Montebello Municipal Code Ch. 5.90 Commercial Cannabis Activities

Footnotes:

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Editor's note— Ord. No. 2400, § 2, adopted Feb. 14, 2018, repealed the former Ch. 5.90., §§ 5.90.010—5.90.170, and enacted a new Ch. 5.90 as set out herein. The former Ch. 5.90 pertained to cannabis cultivation, manufacturing and testing and derived from Ord. No. 2399, 9-13-2017.

For purposes of this chapter, the following definitions shall apply:

"Act" shall mean the California Medical and Adult-Use Cannabis Regulation and Safety Act, as in Business and Professions Code Section 26000 et seq.

"Applicant" shall mean and refer to a person applying for a development agreement pursuant to this chapter.

"Bureau" shall have the same meaning as in Section 26001(e) of the Business and Professions Code, as the same may be amended from time to time.

"Cannabis" shall have the same meaning as in subsection (f) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Cannabis accessories" shall have the same meaning as in subsection (g) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Cannabis concentrate" as used in this chapter shall have the same meaning as in subsection (h) of Section 26001 of the Business and Professions Code.

"Cannabis products" as used in this chapter shall have the same meaning as in subsection (i) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Commercial cannabis activity" shall have the same meaning as in subsection (k) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time, as the same may be amended from time to time.

"Cultivation" shall have the same meaning as in of subsection (1) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Cultivation site" as used in this chapter shall have the same meaning as in subsection (m) of Business and Professions Code Section 26001, as the same may be amended from time to time.

"Customer" as used in this chapter shall have the same meaning as in subsection (n) of Business and Professions Code Section 26000, as the same may be amended from time to time.

"Day care center" as used in this chapter shall have the same meaning as in subsection (o) of Business and Professions Code Section 26001, as the same may be amended from time to time.

"Development agreement" as used in this chapter shall mean the agreement entered into between a person and the city authorizing said person to engage in commercial cannabis activity within the city's jurisdictional boundaries.

"Delivery" shall have the same meaning as set forth in subsection (p) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Delivery-only retailer" shall mean a person that has been issued a Type 9 Non-Storefront Retailer license from the bureau to conduct retail cannabis sales exclusively by delivery, as defined in Business and Professions Code Section 26001(p).

"Distribution" shall have the same meaning as in subsection (j) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Distributor" shall have the same meaning as in subsection (a)(2) of Section 26070 of the Business and Professions Code, as the same may be amended from time to time.

"License" shall have the same meaning as in subsection (y) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Licensee" shall have the same meaning as in subsection (z) of Business and Professions Code Section 26000, as the same may be amended from time to time.

"Manufacture" shall have the same meaning as in subsection (ag) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Manufacturer" shall have the same meaning as in subsection (ah) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Manufacture site" shall mean a location where a person conducts the production, preparation, propagation, or compounding of cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container.

"Microbusiness" shall have the same meaning as in subsection (a)(3)(A) of Section 26070 of the Business and Professions Code, as the same may be amended from time to time.

"Operation" or "operate" shall have the same meaning as in subsection (ak) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Owner" as used in this chapter shall have the same meaning as in subsection (al) of Business and Professions Code Section 26001, as the same may be amended from time to time.

"Permittee" shall mean a person that has entered into a development agreement with the city authorizing said person to engage in commercial cannabis within the city's jurisdictional boundaries.

"Person" shall have the same meaning as in subsection (an) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Premises" shall have the same meaning as in subsection (ap) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Purchaser" shall have the same meaning as in subsection (ar) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Regulations" shall mean the regulations in the California Code of Regulations (Title 16, Div. 24) to implement, interpret, and make specific the Act, and providing licensing and enforcement criteria for commercial cannabis businesses in California.

"Retailer" or "retail" shall have the same meaning as in subsection (a)(1) of Section 26070 of the Business and Professions Code, as the same may be amended from time to time.

