Article 4 — Operating Standards

All cannabis use permits for Type 11 distribution facilities shall be approved only if subject to all conditions of this section:

(a) After taking physical possession of a cannabis goods batch, the distributor shall contact a testing laboratory and arrange for a laboratory employee to come to the distributor’s licensed premises to select a representative sample for laboratory testing.

(b) A distributor shall ensure that all cannabis goods batches are stored separately and distinctly

Exterior signage shall comply with the sign standards set forth in Chapter 14-21.

(a) A facility shall not print, publish, advertise, or disseminate in any way or by any means, other than a dedicated business internet website accessible only through an age gate portal.

(b) A facility may provide an entry in the telephone directory with the name, location, and phone number of the facility. Such directory entry may identify the business as a “cannabis facility.” The

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telephone directory shall not include: pricing of products, details regarding specific cannabis products, or cannabis photography or graphics related to the cannabis plant or cannabis products.

(c) Banners, sandwich boards, flags, billboards, placards, and persons waving signs are prohibited.

(d) All signage and advertising shall comply with the State of California Business and Professions Code Sections 26150 through 26155 and any modifications or relocations of these code sections. In addition, any form of advertisement or signage that includes pricing of cannabis and cannabis products, details related to specific cannabis products, or photography or graphics of the cannabis plans or cannabis products is prohibited except on a dedicated business website accessible only through an age gate portal.

(§ 2, Ord. 1465-24 (CM), eff. June 11, 2024)

Cannabis delivery businesses permitted to engage in delivery of cannabis and cannabis products inside the City of Watsonville are subject to the following requirements:

(a) A licensed facility shall not deliver cannabis goods to an address located on publicly owned land or any address on land or in a building leased by a public agency.

(b) A licensed facility shall comply with all requirements of State and local law pertaining to the cannabis permit and all subsequent policies, procedures and regulations which may be amended by the Community Development Department from time to time in order to enforce this chapter.

(§ 2, Ord. 1465-24 (CM), eff. June 11, 2024)

(a) Each facility shall maintain an inventory control and reporting system to track and report on all aspects of the facility including, but not limited to, such matters as cannabis tracking, inventory data, and gross sales (by weight and sale) and shall ensure that such information is compatible with the City’s recordkeeping systems and complies with State law.

The system must have the capability to produce historical transactional data for review by the City of Watsonville. All information provided to the City pursuant to this subsection shall be confidential and shall not be disclosed, except as otherwise may be required under the law. Such system must be authorized by the City Manager or their designee.

(b) Each applicant or permittee shall maintain at the premises all records and documents required by 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) The name, address, and telephone number of each patient and primary caregiver, along with a copy of the written documentation provided by each qualified patient designating his or her primary caregiver;

(3) The name, business address, and telephone number of each attending physician who provided a physician’s recommendation for any patient of the applicant or permittee;

(4) The records of all qualified patients with a valid identification card and primary caregivers with a valid identification card may be maintained by the applicant or permittee 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 this section;

(5) Complete and up-to-date records regarding the amount of cannabis cultivated, produced, harvested, stored, or packaged at its cultivation site;

(6) Complete and up-to-date manifest records regarding cannabis transfers from the applicant’s or permittee’s cultivation site to dispensing location(s), including the date and time of the transfer; the name and address of the cultivation facility and the name and address of the supplier if different from the cultivation facility; the amount, form, type, batch and lot number of cannabis transferred; the time of departure from the cultivation facility; the time of arrival at the dispensing location; the names of the employees distributing the product; and the name of the employee who received the product at the dispensing location;

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(7) Complete and up-to-date records documenting each transfer of cannabis from the applicant’s or permittee’s dispensing location to patients, including the amount provided, the form or product category in which the cannabis was provided, the date and time provided, the name of the employee making the transfer, and the amount of monetary or other transaction;

(8) All receipts of the applicant or permittee, including but not limited to all contributions and all expenditures incurred by the applicant or permittee for the cultivation and dispensing of cannabis; and

(9) Records demonstrating compliance with State and Federal rules and regulations regarding reporting and taxation of income received.

(c) The permittee shall review the information recorded in the track and trace system at least once every thirty (30) calendar days to ensure its accuracy, including at a minimum:

(1) Reconciling on-hand inventory of cannabis and cannabis product with the records in the track and trace system; and

(2) Reviewing the permittee’s authorized users and removing any users who are no longer authorized to enter information into the track and trace system.

