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HomeMy WebLinkAboutMINUTES-02/22/2011-AdjournedFebruary 22, 2011 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Adjourned Meeting - 6:00 p.m. An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday, February 22, 2011, at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered by the following Councilmembers: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy, and Troxell. Staff Members Present: Atteberry, Krajicek, Roy. Items Relating to Medical Marijuana Businesses Adopted on First Reading The following is staffs memorandum for this item. "EXECUTIVE SUMAMRY A. First Reading of Ordinance No. 018, 2011, Authorizingthe Continuing Operation of Existing Medical Marijuana Businesses. B. First Reading of Ordinance No. 019, 2011, Making Certain Amendments to Chapter 15, Article AW of the City Code Governing the Licensing, Number, Location and Operation of Medical Marijuana Businesses, and Adding a New Article Governing the Cultivation of Medical Marijuana by Primary Caregivers and Patients. C. First Reading of Ordinance No. 020, 2011, Amending the City's Land Use Code by Adding Medical Marijuana -Infused ProdtictMant facturingFacilities as Permitted Uses in Various Zones Districts, and Renaming Dispensaries and Cultivation Facilities. These three ordinances are beingpresented to Council to further clarify, regulate, and align medical marijuana businesses to the State regulations and to the intent of previous local ordinances. Ordinance No. 018, 2011, will allow for existing medical marijuana businesses that have met all requirements and paid appropriate fees to both the City and the State to continue operating, even if such businesses do not meet the required zoning and location requirements. Ordinance No. 019, 2011, will amend the provisions of Chapter 15, Article 16 and 17 of the City Code to align the City's local regulations with the Colorado Medical Marijuana Code, to adopt certain additional, more restrictive regulations as permitted tinder State law, and to adopt local regulations for primary caregivers. 173 February 22, 2011 Ordinance No. 020, 2011, will amend the Land Use Code to add a definition for a Medical Marijuana - Infused Products Manufacturing Facility, to add the use of such facility to the list of permitted uses in the appropriate zones, and to rename dispensaries and cultivation facilities to be consistent with the Colorado Medical Marijuana Code. BA CKGRO UNDIDISCUSSION Since March 2010, City Council has adopted numerous ordinances related to the operation and regulation of medical marijuana businesses (MMBs) in Fort Collins. On June 7, 2010, the State of Colorado passed the Colorado Medical Marijuana Code, which regulates MWBs and allows for municipalities to adopt more restrictive regulations or even to ban such businesses, and imposes a moratorium on any new applications until July 1, 2011. Under Ordinance No. 25, 2010, existing MMBs in Fort Collins had until June 30, 2010, to submit an application for a business license. The City has so far inspected and issued provisional licenses to 19 medical marijuana centers (formerly known as medical marijuana dispensaries), and 10 associated optional premises cultivation facilities (formerly known as medical marijuana cultivation facilities), with 21 more locations (4 centers and 17 cultivationfacilities) that arepending approval. An additional requirement imposed on these businesses under State law is that the applicant must apply and pay fees to the State by August 2010. The City currently has four outstanding applications that could potentially bring the total number of Centers to 23. In August 2010, Council passed a resolution which delayed the decision as to whether existing MMBs should be allowed to remain in their current locations and as to when, if at all, applications for new MMBs should be accepted by the City until additional information was gathered on the number of existing local businesses that were eligible for licensing under State law. Of the 19 medical marijuana centers that have provisional licenses issued by the City, only two meet all ofthe zoning and separation requirements. One additional center, which is notyet licensed, also meets all zoning and separation requirements. Ordinance No. 018"2011, proposes allowing all current licensed centers to remain in their current locations or in new, conforming locations. Ordinance No. 019, 2011, proposes limiting the total number ofallowable center licenses available in Fort Collins to 23. This would honor the good faith business investments made by MMBs that were in operation prior to our current regulations while addressing the concerns heard from citizens. The surrounding municipalities, including Larimer County, Loveland, Longmont, Windsor, and Greeley, have all banned or continued their moratoriums on marijuana related businesses. This has placed additional pressure on Fort Collins from those individuals