Vallejo Municipal Code Ch. 7.200 Cultivation, Distribution, and Manufacturing of Medical Marijuana

It is the purpose and intent of this chapter to exercise local police power and authority to the full extent allowed by the California Constitution and the Medicinal and Adult-Use Cannabis Regulation and Safety Act of 2017, to facilitate safe access to and regulate certain businesses engaged in cannabis business activity and to regulate cannabis laboratories while preventing the proliferation of noncompliant and nonconforming illegal cannabis businesses and negative secondary effects associated with them including crime, code violations, and strain on municipal staff and resources. This ordinance is not intended to conflict with federal or state law. Nothing in this ordinance purports to permit activities that are otherwise illegal under federal, state, or local law.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

Unless a different definition is set forth below or in Chapter 16.06 of the Vallejo Municipal Code, whenever cannabis industry-related words or phrases appear in this chapter, they shall be given a meaning that is consistent with the definitions contained in California Business and Professions Code section 26001.

"Amortization period" is the period of time after which all non-conforming cannabis businesses must cease. For purposes of this ordinance, the amortization period begins upon the effective date of this ordinance and ends on January 1, 2022.

"Applicant" is an owner who is applying for the local regulatory permit issued under this chapter.

"Cannabis" has the same meaning as marijuana in Section 5.05.100 of the Vallejo Municipal Code. Cannabis includes Cannabis indica, and Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin.

"Cannabis concentrate" means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product's potency. Resin from granular trichomes from a cannabis plant is a concentrate. A cannabis concentrate is not considered food, as defined by Section 109935 of the California Health and Safety Code, or a drug, as defined by Section 109925 of the California Health and Safety Code.

"Cannabis business" is a store or location engaged in cannabis business activity.

"Cannabis business activity" is commercial cannabis activity consisting of retail sales, delivery, distribution, storage, dispensing, selling, manufacturing, infusing, packaging, re-packaging, labeling, re-labeling, cultivating, delivering and distributing cannabis, cannabis concentrate, cannabis products and cannabis accessories as defined, licensed and permitted in accordance with the Vallejo Municipal Code, its zoning ordinances, and as further regulated by the State of California pursuant to the Medical and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). Cannabis business activity does not include "cannabis testing laboratory"

"Cannabis business retailer" is a store or business engaged in authorized retail sales of adult-use cannabis goods to individuals who are at least twenty-one years of age, and medicinal cannabis goods to individuals at least eighteen years of age who possess a valid physician's recommendation for himself or herself or a person for whom he or she is a primary caregiver.

"Cannabis cultivation" is the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

"Cannabis distribution" is the procurement, sale and transport of cannabis and cannabis products between persons who have the required State and Local licenses and permits.

"Cannabis manufacturing" refers exclusively to the non-volatile production, preparation, propagation, or compounding of cannabis or cannabis products whether done directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, at a fixed location. This classification also includes infusion, consisting of the direct incorporation of cannabis, cannabinoids, or cannabis concentrates into an edible, topical or other product to produce a cannabis product as well as the packaging or repackaging of cannabis or cannabis products and the labeling or re-labeling of cannabis containers.

"Cannabis products" has the same meaning as in Section 11018.1 of the California Health and Safety Code.

"Cannabis testing laboratory" means a testing laboratory, facility, or entity which offers or performs tests of cannabis, cannabis concentrate or cannabis products to determine chemical profile, the presence of contaminants, or other similar information.

"Local regulatory permit" is the regulatory permit issued by the city of Vallejo to permit specific kinds of cannabis business activity and cannabis testing laboratories in accordance with this chapter.

"Manager" means a person hired by or accountable to the cannabis business or laboratory who is responsible for its establishment, organization, registration, supervision, or oversight, including but not limited to persons who perform the functions of president, vice president, director, operating officer, financial officer, secretary, treasurer, or manager of the cannabis business.

"Nonconforming cannabis business(es)" are those cannabis businesses who have not obtained their land use entitlement under the city's zoning ordinance or are not in full compliance with the Vallejo Municipal Code and the State of California's Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA).

"Owner" means any of the following:

1. A natural person with a majority ownership interest in the business entity.

2. The chief executive officer of a nonprofit or other entity.

"Property" as used in this chapter means the location at which the cannabis business activity occurs.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. It is prohibited to engage in cannabis business activity or to operate a cannabis testing laboratory, without paying the applicable tax, obtaining the required local regulatory permit(s) and the required state license(s). Cannabis business activity that is permitted under this chapter is solely that cannabis business activity that is defined in Section 7.200.020.

B. The use of any building, structure, location, premises or land to conduct cannabis business activity or to operate a cannabis testing laboratory without the proper license(s) and local regulatory permit(s) required under this code and under state law shall be deemed to be unregulated cannabis business activity and is prohibited.

