Chapter 4-38 — PERMITTED COMMERCIAL CANNABIS ACTIVITY

(Legislative History: Ordinance No. 2017-019, 12/4/17; Ordinance No. 2019-004, 4/1/19 (Sections 4-38-100—4-38-500); Ordinance No. 2022-015, 11/7/22 (Section 4-38-500))

The intent and purpose of this Chapter is to regulate commercial cannabis activity (as defined below) in accordance with State law to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to the MAUCRSA. The goals of this regulation are to ensure the City's regulatory framework is not preempted by State law in the areas of cannabis distribution, dispensing, manufacture, testing and cultivation of cannabis for adult use. It is City policy to permit the dispensing and retailing of cannabis in accordance with City of San Leandro Municipal Code Chapters 4-33 and 4-38, to permit the manufacture of cannabis products at City permitted dispensaries, to permit the manufacture and laboratory testing of cannabis products for medicinal and adult use, and to prohibit cultivation of cannabis, except for personal use that comports with State law. Any references to "medicinal cannabis" or medical cannabis shall also be applicable to adult-use cannabis. The City's permitted medical cannabis dispensaries shall be allowed to conduct retail sales for adult use to any customer who is verified as being 21 years of age or older.

For purposes of this Chapter, the following definitions shall apply, unless the context clearly indicates otherwise:

"A-License" means a State License issued under Division 10, commencing with Section 26000 of the Business and Professions Code, for cannabis or cannabis products that are intended for adults 21 years of age and over and who do not possess physician's recommendations or an interim license issued by the State for the same.

"A-Licensee" means any Person holding a State License under Division 10, commencing with Section 26000, of the Business and Professions Code for cannabis or cannabis products that are intended for adults 21 years of age and over and who do not possess physician's recommendations or an interim license issued by the State for the same.

"Adult Use Cannabis" means the non-medical use of cannabis by adults of age 21 and over as permitted by MAUCRSA and other applicable State and City laws.

"Cannabis" shall have the same meaning as in Section 26000 of the Business and Professions Code.

"Cannabis Dispensary" or "Dispensary" shall be as defined in City of San Leandro Municipal Code Section 4-33-100(d)

"Cannabis Product" shall have the same meaning as in Section 11018.1 of the Health and Safety Code.

"City" shall be the City of San Leandro.

"City Council" means the current members of the City Council of the City.

"City Manager" means the individual duly appointed by a majority of the City Council to serve in the capacity as executive officer of the City on a permanent or interim basis or such other

official as designated by the City to fulfill such duties.

"Commercial Cannabis Activity" includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and cannabis products as provided for in this Chapter and Division 10, commencing with Section 26000, of the Business and Professions Code.

"Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

"Deliver" or "Delivery" means the commercial transfer or delivery of cannabis or cannabis products to a customer.

"Distribution" means the procurement, sale, and transport of cannabis and cannabis products between State licensees.

"Indoor Cultivation" means a cultivation using exclusively artificial lighting.

"Manufacture" means to compound, blend, extract, infuse, or otherwise make or prepare a cannabis product from such blends, extractions, or infusions.

"Medicinal Cannabis" or "Medicinal Cannabis Product" means cannabis or a cannabis product, respectively, intended to be sold for use pursuant to the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code, by a medicinal cannabis patient in California who possesses a physician's recommendation.

"Mixed Light Cultivation" means a cultivation facility using a combination of natural and supplemental artificial lighting.

"Outdoor Cultivation" means any cultivation conducted without the use of artificial lighting.

"Person" includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.

"State License" means a State license issued under Division 10, commencing with Section 26000, of the Business and Professions Code, and includes both an A-license and M-license as well as a testing laboratory license.

"State Licensee" means a person that has been issued a State license.

"Testing" means the laboratory testing of the quality, makeup, or purity of cannabis and cannabis products as required by applicable State law.

All commercial cannabis activity, including any that would be allowed under an A-license or to an Alicensee or for adult use, and all cultivation, including any indoor cultivation, mixed light cultivation and outdoor cultivation, other than cultivation for personal use in accordance with State law, is prohibited within the City, except as permitted by this Chapter.