looking for a location to start a MMB. Capping the total allowable number of MMB licenses in Fort Collins provides a means to prevent Fort Collins from becoming a regional MMB capital. If all the local medical marijuana centers that have applied to the State are licensed, there would be a capacity to serve 7, 600 patients. At last report, there were 116,000 patients in the State; 8 to 10% of the State patients have historically resided in Larimer County; and Fort Collins has about 47% of the population of the county. Using these figures, a generous estimate of the total number ofpatients in Fort Collins is 174 February 22, 2011 about 5,482. While the exact figures are not available, it is apparent that the current number of centers can easily provide for the patients that reside in Fort Collins, especially since primary caregivers could grow medical marijuana for up to five patients each and patients could also opt to grow medical marijuana for themselves. Ordinance No. 019, 2011, implements and aligns definitions, language, and regulations with State law. Additionally, it allows for the licensing of a new type of business for persons who manufacture medical marijuana -infused products (such as baked goods, tinctures, and beverages) in conformity with State law. Further, it creates'a medical marijuana licensing authority as required by State law, removes duplicative regulations by eliminating those that are already covered in State law, and adds a number of more restrictive provisions than exist under State law. The following are some examples of more restrictive provisions: • Limits any applicant to only two medical marijuana center licenses in the City. • Caps the total number ofallowable centers in the City. • Maintains the existing local separation requirements and measuring techniques, both of which are more restrictive than the State. • Requires the reporting of all disturbances and unlawful activity at any MMB licensed facility. • Limits the type of plants, clones, or seedlings that centers may sell. • Requires all cultivation facilities within the City to have a center in Fort Collins. • Allows for the exchange of no more than 8 oz. of medical marijuana per seven-day period between licensed centers. (This relaxes the previous local limit of 4 oz) • Continues the current local limit on the amount of medical marijuana that can be dispensed to patients or primary care givers (207. within a seven-day period). • Requires all cultivation of medical marijuana to be conducted entirely within a building or other fidly enclosed structure. • Prohibits the cultivation of any medical marijuana within any duplex or multi family dwelling, or within any structure that is located on the same legal parcel as a duplex or multi family dwelling. • Imposes a twelve (12) marijuana plant count, including no more than six (6) mature plants, that may be cultivated or kept within, or on the same legal parcel as, any single- family dwelling. • Establishes the following local regulations for manufacturers of medical -infused products: 175 February 22, 2011 prohibits the operation ofa medical marijuana -infused products manufacturer in the City unless such manufacturer also operates a center in the City; prohibits the posting ofsigns or other advertising materials identifying the premises as being associated with the production or use of medical marijuana; and requires that all products produced by a medical marijuana -infused products manufacturer be sold only through a center under the same ownership. In prior ordinances, the City did not address provisions for the manufacturing of medical marijuana -infused products. Since the State law now allows for the licensing of a medical marijuana -infused products manufacturer and because staff has been informed by local industry representatives that this is an important element of a MAM, Ordinance No. 020, 2011, adds a definition and allowable zone districts for this use. Medical marijuana -infused products manufacturing facilities are proposed to be allowed in the same zone districts as cultivation facilities, and like those facilities, would have no separation requirements. HiVANCIAUECONOMIC IMPACTS Staff has identified only a few financial impacts. The time and effort to process MMB application and issue licenses was initially underestimated. Staff has been tracking the workload and anticipates raising fees to ensure that staff time is covered. If the number of M_LIB licenses is limited, those individuals looking to start a business in Fort Collins could be financially impacted. In 2010, the City received approximately $260, 000 in sales tax revenue from MMBs. " Captain Jerry Schiager, Police Services, discussed the history of the medical marijuana business issue in Fort Collins and outlined the current and pending business and cultivation facility licenses. Ordinance No. 018, 2011, will grandfather the 23 current, existing medical marijuana businesses. Ordinance No. 019, 