C. It is unlawful for any person knowingly to make any false, misleading or inaccurate statement or representation in any form, record, filing or documentation required to be maintained, filed or provided to the city under this chapter or any applicable section of the Vallejo Municipal Code. A violation of this subsection may be prosecuted as a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding one thousand dollars, or by both.

D. It is prohibited to engage in cannabis manufacturing involving volatile methods of production, preparation, propagation, compounding or infusion.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

The local regulatory permit authorizing the cannabis business activity or the cannabis testing laboratory shall not create, confer, or convey any vested or nonconforming right or benefit or land use entitlement running with the land.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. A local regulatory permit is required to conduct any type of cannabis business activity or to operate a cannabis testing laboratory.

B. Annual term. Local regulatory permits are valid upon issuance for the remainder of the fiscal year and must be renewed annually on or by June 30 for the next fiscal year (e.g., for applications submitted by June 30, 2019, the permit shall be valid until June 30, 2020.)

C. Permit types. The following permits are issued by the city of Vallejo:

7.200 Table of Cannabis Permits

D. Permits for cannabis business activity. An eligible applicant wishing to engage in cannabis business activity must apply and obtain a CR permit. A CR business retailer is eligible to apply for and obtain a CC, a CD, or a CM permit, or any combination thereof.

1. Eligibility.

a. The following applicants are eligible to receive a CR permit authorizing retail sales of cannabis.

i. Those cannabis business owners who received a limited immunity authorization letter from the city of Vallejo on or before August 22, 2017.

ii. Those cannabis business owners who received written authorization from the city manager to receive a transferred CR permit issued under Chapter 7.200 of this code as described in Section 7.200.100.

b. Applicants for a CC, CD or CM permit must also hold a CR permit.

c. Applicants must meet the requirements of 7.200.060(C) and 7.200.070.

2. Revocation. Local regulatory permits are subject to revocation pursuant to Section 7.200.120.

3. Co-location. A CR cannabis business retailer may locate its cannabis business activity for which a CC, CD and/or CM is required either on its existing location, or in one other location as long as zoning permits are obtained and the other location, like the primary location, complies with all applicable local and state laws.

4. Relationship with zoning ordinance. A CR cannabis business retailer must obtain a minor use permit to conduct manufacturing and distribution cannabis business activities, whether at its primary cannabis business retailer location or at the one other additional site. However, as limited by Vallejo Municipal Code Section 16.58.040(H)(Accessory uses), manufacturing and distribution activities may be conducted at the primary cannabis business retail site.

E. Permits for cannabis testing laboratory.

1. Eligibility.

a. A cannabis testing laboratory applicant may not be affiliated with, a subsidiary of, a business partner, a manager or employee of a cannabis business retailer.

b. Applicants must meet the requirements of 7.200.070(D).

2. Location. A cannabis testing laboratory may not co-locate with any other cannabis business conducting cannabis business activity.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. All cannabis business retailers who held a local regulatory permit under Vallejo Municipal Code Chapter 7.100 must apply no later than January 1, 2021, for the CR permit described in this chapter and comply with the requirements of section 7.200.060(C) continuously. This local regulatory permit must be obtained initially and thereafter renewed every year together with the annual tax certificate renewal. Renewal applications must be submitted at least sixty days before the end of the fiscal year. A cannabis business retailer who submits a renewal application late (less than sixty days before the end of the fiscal year) will be required to submit a new application and pay a new application fee. Cannabis business owners must include information showing compliance with each requirement in section 7.200.060(C) below in their initial application as well as each renewal.

B. All applicants for a CT cannabis testing laboratory must submit an application, which must be renewed every year together with the annual tax certificate renewal. Applicants must include the information showing compliance with each requirement in 7.200.060(C) below in their initial application as well as each renewal.

C. Each applicant for a local regulatory permit and for renewal of that permit shall have one owner who must use his or her natural name in the application, and whose name must be the same name appearing in the city's business license, must be named as one of the principals in the Secretary of State filings, and must sign a declaration under penalty of perjury attesting to the truthfulness in meeting every requirement hereunder. The following submissions and requirements apply to applicants who apply for or renew the local regulatory permit issued pursuant to this chapter in order to conduct cannabis business activity or operate a cannabis laboratory:

1. For businesses engaged in cannabis business activity only:

a. A copy of the limited immunity authorization letter issued by the city of Vallejo received on or before August 22, 2017, if applicant is an original person who received it, or, a copy of the limited immunity authorization letter issued by the city of Vallejo plus a copy of the authorization letter from the city manager authorizing transfer of the local regulatory permit as described in Section 7.200.100 if the applicant is not the original person who received it.

b. A copy of the tax certificate issued by the city to the cannabis business when it operated as a medical marijuana certificate, before April 23, 2013.

c. A statement of whether edible cannabis is prepared onsite and, if so, evidence of approval from the applicable regulatory agency pursuant to state law.