(d) If a permittee finds a discrepancy between the on-hand inventory and the track and trace system, the licensee shall conduct an audit and notify the Department of Cannabis Control (DCC) and Watsonville City Manager in writing if the discrepancy is significant as defined in 4 CCR Section 15034.

(e) All records required by this section shall be maintained by the applicant or permittee for a period of seven (7) years and shall be made available by the applicant or permittee to the Zoning Administrator and any City official charged with enforcing the provisions of this Code upon request. (§ 2, Ord. 1465-24 (CM), eff. June 11, 2024)

(a) A permitted facility shall implement enough security measures to deter and prevent the unauthorized entrance into areas containing cannabis or can-

nabis products, and to deter and prevent the theft of cannabis or cannabis products at the facility. Except as may otherwise be determined by the City Manager or his/her designee(s), these security measures shall include, but shall not be limited to, all of the following:

(1) Alarm system (perimeter, fire, and panic buttons).

(2) Remote monitoring of alarm systems by licensed security professionals.

(3) Perimeter lighting systems (including motion sensors) for after-hours security.

(4) Perimeter security and lighting as approved by the Police Chief and Director of the Community Development Department or his/her designee.

(5) Preventing individuals from remaining on the premises of the facility if they are not engaging in an activity directly related to the permitted operations of the facility.

(6) Establishing limited access areas accessible only to authorized facility personnel.

(7) Except for live growing plants which are being cultivated at a cultivation operation, all cannabis and cannabis products shall be stored in a secured and locked vault or vault equivalent. All safes and vaults shall be compliant with Underwriters Laboratories burglary-resistant and fire-resistant standards. All cannabis and cannabis products, including live plants that are being cultivated, shall be kept in a manner as to prevent diversion, theft, and loss.

(8) Installing twenty-four (24) hour security surveillance cameras of at least HD-quality to monitor all entrances and exits to and from the premises, all interior spaces within the facility which are open and accessible to the public, all interior spaces where cannabis, cash or currency is being stored for any period of time on a regular basis and all interior spaces where diversion of cannabis could reasonably occur. All cameras shall record in color. All exterior cameras shall be in weatherproof enclosures, shall be located so as to minimize the possibility of vandalism, and shall have the capability to automatically switch to black and white in low light conditions. The facility shall be responsible for ensuring that the security surveillance camera’s footage is remotely

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accessible by the City Manager or his/her designee(s), and that it is compatible with the City’s software and hardware. In addition, remote and real-time, live access to the video footage from the cameras shall be provided to the City Manager or his/her designee(s). Video recordings shall be maintained for a minimum of ninety (90) days and shall be made available to the City Manager or his/her designee(s) upon request. Video shall be of sufficient quality for effective prosecution of any crime found to have occurred on the site of the facility and shall be capable of enlargement via projection or other means. Internet protocol address information shall be provided to the Watsonville Police Department by the facility, to facilitate remote monitoring of security cameras by the Department or its designee.

(9) Sensors shall be installed to detect entry and exit from all secure areas and shall be monitored in real time by a security company licensed by the State of California Bureau of Security and Investigative Services.

(10) Panic buttons shall be installed in all facilities with direct notification to the Watsonville Police Department dispatch and shall be configured to immediately alert dispatch for the Watsonville Police Department.

(11) Having a professionally installed, maintained, and monitored real-time alarm system by a security company licensed by the State of California Department of Consumer Affairs Bureau of Security and Investigative Services. Such security system shall be operational twenty-four (24) hours a day seven (7) days a week.

(12) Any bars installed on the windows or the doors of the facility shall be installed only on the interior of the building.

(13) Security personnel shall be on site during operating hours as well as any hours in which employees may be on site before or after regular operating hours. Security personnel must be at least twenty-one (21) years of age, licensed by the State of California Bureau of Security and Investigative Services personnel and comply with Chapters 11.4 and 11.5 of Division 3 of the Business and Professions

Code. Security personnel shall be subject to the prior review and approval of the City Manager or his/her designee(s), with such approval not to be unreasonably withheld. Firearms may be carried by security personnel while they are on duty if authorized by the Chief of Police.

(14) Each facility shall have the capability to remain secure during a power outage and shall ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage.

(15) Entrance areas are to be locked at all times and under the control of a designated responsible party that is either (i) an employee of the facility, or (ii) a licensed security professional.

(i) For retail facilities, the entrance area to the sales floor is to be under the control of a designated responsible party that is either (aa) an employee of the facility, or (bb) a licensed security professional, during hours of operation.

