Title
Introduction of an Ordinance Amending the Alameda Municipal Code by Amending Various Provisions of Article XVI (Cannabis Businesses) of Chapter VI (Businesses, Occupations and Industry), Including but not Limited to (a) Modify the Definition of “Youth Centers” as a Sensitive Use, Including Specifically Excluding Certain Uses (Martial Arts/Combat Sports, Cultural or Similar Education, and Physical Fitness); (b) Modify the Definition of “Cannabis Business Owner” to Conform with State Law; and (c) Make Any Other Conforming Amendments. (Community Development 481007)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
On November 7, 2018, the City Council adopted an ordinance amending the City’s Cannabis Ordinances (Regulatory and Land Use), including increasing the number of retail dispensaries, permitting the sale of cannabis for adult use at those dispensaries, adopting a two-tier buffer system for sensitive uses, and making various other amendments, in addition to clean-up revisions. That Ordinance will be effective on December 7, 2018.
This report recommends an additional amendment to the City’s Cannabis Regulatory Ordinance, modifying the definition of “Youth Centers,” a sensitive use specified in the Ordinance, to exclude certain uses, including martial arts/combat sports, cultural or similar education, and physical fitness activities, and to make other revisions to the scope of the definition.
Additionally, staff is recommending modifying the definition of Cannabis Business Owner to ensure that it will always track state law, in light of amendments to the regulations by the Bureau of Cannabis Control.
BACKGROUND
The City Council adopted its first regulatory and land use ordinances governing cannabis businesses in the fall of 2017. Pursuant to those ordinances, City staff issued a Request for Proposals (RFP) for persons interested in operating a variety of cannabis businesses in Alameda in April 2018.
In May 2018, City Council held a work session in which it provided input on its major priorities for the upcoming fiscal year. At that work session, Council directed staff to prepare a series of recommendations related to the City’s ordinances regulating cannabis for its consideration, based lessons learned during the RFP process and on-going revisions to state law. Issues included expanding the zones in which cannabis businesses would be permitted to operate, lifting the cap on testing laboratories, allowing two delivery-only dispensaries to operate, providing for a two-tier buffer system, and making various other amendments, in addition to clean-up revisions.
Staff presented the Council with its analysis and recommendations in July 2018. Council provided feedback and directed staff to prepare two ordinances amending the regulatory and land use ordinances based on feedback received. After taking certain aspects of those to the Planning Board, those ordinances were adopted on November 7, 2018, and will be effective on December 7, 2018.
In addition to the amendments to the initial ordinances, staff has also made changes to the regulations that implement those ordinances to conform to those amendments as well as to better administer the program.
During the course of staff’s work to implement the cannabis regulatory program, certain members of the public have requested clarification. Such clarification may take the form of either a regulation or amendment to the ordinance. One such issue is the definition of “Youth Centers” as currently contained in the Regulatory Ordinance. Staff is proposing to clarify the definition as discussed below.
DISCUSSION
“Youth Centers” Definition
The Regulatory Ordinance provides the Director with the authority to adopt regulations to implement the Ordinance. Nonetheless, as regulations are developed for cannabis business activities in the City, staff may, from time to time, seek direction and clarity from City Council. This is the case with the definition of “Youth Centers” currently contained in the Regulatory Ordinance. Similar to Council’s refinement of the definition of “Schools,” distinguishing “Tutorial Centers” from “Schools,” the term “Youth Centers” could benefit from further clarification.
The issue raised by a member of the public is whether a martial arts studio falls under the definition of “Youth Centers.” The answer centers on the meaning of the word “primarily” in the definition of “Youth Centers,” which is currently defined in the Regulatory Ordinance as follows:
“Any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities. Youth Centers shall also mean any facility determined by the Alameda Recreation and Parks Department to be a recreation center in a City park.” See section 6-59.3.dd.
The first sentence in the definition is taken from the State law definition of “Youth Centers” under Section 11353.1 of the Health and Safety Code.
As noted above, the ambiguity arises with the term “primarily used to host …activities for minors,” and how “primarily” is determined. Some possible definitions include:
1) 50% + 1 of the patrons served are minors;
2) 75% of those served are minors; or
3) Over half of the time the business or organization is open, it serves minors, even if minors account for less than half of the patrons.
The State law definition does not further clarify or expand on the meaning of the word “primarily” and the State has indicated the definition is intentionally broad to allow local jurisdictions flexibility to define “Youth Centers” in a manner appropriate for their city or county.
This definitional issue has practical implications as well. In recent weeks, as part of processing the first use permit application for a retail dispensary, staff received an inquiry about whether a martial arts studio in the City would meet the definition of “Youth Centers.” Staff initially considered these businesses as places for adults, as well as youth, to learn and perfect martial arts skills, and thus, determined that martial arts studios are not a sensitive use, as they did not primarily serve minors.
The Council may want to consider a number of issues with respect to this definition, including the following policy concerns:
• Protection of Sensitive Uses. Provide some protection to sensitive uses;
• Prevent De Facto Prohibition. Ensure the definition does not, as a practical matter, make it virtually impossible for a cannabis dispensary to locate within the City;
• Application/Administration. Ease and clarity of application of any rule without relying on administratively burdensome means to apply it;
• Comprehensiveness/Narrow Scope. Balancing on the one hand, the need to ensure that all potential uses are captured, while on the other hand, narrowing the scope of what would fit within the definition (i.e., the definition is not overly broad); and
• Clarity. Ensure that there is a reasonable amount of clarity for cannabis business applicants and members of the public to ensure all parties understand fully the protected sensitive uses before an application is considered and a business is permitted.
