LAKEPORT, Calif. – The Board of Supervisors this week held its first consideration of a new set of draft regulations to guide the formation of a local cannabis industry.
The board hosted the workshop during a special meeting on Tuesday evening in the board chambers at the Lake County Courthouse in Lakeport.
Before beginning the workshop, the board unanimously approved a resolution confirming existence of a local emergency due to the storms. Sheriff Brian Martin had first declared the emergency Jan. 13.
Board Chair Jeff Smith held the length of the meeting to a total of three hours, first having county staff make presentations on several facets of the proposed regulations before taking public input.
The draft regulations – which are an update of Article 72, or Measure N, passed by voters in 2014 – resulted from a series of discussions held during Lake County Planning Commission meetings during the second half of last year, according to Community Development Director Bob Massarelli.
He suggested the board think about the proposed rewritten ordinance as a living document that would change and be updated as state law evolves over the next five years.
In July he had proposed to the board a process that included working with the planning commission to develop the conceptual ordinance, along with proposed staffing and implementation, which would be brought to the board to give approval on its direction. That is where the process was at on Tuesday.
After staff gets direction from the board, they will go back to the planning commission to develop an updated version of the ordinance; there will be a 90-day review period in which the county will consult with local tribes and the public; staff will return to the commission to create the final ordinance; and the final ordinance will be presented to the supervisors, he said.
“So we're in the middle of the process right now,” Massarelli said, explaining there was to be no action to be taken that night, but that he was seeking guidance from the board on how to proceed.
Massarelli said there were four key areas to cover: private use; manufacturing, distribution and transportation; dispensaries, retail and micro businesses; and cultivation. The board's discussion on Tuesday focused primarily on the commercial aspects, with cultivation to be the focus of an upcoming workshop.
He said staff believes that, properly regulated and managed, cannabis can be a sustainable and viable business in the county, and that it will add economic diversity and create jobs.
While there are strong feelings on both sides of the issue, Massarelli said there appears to be a developing consensus to support the industry, as evidenced by the passage of the county's Measure C cannabis tax and, at the state level, Proposition 64. During the course of the meeting it was noted that the state law is necessitating some of the proposed changes to county regulations.
From a business point of view, Massarelli said it's important to know that other counties are ahead of Lake County in developing their regulations. He added that the county is not, however, in the tail end.
He also acknowledged that, no matter what the board does, the black market will continue to flourish. In the case of Colorado, which was ahead of California in recreational use legalization, the black market has grown.
Massarelli said the effort's goals include protecting the public health, safety and welfare, and bringing the existing cannabis industry “out of the shadows” and into compliance in order to allow its members to become legitimate members of the local economy.
Commercial cultivation is to be limited to defined areas, the county will promote collocation of multiple facilities – indoor nurseries, manufacturing, testing, distribution and transportation – at certain sites, and permits would not be assignable, limited to specific parcels or have specific time limits.
Proposition 64 allows for medical personal use for qualified patients or caregivers with up to six plants per parcel on any zoning – even community growth boundaries, which are prohibited under the current Article 72. However, he said the county can limit it to indoor growing, which is a proposal for smaller parcel sizes.
Supervisor Rob Brown said he was concerned about being able to enforce the proposed new rules, as the county doesn't have the staffing or the way to fund more employees for the Community Development Department.
He also took issue with the idea that Lake County is far behind in crafting its new regulations, saying he didn't see evidence of the other counties that are said to be farther along in the process being successful.
Massarelli assured the board that he can show them how more staff for his department can be funded through the proposed regulations.
Supervisor Tina Scott pointed out that the regulations are intertwined, and if the board tries to take them apart to work on them, they will risk not having the funding the rules are expected to generate. Massarelli agreed, explaining that's why he wants the board to take the regulations in one piece.
Creating 'cannabis hubs'
In presenting to the board the topic of manufacturing, distribution and transfer, Massarelli said that area would be important if the county wanted a viable cannabis industry.
He suggested the creation of “cannabis hubs,” campus-like facilities where processing and manufacturing, research and development, and marketing can be centrally located within a two-mile corridor along three of the county's main highways – 20, 29 and 53.
The type of zoning for those facilities was a key point of discussion. Potential zoning classifications for those hubs included planned development commercial, manufacturing, industrial park and commercial. There also was the suggestions of possibly collocating those hub-related uses with cultivation sites.
Smith said he was leaning toward planned development commercial, which Massarelli said is the most restrictive, adding that as the industry develops in the future, other zoning areas can be opened up to cannabis hubs. Supervisor Jim Steele said it's easier to back up and loosen regulations than to tighten them later.
The board's consensus was to look at the planned development commercial zoning for the regulations, which received a mixed reaction during public comment.
Barry Fulman, a professional consultant with Gro-Pro's LLC of Santa Rosa and a landowner in the Soda Bay area, said he also was leaning toward the planned development commercial zoning because of the ability to control issues and the number of businesses, and ensure security.
Other comments, though, focused on that zoning classification's restrictive aspect and concerns that it could make it more difficult on smaller operations to the point of forcing them out. Some of the commenters asked that the board first consider allowing smaller manufacturing facilities rather than focusing first on bigger operations.