(16) Each facility shall have an accounting software system in place to provide point-of-sale data as well as audit trails for both product and cash, where applicable.

(17) Each facility shall demonstrate to the Chief of Police, City Manager or their designees, compliance with the State’s track and trace system for cannabis and cannabis products, as soon as it is operational.

(18) Each facility shall have a professionally installed video surveillance system, access control and intrusion alarm systems designed to protect the inventory, facility, and employees. Each business shall have network security protocols that are certified by Underwriters Laboratories.

(19) Exterior vegetation shall be planted, altered and maintained in a fashion that precludes its use as a hiding place for persons on the premises.

(20) Emergency access and emergency evacuation plans that are in compliance with State and local fire safety standards.

(b) Each facility shall identify a designated security representative/liaison to the City of Watsonville, who shall be reasonably available to meet with the City Manager or his/her designee(s) regarding

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any security related measures and/or operational issues. The designated security representative/liaison shall, on behalf of the cannabis facility, annually maintain a copy of the current security plan on the cannabis facility to present to the City Manager or his/her designee upon request that meets the following requirements:

(1) Confirms that a designated manager will be on duty during business hours and will be responsible for monitoring the behavior of employees.

(2) Identifies all managers of the cannabis facility and their contact phone numbers.

(3) Confirms that first aid supplies and operational fire extinguishers are in the service areas and the manager’s office.

(4) Confirms that burglar, fire, and panic alarms are operational and monitored by a licensed security company twenty-four (24) hours a day, seven (7) days a week, and provides contact information for each licensed security company.

(5) Identify enough licensed, interior and exterior security personnel who will monitor individuals inside and outside the facility, the parking lot, and any adjacent property under the business’ control.

(6) Confirm that the licensed security personnel shall regularly monitor the parking lot and any adjacent property to ensure that these areas are: (i) free of individuals loitering or causing a disturbance; (ii) are cleared of employees and their vehicles one-half (1/2) hour after closing.

(c) As part of the application and permitting process each facility shall have a storage and transportation plan, which describes in detail the procedures for safely and securely storing and transporting all cannabis, cannabis products, any hazardous materials that may be used by the business, and any currency.

(d) The facility shall cooperate with the City whenever the City Manager or his/her designee(s) makes a request, with or without prior notice, to inspect or audit the effectiveness of any security plan or of any other requirement of this chapter.

(e) A facility shall notify the City Manager or his/her designee(s) within twenty-four (24) hours after discovering any of the following:

(1) Significant discrepancies identified during inventory. A significant discrepancy in inventory is defined as a five (5%) percent difference between the licensee’s physical inventory and the inventory recorded in the track and trace system.

(2) Diversion, theft, loss, or any criminal activity involving the facility or any agent or employee of the facility.

(3) The loss or unauthorized alteration of records related to cannabis, customers or employees or agents of the facility.

(4) Any other breach of security.

(f) Compliance with the foregoing requirements shall be verified by the Zoning Administrator before commencing business operations. The Zoning Administrator may supplement these security requirements once operations begin upon request of the business owner.

(§ 2, Ord. 1465-24 (CM), eff. June 11, 2024)

(a) Minimum Requirements. The following video surveillance requirements shall apply to all facilities:

(1) Prior to exercising the privileges of a facility, an applicant must install a fully operational video surveillance and security camera recording system. The recording system must record in digital format and meet the requirements of this chapter.

(2) All video surveillance records and recordings must be stored in a secure area that is only accessible to an applicant’s or permittee’s management staff.

(3) Video surveillance records and recordings must be made available upon request to the Division, the relevant local licensing authority, or any other State or local law enforcement agency for a purpose authorized by the Municipal Code or for any other State or local law enforcement purpose.

(4) Video surveillance records and recordings of point-of-sale areas shall be held in confidence by all employees and representatives of the Division, except that the Division may provide such records and recordings to the relevant local licensing authority, or any other State or local law enforcement

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agency, for a purpose authorized by the Municipal Code or for any other State or local law enforcement purpose.

(b) Video Surveillance Equipment.

(1) Video surveillance equipment shall, at a minimum, consist of digital or network video recorders, cameras capable of meeting the recording requirements described in this subsection (b), video monitors, digital archiving devices, and a color printer capable of delivering still photos.

(2) All video surveillance systems must be equipped with a failure notification system that provides prompt notification to the applicant or permittee of any prolonged surveillance interruption and/or the complete failure of the surveillance system.