2011 is the regulatory, licensing ordinance and it will amend local provisions to match those of the State. This Ordinance creates a licensing authority, caps the number of allowable businesses to the existing 23, allows two medical marijuana licenses per applicant, maintains the recommended distance requirements, distinguishes between the dispensary and cultivation facility, requires an individual with a cultivation facility in Fort Collins to also have a retail center in Fort Collins, and increases the amount of transactions allowed between licensed centers from 4 to 8 ounces per week. Additionally, centers are required to report disturbances or law violations. Ordinance No. 020, 2011 changes the Land Use Code to accept infused product manufacturers into the same zones in which cultivation facilities are currently allowed. Alfred Reaud, 1104 Columbine Court, supported grandfathering existing businesses. Steve Ackerman, 346 East Mountain, Organic Alternatives, supported grandfathering existing businesses. Dawn Nannini, 321 North Meldrum, Team Fort Collins, opposed grandfathering existing businesses. Kyle Kaufman, 1101 Academy Court, Top Shelf Colorado, supported grandfatherine existing businesses. 176 February 22, 2011 Damian Farris, 1101 Academy Court, Top Shelf Colorado, supported grandfathering existing businesses. Wes Melander, Larimer County resident and patient advocate, supported grandfathering existing businesses. David Schwaab, 351 Linden Street, Abundant Healing, supported grandfathering existing businesses and opposed fixed amount limits. Michael Stolting, 810 North College, Medical MJ, supported grandfathering existing businesses. Sam Leuschen, 810 North College, Medical MJ, supported grandfathering existing businesses. Doug Anderson, 1630 South College, supported grandfathering existing businesses. Carrie Cortiglio, Health District of Northern Larimer County Policy Analyst, opposed grandfathering existing businesses and favored stringent regulations, specifically regarding the amount of edibles allowed to be purchased. Dr. Nancy Smith, 420 South Loomis, opposed grandfathering existing businesses and the medical marijuana industry as a whole. Evan Stafford, Green Rooster Natural Medicine, expressed concern regarding the grandfathering of his delivery -only medical marijuana business and supported grandfathering all existing businesses. Jesse Levine, Dufek Group, discussed his delivery -only medical marijuana business and supported grandfathering it and all existing businesses. Michael Popovich, Fort Collins resident, medical marijuana patient, supported grandfathering all existing businesses. Julie Kresky, Fort Collins resident, medical marijuana patient, supported the industry and grandfathering existing businesses. Kirk Scramstead, A Kind Place, supported grandfathering existing businesses. Ken Correa, 301 Smokey Street, Solace Meds, supported grandfathering existing businesses and stated very little crime has occurred relating to the businesses. Deb Earl, Loveland resident and medical marijuana patient, discussed the benefits of medical marijuana and supported grandfathering existing businesses. Travis Mate, FOCO Compassion Center, supported grandfathering existing businesses. 177 February 22, 2011 Nick Dice, 810 North College, Medical MJ, supported grandfathering existing businesses. Don Krukshank, A Kind Place, supported grandfathering existing businesses. Councilmember Kottwitz asked about regulations regarding the amount of edibles allowed to be purchased and whether or not State regulations would apply. Schiager replied he has not seen State regulations regarding edibles. Infused product manufacturers are not regulated in any way; they may have an unlimited number of plants and do not have to have patients designate them as primary caregivers. They are required to have a contractual relationship with a center to be able to sell their products. Councilmember Kottwitz asked if individuals or other businesses within the MMB areas were contacted. Ginny Sawyer, Neighborhood Administrator, replied there was no direct contact though comments have been heard from some neighbors. Councilmember Kottwitz asked if it is possible for more than the existing two MMBs to meet regulations, should grandfathering not occur. Schiager replied businesses have stated it is difficult to find locations meeting the requirements. The maps show 410 acres of available space, though structures may not exist on those acres. Councilmember Poppaw asked how many MMBs could be accommodated within the 410 acres c, given separation requirements. Steve Dush, Current Planning Director, replied it is a difficult question to answer given separation requirements between each other and other protected uses. Councilmember Poppaw asked if the 410 acres are located throughout the City. Dush replied in the affirmative. Sawyer discussed the maps and locations available for MMBs and cultivation facilities. Councilmember Kottwitz