The following are permitted commercial cannabis activity within the City of San Leandro:

(a) Cannabis distribution and dispensing from a State-licensed cannabis dispensary for medical and adult use by persons 21 years of age or older that also has a City-issued cannabis dispensary operating permit awarded pursuant to City of San Leandro Municipal Code Chapter 4-33, and a City-issued conditional use permit awarded pursuant to City of San Leandro Zoning Code Article 22;

(b) Delivery of cannabis within the City of San Leandro from State-licensed cannabis dispensaries;

(c) The manufacture of cannabis product by a State licensee in accordance with all City of San Leandro ordinances and regulations, including, but not limited to, the City of San Leandro Zoning Code and the City of San Leandro Administrative Code;

(d) The testing of cannabis and cannabis product within a laboratory by a State licensee in accordance with all City of San Leandro ordinances and regulations, including, but not limited to, the City of San Leandro Zoning Code and the City of San Leandro Administrative Code.

Subject to the requirements of this Chapter, and in accordance with the MAUCRSA and Division 10, commencing with Section 26000 of the Business and Professions Code, the following State license classification types, including temporary licenses, will be allowed within the City:

(a) Type 6—A or M - Manufacturer 1. (A - Adult Use; M - Medicinal) (Type 1 denotes
manufacturers that do not use solvents in the manufacturing process).

(b) Type 7—A or M - Manufacturer 2. (A - Adult Use; M - Medicinal) (Type 2 denotes
manufacturers that do use solvents in the manufacturing process).

(c) Type 8—Testing Laboratory.

(d) Type 10—A or M - Retailer. (A – Adult Use; M - Medicinal).

(e) Type 11—A or M - Distributor. (A – Adult Use; M - Medicinal).

(f) Cannabis dispensaries may also operate with a Type 6 M - Manufacturer 1 State license.
Cannabis dispensaries shall not operate with a Type 7 M - Manufacturer 2 State license.

(g) Cannabis dispensaries shall not operate with a Type 8 - Testing Laboratory State license.

(h) Cannabis dispensaries may operate with a Type 10 A or M - Retailer (non-storefront) State
license.

(i) Unless determined by the City Manager that cross-permitting would negatively impact
public safety, and unless otherwise provided herein, State license Types 6, 7, and 8 are for
both commercial adult-use cannabis activity and commercial medicinal cannabis activity.

(a) Any cultivating, infusing, manufacturing, packaging, testing, or transporting commercial cannabis activity within the City and without a permit under this Chapter or in violation of this Chapter is expressly prohibited and is hereby declared to be unlawful and a public nuisance.

(b) Any person who willfully or knowingly: (1) engages in a violation of this Chapter; or (2) owns, possesses, controls, or has charge of any parcel of real property in the City upon which a violation of this Chapter is maintained and who has actual knowledge of such violation (or would have actual knowledge of such violation after a reasonable inquiry), shall be subject to the penalties and remedies provided by this Chapter.

(c) Any violation of this Chapter shall constitute a separate offense for each day the violation occurs or persists.

(d) Any person in violation of any provision of this Chapter or who causes another person to be in violation of this Chapter shall have committed a misdemeanor. In addition, such violation may be punishable by a fine of up to One thousand dollars for each violation and for each day the applicable violation continues to persist, in addition to the remedies for nuisance abatement provided in City of San Leandro Municipal Code Chapter 1-12 Section 1-12-140.

(e) Any person in violation of any provision of this Chapter may be subject to an administrative fine of up to One thousand dollars per offense.

(f) These penalties and remedies are cumulative, and in addition to any other penalties and remedies available to the City, in addition to the remedies for nuisance abatement provided in City of San Leandro Municipal Code Chapter 1-12 Section 1-12-140.

(g) Any person in violation of any provision of this Chapter shall be reported to the State Bureau of Cannabis Control, or other applicable licensing authority as defined in Section 26000 of the Business and Professions Code.