Last night, Santa Ana city officials held a council committee meeting regarding a new cannabis ordinance that would operate alongside Measure BB, the city’s medical marijuana measure. The proposed canna-regulations would allow 23 adult use dispensaries, 20 medical cannabis dispensaries, 20 indoor cultivation businesses, 20 non-volatile manufacturing businesses, five distribution businesses and an unlimited number of testing facilities in Santa Ana. The unnamed adult use ordinance won’t only make Santa Ana the greenest city in Orange County, it’ll also make Santa Ana the second city in Southern California to implement adult use regulations.
Over the last several months, the City’s staff met with a variety of interested groups including eight neighborhoods, Santa Ana’s Chamber of Commerce, Communication Linkage Executive Board and the Santa Ana Collectives Association. The City found that the majority of these groups supported having adult use and medical cannabis in the city. Thus, the drafted ordinance allows for cannabis activities in industrial areas as long as retail stores are a minimum of 500 feet from each other, while all cannabis facilities remain 1000 feet away from schools, parks and residential areas.
Each business is also allowed to obtain more than one license. “[The first assumption we’re making is that] medicinal uses will probably either expand to include adult uses, so one business would have multiple licenses,” said Tamara Bogosian, the Assistant City Attorney. “When we spoke to representatives from the cannabis industry they indicated that it was important for retail businesses to also be able to do some cultivation and manufacturing. So one business may carry four, even five licenses.”
But unlike the mayhem that ensued at the onset of Measure BB, the city’s issuing licenses based on a merit, or point, system instead. The process is divided into two phases: The registration application and the regulatory safety permit application. The City Manager will determine who gets through phase one based on whether the applicants meet specific criteria (how the points are determined), such as application completion, if it was submitted within the proper timeframe, having the proper zoning criteria and ensuring all applicants pass a Live Scan screening. The same process goes for phase two, except that a comprehensive background check, formal zoning compliance and official building inspection approval are required. After all of that, the City Manager will then determine who gets a license based on the points each applicant earns. All businesses granted a license, however, are then subject to an in-lieu tax agreement, meaning the city’s implemented a mitigation option to compensate for authorized impacts to city services or residents.
The time line in which the city plans to roll out this new ordinance is impressive. Between Nov. 8 – Dec. 31, the city will review and finalize the application process, and plan to start accepting applications with the intent of having the ordinance fully operational by Jan. 2, 2018.
Although the ordinance seems to outline a fair set of rules, holes still exist. Prominent Orange County cannabis attorney, Chris Glew, addressed the fact the state has to recognize that Santa Ana has given an “operational status” to people who seek any license under state law before Jan. 1, 2018. Otherwise the city’s grand plans for a greener future won’t come to fruition.
“If applicants can’t get operational and start the application process, there’s a very big chance the state will prohibit use ‘till 2019. So what we’re seeking is some sort of language in the ordinance that defines the existing Measure BB clubs as operational before Jan. 1, 2018. Additionally we’d like to see all licensed categories find a pathway to licensure before Jan. 1, 2018.”
Glew also pointed out the importance of micro businesses and how they’d allow the city to maximize the benefits (revenue) of the ordinance. But that would require businesses have the ability to obtain more than five licenses. “Five licenses is actually a very small number,” says Glew. “The expansion of the micro business category will allow for people to have a retail location with a small grow in the back. That way a shop, like a Measure BB shop, could have retail in front and a 5000 square-foot grow in the back. It’s going to give you the ability to scale the ordinance and give the city more opportunities to bring in additional revenue from the ordinance. You can have essentially 20 new cultivation sites that are all 22,000 square-feet, and you can still have additional grows under the micro businesses.”
Glew made solid points. If Santa Ana doesn’t get its new ordinance in order before 2018, the $9,100,000 estimated revenue that adult use cannabis will bring into the city will be nil. Additionally, the more licenses the city allows each business to have–especially in terms of cultivation– the less the black market (where every licensed and unlicensed dispensary in OC currently gets their flower from) will have an impact on the legal market, which is the purpose of adopting an ordinance and regulating cannabis in the first place.