Michael Green, on behalf of the Lake County Growers, said manufacturing is a very important subject in the larger cannabis discussion, and noted his group wasn't opposed to starting out with planned development commercial zoning. However, he pointed out that there are a whole range of licensing types to consider.
Erin Carlstrom, an attorney for the Rogoway Law Group, which represents the cannabis industry, and a former Santa Rosa City Council member, said both Santa Rosa and Sonoma County have treated manufacturing as an exclusively industrial use and put them in industrial zones, allowing collocation in some cases.
She said there are different sizes and types of manufacturing operations, some of which are more closely analogous to processing.
The restrictive zoning rules in Sonoma County have created a real estate boom and priced out some operators, said Carlstrom, who suggested the board move forward with collocation, and make it available in a wide variety of zoning districts in order to generate revenue.
Cannabis grower John Brosnan said he believed the county will grow into a cannabis hub, but he felt it was crucial to allow manufacturing on smaller sites, holding it close to where it's grown to allow growers to be accountable for their products.
Massarelli said Tuesday's discussion was the first time his staff had gotten a lot of input on the manufacturing aspects, which he found useful. He suggested moving forward with planned development commercial zoning and taking a closer look at boutique and small manufacturing operations.
In transitioning to a discussion of retail facilities, such as dispensaries and micro businesses, Massarelli said some cities concentrate dispensaries in one area. He said there was also the question of how many of those facilities should be allowed.
Currently, Article 72 prohibits such facilities from being within 1,000 feet of public or private schools through 12th grade, developed parks containing playground equipment, drug and alcohol rehabilitation facilities, child care facilities or nursery schools, and church or youth-oriented facilities catering to or providing services primarily intended for minors. He said Proposition 64 reduces that distance to 600 feet.
He said staff had done a calculation of how many dispensaries to allow in the county based on population. The number they came up with was 25, or five per supervisorial district. However, he said the feedback on that number was that it was too many and that there isn't the demand to support it.
At the same time, Massarelli said reducing the number to just one commercial facility per district would create a monopoly. “This is a very different number to come up with.”
He said Proposition 64 doesn't allow for a concentration of retail facilities in one area, that they must be spread out.
Massarelli cited the experience of Denver, which initially started out allowing for unlimited retail facilities. At one time, it had more than 400 before putting a cap on them and issuing licenses by lottery. He said Denver learned the hard way that it can't be left wide open, with an unlimited number.
Arriving at a reasonable cap for Lake County, where there are questions about what will be locally driven and what could result from cannabis tourism, “is not an easy one to answer,” he said.
Smith said he'd be interested in getting input from interim Clearlake Police Chief Lt. Tim Celli about working with dispensaries in the city, which is the only area currently allowing for dispensaries in Lake County.
Scott asked about rents, pointing out that there already are empty storefronts and businesses scraping by. She said they needed to make sure they weren't putting other businesses in jeopardy of not succeeding.
She asked if Clearlake rents rose due to the presence of dispensaries. Smith, who owns rental property in the city of Clearlake, said he didn't think so.
“Let's keep this as a work in progress, and continue to refine it,” suggested Massarelli, noting it may need to be further researched and he wanted to hear public input.
Michael Green of Lake County Growers told the board that dispensaries and retail outlets will be among the most controversial elements of the bigger regulatory picture. He said they also are waiting for the state to align the rules created by Proposition 64 and the California Medical Marijuana Regulation and Safety Act.
Jon Hanson, owner of the smoke shop MJ's Place in Upper Lake, previously has a dispensary several years ago before the county shut them down.
He said he wants to reopen a dispensary in town, and has a license through the state. Hanson suggested that each community should get to vote on how many dispensaries they want, and added that he's gotten support from the town council about reopening such a facility.
Middletown resident Margaret Greenley, owner of Lovie's Garden Supply, asked if she could sell cannabis nursery stock at her store, or if it needed to go through a dispensary or other zoned land.
Massarelli said his staff's interpretation was that, from a land use perspective, there wasn't a huge difference between selling roses and ornamentals or marijuana seedlings.
However, a short time later in the meeting, County Agriculture Commissioner Steve Hajik said nurseries need a license from the California Department of Agriculture, which doesn't recognize cannabis as an agricultural commodity, while the California Department of Pesticide Regulations does.
“It's in a state of limbo right now,” he said.
Carlstrom returned to the microphone to urge against a cap on retail facilities. She said Sonoma County has limited their retail establishments to nine for a population of around 500,000. That, she suggested, provided Lake County with an opportunity to serve other populations by keeping a more liberal ordinance.
Smith ended the meeting right at 8 p.m., thanking the group for being courteous and concise, adding that he thought the board had heard a lot of good information.
He also tentatively scheduled another three-hour workshop for 5 p.m. Tuesday, Feb. 21, for the purpose of a discussion focused on the proposed regulations regarding cannabis cultivation.
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Supervisors, community discuss proposed cannabis industry rules
- Elizabeth Larson
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