asked about the delivery -only business and whether'that business could appeal to the medical marijuana licensing authority or if it needs to be dealt with in the grandfathering discussion. Schiager replied the original City Ordinance allowed a cultivation - delivery model which is not allowed under State regulations. The delivery -only business has been allowed to find a physical location. Councilmember Manvel asked for further detail regarding the delivery -only business. Schiager replied the business was allowed to find a location and has opted to attempt to use the facility in which he is currently growing; however, that is in a zone that does not allow retail sales. Councilmember Manvel asked if it would be possible to grant a variance which would allow the retail location without sales. Schiager replied the State prohibits a delivery model unless patients are homebound. Councilmember Troxell asked if the City would be fully in compliance with Amendment 20 if Council does not grandfather existing businesses, leaving only the two compliant businesses in operation. Schiager replied the State allows municipalities to ban the activity entirely. City Attorney Roy concurred. 178 February 22, 2011 Councilmember Troxell asked about outreach to the medical community. Schiager replied talks and discussions have been held with members of the medical community and input has been received from other interests as well. Councilmember Troxell asked why staff is recommending grandfathering all existing locations. Schiager replied staff had a difficult time prioritizing different location requirements accepted by Council. Councilmember Manvel asked what determines the capacity of a center. Schiager replied the State licensing requires centers to apply with patient ranges; most in Fort Collins are listed up to 300 patients, some up to 500. Councilmember Manvel asked if it is possible to keep centers from accepting patients from other communities. Schiager replied in the affirmative. City Attorney Roy replied he would need to further examine the issue to be completely confident in the response. Sawyer stated centers' patient numbers are attached to their plant numbers and they can sell to individuals who are not on their specific patient rosters. Mayor Pro Tem Ohlson supported not capping the number of allowable centers in a market economy. He asked for input on the instances in which the City's regulations are more strict than those of the State. Schiager replied, as many of the surrounding jurisdictions are banning the industry, this Ordinance specifically addresses the fact that the desire is not for Fort Collins to become the producer of medical marijuana for all of northern Colorado. The increase to 8 ounces will reduce the wholesale large-scale marijuana transactions. The State's 70/30 split deals with the annual amount of marijuana produced and requires a center to produce 70% of what it sells on an annual basis. It is not as enforceable as the 8 ounce proposal in the Ordinance. Mayor Pro Tern Ohlson asked about the logic behind capping the number of centers allowed. Schiager replied staff is concerned about having an over -capacity and is confident the current number of centers is adequate, should grandfathering occur,. Mayor Pro Tern Ohlson asked what the downside would be of becoming the medical marijuana center of Northern Colorado. Schiager replied, as the number of centers grows, exposure to youth and to other protected interests increases. Allowing additional grow operations to provide product to other municipalities would not generate additional revenue, other than via the leasing of properties, and crime concerns would increase Staff s approach is to serve the local community, respect the local, existing businesses that have gone through the licensing process, but also limit potential negative impacts on the community. Councilmember Kottwitz asked how many more centers would actually surface. Schiager replied growth could occur as some of the aforementioned 410 acres are developed, or possibly through annexations or zoning changes. With the existing location and separation requirements, and with the existing facilities, there is not a he risk of many more centers surfacing. 