Part 3.5

CANNABIS EQUITY ASSISTANCE PROGRAM

Sections:

• A. To be eligible for the Equity Assistance Program as an equity employee, an individual shall satisfy the following criteria:

  1. Be a natural person; and

  2. Reside in a San José neighborhood rated high, higher, or highest priority by the Metropolitan Transportation Commission's Equity Priority Community program or a former Strong Neighborhoods Initiative neighborhood in the City of San José; and

  3. In the year prior to employment with a cannabis business registered in the City of San José, have had an annual household income at or below eighty percent (80%) of the Area Median Income (AMI) for Santa Clara County adjusted for household size; and

  4. The individual satisfies at least one of the following criteria:

     • a. Has lived for at least four years in a San José neighborhood rated high, higher, or highest priority by the Metropolitan Transportation Commission's Equity Priority Community program or a former Strong Neighborhoods Initiative neighborhood in the City of San José; or

     • b. Was arrested or convicted for a crime relating to the sale, possession, use, or cultivation of cannabis in California, excluding those offenses which would be disqualifying for cannabis licensure under current State law; or

     • c. Had a parent, guardian, child, or sibling convicted of a crime relating

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to the sale, possession, use, or cultivation of cannabis in California, excluding those offenses which would be disqualifying for cannabis licensure under current State law; or

  - d. Is a person who experienced sexual assault, exploitation, domestic violence, and/or human trafficking while participating in the California cannabis industry. 

• B. To be eligible for the Equity Assistance Program as an equity business owner, an individual shall satisfy the following criteria:

  1. Be a natural person; and

  2. Reside in a San José neighborhood rated high, higher, or highest priority by the Metropolitan Transportation Commission's Equity Priority Community program or a former Strong Neighborhoods Initiative neighborhood in the City of San José; and

  3. In the year prior to submitting the application to be an equity business owner, the individual resided in a household with an income at or below 150% of the Area Median Income for San José; and

  4. Holds a minimum of fifty-one percent (51%) or more ownership of the entity applying for a Cannabis Business Registration as an Equity Business Owner; and

  5. Has lived for four years in a San José neighborhood rated high, higher, or highest priority by the Metropolitan Transportation Commission's Equity Priority Community program or a former Strong Neighborhoods Initiative neighborhood in the City of San José; and

  6. Meets one of the following criteria:

     • a. Has worked in the cannabis industry in San José for at least two years between 2009 and the present; or

     • b. Was arrested or convicted for a crime relating to the sale, possession, use, or cultivation of cannabis in Cali-

fornia, excluding those offenses which would be disqualifying for cannabis licensure under current State law; or

  - c. Had a parent, guardian, child, or sibling convicted of a crime relating to the sale, possession, use, or cultivation of cannabis in the California, excluding those offenses which would be disqualifying for cannabis licensure under current State law; or 

  - d. Is a person who experienced sexual assault, exploitation, domestic violence, and/or human trafficking while participating in the cannabis industry. 

• C. To be eligible for the Equity Assistance Program as an Equity Business Partnership, the partnership must meet the following criteria:

  1. The aggregate ownership held by equity business partners must total fifty-one percent (51%) or more; and

  2. Each equity business partner must satisfy the criteria set out in Subsection B above, except for Subsection B.4.

(Ords. 30234, 30726.)

Individuals applying as equity employees at a Cannabis Business or applying for a Cannabis Business Registration as an equity business owner or equity business partnership applicant, may be eligible to receive technical assistance, training for prospective employees, and other services dependent upon funding.

(Ords. 30234, 30726.)

The City Manager shall promulgate regulations pursuant to Section 6.88.315 to further establish an application process and procedures for the

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Equity Assistance Program. Such regulations may include eligibility verification procedures and registration requirements. (Ords. 30234, 30726.)

Part 4

OPERATING REGULATIONS AND CONDITIONS

Sections:

• 6.88.400 Operating regulations and conditions.

• 6.88.410 Compliance with the Code. 6.88.420 Security. 6.88.425 Identification display requirements. 6.88.430 Cultivation of cannabis. 6.88.431 Delivery-only site. 6.88.435 Cultivation site. 6.88.436 Manufacturing site. 6.88.437 Distribution site.

• 6.88.438 Combined manufacturing and distribution site.

• 6.88.439 Testing laboratory. 6.88.440 Cannabis business operations. 6.88.445 Deliveries of cannabis. 6.88.446 Mobile dispensaries prohibited. 6.88.450 Owner and individual person requirements.

• 6.88.460 Dispensing and packaging of cannabis.

• 6.88.470 Public safety and safety of location.

• 6.88.480 Property maintenance. 6.88.490 Performance standards.

• A. The provisions of this Part shall constitute terms and conditions applicable to each registration.

• B. The provisions of this Part shall also constitute operating regulations that are applicable

to each Cannabis Business registered with the City of San José at each of the Cannabis Business's Locations.

• C. It shall be unlawful for any person or Cannabis Business registered under this Chapter, or required to be registered under this Chapter, whether or not such person or Cannabis Business is actually so registered, to violate any of the provisions of this Part or to violate any provision of regulations promulgated by the City Manager pursuant to Section 6.88.315.

• (Ord. 30210.)

The Cannabis Business's Premises and Location shall at all times comply with all the provisions of this Code, including but not limited to Title 17, Title 20, Title 23, and Title 24. All occupancies, construction and equipment used therein, shall meet all conditions of the current state, local, building, fire and any other applicable provision of state or local law prior to the cultivating, processing, manufacturing, distributing, transporting, transferring, dispensing, delivering, testing, and disposing of cannabis at or from the Premises or Location. (Ords. 30210, 30927.)

• A. Video Surveillance Systems shall comply with Title 4 of the California Code of Regulations Section 15044.

  1. The video surveillance system shall be fully functional prior to engaging in any Cannabis Activity at the Premises or Location.

  2. The video surveillance recordings shall be made available and accessible to the Chief of Police and any other City official charged with enforcing the provisions of this Code immediately upon request for review and copying, without the need for a search warrant, subpoena or court order.

  3. The Cannabis Business shall provide the Chief of Police with remote access to the

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video surveillance system, including live and previously recorded video playback, at any time without a warrant, subpoena or court order.

