meets the
requirements of this Division, may be licensed as a retail marijuana establishment operator.
Section 5. That Article XVI of Chapter 15 of the Code of the City of Fort Collins is
hereby amended by the addition of new Section 15-611.5 which reads in its entirety as follows:
Sec. 15-611.5. License and permit prohibited.
The following retail marijuana business license and permit shall be prohibited in the City:
(1) Retail Marijuana Transporter License; and
(2) Retail Marijuana Off-premises Storage Permit.
Introduced, considered favorably on first reading, and ordered published this 20th day of
February, A.D. 2018, and to be presented for final passage on the 6th day of March, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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Passed and adopted on final reading on the 6th day of March, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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