"Sell," "sale," and "to sell" shall have the same meaning as in subsection (as) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Testing laboratory" shall have the same meaning as in subsection (at) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

"Youth Center" as used in this chapter shall have the same meaning as in subsection (av) of Section 26001 of the Business and Professions Code, as the same may be amended from time to time.

(Ord. No. 2400, § 2, 2-14-2018; Ord. No. 2405, § 3, 6-12-2018)

A. It shall be unlawful for any person to operate, cause, allow, assist, participate in, engage in, or in any way conduct any commercial cannabis activity within the city, including but not limited to the cultivation, delivery, distribution, manufacture, testing, transport, retail, microbusiness, purchase, sale, testing, distribution, giving away, or otherwise transferring of cannabis or cannabis products, or any other activities for which a license is available under the Act or the regulations.

B. The prohibitions of subsection (A) shall not apply to the following persons, provided said person operates the specified activity in strict accordance with state law and this code: (1) a clinic, licensed pursuant to Chapter 1 of Division 2 of the Health and Safety Code; (2) health care facility, licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code; (3) a residential care facility for persons with chronic life-threatening illness, licensed pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code; (3) a residential care facility for the elderly, licensed pursuant to Chapter 3.2 of Division 2 of the Health and Safety Code; (4) a residential hospice or home health agency, licensed pursuant to Chapter 8 of the Health and Safety Code; (5) personal indoor cultivation in compliance with Chapter 9.60 of this Code; (6) a licensee's transportation or delivery of cannabis or cannabis products on public roads pursuant to subsection (b) of Section 26080 or subsection (e) of Section 26090 of the Business and Professions Code, as the same may be amended from time to time, provided the licensee is permitted or approved to operate by the local jurisdiction in which the licensee's facilities are physically located; (7) a permittee authorized to engage in cultivation, manufacturing, or delivery-only retailer activities under this chapter, that also engages in distribution activities related to their business; or (8) a permittee under this chapter, provided that said person has entered into a development agreement with the city, has been granted a conditional use permit pursuant to Chapter 17.70, has been issued the requisite license from the bureau, and otherwise complies, at all times, with the provisions of this code.

(Ord. No. 2400, § 2, 2-14-2018; Ord. No. 2405, § 4, 6-12-2018)

Except as otherwise provided herein, this chapter incorporates the requirements of the Act and regulations. In the event of any conflict between the provisions of this chapter and the provisions of the foregoing, the more restrictive provision shall control.

(Ord. No. 2400, § 2, 2-14-2018)

A. No person shall operate a cultivation site, manufacturing site, delivery-only retailer site, distribution site, or testing laboratory in the city, or otherwise engage in the cultivation, manufacture, delivery, distribution, or testing of cannabis or cannabis products, for profit or otherwise, except in strict accordance with this chapter, the terms and conditions of the development agreement, any conditions of approval specified in the conditional use permit, and other applicable provisions of this code.

B. The effectiveness of any provision in this chapter that provides for the operation of specified commercial cannabis activities in the city is conditioned upon the city council's adoption of an amendment to Title 17 of this code adding cannabis cultivation sites, manufacturing sites, delivery-only retailer site, distribution site, and/or testing laboratories, as applicable, as an authorized land use in the city.

(Ord. No. 2400, § 2, 2-14-2018; Ord. No. 2405, §§ 5, 6, 6-12-2018)

A. The city council may, in its sole discretion, approve and direct the issuance of a notice inviting applications, a request for applications, or similar solicitation inviting persons interested in operating commercial cannabis activities in the city to submit an application for a development agreement.

B. Whether to issue a solicitation for applications, the manner of accepting applications, the manner of application review, and whether to approve or deny any such application shall be subject to the sole and absolute discretion of the city council. The criteria utilized in evaluating or scoring any application for a development agreement shall be that specified in this chapter, elsewhere in this code, or in the solicitation for applications issued by the city council. Subject to the discretion of the city council, the solicitation may include provisions pertaining to: the information required to be submitted by applicants, including but not limited to the application information specified in the regulations for a license from the bureau; the city's application review, vetting, and approval processes; the review and scoring criteria that will be utilized by the city in distinguishing among applicants; applicant background checks and verification requirements; conditions of approval; security features and requirements; operating guidelines, standards, limitations, and requirements; site improvement obligations; maintenance requirements; book, accounting, and record keeping requirements; and/or a draft development agreement.