• B. The Premises or Location shall have a burglar alarm system which complies with Title 4 of the California Code of Regulations Section 15047.

  1. The burglar alarm system shall be fully functional at all times and prior to engaging in any Cannabis Activity at the Premises or Location.

  2. At a minimum, the burglar alarm system shall cover the perimeter of the Premises or Location and shall focus on those areas where cannabis is cultivated, stored, manufactured, distributed, processed, tested or dispensed.

  3. The burglar alarm system shall comply with all requirements of Chapters 17.12, 17.68, and 17.78 of this Code and Title 24 of this Code.

  4. The burglar alarm system shall be installed and programed to be a functionally complete burglar alarm system per the manufacturer's guidelines.

  5. The burglar alarm system shall be provided with secondary power. The secondary power shall provide at least 24 hours of continued operation time in case of power failure.

• C. The Premises or Location shall have and maintain a fire alarm system.

  1. The fire alarm system shall be fully functional at all times and prior to engaging in any Cannabis Activity at the Premises or Location.

  2. The fire alarm system shall comply with all requirements of Chapters 17.12, 17.68, and 17.78 of this Code and Title 24 of this Code.

  3. The fire system shall be provided with secondary power. The secondary power

shall provide at least 24 hours of continued operation time in case of power failure.

4. The fire alarm system shall be an automatic fire alarm system that provides both fire department and occupant notification.

   • a. Where an approved automatic sprinkler system is installed and the notification devices/appliances activate via sprinkler water flow, the sprinkler system may be used as fire detection for the alarm system.

   • b. A minimum of one (1) manual fire alarm box shall be provided in an approved location to initiate a fire alarm signal. The system shall be monitored by a UL listed central station service.

• c. If the facility has a fire sprinkler system, all valves controlling the water supply for the automatic fire sprinkler system and all water flow switches shall be electrically supervised by a listed fire alarm control unit. The dedicated function fire alarm system shall be monitored offsite by a UL-listed central supervising station.

  5. Exception: Automatic Fire Alarm system is not required in cannabis retail only operations in an existing B or M Occupancy that meets all of the following conditions:

     • a. Without existing fire alarm and smoke detection system;

     • b. Without use of hazardous materials;

     • c. Without operations such as manufacturing, cultivation, and processing; and

     • d. Without consumption of cannabis or smoking cannabis onsite.

• D. If the Cannabis Business maintains records in a printed format pursuant to Section 6.88.500,

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then the Premises shall contain at least one (1) fire-proof safe and all records required by this Chapter shall be stored in one (1) or more fire-proof safes.

• E. Exterior lighting on the Premises and parking area lighting for the Location shall be balanced and shall not result in glare on adjoining properties, shall complement the security systems required in Subsections A and B above to ensure that all areas of the Location are visible, and shall provide increased lighting at all entrances to the Premises. The lighting required in this Subsection shall be turned on from dusk to dawn.

• F. Cannabis shall be stored in buildings that are completely enclosed, and in a locked vault or safe, or other secured storage structure which is bolted to the floor or structure of the Premises in compliance with all building and fire provisions of this Code.

• G. Windows and roof hatches of the Premises shall be secured from the inside with effective means so as to prevent unauthorized entry, and shall be equipped with latches or a similar mechanism that may be released quickly from the inside to allow exit in the event of emergency in compliance with all applicable provisions in the Code.

• H. Exterior doors to the Premises shall remain locked from the outside to prevent unauthorized ingress to the Premises. Ingress shall be allowed by means of a remote release operated from within the Premises of the Cannabis Business. In all cases, doors shall remain openable from the inside to allow egress without the use of a key or special knowledge. Access-controlled egress doors shall comply with all requirements of Chapter 17.12 of this Code and Title 24 of this Code.

• I. All areas of the Cannabis Business not open to the public shall be secured from unauthorized entry during public operating hours.

• J. No person shall be in possession of any firearm while on the Premises or Location or while working for a cannabis business without

having first obtained a license from the appropriate state or local agency authorizing the person to be in possession of such firearm.

• K. Persons in possession of a firearm while on the Premises or Location or while working for a cannabis business must provide the City Manager and the Chief of Police, ten (10) days before bringing the firearm onto the Premises or Location, with the following:

  1. A copy of the license issued to the person by the appropriate state or local agency authorizing him or her to possess such firearm;

  2. A copy of his or her law enforcement identification (if he or she is employed by a law enforcement agency);

  3. A copy of his or her California driver's license or California identification card; and

  4. Any other information reasonably required by the Chief of Police to show that the individual is in compliance with the provisions of all laws regarding the possession and use of a firearm.

• L. Security Personnel shall be required and comply with Title 4 of the California Code of Regulations Section 15045.

• M. Proof of application and registration for all Security Personnel shall be maintained by the Cannabis Business and shall consist of copies of all relevant documentation including the actual proof of registration.

• (Ords. 30210, 30726, 31099.)

• A. A valid identification badge must meet the requirements of Section 15043 (Licensee Employee Badge Requirement) of Title 4 of the California Code of Regulations (Medicinal and Adult-Use Commercial Cannabis Regulations).

• B. While at the Cannabis Business's Premises or Location, each Owner, and individual person engaged, whether directly or indirectly, in the cultivation, processing, manufacturing, distrib-

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• uting, testing, transporting, delivery, handling or dispensing of cannabis shall, at all times while engaged in the duties of his or her position for the Cannabis Business, wear in plain sight, on his or her person and above the waist, a valid identification badge.

• C. While engaged, whether directly or indirectly, in the duties of his or her position for the Cannabis Business, but not at the Cannabis Business's Premises or Location, each Owner, and individual person engaged in the cultivation, processing, manufacturing, distribution, transporting, transferring, dispensing, delivering, testing, handling or disposing of cannabis shall at all times have in his or her possession a valid identification badge.

• D. Upon request by the Chief of Police or any other City official charged with enforcing the provisions of this Code, or any state official charged with enforcing state law pertaining to Cannabis Businesses, each Owner, and individual person engaged, whether directly or indirectly, in the cultivation, processing, manufacturing, distribution, transporting, transferring, dispensing, delivering, testing, handling or disposing of cannabis shall produce such valid identification badge for inspection.

