San Jose Municipal Code Part 3 General Provisions

A. No Cannabis Business shall operate in the City of San José unless and until it has first filed a registration application in accordance with the provisions of this Chapter, has paid all fees required by this Chapter, and has received a Notice of Completed Registration from the City Manager.

B. Effective January 1, 2018 or upon issuance of licenses by the State of California, no Cannabis Business shall operate in the City of San José unless and until it has first obtained the appropriate state license or licenses for the Cannabis Activity in which it is engaged.

C. It shall be unlawful for a Person to maintain, manage, operate, conduct, control or own a Cannabis Business unless the Cannabis Business is maintained and operated in strict compliance with a Notice of Completed Registration issued by the City Manager.

D. It shall be unlawful for a Person to maintain, manage, operate, conduct, control or own a Cannabis Business unless the Cannabis Business is maintained and operated in strict compliance with state law, including without limitation, possessing any applicable state licenses.

E. Only a Medical Cannabis Collective or Medical Cannabis Business in possession of a Notice of Completed Registration from the City of San José as of December 18, 2015 and continually registered since that date is eligible to apply for and receive registration to cultivate, dispense, or deliver Medical and Non-medical Cannabis.

F. Notwithstanding Section 6.88.300 E., up to ten (10) new cannabis businesses may be registered as retail storefronts or dispensaries, retail storefronts or dispensaries with delivery, or delivery only to equity business owners and only to conduct transfers of cannabis to customers (i.e., not eligible to engage in cultivation).

G. To be eligible to register, a Cannabis Business must be able to provide a cannabis business tax return evidencing payment of any applicable taxes due to the City pursuant to Chapter 4.66 of this Code and have no outstanding compliance orders under Chapter 1.14 of this Code.

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

A. A Cannabis Business shall have a Notice of Completed Registration from the City for each Cannabis Activity and for each Location, and shall also have any applicable state license for each Cannabis Activity at each Location.

B. A Cannabis Business shall comply with the provisions of this Chapter and of Title 20 of this Code at each of its Locations.

C. All registered locations must remain registered to, and controlled by, the registered cannabis business listed on its Registration.

D. A Cannabis Business's number of locations shall conform to the regulations and limitations set forth in Table 6.88-310.

Table 6.88.310 Number of Cannabis Business Locations

Notes:

1. Businesses registered on or before December 18, 2015, and continuously registered since that date: No more than a total of thirty-two (32) Retail Storefronts or Dispensaries or Delivery-Only locations in the City.

2. Businesses registered after December 18, 2015: No more than a total of ten (10) Retail Storefronts or Dispensaries or Delivery-Only locations in the City.

3. No Medical Cannabis Transfers or Non-medical Cannabis Transfers from more than two (2) locations, including from any delivery location(s).

4. No cannabis business shall operate at more than three (3) locations in any combination of cannabis activities.

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

A. The City Manager is authorized to promulgate all regulations necessary to implement the requirements and fulfill the policies of this Code relating to Medical and Non-medical Cannabis, including, but not limited, to the following subjects:

1. Registration, review, investigation, priority order and disqualification process for Cannabis Businesses and forms necessary thereto.

2. Internal or external security requirements for the operation of Cannabis Businesses.

3. Storage or display of cannabis.

4. Criteria necessary to promote the safe cultivation, manufacture, distribution and testing of cannabis.

B. Regulations shall be published on the City's website.

C. Regulations promulgated by the City Manager shall have the same force and effect of law. Unless a later date is specified in a regulation, a regulation shall become effective upon date of publication.

D. The City Manager shall promulgate regulations to ensure that a Cannabis Business controls, records, and tracks their cannabis throughout the cultivation, processing, manufacturing, distributing, transporting, transferring, dispensing, delivering, testing, and disposing processes in accordance with state law.

(Ords. 30210, 30927.)