179 February 22, 2011 Mayor Pro Tern Ohlson noted the City's Code provisions are considerably stricter than State regulations in terms of separation requirements and asked about the history of those requirements. Schiager replied the City put its requirements into effect, despite staff s recommendation that it wait until the State regulations came out. Sawyer noted staff has not been before Council since the State passed its regulations and Council has the opportunity to change the requirements. Staffs recommendations attempt to balance the needs of all in the community. Mayor Pro Tern Ohlson asked if the medical marijuana industry is primarily concerned about the grandfathering issue or if it would like to see other regulations changed. Sawyer replied some of the new proposed regulations are required by the State and others are set to match proposed. regulations. Mayor Pro Tern Ohlson asked for industry input regarding the State's 70/30 rule. Mr. Correa replied, while the rule does provide some enforcement challenges, it would allow for centers who may have a catastrophic failure in a grow operation to procure medicine to provide patients. Mayor Pro Tern Ohlson stated he would support the staff recommendation if it would be possible to craft some type of language providing for a solution for a business with a catastrophic crop failure. He requested that issue be examined prior to Second Reading. Councilmember Kottwitz asked which surrounding communities have banned the industry. Schiager replied Larimer County, Loveland, Longmont, Windsor, and Greeley have banned the industry. Councilmember Roy made a motion, seconded by Councilmember Manvel to adopt Ordinance No. 018, 2011, on First Reading. Councilmember Kottwitz expressed concern that outreach to affected protected neighbors has not occurred. She asked if regulations regarding edibles could be considered in a future ordinance. City Attorney Roy replied this Ordinance could be amended in the future, particularly after the State regulations are set. Mayor Pro Tern Ohlson supported future regulations on edibles as well as grandfathering. Councilmember Kottwitz expressed concern regarding the lack of consistency in regulating this industry versus other regulated industries in the City, specifically with regard to uses not allowed in a given zone district. Mayor Pro Tern Ohlson noted the centers went into appropriate commercial areas prior to the City setting distance requirements. Councilmember Poppaw agreed that is the case with most centers, but noted there are some dispensaries located within residential neighborhoods. Sawyer showed a map of the location of A Kind Place, near a residential zone. Councilmember Poppaw noted the facility abuts a commercial zone but asked if the center itself is in a residential zone. Peter Barnes, Zoning Administrator, replied the property at 123 East Drake is in the RL — Low Density Residential zone; however, that 180 February 22, 2011 building has been approved for a commercial use. There are no existing centers in areas in which they would not have been allowed. Councilmember Manvel noted grandfathering has occurred in many instances. He stated Council has not received communications regarding large problems with existing centers. Schiager replied there is no perceptible difference in crime in the areas within 1/8 of a mile of existing centers. Burglaries have occurred occasionally. City Attorney Roy stated staff is recommending these centers be treated as legal non -conforming uses in the same sense as businesses that were put out of conformity by changes in zoning laws. Trial courts have, thus far, said there is no legal obligation to grandfather when the non -conformity is the result of a licensing law.. Staff is recommending grandfathering to respect investment -backed expectations; though Council is not legally required to grandfather. Selective grandfathering becomes a more complex issue. Councilmember Roy stated the issue should be supported as voters approved the use of medical marijuana and it is now allowed as part of the State constitution. Additionally, the attrition rate,has brought the number of existing businesses down to 19 with four pending. Councilmember Kottwitz asked if it would be possible to display signs on or near the properties to alert nearby residents in order to assure everyone is informed prior to Second Reading. Sawyer replied a letter could be mailed to residents within a certain radius of each business. Councilmember Kottwitz stated residents as well as individuals dropping children off at childcare facilities have the right to know the dispensaries exist. Mayor Pro Tern Ohlson stated he would support the idea providing notice. Sawyer stated most of the dispensaries have been in their locations for at least nine to twelve months. Their signs have been regulated in terms of size and language but signs do exist. Councilmember Roy expressed concern about providing notice to citizens as they should be participating if they have concerns. Councilmember Manvel asked what impact negative replies to the notices would have on Council's decision. Councilmember Poppaw noted many dispensary owners have already contacted neighbors but stated she would support the idea of providing notice. City Attorney Roy noted it is possible to consider selective grandfathering, though additional issues will need to be discussed. Councilmember Kottwitz made a motion, seconded by Councilmember Poppaw, to provide notice to schools, colleges, jails, rehab facilities, churches, and childcare group homes, of the intent to grandfather existing medical marijuana centers, prior to Second Reading. 