Sacramento Municipal Code Art. II Cannabis Business Permit Applications, Procedures, and Appeals

A. A person may apply for a cannabis business permit by filing an application with the city manager. The application must be on a form approved by the city manager and may require any information or documentation consistent with the provisions of this code and state law, including the following:

1. Applicant.

a. A description of the statutory entity or business form that will serve as the legal structure for the applicant and a copy of its formation and organizing documents, including, but not limited to, articles of incorporation, certificate of amendment, statement of information, articles of association, bylaws, partnership agreement, operating agreement, and fictitious business name statement.

b. The phone number and address to which notice of action on the application and correspondence is to be mailed.

2. Interested parties. The name, address, telephone number, title, and function of each of the interested parties described in section 5.150.070.

3. Background checks. For each of the interested parties identified pursuant to subsection A.2:

a. A legible copy of one valid government-issued form of photo identification, such as a state driver's license, a passport issued by the United States, or a permanent resident card.

b. A list of their misdemeanor and felony convictions, if any. For each conviction, the list must set forth the date of arrest, the offense charged, the offense convicted, the jurisdiction of the court, and whether the conviction was by verdict, plea of guilty, or plea of nolo contendere.

c. Consent to fingerprinting and a criminal background investigation.

4. Business site.

a. Description. A general description of the proposed business site, including the street address, parcel number, and the total square footage of the site.

b. Floor plan. A scaled floor plan for each level of each building that makes up the business site, including the entrances, exits, walls, and operating areas. The floor plan must be professionally prepared by a licensed civil engineer or architect.

c. Compliance with the Planning and Development Code. The date of issuance and the file number of the conditional use permit that was approved by the city for the proposed location.

d. Statement of owner's consent. Written consent of the owner or landlord of the proposed site to operate a cannabis business, specifying the street address and parcel number.

5. Security.

a. Security plan. A detailed security plan outlining the measures that will be taken to ensure the safety of persons and property on the business site. The security plan must be prepared by a qualified professional.

b. Lighting plan. A lighting plan showing existing and proposed exterior and interior lights that will provide adequate security lighting for the use.

6. Odor control. A detailed plan describing the air treatment system, or other methods that will be implemented to prevent cannabis odors from being detected outside the buildings on the business site.

7. Business operations.

a. Business plan. A plan describing how the cannabis business will operate in accordance with this code, state law, and other applicable regulations. The business plan must include plans for handling all cash and transporting all cannabis and all cannabis products to and from the site.

b. Community relations contact. The contact information of the person designated as being responsible for outreach and communication with the surrounding community, including the neighborhood and businesses.

c. Tax compliance. The city business operations tax certificate number; a copy of the applicant's most recent financial statements; a copy of the applicant's most recent state and federal signed tax returns; and proof of filing the tax returns with the applicable government agency.

d. Insurance. The applicant's certificate of commercial general liability insurance and endorsements.

e. Budget. A copy of the applicant's most recent annual budget for operations.

8. City authorization. Authorization and consent for the city manager to seek verification of the information contained within the application.

9. Applicant's certification. A statement dated and signed by the applicant, under penalty of perjury, that the applicant has personal knowledge of the information contained in the application, that the information contained therein is true and correct, and that the application has been completed under the applicant's supervision.

10. Indemnification. An agreement, in a form approved by the city attorney, whereby the applicant: (1) releases the city, and its agents, officers, elected officials, and employees from any and all claims, injuries, damages, or liabilities of any kind arising from: (a) any repeal or amendment of this chapter or any provision of the Planning and Development Code relating to cannabis, and (b) any arrest or prosecution of the applicant or its managers, employees, or members for violation of state or federal laws; and (2) defends, indemnifies, and holds harmless the city and its agents, officers, elected officials, and employees from and against any and all claims or actions: (a) brought by adjacent or nearby property owners or any other parties for any damages, injuries, or other liabilities of any kind arising from operations at the cultivation site, and (b) brought by any party for any problems, injuries, damages, or other liabilities of any kind arising out of the distribution of cannabis produced or processed at the site or by the business.