A. Registration with the City of San José to cultivate, dispense, or deliver Medical and Non-medical Cannabis is open only to those Medical Cannabis Collectives or Medical Cannabis Businesses in possession of a valid Notice of Completed Registration from the City of San José as of December 18, 2015 and continually registered since that date.

B. Notwithstanding Section 6.88.320 A., registration with the City of San José to dispense or deliver Medical and Non-medical Cannabis is open to Equity Business Owners as set forth in Section 6.88.300 and pursuant to the City Manager Regulations for Medical and Non-medical Cannabis.

C. Registration with the City of San José to manufacture cannabis, distribute cannabis or test cannabis is open to any Cannabis Business.

D. Registration applications must contain all information as required by the City Manager pursuant to the rules and regulations.

E. Each Cannabis Business shall pay any applicable fee(s) related to its registration applications, as set forth in Section 6.88.380 and as required by the City Manager pursuant to the rules and regulations, prior to being issued a Notice of Completed Registration.

(Ords. 30210, 30726.)

A. Registration review. Pursuant to Section 6.88.300, no Collective or Cannabis Business shall operate in the City of San José without a Notice of Completed Registration from the City Manager. A Collective or Cannabis Business desiring to obtain a Notice of Completed Registration shall file a registration application with the City Manager that shall contain such accurate, complete and truthful information as is required pursuant to the application process set forth in the regulations promulgated by the City Manager pursuant to Section 6.88.315.

B. Consent for inspection of records and Location.

1. Required consent for inspection and copying of records.

a. As part of the registration process, the Cannabis Business shall provide written consent for the inspection and copying by the Chief of Police, and any other City official charged with enforcing the provisions of this Code, of any recordings and records required to be maintained under this Chapter without requirement for a search warrant, subpoena or court order.

b. The Cannabis Business shall be subject to the inspection and copying set forth in Subsection 6.88.330 B.1 .a. at any time and without notice during the Cannabis Business's hours of operation and at any other time upon reasonable notice.

c. Nothing in this Chapter requires the disclosure of any Qualified Patient's Private Medical Record.

2. Required consent for inspection of Location and Premises.

a. As part of the registration process, the Cannabis Business shall provide written consent for the inspection of the Location and the Premises by the Chief of Police, and any other City official charged with enforcing the provisions of this Code, without requirement for a search warrant or court order.

b. The Cannabis Business Location and Premises shall each be subject to the inspection set forth in Subsection 6.88.330 B.2.a. at any time and without notice during hours of operation and at any other time upon reasonable notice.

C. Signatories to registration. The person or persons authorized to sign on behalf of and legally bind the Cannabis Business shall print his or her name and sign the registration application under penalty of perjury certifying that all the information contained therein, and any attachments thereto, is true, complete and correct.

D. Investigation and determination.

1. Upon receiving a Cannabis Business's registration application, the City Manager shall proceed to investigate the information provided by the Cannabis Business and evaluate the compliance of the Cannabis Business with the requirements of this Chapter.

2. The City Manager shall also investigate the Location and the Premises for the purpose of assuring that each Cannabis Business complies with the requirements of this Chapter, including, but not limited to Part 4, and all public health, safety, welfare and zoning laws set forth in this Code and in state and local laws.

3. The Chief of Police shall also verify the age of any Owner of the Cannabis Business and on any individual persons who participate in the cultivation, processing, manufacturing, distributing, transporting, transferring, dispensing, delivering, testing, or disposing of cannabis.

E. Disqualification from registration.

1. Any Cannabis Business may be disqualified from the registration process for any of the following reasons:

a. The Cannabis Business or any person applying on behalf of a Cannabis Business knowingly made a false statement of fact or omitted a fact required to be revealed in the registration process, or any amendment or report or other information required to be made thereunder;

b. The Cannabis Business Location or Premises is in violation of any building, zoning, health, safety or other provision of this Code; or of any state or local law which substantially affects the public health, welfare or safety;

c. The Cannabis Business violates or has violated the terms and conditions of any requirement of this Code or any state law related to the operation of a Cannabis Business, other than solely because of its existence after the effective date of this Chapter;