• E. No Owner, or individual person engaged, whether directly or indirectly, in the cultivation, processing, manufacturing, distribution, transporting, transferring, dispensing, delivering, testing, handling or disposing of cannabis shall engage in any activities on behalf of the Cannabis Business, without first submitting a legible, valid government issued identification to the Chief of Police.

(Ords. 30210, 30726, 30927, 30977, 31099.)

• A. No cultivation of cannabis at the Premises or Location shall be visible with the naked eye from any public or other private property, nor shall cannabis or any product containing cannabis be visible from the exterior of any Premises used by the Cannabis Business.

• B. All areas devoted to the cultivation of cannabis shall be secured from public access by means of a closed and locked door or gate and any other security measures necessary to prevent unauthorized entry.

• C. All cannabis and cannabis products must be stored on the Cannabis Business's Location or Premises, or otherwise, in accordance with state law.

• D. The cultivation of cannabis outdoors is prohibited within the City of San José.

• E. Every Cannabis Business shall maintain complete records regarding the amount of cannabis cultivated, processed, stored, manufactured or destroyed at its Cultivation Site or Sites. The amounts of Medical Cannabis and Non-medical Cannabis cultivated, processed, stored, manufactured or destroyed shall be identified and recorded separately.

• F. In addition to any records required to be kept pursuant to this Section, every Cannabis Business shall fully comply with all track-andtrace requirements under state law.

• (Ord. 30210.)

• A. No cannabis shall be dispensed from a DeliveryOnly Site.

• B. A Delivery-Only Site shall not be open to the public.

• C. Every Delivery-Only Business shall maintain complete records regarding the amount of cannabis stored at, and delivered from, its DeliveryOnly Site. The amounts of Medical Cannabis and Non-medical Cannabis stored and delivered shall be identified and recorded separately.

• D. Every Delivery-Only Business shall maintain complete records regarding the transporting of cannabis to, from or between any of its Locations or other businesses licensed by the State. Such records shall include, but not be limited to, the date and time the cannabis was transported, the amount of cannabis transported, whether the cannabis was Medical Can-

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nabis or Non-medical Cannabis, whether the cannabis was in flower, concentrate or edible form, and the strain of cannabis transported. (Ord. 30927.)

• A. No cannabis shall be dispensed from a Cultivation Site, unless that site also serves as the Cannabis Business's registered dispensing Location.

• B. Two (2) Cannabis Businesses may share a single Cultivation Site within the City of San José provided that the cannabis cultivated or manufactured by each Cannabis Business is kept separate. A shared Cultivation Site shall not be a Cannabis Business's dispensing Location and no cannabis shall be dispensed from a shared Cultivation Site.

• C. A Cultivation Site that does not serve as the Cannabis Business's registered dispensing Location shall not be open to the public.

• D. Every Cannabis Business shall maintain complete records regarding the amount of cannabis cultivated, processed, stored, manufactured or destroyed at its Cultivation Site or Sites. The amounts of Medical Cannabis and Non-medical Cannabis cultivated, processed, stored, manufactured or destroyed shall be identified and recorded separately.

• E. The Cannabis Business shall maintain complete records regarding the transporting of cannabis to, from or between any of its Locations or other businesses licensed by the state. Such records shall include, but not be limited to, the date and time the cannabis was transported, the amount of cannabis transported, whether the cannabis was Medical Cannabis or Non-medical Cannabis, whether the cannabis was in flower, concentrate or edible form, and the strain of cannabis transported.

• F. All transporting of cannabis shall be conducted between the hours of 6:00 a.m. and midnight.

(Ords. 30210, 30726, 30927.)

• A. No cannabis shall be dispensed from a Location that is only a Manufacturing Site.

• B. Each Cannabis Business engaged in the Manufacture of Cannabis shall maintain complete records regarding the amount of cannabis received, processed, stored, manufactured or destroyed at its Manufacturing Site. The amounts of Medical Cannabis and Non-medical Cannabis received, processed, stored, manufactured or destroyed shall be identified and recorded separately.

• C. Any Cannabis Business engaged in the Manufacture of Cannabis shall maintain complete records regarding the transporting of cannabis to, from or between any of its Locations or other businesses licensed by the state. Such records shall include, but not be limited to, the date and time the cannabis was transported, the amount of cannabis transported, whether the cannabis was medical or non- medical, whether the cannabis was in flower, concentrate or edible form, and the strain of cannabis transported.

• D. All cannabis shall be packaged in a tamperevident, child-resistant package in accordance with Section 26120 of the Business and Professions Code and any other applicable state law or regulation.

• E. All transporting of cannabis shall be conducted between the hours of 6:00 a.m. and midnight.

(Ords. 30210, 30726, 30927.)

• A. No cannabis shall be dispensed from a Location that is only a Distribution Site.

• B. Each Cannabis Business engaged in the Distribution of Cannabis shall maintain complete records regarding the amount of cannabis received, stored, packaged, re-packaged, labeled, re-labeled or destroyed at its Distribution Site. The amounts of Medical Cannabis and Non-medical Cannabis received, stored, repackaged or destroyed shall be identified and recorded separately.

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• C. Any Cannabis Business engaged in the Distribution of Cannabis shall maintain complete records regarding the transporting of cannabis to, from or between any of its Locations or other businesses licensed by the state. Such records shall include, but not be limited to, the date and time the cannabis was transported, the amount of cannabis transported, whether the cannabis was medical or non-medical, whether the cannabis was in flower, concentrate or edible form, and the strain of cannabis transported.

• D. All loading activities shall be conducted between the hours of 6:00 a.m. and 9:00 p.m.

• E. All transporting of cannabis to or from a Distribution Site shall be conducted between the hours of 6:00 a.m. and midnight.

• (Ord. 30210.)

• A. No cannabis shall be dispensed from a combined Manufacturing and Distribution Site.

• B. A combined Manufacturing and Distribution Site shall abide by all the operating regulations for a Manufacturing Site as set forth in Section 6.88.436 and a Distribution Site as set forth in Section 6.88.437.

• (Ord. 30210.)

• A. No cannabis shall be dispensed from a Testing Laboratory.

• B. A Testing Laboratory shall not be open to the public.

• C. A Testing Laboratory shall operate in accordance with the California Code of Regulations, Title 16, Division 42, Chapter 5.

• D. All loading activities shall be conducted between the hours of 6:00 a.m. and 9:00 p.m.