C. A development agreement approved by the city council is required before any person operates a cultivation site, manufacturing site, distribution site, delivery-only retailer site, or testing laboratory in the city. Said development agreement shall set forth the terms and conditions under which the commercial cannabis activities may be operated, in addition to the terms and conditions otherwise set forth in this chapter or elsewhere in this code. Subject to the agreement of any permittee and approval of the city council, such additional terms and conditions of the development agreement may include, but are not limited to, public outreach and education requirements, community service requirements, the payment of mutually agreeable fees and charges, development and operating plans (including site plan, floor plan, and elevations), security measures, operating standards and procedures, site location and design standards, and such other terms and conditions as may be agreed upon by a permittee and the city council, as well as those that the city council deems necessary to protect and promote the public health, safety, and welfare of the community.

D. In addition to a development agreement, no person shall operate a cultivation site, manufacturing site, distribution site, delivery-only retailer site, or testing laboratory unless and until a conditional use permit therefor has been approved by the planning commission or city council, as applicable, in accordance with Chapter 17.70 of this code. The application process for the conditional use permit shall be the same as is generally applicable to conditional use permits in the city, provided that a development agreement between the permittee and the city shall be a condition precedent to approving a conditional use permit.

E. Nothing in this chapter is intended or shall be construed as requiring the city council to approve or any development agreements or to otherwise allow commercial cannabis activities in the city. No application for a development agreement will be accepted except during the times specified by the city Council in a solicitation for applications. The city council's solicitation for, review of, and approval of any application for a development agreement is discretionary, and nothing in this chapter is intended or shall be interpreted as rendering commercial cannabis activities a "by-right" land use in the city.

(Ord. No. 2400, § 2, 2-14-2018; Ord. No. 2405, § 7, 6-12-2018)

A. No commercial cannabis activities shall be permitted in the city except in the zones and locations authorized by Title 17, and except upon the specific premises identified in a permittee's development agreement and conductional use permit.

B. No commercial cannabis activities shall be operated except within a fully enclosed and permanent building. For purposes of this section, the phrase "fully enclosed and permanent building" shall mean a structure having a roof that is enclosed on all sides and is intended and has a useful life appropriate for long-term use, as contrasted with a "temporary building" that is not designed or intended to be permanently located, placed, or affixed to the premises.

C. Delivery-only retailer establishments shall be closed to the public and shall conduct retailer cannabis sales exclusively by delivery. No distribution facility shall be physically located in the city, unless the distribution facility is established and operated in conjunction with a cannabis cultivation, manufacturing, or delivery-only retailer site permitted under this chapter.

(Ord. No. 2400, § 2, 2-14-2018; Ord. No. 2405, §§ 8, 9, 6-12-2018)

A. No permittee may sell, transfer, pledge, assign, grant an option, or otherwise dispose of, in whole or in part, their rights or interest under a development agreement entered into pursuant to this chapter, and no owner may sell, transfer, pledge, assign, grant an option, or otherwise dispose of, in whole or in part, their ownership interest in a cultivation site, manufacturing site, or testing laboratory permitted under this chapter, without the advanced discretionary approval of the city council. Before approving any such request, the city may require the purchaser, assignee, or transferee to provide the same information and materials that are required of an initial applicant, including the payment of associated fees.

B. Before exercising any rights under a development agreement, permittees shall demonstrate proof of lawful possession of the premises where commercial cannabis activities will be operated with such evidence consisting of properly executed deeds of trust, leases, licenses, or similar documents evidencing the permittee's right to possession and use of the premises. Subject to the criteria specified by the city council in a solicitation for applications, a development agreement may be awarded contingent upon an applicant's subsequent identification of a premises that is acceptable to the city, or subject to an applicant's provision of an option, letter of intent, or similar instrument executed by the current owner of the proposed premises in favor of a permittee or applicant authorizing commercial cannabis activities to be operated thereon.