d. The Cannabis Business or any one of its Owners have owned or leased a Location or Premises that has been the subject of an administrative, civil or criminal nuisance abatement action and court judgment or administrative determination finding the Location or Premises to be a nuisance within the past five (5) years;

e. The Cannabis Business was disqualified from the registration process under this Chapter on one or more of the grounds provided in this Section within five (5) years prior to the date of the current attempt to register;

f. The Cannabis Business's registration under this Chapter has become null and void within the past five (5) years for any of the reasons set forth in Section 6.88.350;

g. The Cannabis Business's registration, permit, license or any other authorization issued by the City or by any state or local agency and required to operate a cannabis Collective, cooperative, Retail Storefront, Dispensary, business or other such establishment, has been deemed null and void or has been suspended or revoked or otherwise nullified within the past five (5) years;

h. The Cannabis Business has conducted itself in a manner that creates or results in a public nuisance, as defined in Section 1.13.050 of this Code or Sections 3479 and 3480 of the California Civil Code, on or within three hundred (300) feet of the Location;

i. If the Cannabis Business is a corporation, the corporation is not in good standing or authorized to do business in the state;

j. The Cannabis Business conducted, conducts or anticipates conducting a Cannabis Business on a Location or Premises and such operation is prohibited under the terms of the lease for the Location or Premises or under the terms of another such document which memorializes the Cannabis Business's right to possess the Location or Premises;

k. The Cannabis Business has as an Owner who had a cannabis-related application denied by the State;

l. The Cannabis Business's operation from the Location or Premises results or will result in an imminent threat to the public's health, safety or welfare;

m. The Cannabis Business or any one of its Owners owns or has owned or operated a cannabis business with any unpaid liability due to the City; or

2. If, based on the investigation conducted pursuant to this Section or Section 6.88.360, the City Manager finds that there are grounds for disqualification of a Cannabis Business because an Owner, is found in violation of subsection E.1.k. above, and the Cannabis Business proves conclusively to the City Manager that it has terminated its relationship with that individual so that the individual is prohibited from being involved in the Cannabis Business as an Owner, then in the City Manager's discretion, the Cannabis Business may be allowed to continue the registration process, or amended registration process, as the case may be, subject to compliance with all other requirements of this Code.

F. Completed registration. After verification that all required application fees, as set forth in Section 6.88.380, have been timely and fully paid and that all necessary information has been provided and that the Cannabis Business is in compliance with all requirements of this Chapter, the City Manager shall notify the Cannabis Business that the annual operating fee and any applicable hourly inspection and/or investigative fee(s), as set forth in Section 6.88.380, are now due and payable to the City. Within ten (10) business days of receiving the Cannabis Business's payment of the annual operating fee, as set forth in Section 6.88.380, and any applicable hourly inspection or investigative fees, the City Manager shall mail a Notice of Completed Registration, and any subsequent updated registration, to the person authorized to accept service of process on behalf of the Cannabis Business.

G. Notice of disqualification. If the Cannabis Business has not paid the fees or taxes required by this Code, has not provided all necessary information, is not in compliance with all the requirements of this Code, or has otherwise been disqualified from the registration process, the City Manager shall mail notice to the person authorized to accept service of process on behalf of the cannabis business advising the Cannabis Business that it has been disqualified from the registration process.

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

Registration is valid from the date of issuance, as indicated on the Notice of Completed Registration, through the end of the fiscal year.

(Ords. 30210, 31273.)

A registration deemed completed by the City Manager shall become null and void upon any of the following:

A. Failure to pay the total amount due of any City-issued invoice or tax within thirty (30) days after the due date;

B. Any of the reasons set forth in Subsection 6.88.330 E. regarding disqualification;

C. Relocation of the Cannabis Business to a different Location or Premises without following the procedures specified in this Code or the City Manager regulations;

D. One (1) year after the issuance of the registration, as set forth in Section 6.88.340 above;

E. Any attempt to assign, transfer or sell a registration without following the procedures set forth in Subsection 6.88.840 B.; or

F. Violation of the terms or requirements of this Chapter or Title 20 of this Code.

(Ords. 30210, 31099.)