• (Ord. 30210.)

• A. Only a Dispensary or Retail Storefront shall be open to the public. Cannabis Business Lo-

cations that are not Dispensaries or Retail Storefronts shall not be open to the public. A Dispensary or Retail Storefront shall be open to the public during hours of the day that are in accordance with the regulations promulgated by the City Manager pursuant to Section 6.88.315.

• B. All cannabis cultivated, processed, manufactured, distributed, transported, transferred, obtained, purchased, dispensed, delivered, or tested by the Cannabis Business must be stored and dispensed in strict accordance with state law, this Chapter and other provisions of this Code.

• C. All cannabis dispensed by a Cannabis Business must comply with all other provisions of this Chapter, all regulations promulgated by the City Manager pursuant to Section 6.88.315, and state law.

• D. All contributions (whether in-kind, monetary or property) shall be fully documented, in writing, at the time of their receipt by the Cannabis Business and in accordance with Part 5 of this Chapter.

• E. All sales and transfers of cannabis by a Medical or Non-medical Cannabis Business shall be fully documented, in writing, at the time of the sale or transfer.

• F. Each Cannabis Business shall account for all monetary contributions or payments. Monetary contributions or payments shall be made by cash, personal check, cashier's check, debit card or credit card. All accountings, billings, and contributions (whether in-kind, monetary or property) shall be fully documented, in writing and in accordance with Part 5 of this Chapter and shall be submitted to the Director of Finance on a quarterly basis.

• G. No persons under the age of twenty-one (21) shall be allowed at the Location. When enforcing this subsection, the Chief of Police shall consider circumstances such as site configuration, shared Location with other tenants or other constraints related to the unique circumstances of the incident.

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• H. No person age twenty-one (21) or older accompanied by any person under age 21 shall be allowed at the Location, and shall be prohibited from receiving any cannabis transfers for the remainder of the business day.

• I. A Dispensary or Retail Storefront shall verify the age of every person entering the Premises with an Electronic Age Verification Device, excepting verified employees of the Retail Storefront or Dispensary; and City, County and/or State officials on official business. Manually entering identification information (for example, birthdate) is prohibited.

• J. No Medical Cannabis Transfers shall be made by a Cannabis Business to a person under the age of twenty-one (21).

• K. No Medical Cannabis shall be provided, sold, or transferred to any person who is not a Qualified Patient or Primary Caregiver, and who is not age twenty-one (21) or older.

• L. No Non-medical Cannabis shall be provided, sold, or transferred to any person who is not age twenty-one (21) or older.

• M. Prior to transferring Medical or Non-medical Cannabis to any person, an Electronic Age Verification Device shall be used to determine the age of the person attempting to obtain cannabis, without exception. The Electronic Age Verification Device may be mobile or fixed, and must retain a log of all scans that includes the following information: date, time, and age (or birthdate, or both).

• N. The electronic age verification log shall be kept for a minimum of one hundred eighty (180) days.

• O. Notwithstanding any other provision of state law, no Medical Cannabis provided to a Primary Caregiver may be provided by the Primary Caregiver to any person other than the Primary Caregiver's Qualified Patient for whose care the Primary Caregiver is responsible.

• P. No Cannabis Business shall cause or permit the sale, dispensing, or consumption of alcoholic beverages at the Premises and/or Location or in the parking area for the Premises and/or Location.

• Q. Cannabis may not be inhaled, smoked, eaten, ingested, vaped, or otherwise used or consumed at the Premises and/or Location, in the parking areas of the Premises and/or Location, within three hundred (300) feet of the Premises and/or Location on the public rightof-way, or in those areas restricted under the provisions of California Health and Safety Code Section 11362.79.

• R. No cannabis shall be taken into a restroom at the Premises and/or Location, including temporary restrooms in the parking areas of the Premises and/or Location.

• S. Each Cannabis Business shall operate and maintain an on-site twenty-four (24)-hour landline telephone number at the Premises for receiving complaints and other inquiries regarding the Cannabis Business. A person engaged in the management of the Cannabis Business shall be responsible for receiving, logging, and responding to these complaints and other inquiries on a daily basis. The log shall be maintained in the records of the Cannabis Business and in accordance with Part 5 of this Chapter.

• T. None of the following items shall be allowed on the Premises or at the Location or in the parking area for the Premises or Location:

  1. Any controlled substances, other than cannabis as defined herein;

  2. Any paraphernalia used for the ingestion of any type of controlled substance, except for cannabis;

  3. Alcoholic beverages; or

  4. Firearms, except in strict compliance with federal, state and local laws and with Section 6.88.420 J.

• U. A sign shall be posted in a conspicuous location inside the Premises advising, in English, Spanish and Vietnamese, the following: "Both the sale of cannabis and the diversion of cannabis to persons under age twenty-one (21) are violations of state law. The use of cannabis may impair a person's ability to operate a motor vehicle or heavy machinery. Loitering

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at the Location of a Cannabis Business for an illegal purpose is prohibited by California Penal Code Section 647(h). This Cannabis Business is registered in accordance with the laws of the City of San José."

• V. All water used in any Cannabis Activity shall be legally obtained and shall be applied in accordance with state and local laws.

• W. All electricity used in any Cannabis Activity shall be legally obtained and shall be used in accordance with state and local laws.

• X. The extraction and refinement of chemical compounds from cannabis by way of a Solventbased method utilizing compressed flammable gases or alcohol in violation of state law is prohibited. No Cannabis Business shall possess, dispense or transport any cannabis manufactured unlawfully. All extraction and refinement equipment used by a Cannabis Business shall be subject to review by, and approval of, the City pursuant to Chapter 17.12 of this Code or Title 24 of this Code.

• Y. Any hazardous materials shall be used and stored in full compliance with Chapter 17.68 of this Code.

• Z. All activities conducted at a Cannabis Business shall at all times fully comport with the provisions of California Health & Safety Code Section 11362.5 et seq., the Compassionate Use Act, the Medical Marijuana Program Act, the Adult Use of Marijuana Act, the Medicinal and Adult-Use Cannabis Regulation and Safety Act, and any other applicable state laws or regulations, as the same may be amended from time to time; provided, however, that if there is a conflict between the provisions of this Code and the provisions of state law, the most restrictive law allowed to apply shall govern and control.

