HomeMy WebLinkAbout2023-10-24; City Council; ; Adoption of Ordinance No. CS-460 – Non-Storefront Retail Medicinal Cannabis Delivery Service BusinessesCA Review CKM
Meeting Date: Oct. 24, 2023
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Faviola Medina, City Clerk Services Manager
faviola.medina@carlsbadca.gov, 442-339-5989
Subject: Adoption of Ordinance No. CS-460 – Non-Storefront Retail Medicinal
Cannabis Delivery Service Businesses
District: All
Recommended Action
Adopt Ordinance No. CS-460 amending Carlsbad Municipal Code Chapter 8.90, adding Chapter
8.95 and repealing Section 5.04.160 of the Carlsbad Municipal Code to allow non-storefront
retail medicinal cannabis delivery service businesses consistent with the Medicinal Cannabis
Patients’ Right to Access Act, also referred to as Senate Bill 1186.
Executive Summary
Consistent with SB 1186, staff are asking the City Council to adopt Ordinance No. CS-460 that
will allow the establishment of non-storefront retail medicinal cannabis delivery service
businesses in the city subject to current zoning requirements, security, public health and safety
requirements, licensing requirements, business license taxes and compliance with restrictions
imposed on cannabis businesses by state law and regulations issued by the California
Department of Cannabis Control.
Explanation & Analysis
Ordinance No. CS-460 was introduced and first read at the City Council meeting held on Oct. 17,
2023. On a motion by Mayor Pro Tem Bhat-Patel, seconded by Council Member Acosta, the City
Council voted 5-0 to introduce Ordinance No. CS-460. The second reading allows the City
Council to adopt the ordinance, which will become effective on Jan. 1, 2024.
Fiscal Analysis
The proposed ordinance includes language authorizing the City Council to impose by resolution
a nonrefundable fee to reimburse the city for its reasonable and necessary costs in receiving,
processing, reviewing, and inspecting applications, and reviewing renewal requests or appeals
for a medicinal cannabis delivery service license. This fee would be in addition to the business
license fees and taxes required by Carlsbad Municipal Code Chapter 5.08
Because the medicinal cannabis delivery service license is a new program with an unknown
volume of applicants, staff are uncertain of the amount of city time and costs that will be
Oct. 24, 2023 Item #3 Page 1 of 18
required to process such licenses. Staff will monitor license activity over the next 12 to 18
months and if found justified, propose the City Council adopt a license fee consistent with City
Council Policy Statement No. 95 (cost recovery policy for fees and charges for services).
Next Steps
The City Clerk Services Manager will have the ordinance, or a summary of the ordinance,
published in a newspaper of general circulation within 15 days following adoption of the
ordinance.
Environmental Evaluation
The proposed ordinance is exempt from further environmental review under the California
Environmental Quality Act in accordance with CEQA Guidelines Section 15268 (statutory
exemption) and 15061(b)(3) (common sense exemption). A notice of exemption was prepared
for the project in accordance with the CEQA Guidelines sections 15061 and 15062.
A notice of intended decision regarding the environmental determination was advertised on
July 31, 2023, and posted on the city’s website. The notice included a general description of the
project, the proposed environmental findings, and a general explanation of the matter to be
considered. The findings and determination contained in that notice are to be declared as final
on the date of the noticed decision, unless appealed as provided by the procedures
commencing in Chapter 21.54 (Procedures, Hearings, Notices, and Fees) of the city’s Zoning
Ordinance.
The city received no comment letters from the public regarding the prospective environmental
determination. Since no appeal was filed, the city planner’s written decision is final and the
CEQA determination is not within the City Council’s purview. The notice of exemption
demonstrates that the project qualifies for the exemption: None of the exceptions to
categorical exemptions listed in the CEQA Guidelines section 15300.2 or Chapter 19.04 of the
Carlsbad Municipal Code have been triggered, and no substantial evidence has been submitted
to the city that would support a finding that the exemption requirements would not be
satisfied. With the appropriate environmental clearances in place, all the city’s procedural
requirements and relevant aspects of CEQA have been satisfied.