A. Any time a Cannabis Business changes any of its Locations or Premises, or adds an additional location, it shall, immediately upon obtaining a Zoning Code Verification Certificate pursuant to Title 20 of this Code, prior to beginning operations at the Location or Premises, apply to amend its registration with the City Manager. The Cannabis Business shall file an amended registration application with the City Manager for review along with payment of an amendment application processing fee, as set forth in Section 6.88.380. A Cannabis Business may not begin operations at the new Location or Premises until it receives an amended Notice of Completed Registration and any associated State license for its new Location or Premises.

B. Prior to making a physical change, alteration or modification of a Registered Location or Premises which materially or substantially alters the Location or Premises or the use of the Location or Premises, the Cannabis Business shall receive approval from the City Manager. Prior approval shall be obtained by providing a written request for the modification, filing any applicable amendment application(s), obtaining all applicable permits and other authorizations, and paying all applicable fees.

1. Material or substantial changes, alterations, or modifications requiring approval include, but are not limited to:

a. The removal, creation, or relocation of a common entryway, doorway, passage, or a means of public entry or exit, when such common entryway, doorway, or passage alters or changes limited- access areas within the licensed premises;

b. The removal, creation, or relocation of a wall or barrier; and

c. Changing the activities conducted in or the use of an area identified in the last premises diagram provided to the City Manager.

2. Physical changes, alterations or modifications must comply with all current building, fire, and any other applicable provision of state or local law.

C. Within fifteen (15) calendar days of any other change in the information provided in the registration application which is not covered by Subsection A or B above or subsection D below, or any change in status of compliance with the provisions of this Chapter, or any change in the status of compliance with County or State laws and regulations, including any change in the Cannabis Business's ownership or management, the Cannabis Business shall file updated application forms containing all information that has changed with the City Manager for review along with payment of all applicable fees, as set forth in Section 6.88.380. Upon verification that all required fees have been paid, all necessary information has been provided, and that the Cannabis Business is in compliance with all requirements of this Chapter, the City Manager shall provide confirmation that the updated forms have been approved to the person authorized to accept service of process on behalf of the Cannabis Business.

D. Within fifteen (15) calendar days of any change in the information provided in the registration application regarding persons authorized to represent the Cannabis Business and regarding the Cannabis Business's agent for service of process, the Cannabis Business shall file with the City Manager written notification of such change.

E. The person authorized to sign on behalf of and legally bind the Cannabis Business shall print his or her name and sign any application form required to be updated, under penalty of perjury, certifying that all information contained in the updated application is true, complete and correct.

(Ords. 30210, 30726, 30927.)

A. No registration issued under this Chapter may be renewed unless:

1. A new registration application has been filed with the City Manager pursuant to the process set forth in Section 6.88.330 sixty (60) days prior to the expiration date of the current registration;

2. A renewal application registration fee, as set forth in Section 6.88.380, has been paid by the Cannabis Business; and

3. The Cannabis Business and its Owners all meet the requirements of this Chapter for registration.

B. If a new registration application is not filed, or the required fees are not paid prior to the expiration date of the current registration, the registration shall be deemed to have expired on the date of expiration noted on the registration.

(Ords. 30210, 31099.)

A. The City Manager is hereby authorized to charge and collect from each Cannabis Business all fees associated with the registration of that Cannabis Business. Prior to operating in the City of San José, each Cannabis Business shall timely and fully pay all fees associated with the registration of that Cannabis Business.

B. All fees associated with the registration of a Cannabis Business shall be as set forth in the schedule of fees and charges established by resolution of the City Council.

1. All fees must be paid within thirty (30) days of invoice date. Payment becomes delinquent thirty (30) days after invoice date unless otherwise noted. Failure to pay the total amount due by the due date can be subject to penalties, interest and fees.