11. State labor peace agreement. Proof of compliance with the state's labor peace agreement requirement under California Business and Professions Code section 26051.5(a)(5) and will maintain a copy of the agreement or notarized statement on site.

B. Every application for a cannabis business permit shall be accompanied by a nonrefundable cannabis business permit program fee.

C. No person shall knowingly make a false statement of fact or knowingly omit any information that is required in an application for a cannabis business permit. (Ord. 2022-0006 § 6; Ord. 2020-0004 § 7; Ord. 2017-0046 § 1)

The city manager may establish procedures and guidelines to process new and renewal cannabis business permit applications. (Ord. 2022-0006 § 7; Ord. 2017-0046 § 1)

A. An application that is filed with the city is abandoned if:

1. The application has been incomplete for 180 days after it was filed, and the applicant has not requested an extension and paid the applicable fee; or

2. The applicant has failed to pay the cannabis business permit program fee within 30 days of filing the application.

B. The city will not process abandoned applications. (Ord. 2022-0006 § 8)

A. A cannabis business permit issued pursuant to this chapter is valid for one year from the date that the permit is issued, unless suspended or revoked sooner.

B. A cannabis business permit is valid for only one site.

C. Conditions placed on the conditional use permit issued under the Planning and Development Code are also conditions of the cannabis business permit. Any violation of the conditional use permit's conditions is grounds for suspending or revoking the cannabis business permit.

D. The city manager may impose additional conditions on the cannabis business permit, including the maximum amount of cannabis allowed on the site, number and types of equipment allowed, and security features.

E. To renew a cannabis business permit, the permittee shall submit a renewal application, renewal fee, and required documents in accordance with section 5.150.210. The permittee shall submit the application no later than 30 days prior to the permit expiration date. Untimely applications are subject to a late penalty in the amount established by resolution of the city council. (Ord. 2022-0006 § 9; Ord. 2017-0046 § 1)

The city manager may deny a cannabis business permit if the city manager determines that one or more of the following circumstances exist:

A. The application received is not responsive to the requirements of this article.

B. The application contains a false or misleading statement or omission of a material fact.

C. The operation of a cannabis business described in the application fails to comply with any of the requirements in this code, state law, or any other regulation.

D. The applicant or any of its managers has any unpaid and overdue administrative penalties imposed for violations of this chapter.

E. The applicant has not paid the applicable business operations tax pursuant to chapter 3.08.

F. Within 12 months of the filing date of the application: (1) the applicant has had its cannabis business permit suspended more than once, revoked, or had two or more administrative penalties issued to it; or (2) any of its owners, officers, directors, partners, agents, or any persons vested with the authority to manage or direct the affairs of the business were associated with another business that had its cannabis business permit suspended more than once, revoked, or had two or more administrative penalties issued to them.

G. The applicant or any of its managers has violated a provision of this chapter.

H. Within 12 months of the filing date of the application, the applicant, the cannabis business' manager, or property owner has violated a provision of the CBC, CEC, CFC, CPC, CMC, or chapters 8.04, 8.08, 8.96, or 8.100 of this code, in connection with developing or operating the cannabis business or the site.

I. The application to renew a permit is filed with the city after the permit has expired.

J. The applicant for renewal of a permit has violated one or more conditions on the permit.

K. Operation of the cannabis business is a threat to the public health, safety, or welfare. (Ord. 2022-0006 § 10; Ord. 2020-0004 § 8; Ord. 2017-0046 § 1)

A. If the city manager denies a cannabis business permit or renewal thereof after the application is accepted as complete, written notice of denial shall be served on the applicant. The notice must contain:

1. A brief statement of the grounds for the denial.

2. A statement that the applicant may request reconsideration of the denial, in writing to the city manager, within 10 days of the date of service of the notice.

3. A statement that the failure to timely request reconsideration of the denial will constitute a waiver of all rights to reconsideration, and the denial will be final.

B. If the applicant properly files a request for reconsideration the city manager shall set the date of a hearing within 30 days from the date the request is filed. The hearing shall be conducted by the city manager.