2. For businesses engaged in cannabis business activity and for cannabis laboratories:

a. An approved land use permit(s), together with the conditions of approval authorizing the applicable cannabis business activity for which a local regulatory permit is being sought.

b. A copy of the Bureau of Cannabis Control license(s) for the applicable cannabis business activity or for the cannabis testing laboratory for which a local regulatory permit is being sought.

c. A copy of documents showing current taxes paid to the city and to the State.

d. Upon application, and together with any renewal application, or within two weeks of any changes, applicant must update the city with any changes to the address of the property where the cannabis business is operating.

e. Upon application, and together with any renewal application, or within two weeks of any changes, provide to or update the city with the name, address, telephone number, title and function(s) of each manager. For each manager, a fully legible copy of one valid government-issued form of photo identification, such as a driver's license shall be submitted.

f. Upon application, and together with any renewal application, or within two weeks of any changes, provide to or update the city with any changes to the criminal status of any of its owner or manager(s) in the event any of them is charged with or has been convicted within the previous ten years of a crime of moral turpitude (such as theft, fraud, or assault), or has been charged or convicted of crimes involving the sale or distribution of any controlled substance.

g. Upon application, and together with any renewal application, or within two weeks of any changes, submit a summary criminal history ("LiveScan") for each owner or manager prepared not more than two weeks prior to the date of submission and demonstrating that there are no pending charges or convictions for any crime (including, without limitation, theft, fraud, or assault) within the previous ten years, and that the owner or manager has been charged or convicted of crimes involving the sale or distribution of any controlled substance.

h. Upon application, and together with any renewal application, or within two weeks of any changes, provide to or update the city providing all relevant documents reflecting the initial business entity creation or any changes to its business entity, including changes in principals, changes to the incorporation status, its filed articles of incorporation with the Secretary of State, statements of information, by-laws, charter, constitution etc.

i. For those cannabis businesses engaged in cannabis business activity, a valid seller's permit from the California Board of Equalization.

j. The name, telephone number, and address of the applicant's current agent for service of process.

D. If any of the application or renewal requirements are not met, the city manager shall notify the applicant of the deficiency within thirty calendar days of submission of the application or the renewal, after which the applicant will have fourteen calendar days from receipt of notice to correct the deficiency. If the deficiency is not corrected within fourteen calendar days, the city manager may deny the permit and notify the applicant of this determination in writing.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. All transactions shall designate Vallejo as the point of sale and be completed through a single, fully integrated point of sale software system acceptable to the finance director.

B. Inspections by a representative of the city may be conducted anytime during the business's regular business hours, to the full extent allowed by state and federal law.

C. Cannabis business owners and cannabis laboratory owners may only engage in cannabis business activity, apply for local and state licenses, advertise, and operate a cannabis laboratory, as applicable under one business name. The name of the business and the name of the owner must both be included as such on their local permit(s) and on their state license(s).

D. No person who is currently charged with or has been convicted within the previous ten years of a crime of moral turpitude (such as theft, fraud, or assault), or a crime involving the sale or distribution of any controlled substance, shall be engaged directly or indirectly in the management of the cannabis business, nor shall any such person manage or handle the receipts and expenses of the cannabis business or cannabis laboratory.

E. No cannabis business activity of any kind other than as described in the corresponding local regulatory permit application and the local regulatory permit may conducted on the cannabis business site.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. Each authorized cannabis business is authorized to deliver cannabis.

B. Deliveries originating outside of Vallejo shall comply with all local and state law requirements, including obtaining a Vallejo business license and paying Vallejo business license tax.

C. Every person making a delivery of cannabis in Vallejo shall carry a copy of the local and state license authorizing delivery and shall submit a copy of such licenses to the city manager prior to engaging in deliveries.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

Notwithstanding the land use approval requirement under Section 7.200.060(C)(2)(a), the city manager in his or her reasonable discretion, may authorize the issuance of a conditional local regulatory permit under this chapter to any applicant who has submitted all the required information and met all other applicable requirements of this chapter if the applicant has submitted a complete land use entitlement application and paid its fee but the city has not yet ruled on its approval. If the city issues the required land use entitlement, the temporary conditional regulatory permit shall become the local regulatory permit issued under this chapter. If the city denies the land use entitlement, the temporary conditional use permit shall be revoked.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. All transfers of the local regulatory permit for CR from one owner engaged in cannabis business activity to another owner must be approved by the city manager. A transfer of the local regulatory permit without city manager approval voids the local regulatory permit. A cannabis laboratory local regulatory permit may not be transferred.