C. A permittee shall only operate commercial cannabis activities within the area, building, structure, and portion of the premises that is specifically described in development agreement and/or conditional use permit. A permittee shall not relocate, move, or otherwise alter the location of its operations from the specific area so identified without first obtaining approval from the city, regardless of any possessory interest or right to possession to such additional areas. No permittee shall add additional or contiguous units or areas, thereby altering the initially approved premises, without first obtaining the approval of the city council.

D. No permittee shall sublet, transfer, or otherwise assign any portion of any approved premises for any purpose, unless approved in advance by the city council.

E. No permittee shall make any physical change, alternation, or modification to the approved premises that materially or substantively alters, in the discretion of the building official, the location, production estimates, or the usage of the premises from the plans approved in the development agreement and/or conditional use permit, without the advanced approval of the city council. For purposes of this subsection, the phrase "materially or substantively alters" shall mean any physical change, alternation, or modification to the area of the premises identified a development agreement or conditional use permit for the operation of commercial cannabis activities that either: (1) increases the capacity or scope of commercial cannabis activities by five percent or more, or (2) requires a building permit under this code.

(Ord. No. 2400, § 2, 2-14-2018)

Any premises, location, or person establishing or operating commercial cannabis activities in the city in violation of this chapter shall not be considered a lawful or permitted nonconforming use. Any such unlawfully established business, location, or operation shall constitute a public nuisance subject to abatement by the city.

(Ord. No. 2400, § 2, 2-14-2018)

A. Each applicant or permittee shall timely and fully pay all fees set forth in this section. The failure of an applicant to pay the requisite fees is grounds for denial, and the failure of a permittee to pay the requisite fees shall constitute a breach of the development agreement, and is grounds for revocation of the conditional use permit. Except as otherwise provided herein, the amount of each fee may be established by resolution of the city council.

1. Application fee to cover the city's costs incurred in the initial acceptance and review of an application for a development agreement, due and payable in full at the time an application is submitted.

2. Processing fee to cover the city's costs incurred in the review, investigation, scoring, and/or selection of applicant for the award of a development agreement, in accordance with evaluation criteria specified by the city council in a notice inviting applications, a request for applications, or similar solicitation, due and payable in full at the time an application is submitted. The city may charge a separate processing fee for each round of the application review and selection process.

B. In addition to the fees specified in subsection (A), applicants and permittees shall timely pay all other applicable fees provided for in this code, including, but not limited to, fees associated with processing applications for conditional use permits, development agreements, building permits, and plan checks, as well as the city's cost of preparing a development agreement.

C. In addition to the fees set forth in this section, a development agreement entered into pursuant to this chapter may provide for a permittee to pay the city a fair share contribution towards the city's costs incurred in, without limitation, enforcing the provisions of this chapter, inspecting for and remediating any direct or secondary negative impacts of the commercial cannabis activities, and mitigating impacts to the city's existing public facilities caused by the commercial cannabis facility. If applicable, the remediation payments described in this section shall be memorialized in a development agreement, and paid by a permittee to the city in strict accordance with the terms thereof.

(Ord. No. 2400, § 2, 2-14-2018)

A. To the fullest extent permitted by law, the city shall not assume any liability whatsoever, with respect to receiving, reviewing, processing, denying, or approving any application to operate commercial cannabis activities under this chapter.