(Ords. 30210, 30726, 30927, 31099, 31273.)

• A. Except as provided in Subsections B and C below, Cannabis Businesses are prohibited from delivering cannabis to any person or location within the City.

• B. Cannabis retail storefronts or dispensaries that are registered pursuant to this Chapter may apply for registration to deliver Medical Cannabis, Non-medical Cannabis, or both.

• C. Delivery-only cannabis businesses that are registered pursuant to this Chapter may apply for registration to deliver Medical Cannabis, Nonmedical Cannabis, or both.

• D. The City Manager shall promulgate regulations pursuant to Section 6.88.315 to establish an application process and procedures to allow Cannabis Businesses registered pursuant to this Chapter to deliver cannabis within the City. The regulations shall also include security procedures, vehicle requirements, cannabis storage requirements, age verification requirements, and hours of the day during which deliveries may be made. The fees associated with the registration process for delivery shall be as set forth in the schedule of fees and charges established by resolution of the City Council.

(Ords. 30210, 30927, 31099, 31273.)

• A. Only a Cannabis Business registered pursuant to this Chapter may dispense cannabis in the City of San José.

• B. Except as provided in Subsections 6.88.445 B and C, a registered Cannabis Business may only dispense from its registered dispensing Location or Locations.

• (Ords. 30210, 30726, 31099.)

• A. A Cannabis Business shall ban, prohibit, or otherwise refuse entry to any Person violating the provisions of this Chapter.

• B. A Cannabis Business shall maintain a log of persons banned, prohibited, or otherwise refused entry for violating the provisions of this Chapter. The log shall include any information required by the Chief of Police, including but not limited to the person's name (if avail-

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able), brief description (if name is not available), date and time of the incident(s), section(s) of this Chapter violated, and the date the person was banned, prohibited, or otherwise refused entry.

• C. Each Cannabis Business shall designate an On-site Designated Representative who shall be present during all hours of the Cannabis Business's operation. The On-Site Designated Representative shall meet the following minimum requirements:

  1. Comply with all laws and ordinances;

  2. Carry on his or her person, at all times when he or she is functioning as the Onsite Designated Representative, a valid government issued photo identification card or license;

  3. Upon request by the Chief of Police, any other City official charged with enforcing the provisions of this Code, or any state official charged with enforcing state law regarding Cannabis Businesses, produce such photo identification card or license for inspection;

  4. Be available at the telephone number identified in the registration as the on-site landline telephone number for the Premises;

  5. Cooperate fully with the Chief of Police, any other City official charged with enforcing the provisions of this Code, or any state official charged with enforcing state law regarding Cannabis Businesses with any inquiry, inspection, request, or investigation necessary or appropriate to implement the requirements of this Code or to enforce any other state or local law;

  6. Immediately report to the Chief of Police any violations of state or local law or conditions which the On-Site Designated Representative knows, or reasonably should know, exist on the Premises and at the Location and could result or have resulted in harm or an imminent threat

of harm to the health, safety or general welfare of any person or member of the public; and

7. Immediately report to the Chief of Police and the County health department, any information indicating that any person experienced an adverse reaction to, or other difficulty related to, any cannabis procured from the Cannabis Business.

• D. No Owner, or individual person participating, whether directly or indirectly, in the cultivation, processing, manufacturing, distribution, testing, transporting, delivery, handling or dispensing of cannabis shall fail to make a report to the Chief of Police, immediately upon discovery of any conduct which raises a reasonable suspicion that a misdemeanor or felony crime under the laws of the state has been committed on the Cannabis Business's Premises or Location.

directly, in the cultivation, processing, manufacturing, distribution, testing, transporting, delivery, handling or dispensing of cannabis shall fail to make a report to the Chief of Police, immediately upon discovery of any conduct which raises a reasonable suspicion that a misdemeanor or felony crime under the laws of the state has been committed on the Cannabis Business's Premises or Location.

• E. No Owner, or individual person participating, whether directly or indirectly, in the cultivation, processing, manufacturing, distribution, testing, transporting, delivery, handling or dispensing of cannabis shall fail to report any conduct which raises a reasonable suspicion of a violation of this Chapter to the Chief of Police within twenty-four (24) hours of its discovery.

(Ords. 30210, 30726, 31099.)

Prior to delivery or sale at a retailer, all cannabis and cannabis products shall be labeled and placed in a tamper-evident, resealable, child-resistant package in accordance with Section 26120 of the Business and Professions Code and any other applicable state law or regulation. (Ords. 30210, 31099.)

• A. Each Cannabis Business shall operate in a manner such that the cultivation of cannabis does not adversely affect the health or safety

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of nearby properties through creation of mold, mildew, dust, glare, heat, noise, noxious gasses, odor, smoke, traffic, vibration, or other impacts.

• B. Each Cannabis Business shall prevent the odor of cannabis from emanating beyond the walls of the Premises by utilizing appropriate air purification systems and air scrubbers wherever cannabis is cultivated, processed, manufactured, stored, tested, distributed or dispensed.

• C. The cultivation of cannabis shall not create hazards due to the use or storage of materials, processes, products or wastes.

• D. All electrical equipment used in the cultivation of cannabis shall be plugged directly into a wall outlet or otherwise hardwired. The use of extension cords to supply power to electrical equipment used in the cultivation of cannabis is prohibited.

• E. Each and every Cannabis Business shall ensure that it has safe growing facilities. Chemicals and fertilizers shall be properly stored, used, and disposed; carbon dioxide levels are tested (if carbon dioxide is added to the air within the Cannabis Business's cultivation areas); areas are properly vented; and mold is tested and controlled.

(Ords. 30210, 30726.)

The Owner and/or operator of a Cannabis Business shall keep the Premises and Location in a clean and safe condition by, at a minimum, performing all of the following tasks:

• A. Properly remove and store all trash, litter, rubbish and debris on the Premises and Location at the end of each business day; and

• B. Properly dispose of all trash, litter, rubbish and debris from the Premises and Location; and

• C. Remove graffiti placed upon the Premises and Location within forty-eight (48) hours of its occurrence; and

• D. Keep driveways, sidewalks, parkstrips, fire access roads and streets on or adjacent to the Premises and location clear and clean; and

• E. Provide lighting on the Premises and Location to ensure the safety of the public and the employees of the Cannabis Business; and

• F. Otherwise operate in a manner that does not create or result in any significant adverse impacts upon its Premises and Location or within twenty(20) feet of the Premises and Location.