181 February 22, 2011 Councilmember Troxell stated he would support the motion. Councilmember Roy noted the topic has been up for discussion since November 2009, is a statewide issue, and has been the topic of numerous work sessions. He opposed the idea of providing notice at this point. Councilmember Poppaw stated she could not oppose outreach. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw and Troxell. Nays: Roy. THE MOTION CARRIED. Mayor Hutchinson stated Council has accommodated the State law allowing medical marijuana, while providing some strict regulations. He asked about the ultimate impact of not grandfathering existing businesses. Schiager replied two existing dispensaries would meet regulations and others could potentially find land on which to relocate. This would result in shutting down, or forcing relocation of 21 dispensaries. Councilmember Troxell stated the separation requirements were designed to protect the community as a whole. He supported upholding the separation requirements. Mayor Pro Tem Ohlson supported grandfathering. Councilmember Poppaw thanked citizens who have voiced opinions on the topic and thanked Council for the discussion on the item. She stated she would support the motion given the compromise on the outreach issue. Councilmember Kottwitz stated some ofher concern lies with the physicians prescribing the medical marijuana cards. She stated she would support grandfathering, particularly given the decision to provide additional outreach. Councilmember Troxell stated he would appreciate the voters in Fort Collins being able to ultimately determine the outcome of the issue. Mayor Hutchinson stated grandfathering makes sense as the businesses were authorized prior to the regulations being set. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw and Roy. Nays: Troxell. THE MOTION CARRIED. Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No. 019, 2011 as amended, on First Reading. 182 February 22, 2011 Mayor Pro Tern stated he would support the motion but was uncertain about capping the number of allowed businesses. .Councilmember Troxell asked what would cause a center to lose its license. Schiager replied , license revocation hearing or act could occur as a result of violating any number of the regulations. City Attorney Roy replied the specific acts are spelled out in the Ordinance. Councilmember Kottwitz expressed concern about the capping provision. Sawyer replied Council can give direction to remove that provision prior to Second Reading. City Attorney Roy asked for confirmation Council is looking for more information prior to Second Reading as to a justification for the cap, as well as an explanation of the other areas in which these regulations are more stringent than the State. Council confirmed it will make a decision following receipt of that information. Mayor Pro Tem Ohlson stated he would support a motion to eliminate the cap. Councilmember Kottwitz made a friendly amendment to eliminate the cap on the number of centers. The amendment was accepted by Councilmembers Roy and Manvel. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No. 20, 2011, on First Reading. Councilmember Troxell asked for clarification regarding the zones allowing medical marijuana infused product manufacturers. Barnes replied that use is proposed to be allowed in the same five zones that allow cultivation facilities: RDR—River Downtown Redevelopmerit, CCN — Community Commercial North College, CS — Service Commercial, I — Industrial, and the non -river side area of the CL zone. All of the zones allow light industrial uses which would include food product manufacturing as well as cultivation. Councilmember Troxell asked for details about these types of facilities. Barnes replied facilities can grow plants as well as manufacture the various medical marijuana products. Councilmember Troxell asked if there is a concern regarding humidity or carbon dioxide output. Sawyer replied the cultivation facility and manufacturing facility must be separated and inspected by the Building Department. The size will be limited by the fact that each edible manufacturer must be tied to a licensed dispensary. Councilmember Manvel asked about the frequency of sales of infused products. Sawyer replied staff would return with more detailed information but allowing the manufacturing facilities is part 183 February 22, 2011 of staffs recommendation. Center owners have requested the ability to produce the products locally as opposed to purchasing from out-of-town dealers. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Other Business Councilmember Manvel stated CSU professor George Wallace has requested Fort Collins participate in a friendship -type arrangement with San Cristobal. Councilmembers Manvel and Roy and Mayor Pro Tern Ohlson stated they would support investigating the possibility. City Manager Atteberry stated staff would return with additional information. The meeting adjourned at 9:00 p.m. ATTEST: City Clerk Adjournment 184