REPORT TO COUNCIL
SUBJECT
Title
Update and Direction on Commercial Cannabis-Related Items [Council Pillar: Promote and Enhance Economic and Housing Development]
Report
BACKGROUND
The passage of Proposition 64, the Adult Use of Marijuana Act (AUMA), on November 8, 2016, legalized personal recreational use by persons 21 and over, and regulated commercial activities related to cannabis. Subsequently, the State legislature passed Senate Bill 94, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), unifying regulations on medical and non-medical commercial cannabis activities and the personal use of cannabis.
On November 21, 2017, the City Council adopted Ordinance No. 1973, which temporarily prohibited all commercial cannabis activity until January 1, 2019 and imposed reasonable restrictions on marijuana growth for personal use. This Ordinance was further amended on November 27, 2018 and May 21, 2019 to extend the temporary ban of all commercial cannabis activity until June 30, 2020.
As of January 2018, the State of California ("State") began licensing of commercial activity, allowing for six general license types for commercial cannabis businesses: retail (including delivery); cultivation; manufacturing; transportation; distribution; and testing. Prior to the issuance of a State license, the State requires, among other items, a local license if local regulations have been enacted.
As a potential revenue enhancement vehicle, Council directed staff to prepare a ballot measure for November 2018 that would allow the City to collect a Cannabis Business Tax in the event commercial cannabis was permitted in the City. On July 16, 2018, Council adopted Resolutions No. 18-8569 and 18-8570 to call a Special Election to submit a Cannabis Business Tax ballot measure ("Measure M") to the voters of Santa Clara. Measure M was passed with an approval of 76.7% of Santa Clara voters on November 6, 2018. The voters authorized an initial tax rate on commercia...
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