(Ords. 30210, 31099.)

• A. A Cannabis Business, including its Owner and/or operator shall conduct its operations in a manner that does not create or result in a public nuisance on the Premises and Location or within twenty (20) feet of the Premises and Location, including but not limited to:

  1. Disturbance of the peace;

  2. Illegal drug activity;

  3. Public drunkenness;

  4. Drinking in public;

  5. Gambling;

  6. Prostitution;

  7. Sale of stolen goods;

  8. Public urination;

  9. Theft;

  10. Assaults;

  11. Batteries; or

  12. Acts of vandalism.

• B. The Cannabis Business shall maintain a log of any public nuisance activity on the Premises and Location or within twenty (20) feet of the Premises and Location. The log shall include any information required by the Chief of Police, including but not limited to the date and time of the occurrence; the type of activity; the circumstances surrounding the activity; the identity of any persons involved in the

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• activity, if known; the corrective action taken by the Cannabis Business; and the police case number, if applicable.

• C. When enforcing this subsection, the Chief of Police shall consider circumstances such as site configuration, shared Location with other tenants or other constraints related to the unique circumstances of the incident.

• (Ords. 30210, 31099.)

Part 5

RECORDS

Sections:

• A. Each Cannabis Business shall maintain all records and documents required by Title 4 of the California Code of Regulations Section 15037 and Parts 3 and 4 of this Chapter and all the information and records listed below:

  1. The name, address, and telephone number(s) of the Owner, landlord and/or lessee of the Location;

  2. For Medical Cannabis transactions, the following information concerning each patient or Primary Caregiver served by the Medical Cannabis Business:

     • a. Name and a confidential patient or Primary Caregiver number unique to that individual which is used solely for the log identified in Subsection 2.h. below;

     • b. A copy of a valid government issued photo identification card or license;

     • c. A copy of the patient's or Primary Caregiver's Identification Card or the Physician's Recommendation for the patient or Primary Caregiver;

     • d. The date the patient or Primary Caregiver started being served by the Medical Cannabis Business;

  • e. The name and telephone number of each Primary Caregiver, along with a copy of every written designation for every Qualified Patient that designated the person as his or her Primary Caregiver;

  • f. The name, business address and telephone number of each Attending Physician who provided a Physician's Recommendation for any patient or Primary Caregiver;

  • g. The records of all Qualified Patients with a valid Identification Card and Primary Caregivers with a valid Identification Card may be maintained using only the Identification Card number issued by the state pursuant to California Health and Safety Code Section 11362.7 et seq., in lieu of the information required by Subsections 6.88.500 A.2.a. through f.; and

  • h. An up-to-date log documenting each and every transfer of Medical Cannabis reflecting the amount provided, the form or product category in which the Medical Cannabis was provided, the date provided, the time provided and the patient or Primary Caregiver number to whom it was provided.

3. Up-to-date information for all savings accounts, checking accounts, investment accounts, credit or debit card processing accounts and trusts associated with the operation of the Cannabis Business;

4. All receipts of the Cannabis Business, including but not limited to all sales, contributions and all expenditures incurred by the Cannabis Business;

5. An up-to-date log documenting each and every sale or transfer of cannabis reflecting the amount sold or transferred, the form or product category in which the cannabis was sold or transferred, and the date and time sold or transferred;

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6. An up-to-date log documenting the date, time, nature, and response by the Cannabis Business to all complaints received by the Cannabis Business pursuant to Subsection 6.88.440 R. of this Chapter;

7. A copy of the annual audit reports required pursuant to Section 6.88.600 of this Chapter; and

8. Proof of completed registration with the City Manager in conformance with this Chapter.

9. A copy of all licenses or certifications required by any state, county or local law or regulation for any aspect of the business's operations. These include, but are not limited to, the following:

   • a. State cannabis license(s);

   • b. Food safety or handling;

   • c. Pesticide safety or handling; and

   • d. Equipment or machinery operation;

• B. All records required by this Chapter shall be maintained by the Cannabis Business for a period of seven (7) years and shall be made available by the Cannabis Business to the City Manager, any City official charged with enforcing the provisions of this Code, or any state official charged with enforcing state law regarding Cannabis Businesses, in accordance with Sections 6.88.330 B. and 6.88.700 of this Chapter.

• C. At the request of the City Manager, any City official charged with enforcing the provisions of this Code, or any state official charged with enforcing state law regarding Cannabis Businesses, all records required by this Section shall be made available in standard electronic format which shall be compatible with Microsoft Office programs and which can easily be imported into either Excel, Access, or any other contemporary software program designated by the City Manager.

• D. In addition to all other formats that the Cannabis Business may maintain, all records required by this Section shall be stored by the

Cannabis Business at the Location in a printed format in a fire-proof safe or in an unalterable electronic format with a documented system for regular information backup that is satisfactory to the City Manager.

(Ords. 30210, 30927, 31273.)

Part 6

AUDITS

Sections:

A Collective or Cannabis Business may be required, at the City Manager's discretion, to file with the City Manager an annual audit of its financial operations, completed and certified by an independent certified public accountant in accordance with generally accepted auditing and accounting principles, if the Collective, Cannabis Business, or Cannabis Business Owner(s) receives a notification from a government or regulatory agency regarding a lawsuit, tax finding, regulatory violation, or improper internal controls. If required, the audit shall be filed with the City Manager by September 30. In the event the audit, completed and certified by an independent public accountant, results in an opinion other than an unqualified opinion, the Collective or Cannabis Business may be required to file annual audits at the City Manager's discretion based on factors including, but not limited to, the City's review of the annual audit, final City- issued tax audit findings, a lawsuit, or improper internal controls.

(Ords. 30210, 30927.)

Part 7

INSPECTION AND ENFORCEMENT

Sections:

• A. The Chief of Police, any other City official charged with enforcing the provisions of this

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Code, or any state official charged with enforcing state law regarding Cannabis Businesses, may enter the Location at any time during the hours of operation without notice and inspect the Location of any Cannabis Business as well as the recordings and records maintained pursuant to this Chapter in accordance with Section 6.88.330 B.