For example, a martial arts studio could argue that it serves and/or caters to a majority of youth (50% or more of enrolled students for example), even though such information about enrollment is not publicly available, and should therefore be considered a sensitive use. Under this argument, if all martial arts studios were treated in the same manner, the ability to locate a cannabis dispensary within the permitted zones could be severely restricted. The Council should be aware that this argument could be applied to dance studios, fencing clubs, as well as other yet-to-be-identified businesses serving both adults and youth, further restricting eligible locations for retail dispensaries.
Accordingly, to assist the Council in understanding the possible magnitude of such uses being defined as “Youth Centers,” attached is a map (Exhibit 1) for policy-making purposes only, illustrating the impact on potential cannabis retail locations if martial arts/combat sports and dance studios are considered to be sensitive uses. This map shows high concentrations of martial arts establishments, in particular, in the same locations zoned for cannabis dispensaries. This could make locating a retail cannabis business nearly impossible within the currently permitted zones. Exhibit 2 is a map showing all sensitive uses, including martial arts and dance studios, and their buffer zones.
Staff recommends specifically excluding martial arts studios (and other related businesses) from the definition of “Youth Centers.” Without a specific carve-out in the definition of “Youth Centers” for martial arts studios and related facilities, it is difficult and administratively challenging to define and then implement the definition if staff is left to determine whether a business “primarily” serves minors or not. In the absence of specificity, if every martial arts studio and related business is assumed to “primarily” serve youth, then there is virtually no opportunity to locate a dispensary within the permitted zones.
In order to facilitate opportunities for potential dispensary locations and to provide a clear regulatory framework for permitting cannabis dispensaries while protecting certain sensitive uses, staff recommends a number of refinements to the definition of “Youth Center.” First, staff recommends clarifying that for a use to be protected it must cater to minors (under the age of 18) exclusively. Second, staff recommends establishing carve-outs that would disqualify a use from falling under the definition of “Youth Centers,” including specifically excluding certain uses involving martial arts/combat sports, cultural or similar education, and physical fitness activities. The intent is for the carve-out language to have no impact on the recreation center designation, which would remain “Youth Centers” if so designated by the Alameda Recreation and Parks Department. These revisions are reflected in the draft ordinance, and are provided below:
“Youth Centers” means any public or private facility that is exclusively used to host recreational or social activities for minors (under 18 years of age), such as, private youth membership organizations or clubs, social service teenage club facilities, or amusement facilities. “Youth Centers” does not include any building, location, or facility where any programs, activities, or services: (a) are offered at private residences, (b) involve martial arts/combat sports, cultural or similar education, or physical fitness, or (c) are offered for fewer than five (5) hours per day each day the building, location, or facility is open. Notwithstanding the foregoing, Youth Centers shall also mean any facility determined by the Alameda Recreation and Parks Department to be a recreation center in a City park.
The Council may want to consider a different numerical threshold in the parentheticals above. For example, the Council may want to consider whether those exempted uses offer activities more, or less, than five hours per day.
Cannabis Business Owner
The Bureau of Cannabis Control recently published for public comment proposed cannabis regulations. One proposed regulation would amend the definition of an “Owner,” including, for example, amending the definition to include those that not only own more than 20% of the cannabis business, but also those who share in that business’ profits in the same percentage. Currently, the definition of “Cannabis Business Owner” in the Regulatory Ordinance mirrors State law, including these implementing regulations. However, rather than make amendments as these implementing regulations evolve over time, staff is recommending that the Council adopt a minor amendment to ensure that the definition of “Cannabis Business Owner” will always encompass how “Owner” under State law evolves over time. That minor amendment is also reflected in the draft ordinance.
Good Neighbor Conditions
At its November 7, 2018 meeting, Vice Mayor Vella noted the use of “Good Neighbor” Policies by at least one other local jurisdiction that regulates cannabis businesses. Staff will be reviewing that policy and consider incorporating them into the permitting/regulatory process, including using it as a basis for preparing conditions of approval.
FINANCIAL IMPACT
There is no financial impact to the General Fund to adopt an ordinance amending the definition of “Youth Centers” as used in the cannabis business regulatory ordinance. The cost of staff work related to regulating cannabis business activities will be borne solely by cannabis businesses through fees.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This report is consistent with Alameda Municipal Code, Article XVI.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) applies only to projects which have the potential for causing a significant effect on the environment. This is not a project and is exempt from CEQA pursuant to CEQA Guidelines, sections 15378 and 15061(b)(3) (General Rule).
RECOMMENDATION
Introduction of an Ordinance Amending the Alameda Municipal Code by Amending Article XVI (Cannabis Businesses) of Chapter VI (Businesses, Occupations and Industry) to (a) Modify the Definition of “Youth Centers” as a Sensitive Use, Including Specifically Excluding Certain Uses (Martial Arts/Combat Sports, Cultural or Similar Education, and Physical Fitness); (b) Modify the Definition of “Cannabis Business Owner” to Conform with State Law; and (c) Make Any Other Conforming Amendments.
Respectfully submitted,
Debbie Potter, Base Reuse and Community Development Director
By,
Lois Butler. Economic Development Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Martial Arts and Dance Studios Buffer Zones
2. Map of All Sensitive Uses