Alameda City Council and Community to Weigh in on Major Policy Issues in Alameda Cannabis Regulation

On July 5, the Alameda City Council voted 4-1 to approve a referral directing staff to propose regulations for cannabis businesses in Alameda. While the meeting left many questions about what those regulations will look like unanswered, including whether Alameda will allow recreational cannabis businesses or only medical, the City Council is pressing for regulations to be in place by January 1, 2018, when the State is scheduled to begin issuing licenses under MAUCRSA.

On September 5, at 7:00 p.m., the City Council will be meeting for a workshop on proposed regulations. The staff released a draft ordinance in anticipation of this meeting, and will be receiving feedback and direction from the Council and community. The draft ordinance can be found here, and detail on permitted locations can be found here and here. Below is an overview of staff’s initial proposal, and the major unresolved policy issues on which staff will be seeking direction.

Proposed Regulations Overview:

  • Structure of proposed ordinance. The proposed ordinance will repeal the Alameda Municipal Code’s current prohibition on medical dispensaries and cultivation (Alameda Municipal Code § 30-5.15), add new sections conditionally permitting cannabis businesses and uses (Alameda Municipal Code Draft Ordinance (Draft Ordinance) Article XVI; § 30-10), and amend Alameda’s tobacco smoking prohibitions so that the prohibitions also apply to cannabis smoking (Draft Ordinance §§ 24-11, 24-12).
  •  Activity and permit limits. The proposed regulations allow for both medical and recreational commercial cannabis activity, including cultivation, manufacturing, testing, research and development, distribution and delivery, and dispensary. The regulations limit the number of dispensary/retailer permits in Alameda to three, but do not limit the number of permits issued in any other category.
  • Location limits. Staff’s proposed ordinance outlines particular areas where permittees can engage in (1) cultivation, (2) industry (e.g. production, distribution, processing, testing, research and development), and (3) retail activity. Draft Ordinance § 30-10.1(f). The proposal also recommends permitting at most one dispensary on Park Street and one on Webster Street. Because Alameda Point has Federal lands that have not been conveyed to the City, and City lands that have not been conveyed to private parties, the staff is concerned about allowing cannabis activity that is prohibited under Federal law, and has recommended the City prohibit cannabis activity on any property that has not transferred to private ownership, including City property.
  • Outdoor cultivation and on-site consumption prohibited. The draft ordinance prohibits both commercial and personal cannabis cultivation outdoors, and staff has recommended that the City initially prohibit on-site consumption.
  • Fees and Taxes. The City will be conducting a fee study to determine what fees and taxes Alameda can and should collect from cannabis businesses. Local taxes on cannabis businesses will have to be approved by voters, and the City is currently surveying of Alameda residents about the issue. It is likely the November 2018 ballot will ask voters to approve a local cannabis tax rate cap.
  • Dual permit structure. The draft ordinance uses a dual permit structure, where businesses must first obtain a Conditional Use Permit (CUP) before applying for and obtaining a Regulatory Permit. The CUP regulates land use concerns and allows the community to weigh in on the location before applicants apply for Regulatory Permit from the Police Department. The application requirements for obtaining a CUP are outlined in the Draft Ordinance Section 3-10.1, and the minimum requirements for obtaining a Regulatory Permit, subject the discretion of the Chief of Police, are currently outlined in the Draft Ordinance Section 6-59.5.
  • Priority for residents. Although the referral asked the staff to consider preferences for Alameda residents of three or more years, the draft ordinance currently does not require Alameda residency or give priority to Alameda residency in issuing permits. The regulations also do not address how the selection process for dispensary/retail permits will take place. It is possible the selection process will consider residency. The ordinance currently states that all businesses “shall provide maximum feasible opportunities for City Alameda residents to apply for jobs,” and encourages “local hires.” Draft Ordinance § 6-59.10.

Major Policy Issues:

  • Will Alameda regulations allow for recreational cannabis businesses, or only medical cannabis businesses?
  • Will Alameda permit all types of cannabis business activities (e.g. manufacturing, cultivation, distribution, dispensaries) or only allow certain types?
  • What will the permit limit, if any, be for each of these different types of activity?
  • If there are permit limits, what will the selection process entail?
  • Will Alameda permit on-site consumption?
  • Will Alameda allow cannabis activity on City-owned land?
  • Will Alameda allow outdoor cultivation for personal use? Will Alameda allow outdoor cultivation for both personal and commercial use?

Following the September 5 workshop, these draft regulations will be subject to multiple rounds of revisions, including a 1st and 2nd reading of the draft ordinances once more details have been hammered out. We will be posting an update on the policy direction of these regulations following the September 5 meeting.