(3) Permittees are responsible for ensuring that all surveillance equipment is properly functioning and maintained so that the playback quality is suitable for viewing and the surveillance equipment is capturing the identity of all individuals and activities in the monitored areas.

(4) All video surveillance equipment shall have sufficient battery backup to support a minimum of four (4) hours of recording in the event of a power outage.

(c) Placement of Cameras and Required Camera Coverage.

(1) Camera coverage is required for all limited access areas, point-of-sale areas, security rooms, all points of ingress and egress to limited access areas, all areas where cannabis or cannabis-infused product is displayed for sale, and all points of ingress/egress to the exterior of the licensed premises.

(2) Camera placement shall be capable of identifying activity occurring within twenty (20') feet of all points of ingress and egress and shall allow for the clear and certain identification of any individual and activities on the licensed premises.

(3) At each point-of-sale location, camera coverage must enable recording of the patients’, caregivers’ or customer(s)’ and employee(s)’ facial features with sufficient clarity to determine identity.

(4) All entrances and exits to the facility shall be recorded from both indoor and outdoor vantage points.

(5) The system shall be capable of recording all predetermined surveillance areas in any lighting conditions. If the licensed premises has a cannabis cultivation area, a rotating schedule of lighted conditions and zero-illumination can occur as long as ingress and egress points to flowering areas remain constantly illuminated for recording purposes.

(6) Areas where cannabis is grown, tested, cured, manufactured, or stored shall have camera placement in the room facing the primary entry door at a height which will provide a clear unobstructed view of activity without sight blockage from lighting hoods, fixtures, or other equipment.

(7) Cameras shall also be placed at each location where the following activities occur:

(i) Weighing, packaging, transport, preparation, or tagging of cannabis or cannabis products.

(ii) Storage and counting of cash. (8) At least one (1) camera must be dedicated to record the access points to the secured surveillance recording area.

(d) Location and Maintenance of Surveillance Equipment.

(1) The surveillance room or surveillance area shall be a limited access area.

(2) Surveillance recording equipment must be housed in a designated, locked and secured room or other enclosure with access limited to authorized employees, agents of the City, County and State for a purpose authorized by this Code or for any other State or local law enforcement purpose, and service personnel or contractors.

(3) Permittees must keep a current list of all authorized employees and service personnel who have access to the surveillance system and/or room on the licensed premises. Permittees must keep a surveillance equipment maintenance activity log on the licensed premises to record all service activity including the identity of the individual(s) performing the service, the service date and time and the reason for service to the surveillance system.

(4) Off-site monitoring and video recording storage of the licensed premises by the permittee or an independent third party is authorized as long as

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standards exercised at the remote location meet or exceed all standards for on-site monitoring.

(5) Each cannabis licensed premises located in a common or shared building must have a separate surveillance room/area that is dedicated to that specific licensed premises. Commonly owned facilities located in the same local jurisdiction may have one (1) central surveillance room located at one (1) of the commonly owned licensed premises which simultaneously serves all of the commonly owned facilities. The facility that does not house the central surveillance room is required to have a review station, printer, and map of camera placement on the premises. All minimum requirements for equipment and security standards as set forth in this section apply to the review station.

(e) Video Recording and Retention Requirements.

(1) All camera views of all limited access areas must be continuously recorded twenty-four (24) hours a day. The use of motion detection is authorized when a permittee can demonstrate that monitored activities are adequately recorded.

(2) All surveillance recordings must be kept for a minimum of ninety (90) days and be in a format that can be easily accessed for viewing. Video recordings must be archived in a format that ensures authentication of the recording as legitimately captured video and guarantees that no alteration of the recorded image has taken place.

(3) The permittee’s surveillance system or equipment must have the capabilities to produce a color still photograph from any camera image, live or recorded, of the licensed premises.

(4) The date and time must be embedded on all surveillance recordings without significantly obscuring the picture. The date and time must be synchronized with any point-of-sale system.

(5) Time is to be measured in accordance with the official United States time established by the National Institute of Standards and Technology and the U.S. Naval Observatory in Pacific time. (§ 2, Ord. 1465-24 (CM), eff. June 11, 2024)

Based on the information set forth in the application, the Zoning Administrator or Planning Commission may impose reasonable terms and conditions on the proposed operations of the facility in addition to those specified in this chapter.

(§ 2, Ord. 1465-24 (CM), eff. June 11, 2024)