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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/06/2018 - ITEMS RELATING TO MARIJUANA LICENSINGAgenda Item 4 Item # 4 Page 1 AGENDA ITEM SUMMARY March 6, 2018 City Council STAFF Ginny Sawyer, Policy and Project Manager Bronwyn Scurlock, Legal SUBJECT Items Relating to Marijuana Licensing. EXECUTIVE SUMMARY A. Second 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. Second 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. These Ordinances, unanimously adopted on First Reading on February 20, 2018, 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. Ordinance No. 035, 2018, relating to Retail Marijuana licensing, has been amended on Second Reading by adding to the definition of “Retail Marijuana Establishment Operator” that it is also known as a “Retail Marijuana Business Operator” in the state law. The terms are used interchangeably in state law. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, February 20, 2018 (w/o attachments) (PDF) 2. Ordinance No. 034, 2018 (PDF) Agenda 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: ATTACHMENT 1 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 shall consider the state’s minimum licensing requirements. Further, issuance of a state transporter license is not Agenda Item 17 Item # 17 Page 3 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) -1- 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. -2- 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: -3- . . . (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) any additional information that the City Manager reasonably determines to be necessary in connection with the investigation and review of the application. . . . (c) 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. 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 -4- Passed and adopted on final reading on the 6th day of March, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk -1- 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. . . . -2- Retail marijuana establishment operator (also known as retail marijuana business operator in the Colorado Retail Marijuana Code) 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 -3- Passed and adopted on final reading on the 6th day of March, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk