RESOURCE MANAGEMENT AGENCY - M. CHAMBLESS, INTERIM RMA DIRECTOR

(To be heard at 9:00 AM or as soon thereafter as the matter may be heard)

Receive and consider Planning Commission Recommendation and Conduct Public Hearing for the Adoption of Amendments to San Benito County Code Cannabis Regulations to Simplify and Streamline Applications and Permit Outdoor Cultivation Outside Exclusion Zone

SBC FILE NUMBER: 790 

ORDINANCE NO: 1036

The regulations governing commercial cannabis permitting have been in effect for more than three years, yet no commercial cannabis permits have been issued to date.  The consensus among potential cannabis permit holders is that the current permitting process is too cumbersome and time-consuming with little to no degree of certainty about the outcomes.

Additionally, the RMA has received input from potential cannabis growers expressing interest in outdoor cultivation based largely on the region's climate and reduced start-up and utility costs in relation to indoor cultivation.

The proposed package of amendments to the current commercial cannabis regulations is intended to provide greater opportunity for cannabis businesses to obtain permits without sacrificing community values related to neighborhood preservation, environmental protection and community safety.

All proposed cannabis businesses require business permits from the Agricultural Commission in addition to Conditional Use Permits from the Resource Management Agency.  The current regulations limit the application periods and require pre-application applicant screening. This process results in excessive waiting periods for would-be permit applicants and the screening process is largely duplicative of existing background checks and evaluation conducted by RMA staff and state licensing requirements. Proposed changes to Chapter 7.02 would eliminate the application period and pre-application evaluation process, which would allow prospective cannabis businesses to apply for their conditional use permit at any time, concurrent to the processing of their business permits through the Ag Commission.

The current ordinance also requires cannabis employees to apply for a work permit for purposes of verifying the employees age, identification, authorization to work, and submitting to a background check.  Recognizing that all cannabis businesses are required to comply with existing state law, including employment law, this requirement unnecessarily adds to the processing time and delays inherent in the existing permitting process.  Eliminating the employee work permit requirement would place the burden of conducting background checks with cannabis businesses rather than with the County.  The delays inherent in conducting background checks are not applied to other agricultural workers and create an impediment to efficient permit processing.

Existing codes requirements restrict the zone districts where cannabis distribution is allowed. Distribution is a separate license type under the state Department of Cannabis Control and allows any cultivator or manufacturer to transport their products to other licensed cannabis businesses, such as retail establishment.  The code also currently prohibits cannabis businesses from being permitted in the Airport Safety (AS) District.  The AS district extends nearly a mile in all directions from the Hollister airport runway and encompasses properties, such as the amazon distribution center in the City of Hollister.  Modifying the code to allow cannabis businesses in limited portions of the AS District provides opportunities in areas of the County that are suitable for commercial use.

The existing code requires a variance to allow a reduction in any one of the setbacks that apply to cannabis businesses. Variances are unique, in that they are subject to statutory justification that the subject parcel has some physical characteristic that differentiates it from others with similar zoning in addition to a findings that the application of site standards (in this case setbacks) would represent a hardship. 

The proposed code amendments include a revision that would replace the variance requirement with an exception process.  This change would allow some discretion when a setback does not achieve a County objective, but the variance findings cannot easily be made. One example is the setback that requires all cannabis businesses to be setback a minimum of 100 feet from all property lines.  For parcels not located in proximity to public roads or adjacent dwellings, this setback could be overly restrictive and require excessive grading for access roads. In this situation variance findings may be difficult to make and an exception process allows some flexibility in considering the context and potential impact to surrounding properties.

Finally, the existing code prohibits outdoor cannabis cultivation.  The proposed amendments include removing this restriction to allow outdoor cultivation in those portions of the County that currently allow outdoor cultivation of industrial hemp.  Outdoor cannabis farms would not be allowed in the designated hemp exclusion areas, which provide 1-mile buffers from City limits, CSA boundaries, and wine/hospitality sites within the San Benito Wine/Hospitality Priority Area.

The high costs of indoor cultivation are an economic barrier to entry for many local non-cannabis farmers seeking to cultivate cannabis. Cultivators in San Benito County therefore, are far more likely to come from out of the area, given the high overhead associated with indoor farming.

RMA staff met with County Sheriff Eric Taylor to assess the potential impact to public safety posed by the addition of outdoor cannabis cultivation.  Sheriff Taylor stated his concern about the impact on law enforcement resources and raised issues that have arisen from legalized hemp cultivation.  Sheriff Taylor acknowledged that there are few, if any, security restrictions applied to hemp, while commercial cannabis is subject to enforcement by several state agencies. All cannabis businesses, which would include outdoor cultivation sites, are required to submit a security plan, which details security access, locations of all cameras and security ingress/egress points.

The confidential security plan would be routed to the Sheriff's Office for review and approval and a copy maintained by both the Sheriff and RMA staff. The camera and alarm systems must be routed to the Sheriff's Office as well, so that any breach is immediately communicated to law enforcement for response.  Conditions of project approval require cannabis business operators to report any breaches or other incidents to both the County Sheriff and the RMA.  

With these safeguards in place, RMA believes that the safety and security of both the sites and the surrounding community can be maintained.  It is worth noting that the state agencies overseeing cannabis businesses each have their own enforcement arms and inspection staff.

The Department of Cannabis Control (DCC), the State Water Resources Control Board (SWRCB) and Department of Fish and Wildlife (DFW) all play a role in overseeing cannabis businesses in the state and have their own licensing and permitting requirements in addition to those imposed by local jurisdictions.  

Cannabis businesses must maintain current state licenses through the DCC in order to operate in California.  Additionally, the DCC maintains communication with all local jurisdictions to further ensure that the businesses are in compliance with local regulations and hold all required local permits and licenses.  The additional layers of enforcement and oversight represented by the state agencies, will help to ensure that cannabis businesses, including outdoor cultivation sites, operate in compliance with all local regulations.

Conclusion

While the proposed revisions are contained in a single agenda item, they are intended to be viewed individually and subject to approval, denial or revision by the Board. In other words, it is hoped that even if the Board does not support approval of one or two proposed revisions, that the remaining code changes can be considered independently.