Exhibit
1.Ordinance No. CS-460
Oct. 24, 2023 Item #3 Page 2 of 18
Exhibit 1
ORDINANCE NO. CS-460
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AMENDING CHAPTER 8.90, ADDING CHAPTER 8.95, AND
REPEALING SECTION 5.04.160 OF THE CARLSBAD MUNICIPAL CODE TO
ALLOW NON-STOREFRONT RETAIL MEDICINAL CANNABIS DELIVERY
SERVICE BUSINESSES CONSISTENT WITH THE MEDICINAL CANNABIS
PATIENTS’ RIGHT TO ACCESS ACT, ALSO REFERRED TO AS SENATE BILL 1186
WHEREAS Chapter 26 (commencing with Section 26320) to Division 10 of the Business and
Professions Code, referred to as the Medicinal Cannabis Patients’ Right to Access Act (“MCPRAA”),
prohibits cities from, on or after January 1, 2024, adopting or enforcing any regulation that prohibits
the retail sale by delivery within the local jurisdiction of medicinal cannabis to medicinal cannabis
patients or their primary caregivers; and
WHEREAS, the MCPRAA further prohibits cities from adopting or enforcing any regulations on
or after Jan. 1, 2024, that have the effect of prohibiting the retail sale by delivery within the local
jurisdiction of medicinal cannabis to medicinal cannabis patients or their primary caregivers in a timely
and readily accessible manner and in types and quantities that are sufficient to meet demand from
medicinal cannabis patients within the jurisdiction; and
WHEREAS Sections 5 and 7 of Article XI of the California Constitution, and the provisions of the
Medical Cannabis Regulation and Safety Act ("MCRSA") as amended by the Medical and Adult-Use
Cannabis Regulation and Safety Act ("MAUCRSA"), authorize cities to adopt ordinances that establish
standards, requirements, and regulations for local licenses and permits for cannabis and cannabis-
related activity. Any standards, requirements, and regulations regarding health and safety, security,
and worker protections established by the State of California, or any of its departments or divisions,
shall be the minimum standards applicable to medicinal cannabis-related activity in a city; and
WHEREAS Chapters 8.90 and 8.95 of the Carlsbad Municipal Code are intended to prohibit
commercial cannabis activity in the City of Carlsbad, with the exception of medicinal cannabis deliveries
pursuant to California Code of Regulations, Title 16, Division 42, Section 5416, and licensed medicinal
cannabis delivery service businesses pursuant to Chapter 8.95; and
WHEREAS Chapter 8.95 of the Carlsbad Municipal Code imposes a regulatory licensing scheme
and reasonable regulations consistent with the MCRSA to protect the city's neighborhoods, residents,
and businesses from negative public safety and aesthetic impacts associated with the transporting,
delivery, and distribution of medicinal cannabis and medicinal cannabis products; and
Oct. 24, 2023 Item #3 Page 3 of 18
WHEREAS, the city planner studied the proposed amendments to the Carlsbad Municipal Code
and performed the necessary investigations to determine if the project qualified for an exemption in
accordance with the California Environmental Quality Act, (CEQA, Public Resources Code section 21000
et. seq.), and its implementing regulations (the CEQA Guidelines, Article 14 of the California Code of
Regulations section 15000 et. seq.). After consideration of all evidence presented and studies and
investigations made by the city planner, the city planner determined that the proposed code
amendments are exempt from further environmental review in accordance with Article 14 of the
California Code of Regulations, Sections 15061 (common sense exemption) and 15268 (Statutory
Exemptions); and
WHEREAS, on July 31, 2023, the city distributed a notice of intended decision to adopt the
exemptions. The notice was circulated for a 10-day period, which began on Aug. 1, 2023, and ended on
Aug. 10, 2023. The city did not receive any comment letters on the CEQA findings and determinations.
The effective date and order of the city planner’s CEQA determination was July 31, 2023. No further
CEQA environmental analysis is required and all aspects of CEQA have been satisfied; and
WHEREAS the city’s business license ordinance, located in Carlsbad Municipal Code Chapters
5.04 and 5.08, is a tax ordinance rather than a regulatory ordinance; and
WHEREAS Carlsbad Municipal Code Section 5.04.100 provides that a business license is not a
permit or license to conduct a business in an unlawful manner or as a nuisance; and
WHEREAS Carlsbad Municipal Code Section 5.04.100 overlaps Carlsbad Municipal Code Section
5.04.160, which provides that businesses that cannot be carried out without violating state or federal
law are prohibited within the city; and
WHEREAS California has legalized the use, production, and sale of medicinal cannabis; and
WHEREAS federal law prohibits the cultivation, possession, distribution and sale of cannabis;
and
WHEREAS, California and federal laws regulating cannabis are inconsistent; however, federal
law does not preempt California law; and
WHEREAS, since 2014, federal law, as interpreted by United States v. McIntosh (9th Cir. 2016)
833 F.3d 1163, 1177, has prohibited federal prosecutors from spending funds to prosecute individuals
who engage in conduct permitted by California’s medicinal cannabis laws and are in full compliance
with those laws; and
Oct. 24, 2023 Item #3 Page 4 of 18
WHEREAS, repealing Carlsbad Municipal Code Section 5.04.160 is necessary to avoid confusion
over inconsistencies in California and federal cannabis laws; and
WHEREAS, repealing Carlsbad Municipal Code Section 5.04.160 does not allow any business to
operate in an unlawful manner or as a nuisance, is consistent with the business license ordinance’s
design as a tax ordinance rather than a regulatory ordinance, is consistent with California’s legalization
of medicinal cannabis and the requirement that the city allow for non-storefront retail delivery of
medicinal cannabis, and is consistent with federal law precluding the prosecution of individuals who
comply with California’s medicinal cannabis laws.