B. Subject to the following conditions, the city manager may approve a transfer of the local regulatory permit to another cannabis business owner.

C. The subsequent cannabis business owner must submit a joint application for transfer of the local regulatory permit, and pay the initial application fee to demonstrate compliance with all the requirements contained in 7.200.060 and 7.200.070 in a form provided by the city manager at least three months prior to the desired date of transfer, or, a shorter time period as may be provided by the city manager in his or her discretion.

D. The local regulatory permit may not be shared or split between two or more owners. Only one owner at a time may hold the local regulatory permit.

E. The original business owner and the subsequent business owner must provide a notarized letter signed by each of them declaring their intent to transfer the business, and their joint request that the local regulatory permit be approved for transfer by the city of Vallejo.

F. At the time of the transfer request, payment of all city and state taxes must be current, and the cannabis business must be in good standing, and in compliance with all state and local laws.

G. The original business owner must cease all cannabis business activity within the city of Vallejo and may not be employed by or involved in the new business owner's cannabis business activity for a period of one year.

H. The subsequent business owner may not begin to conduct cannabis business activity within the city of Vallejo until the city manager approves the transfer in writing.

I. Upon approval of the transfer, the new business owner shall be subject to the same requirements as the original business owner.

J. If the transfer is not approved, the original business owner may either (1) immediately remedy the condition(s) which led to the denial of the transfer or (2) retain the local regulatory permit if the original cannabis business is in full compliance.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. An original permit holder or their assignee or a cannabis testing laboratory permittee shall maintain the following accurate and truthful records on the property:

1. The full legal entity name of the cannabis business as recorded with the California Secretary of State, the name and address of its agent named for service of process, and the address of the property where the cannabis business activity is conducted.

2. The full name, all residential and business address(es), and telephone number(s) of each cannabis business owner(s) and manager(s); date of joining, date of birth, and the exact nature of the participation in the ownership of and the management of the cannabis business.

3. The current address of all sites at which cannabis is cultivated for the cannabis business retailer.

4. A written accounting of all cash and in-kind contributions, reimbursements, and compensation provided by or to the cannabis business owners, managers and members to or from the cannabis business retailer cannabis, and all expenditures and costs incurred by the cannabis business retailer.

5. An inventory record documenting the dates and amounts of cannabis sold, stored, delivered or distributed from the property.

B. These records shall be maintained for a period of five years and shall be made available by the manager to the city upon request.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. The city manager may revoke a permit if any of the following conditions apply:

1. Failure or inability to comply with the provisions of Chapter 7.200 any other applicable provision of the Vallejo Municipal Code or applicable state law;

2. Failure to provide information required by the city;

3. Conviction of an offense listed in Section 7.200.070(D) of the Vallejo Municipal Code;

4. Suspension or revocation of a required state license pursuant to MAUCRSA;

5. Failure to pay city marijuana tax; or

6. Failure to maintain valid state seller's permit.

7. Failure to maintain all applicable State License types.

B. No revocation shall occur unless the city manager has issued a written warning sent by U.S. mail to the holder of the permit to operate and the permit holder has failed to comply within thirty calendar days of mailing.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. Any person aggrieved by the decision of the city manager or his/her designee to deny or revoke the permit to operate may appeal the city manager or his/her designee's written decision within fourteen calendar days of the date of issuance.

B. The appeal shall be heard by a hearing officer selected by the city. The hearing officer shall render a written decision affirming or reversing the decision of the city manager or his/her designee.

C. Any person aggrieved by the decision of the hearing officer may seek judicial review of the decision by filing a petition with a court of competent jurisdiction pursuant to California Code of Civil Procedure sections 1094.5 and 1094.6.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

City representatives may enter and inspect the property of every original permit holder or their assignee or cannabis testing laboratory containing cannabis activity between the hours of 9:00 o'clock a.m. and 7:00 o'clock p.m., or at any reasonable time to ensure compliance and enforcement of the provisions of this chapter. It is unlawful for any property owner, landlord, lessee, member or manager or any other person having any responsibility over the operation to refuse to allow, impede, obstruct or interfere with an inspection.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

Any original permit holder or their assignee that is not in compliance with this chapter or Title 16 or MAUCRSA is an illegal public nuisance.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)

A. Any person violating any provision of this chapter or misrepresenting any material fact in demonstrating compliance with permit requirements shall be deemed guilty of a misdemeanor punishable by a fine of not more than one thousand dollars or by imprisonment for not more than twelve months, or by both such fine and imprisonment.

B. As a nuisance per se, any violation of this chapter shall be subject to injunctive relief, revocation of the certificate of occupancy for the property, 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 local and state law for any violation committed by the operator, its managers, members or any person related or associated with the operations.

(Ord. No. 1812 N.C.(2d), § 1, 12-18-2018)