• B. It is unlawful for any Owner, landlord, lessee, or any other person having any responsibility over the operation of the Cannabis Business to refuse to allow, impede, obstruct or interfere with an inspection, or the review or copying of records and closed-circuit monitoring authorized and required under this Chapter, including but not limited to, the concealment, destruction, and falsification of any recordings, records, or monitoring.

• C. The Chief of Police, any other City official charged with enforcing the provisions of this Code, or any state official charged with enforcing state law regarding Cannabis Businesses, may enter the Location at any time during the hours of operation and without notice to obtain samples of cannabis to test for law enforcement and/or public safety purposes. Any samples obtained by the City shall be logged, recorded, and maintained in accordance with departmental standards. At all other times, the Chief of Police, any other City official charged with enforcing the provisions of this Code, or any state official charged with enforcing state law regarding Cannabis Businesses, may enter the Location to obtain samples of cannabis upon reasonable notice.

• (Ord. 30210.)

Part 8

APPLICATION OF CHAPTER; OTHER LEGAL DUTIES

Sections:

• 6.88.810 Compliance with this chapter and state law.

• 6.88.820 Violation and enforcement.

• 6.88.830 Release of liability and hold harmless.

• 6.88.840 Registration transfers.

• A. Any existing cannabis Collective, Retail Storefront, Dispensary, operator, establishment, business or provider that does not hold a Notice of Completed Registration from the City of San José at the time of the effective date of this Chapter is not in compliance with the San José Municipal Code and shall immediately cease operations. This Chapter does not create any defense to civil or criminal enforcement of the provisions of the San José Municipal Code until such time, if any, that all requirements of this Chapter are met.

• B. No cannabis Collective, Retail Storefront, Dispensary, operator, establishment, business or provider is a legally established use under the provisions of this Code whether in existence before or after the effective date of this Chapter.

• (Ords. 30210, 30927, 31273.)

• A. It is unlawful for any person to cause, permit or engage in the cultivation, possession, manufacture, testing, sales, transfers, distribution, processing, transporting, delivery or giving away of cannabis. To establish an affirmative defense to civil and criminal enforcement of the provisions of the San José Municipal Code, the person seeking to invoke the defense must establish compliance with all other applicable state and local laws.

• B. It is unlawful for any person to cause, permit or engage in any activity related to cannabis, and a person may not establish an affirmative defense to civil and criminal enforcement of

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the provisions of the San José Municipal Code unless in strict compliance with any and all state and local laws.

• C. It is unlawful for any person to knowingly make any false, misleading or inaccurate statements or representations in any forms, records, filings or documentation required to be maintained, filed or provided to the City under this Chapter, or to any other federal, state or local government agency having jurisdiction over any of the activities of Cannabis Businesses.

• D. It shall be the responsibility of the Owners or persons working at or for the Cannabis Business to ensure that the Cannabis Business is, at all times, operating in a manner compliant with all applicable state and local laws. Nothing in this Chapter shall be construed as authorizing any actions which violate state law with regard to the cultivation, processing, manufacturing, distributing, transporting, transferring, dispensing, delivering, testing, disposing, and sale of cannabis.

(Ords. 30210, 30927, 31099.)

• A. Each and every violation of this Chapter shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by this Code. Additionally, as a nuisance per se, any violation of this Chapter shall be subject to injunctive relief, the Cannabis Business's registration being deemed null and void, disgorgement and payment to the City of any and all monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or equity. The City may also pursue any and all remedies and actions available and applicable under state and local laws for any violations committed by the Cannabis Business and persons related to, or associated with, the Cannabis Business. Additionally, when the City Manager determines that there is an imminent threat to public health,

safety, or welfare, the Cannabis Business's registration shall immediately become null and void.

• B. Notwithstanding an initial verification of compliance by the Cannabis Business with the provisions of this Chapter, any Cannabis Business later found to be in violation of any of the requirements of this Chapter at any time is subject to the enforcement provisions provided in this Section.

• (Ord. 30210.)

The Cannabis Business and its Owners, Managers, agents, invitees, contractors and employees shall release the City of San José, and its agents, officers, elected officials, and employees from any injuries, damages, or liabilities of any kind that result from any arrest or prosecution of the Cannabis Business and its Owners, Managers, agents, invitees, contractors and employees for violation of federal or state laws and from any and all legal liability related to or arising from the registration of the Cannabis Business or the enforcement of the provisions of this Chapter, in a form satisfactory to the City's Risk Manager. In addition, the Cannabis Business and its Owners, Managers, agents, invitees, contractors and employees shall indemnify and hold harmless the City of San José and its agents, officers, elected officials, and employees for any claims, damages, or liabilities arising from claims filed by third parties due to the operations at the Location or Premises or arising from claims filed by the Cannabis Business's Owners, Managers, agents, invitees, contractors and employees arising out of the possession, cultivation, manufacture, testing, sales, delivery or dispensing and/or on- or off-site use of cannabis provided at the Location or Premises, in a form satisfactory to the City's Risk Manager.

(Ord. 30210.)

• A. No Person shall assign or transfer any Notice of Completed Registration issued under this

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Chapter unless they follow procedures set out under Subsection B and without following these procedures, any attempt to assign or transfer any Notice of Completed Registration issued pursuant to this Chapter shall render the Notice of Completed Registration null and void. B. Notwithstanding Subsection A above and Subsection 6.88.350.E, a Cannabis Business wishing to transfer ownership or registration of the Cannabis Business may do so provided that:

1. The Cannabis Business and/or Cannabis Business's successor shall submit all required forms, pay any associated fees, and follow any procedures specified in the City Manager regulations.

2. The Cannabis Business and/or Cannabis Business's successor shall meet the requirement for registration under Subsection 6.88.300.G including the full payment of cannabis business taxes, fines, and/or fees. The Cannabis Business and/or Cannabis Business's successor may enter a payment plan in accordance with Subsection 6.88.385 for a term no longer than one year from the date of transfer of registration. A partial payment must be made when entering the payment plan in an amount as determined by the director of finance and all outstanding amounts must be paid in full within one year of the date of transfer of registration.

3. The Cannabis Business must transfer the registration for all locations of the business; no partial transfers of the business will be allowed.