C. Failure to properly file a written request for reconsideration of the notice of denial within 10 days of the date of service of the notice constitutes a waiver of all rights to a hearing, and the city manager's decision will be final. Failure to properly and timely file a request for reconsideration of the notice of denial also constitutes a failure to exhaust administrative remedies and is a bar to any judicial action pertaining to the city manager's decision.

D. If the applicant files a proper request for reconsideration and then fails to appear at the hearing, the request for reconsideration is abandoned, and the decision of the city manager is final and may not be further appealed. Failure to appear at the hearing constitutes a waiver of all rights to a hearing and also constitutes a failure to exhaust administrative remedies and is a bar to any judicial action pertaining to the city manager's decision.

E. Written notice of the decision of the city manager shall be served on the applicant within 10 days following the hearing.

F. The decision of the city manager under this section is subject to appeal in accordance with section 5.150.290. (Ord. 2022-0006 § 11; Ord. 2017-0046 § 1)

The city manager may suspend, modify, or revoke a cannabis business permit issued pursuant to the provisions of this chapter for any of the following reasons:

A. One or more of the circumstances upon which a cannabis business permit could be denied, as described in section 5.150.240, exists or has occurred.

B. One or more conditions of the cannabis business permit has been violated.

C. The permittee, its owners, officers, directors, partners, agents, or other persons vested with the authority to manage or direct the affairs of the business have violated any provision of this chapter. (Ord. 2022-0006 § 12; Ord. 2017-0046 § 1)

A. If the city manager proposes to suspend, modify, or revoke a permit, written notice of the proposed suspension, modification, or revocation shall be served on the cannabis business at least 15 days prior to the date of the proposed suspension, modification, or revocation. The notice shall contain:

1. A brief statement of the grounds for the suspension, modification, or revocation.

2. A statement that the permittee may appeal the action in accordance with section 5.150.290.

3. A statement that the failure to appeal the notice of suspension, modification, or revocation will constitute a waiver of all rights to an appeal hearing, and the suspension, modification, or revocation will be final.

B. Notwithstanding subsection A of this section, the city manager may immediately revoke the cannabis business permit without prior notice under the following circumstances:

1. A cannabis business other than a storefront cannabis dispensary is in violation of section 5.150.070.D (criminal history);

2. A permitted cannabis business ceases operation for 90 consecutive days or longer and does not have city approved plans pursuant to section 5.150.185;

3. The permittee, its owners, officers, directors, partners, agents, or other persons vested with the authority to manage or direct the affairs of the business has been convicted of an offense described in section 5.150.070.E; or

4. Operation of the cannabis business is a threat to the public health, safety, or welfare.

C. If the city manager immediately revokes the permit pursuant to subsection B of this section, written notice of the revocation shall be served on the cannabis business.

D. Within 10 calendar days of the date of service of a notice issued pursuant to subsections A or B, the cannabis business may make a written request for an informal hearing with the city manager to reconsider the city manager's action. The city manager shall set a date for an informal hearing within 30 business days from the date the request is filed.

E. Failure to properly file a written request for reconsideration as described in subsection D constitutes a waiver of all rights to a hearing and the city manager's decision is final. Failure to properly and timely file a written request for reconsideration also constitutes a failure to exhaust administrative remedies and is a bar to any judicial action pertaining to the city manager's decision.

F. If the cannabis business properly files a request for reconsideration and fails to appear at the hearing, the request for reconsideration is abandoned, and the decision of the city manager is final and may not be further appealed. Failure to appear at the hearing constitutes a waiver of all rights to a hearing, a failure to exhaust administrative remedies, and is a bar to any judicial action pertaining to the city manager's decision.

G. Written notice of the city manager's decision for reconsideration shall be served on the subject cannabis business within 10 business days of the informal hearing.