2. A Cannabis Business shall pay the annual operating fee in one annual payment.

a. The annual operating fee shall be paid on a fiscal year basis beginning July 1, 2017, and will be prorated accordingly.

b. The annual operating fee shall be paid prior to obtaining a Notice of Completed Registration.

3. No refund of any operating fee collected pursuant to this Chapter shall be made because of the discontinuation, dissolution or other termination of a Cannabis Business.

4. Whenever the amount of any operating fee, penalty or interest has been overpaid, paid more than once, or has been erroneously or illegally collected or received by the City under this Chapter, it may be refunded to the Cannabis Business that paid the operating fee provided that a written claim for refund is filed with the Chief of Police.

5. The Chief of Police shall have the right to examine and audit all the books and business records of the Cannabis Business in order to determine the eligibility of the Cannabis Business to the claimed refund. No claim for refund shall be allowed if the Cannabis Business refuses to allow such examination of its books and business records after request by the Chief of Police to do so.

6. The Chief of Police shall initiate a refund of any operating fee which has been overpaid or erroneously collected whenever the overpayment or erroneous collection is uncovered by a City audit of operating fee receipts. In the event that the operating fee was erroneously paid and the error is attributable to the City, the entire amount of the operating fee erroneously paid shall be refunded to the Cannabis Business. If the error is attributable to the Cannabis Business, the City shall retain the amount to cover processing expenses from the amount to be refunded, as set forth in the schedule of fees and charges established by resolution of the City Council.

(Ords. 30210, 31099, 31273.)

A. The director of finance is hereby authorized to enter into a payment plan for the payment of outstanding cannabis business taxes, fines, and/or fees if the director of finance determines that entering into a payment plan is in the best interest of the City.

B. A payment plan approved by the director of finance and executed by the Cannabis Business and director of finance for the payment of cannabis business taxes, fines, and/or fees shall meet the requirement for registration under Subsection 6.88.300.G. of providing a cannabis business tax return evidencing payment of any applicable taxes due to the City, and/or fines due to the City, and/or fees due to the City under this Chapter.

C. If a Cannabis Business is not eligible for a renewal of its registration based solely on its inability to provide a cannabis business tax return evidencing payment of any applicable taxes due to the City as required under Subsection 6.88.300.G., and/or inability to provide evidence showing that all fees due the City under this Chapter have been timely paid, but a payment plan is later approved by the director of finance and executed by the Cannabis Business and director of finance, then the City Manager is hereby authorized to issue a renewal of the Cannabis Business's registration and date the registration such as to effectuate no lapse in the registration.

D. If a Cannabis Business's registration is deemed null and void pursuant to 6.88.350.A. based solely on the non-payment of invoices or taxes due to the City, the Cannabis Business may subsequently enter into a payment plan pursuant this Section. If a payment plan is approved by the director of finance and executed by the Cannabis Business and director of finance, then the City Manager is hereby authorized to issue a reinstatement of the Cannabis Business's registration and date the registration such as to effectuate no lapse in the registration if the Cannabis Business.

E. If the Cannabis Business fails to comply with the terms and conditions of the payment plan, then the registration for the Cannabis Business shall be null and void, and all outstanding amounts owed the City shall be immediately due and payable.

(Ords. 31002, 31099.)

A registration deemed completed by the City Manager is merely an acknowledgement of the Cannabis Business's compliance with the registration requirements of this Chapter, and its ability to assert an affirmative defense to civil and criminal enforcement of the San José Municipal Code based solely upon conduct which is in strict compliance with the provisions of this Chapter and the provisions of Title 20 relating to Medical and Non-medical Cannabis. A completed registration does not grant the Cannabis Business any right to operate in the City of San José. Any Cannabis Business submitting a registration application should have no expectation that a registration will ultimately be deemed complete, nor that once so deemed, that its registration will continue.

(Ord. 30210.)