B. As a condition of submitting an application for a development agreement, and as a further condition of approval, each applicant or permittee, as applicable, shall: (1) agree to indemnify the city and its elected and appointed officers, employees, and representatives, from and against any claims, damages, injuries, or liabilities of any kind relating to or arising from an application, the city's denial or approval of an application, or the operation of commercial cannabis activities; (2) waive any and all claims, damages, injuries, or liabilities of any kind against the city and its elected and appointed officers, employees, and representatives; (3) agree to defend, at its sole cost and expense, any action against the city and/or its elected and appointed officers, employees, and representatives, relating to or arising from an application, denial or approval of an application, or the operation of a commercial cannabis activity; and (4) agree to reimburse the city for any court costs and attorneys' fees (with legal counsel of the city's choice) incurred in any legal challenge relating to an application, the denial or approval of any application, or the operation of a commercial cannabis activity.

(Ord. No. 2400, § 2, 2-14-2018)

The city manager, local law enforcement or code enforcement, or other public safety personnel, shall have the right to enter any and all portions of a-premises from time to time, without notice, a search warrant, inspection warrant, subpoena, or court order, between the hours of 10:00 a.m. and 8:00 p.m., or any other reasonable time, to ensure compliance with this chapter, the Act, the Regulations, and any provision or condition of the development agreement or conditional use permit. Such inspection shall include the authority to review or copy any recordings, documents, or other records required to be maintained on the premises. It is unlawful for any permittee, owner, landlord, lessee, employee, or any other person having any responsibility over the operation of the premises to refuse to allow, impede, obstruct or interfere with an inspection or the review or copying of records required under this chapter, including but not limited to, the concealment, destruction, and falsification of any recordings, records, or monitoring.

(Ord. No. 2400, § 2, 2-14-2018)

A. Permittees shall maintain records at the premises accurately and truthfully documenting the following:

1. The full name, address, and telephone number(s) of the owner, landlord and/or lessee of the premises;

2. The full name, address, and telephone number(s) of all persons or owners who are engaged in the management of the premises, and the exact nature of each member's participation in the management or ownership of the premises;

3. All receipts of the premises, including but not limited to all payments, purchases, contributions, reimbursements, and reasonable compensation, whether in cash or in kind, concerning commercial cannabis activities, whether among licensees or otherwise;

4. Proof of compliance with the Act and regulations, including but not limited to the license issued by the bureau authorizing a permittee to operate commercial cannabis activities on the premises;

5. Any other documentation described in the development agreement required to be maintained on the premises.

B. The foregoing records shall be maintained by permittees for a period of seven years and shall be made available by the permittee to the Montebello Police Department, other local law enforcement, or the city manager upon request. If such records are not produced as requested, the city may seek a search warrant, subpoena, or court order to compel access thereto. The records shall be stored at the premises in a manner capable of being reproduced promptly and accurately. Any loss, damage or destruction of the records shall be reported to the Montebello Police Department within twenty-four hours of the loss, destruction or damage.

(Ord. No. 2400, § 2, 2-14-2018)

No later than February 15 of every calendar year, each permittee shall file with the city one copy of an audit of its operations for the previous calendar year, completed and certified by an independent certified public accountant in accordance with generally accepted auditing and accounting principles. The audit shall include, but not be limited to, a discussion, analysis, and verification of each of the records required to be maintained pursuant to this chapter.

(Ord. No. 2400, § 2, 2-14-2018)

A. The city may initiate abatement proceedings as authorized by this code or state law to correct or cure any violation of this chapter or code. The city shall be entitled to recover its courts costs and reasonable attorneys' fees in the event of a court order or judgment of abatement is entered in favor of the city.

B. Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor, and upon conviction thereof shall be punishable pursuant to Section 1.12.010 of this code.

C. The penalties and remedies provided herein are in addition to other remedies available at law, and the city shall have the discretion to pursue and prosecute any such available remedy.

(Ord. No. 2400, § 2, 2-14-2018)

The provisions of this chapter shall be read consistent with all the provisions of state and local law, and their implementing regulations, as well as the other provisions of this code.

(Ord. No. 2400, § 2, 2-14-2018)

Should any provision of this chapter, or its application to any persons or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable, or otherwise void, that determination shall have no effect on any other provision of this chapter or the application of this chapter to any other person or circumstance and, to that end, the provisions hereof are severable.

(Ord. No. 2400, § 2, 2-14-2018)