4. A new or amended Notice of Completed Registration confirming the change in ownership or registration is issued.

• C. Notwithstanding Subsection B above, a Cannabis Equity Owner may not transfer ownership to a non-equity owner such that the total amount of equity ownership falls below fiftyone percent (51%) for a period of five (5) years following the original date of receipt of a Notice of Completed Registration.

• D. Notwithstanding Subsection B above, a Cannabis Equity Business may not transfer shares of ownership to non-equity owners or partners such that the aggregate total of equity ownership falls below fifty-one percent (51%) for a period of five (5) years following the original date of receipt of a Notice of Completed Registration.

• (Ord. 31143.)

Editor’s note— Ord. 31143, adopted Nov. 5, 2024, amended § 6.88.840 in its entirety, in effect repealing and reenacting said § 6.88.840 to read as set out herein. The former § 6.88.840 pertained to registration nontransferable and derived from Ords. 30210, 30726, 31099.

Part 9

PERSONAL USE CULTIVATION REQUIREMENTS AND REGULATIONS

Sections:

• A. Nothing in this Chapter shall be deemed to make unlawful Personal Use Cultivation of Medical or Non-medical Cannabis at the private residence of either a Qualified Patient, the Qualified Patient's Primary Caregiver for use by the Qualified Patient, or a person age twenty-one (21) or older, if such cultivation is conducted pursuant to state law.

• B. Any Medical Cannabis Personal Use Cultivation must be conducted in strict compliance with the following provisions:

  1. A Qualified Patient and Primary Caregiver shall be allowed to cultivate Medical Cannabis within the private residence of either the Qualified Patient or the Qualified Patient's Primary Caregiver for the Qualified Patient's personal use;

  2. The building being used for the cultivation shall remain at all times a residence with legal and functioning cooking, sleeping and sanitation facilities;

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3. Medical Cannabis cultivation shall remain at all times incidental to the residential use of the property;

4. Medical Cannabis cultivation outdoors is prohibited;

5. The Qualified Patient or the Primary Caregiver shall reside in the residence where the Medical Cannabis cultivation occurs;

6. The Medical Cannabis cultivation area shall be in compliance with all current building and fire codes, including without limitation, Chapter 17.12 of this Code, Title 24 of this Code, and the current adopted edition of the California Building Code Section 1203.4 - Natural Ventilation, or Section 402.3 - Mechanical Ventilation;

7. The cultivation shall not adversely affect public health or safety through the creation of mold, mildew, dust, glare, heat, noise, noxious gasses, odor, smoke, traffic, vibration, or other impacts; or be hazardous because of the use or storage of materials, processes, products or wastes, or for any other reason;

8. All electrical equipment used in the cultivation of Medical Cannabis shall be plugged directly into a wall outlet or otherwise hardwired. The use of extension cords to supply power to electrical equipment used in the cultivation of cannabis is prohibited;

9. All electricity used in the cultivation of Medical Cannabis shall be obtained legally;

10. From a public right-of-way, or from a neighboring property, there shall be no exterior evidence of Medical Cannabis cultivation occurring at the property, including, without limitation, odor;

11. Medical Cannabis cultivated for personal use as provided herein shall not be distributed to any person, Collective, entity or Cannabis Business in violation of state law;

12. All water used in the cultivation of Medical Cannabis shall be legally obtained and shall be applied in accordance with state and local laws;

13. Notwithstanding the number of Qualified Patients or Primary Caregivers residing at the private residence, Medical Cannabis cultivation shall be limited to a single space within a single room that is not a garage. The single space in the single room shall be no larger than fifty (50) square feet and all Medical Cannabis plants shall be arranged in a single layer;

14. Medical Cannabis cultivated for personal use by a Qualified Patient shall be exclusively for his or her personal medical use and shall not be provided, donated, sold, or distributed to any other person or entity;

15. Medical Cannabis cultivated for personal use by a Primary Caregiver shall be exclusively for the personal medical use of that Primary Caregiver's designated Qualified Patients and shall not be provided, donated, sold, or distributed to any other person or entity;

16. The area used for any Medical Cannabis cultivation, processing, manufacturing or storage shall be secured in a manner so as to prevent access by anyone other than a Qualified Patient or Primary Caregiver; and

17. The extraction or refinement of chemical compounds from Medical Cannabis for personal use by way of a Solvent-based extraction method utilizing compressed flammable gases or alcohol is prohibited.

• C. Any Non-medical Cannabis Personal Use Cultivation must be conducted in strict compliance with the following provisions:

  1. Not more than six (6) living Non-medical Cannabis plants may be planted, cultivated, harvested, dried, or processed inside a private residence, or inside an accessory building, as defined in Title 20

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• of this Code, to a private residence that is fully enclosed and secure and located upon the grounds of the private residence, as an incidental use to the primary private residential use. These activities shall only be engaged in by a person over the age of twenty-one (21). Non-medical Cannabis in excess of twenty-eight and one-half (28.5) grams produced by plants kept for indoor personal cultivation must be stored in a locked space on the grounds of the private residence not detectable, including by odor or other means, from the public right-of-way or neighboring property;

2. Any personal Non-medical Cannabis cultivation shall comply with all requirements of this Code, including without limitation, Chapter 17.12 of this Code, Title 24 of this Code, and the current adopted edition of the California Building Code Section 1203.4 - Natural Ventilation, or Section 402.3 - Mechanical Ventilation;

3. Non-medical Cannabis cultivation outdoors is prohibited;

4. The cultivation of Non-medical Cannabis shall not adversely affect public health or safety through the creation of mold, mildew, dust, glare, heat, noise, noxious gasses, odor, smoke, traffic, vibration, or other impacts; or be hazardous because of the use or storage of materials, processes, products or wastes, or for any other reason;

5. All electrical equipment used in the cultivation of Non-medical Cannabis shall be plugged directly into a wall outlet or otherwise hardwired. The use of extension cords to supply power to electrical equipment used in the cultivation of cannabis is prohibited;

6. All water used in the cultivation of cannabis shall be legally obtained and shall be applied in accordance with state and local laws;

   7. All electricity used in the cultivation of Non-medical Cannabis shall be obtained legally; and

   8. The extraction or refinement of chemical compounds from Non-medical Cannabis for personal use by way of a Solventbased extraction method utilizing compressed flammable gases or alcohol is prohibited.

• (Ord. 30210.)