H. The decision of the city manager under this section is subject to appeal in accordance with section 5.150.290. (Ord. 2022-0006 § 13; Ord. 2020-0004 § 9; Ord. 2017-0046 § 1)

A. The cannabis business permit appeal fee is established and imposed pursuant to the provisions of this article.

B. The city council shall establish by resolution the amount of the appeal fee and any related penalties. (Ord. 2017-0046 § 1)

A. Except as otherwise provided in this chapter, any applicant or cannabis business aggrieved by the decision of the city manager in conditioning, denying, suspending, revoking, modifying, or not renewing a cannabis business permit may appeal the decision by filing a written appeal, accompanied by a nonrefundable appeal fee, with the city manager's office within 20 calendar days of the personal service of or 25 calendar days of the mailed service of the decision from the city manager. The written appeal shall contain:

1. A brief statement in ordinary and concise language of the specific action protested, together with any material facts claimed to support the contentions of the appellant;

2. A brief statement in ordinary and concise language of the relief sought, and the reasons why it is claimed the protested action should be reversed or otherwise set aside;

3. An address at which the appellant agrees notice of any additional proceeding or an order relating to the decision on the permit may be received by first class mail; and

4. The verification (by declaration under penalty of perjury) of the applicant or cannabis business as to the truth of the matters stated in the appeal.

B. The appeal hearing shall be conducted by a hearing examiner appointed by the city council.

C. Upon receipt of any appeal filed pursuant to this section, the city manager shall transmit the appeal to the secretary of the hearing examiner who shall calendar it for hearing no sooner than 20 days after the notice of appeal is filed.

D. The hearing examiner shall provide written notice of the time and place of the hearing at least 15 days prior to the date of the hearing to each appellant by mailing a copy addressed to the appellant at the address shown on the appeal.

E. Failure of any person to file a timely appeal in accordance with the provisions of this section shall constitute an irrevocable waiver of the right to an administrative hearing and the city manager's decision shall be final.

F. Only those matters or issues specifically raised by the appellant in the appeal notice shall be considered in the hearing of the appeal.

G. Any condition, denial, suspension, revocation, or nonrenewal of a cannabis business permit shall be stayed during the pendency of an appeal which is properly and timely filed pursuant to this section. (Ord. 2020-0004 § 10; Ord. 2017-0046 § 1)5.150.290

A. At the time set for hearing, the hearing examiner shall proceed to hear the testimony of the city manager, the appellant, and other competent persons, including members of the public, respecting those matters or issues specifically listed by the appellant in the notice of appeal.

B. The proceedings at the hearing shall be electronically recorded. Either party may provide a certified shorthand reporter to maintain a record of the proceedings at the party's own expense.

C. The hearing examiner may, upon request of the appellant or upon request of the city, or upon his or her own motion, grant continuances from time to time for good cause shown.

D. In any proceedings under this chapter, the hearing examiner has the power to administer oaths and affirmations and to certify to official acts. (Ord. 2020-0004 § 11; Ord. 2017-0046 § 1)

A. Hearings need not be conducted according to the technical rules relating to evidence and witnesses. California Government Code section 11513, subdivisions (a), (b), and (c) shall apply to hearings under this chapter.

B. Oral evidence shall be taken only upon oath or affirmation.

C. Irrelevant and unduly repetitious evidence shall be excluded.

D. Each party shall have these rights, among others:

1. To call and examine witnesses on any matter relevant to the issues of the hearing.

2. To introduce documentary and physical evidence.

3. To cross-examine opposing witnesses on any matter relevant to the issues of the hearing.

4. To impeach any witness regardless of which party first called the witness to testify.

5. To rebut the evidence presented against the party.

6. To represent himself, herself, or itself or to be represented by anyone of his, her, or its choice who is lawfully permitted to do so.

E. In reaching a decision, official notice may be taken, either before or after submission of the case for decision, of any fact that may be judicially noticed by the courts of this state or that may appear in any of the official records of the city. (Ord. 2017-0046 § 1)

A. If it is shown, by a preponderance of the evidence, that one or more grounds exist to condition, deny, suspend, revoke, modify, or not renew a cannabis business permit, the hearing examiner shall affirm the city manager's decision. The decision of the hearing examiner shall be issued within 30 days of the hearing, in writing and shall contain findings of fact and a determination of the issues presented.

B. The decision shall inform the appellant that the decision is final and that the time for judicial review is governed by California Code of Civil Procedure section 1094.6. Copies of the decision shall be delivered to the parties by first class mail to the address shown on the appeal. The decision is final when signed by the hearing examiner and served as provided in this section. (Ord. 2020-0004 § 12; Ord. 2017-0046 § 1)