NOW, THEREFORE, the City Council of the City of Carlsbad, California, ordains as follows that:
SECTION I The above recitations are true and correct.
SECTION II That Carlsbad Municipal Code Title 5, Chapter 5.04 is amended to repeal Section
5.04.160, in its entirety.
SECTION III That Carlsbad Municipal Code Title 8, Chapter 8.90, Section 8.90.010 is amended
to read as follows:
8.90.010 Purpose.
This chapter is declarative of existing law. The Carlsbad Municipal Code, Title 21 (Zoning), only allows
land uses permitted by the code. No provision of the Carlsbad Municipal Code allows any cannabis
operation or land use of any kind within any zone, with the exception of medicinal cannabis deliveries
pursuant to California Code of Regulations, Title 16, Division 42, Section 5416, and licensed medicinal
cannabis delivery service businesses pursuant to Chapter 8.95 of this code. The purpose and intent of
this chapter is to clarify the intent of the Carlsbad Municipal Code to prevent the cultivation, delivery,
distribution, and sale of cannabis within Carlsbad city limits to the fullest extent of the law. Commercial
cannabis activity has judicially recognized adverse secondary effects on the community, including, but
not limited to, increases in crime in the vicinity of or as a result of the commercial cannabis activity;
increases of fraud in obtaining or using state-issued identification cards and licenses; interference with
residential property owners’ enjoyment of their properties when such properties are located in the
vicinity of commercial cannabis activity as a result of increases in crime, litter, noise, and vandalism;
and the deterioration of neighborhoods. Prohibition of commercial cannabis activity is necessary to
prevent these adverse secondary effects and the blighting or degradation of the neighborhoods in the
vicinity of commercial cannabis activity, while at the same time protecting the rights of those
individuals who desire to use cannabis within a private residence as authorized under the Adult Use of
Marijuana Act.
Further, it is the intent of this chapter to limit the demands on police and other city resources and allow
time for the state to establish and implement its regulatory and licensing programs under the Medical
Cannabis Regulation and Safety Act of 2015, the Adult Use of Marijuana Act of 2016, and the Medicinal
and Adult-Use Cannabis Regulation and Safety Act of 2017.
This chapter is not intended to conflict with federal or state law. The city council intends that this
chapter be interpreted to be compatible with federal and state law. To the extent that this chapter may
Oct. 24, 2023 Item #3 Page 5 of 18
be deemed to conflict with any provision of state law, the city council has determined that the subject
of the conflict is a municipal affair.
SECTION IV That Carlsbad Municipal Code Title 8, Chapter 8.90, Section 8.90.020 is amended
to read as follows:
8.90.020 Definitions.
For the purposes of this chapter and Chapter 8.95 of this code, the following definitions apply:
“Applicant” means a person or entity who has submitted an application for a medicinal cannabis
delivery service license under Chapter 8.95 of this code.
"Business owner" or “business ownership” means any of the following: (1) A person with an aggregate
ownership interest of twenty percent or more in the medicinal cannabis delivery service business,
unless the interest is solely a security, lien, or encumbrance; (2) the chief executive officer of a
nonprofit or other entity applying for, or holding, such license; (3) a member of the board of
directors of a nonprofit applying for, or holding, such license; or (4) an individual participating in
the direction, control, or management of the person applying for, or holding, such license.
“Cannabis” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis
ruderalis, whether growing or not; the seeds of the plant; the resin extracted from any part of the
plant, whether crude or purified; every compound, manufacture, salt, derivative, mixture,
concentrate, or preparation of the plant, its seeds, or resin; and edible or topical products
containing any of the above. “Cannabis” does not include industrial hemp, as defined in California
Health and Safety Code Section 11018.5.
"Cannabis products" has the same meaning as in Section 26001 of the California Business and
Professions Code.
“Caregiver” or “primary caregiver” has the same meaning as that term is defined in Section 11362.7 of
the California Health and Safety Code.
“Commercial cannabis activity” means any cultivation, possession, manufacture, distribution,
processing, storing, laboratory testing, packaging, labeling, transportation, distribution, delivery,
or sale of cannabis requiring a license from the State under Division 10 of the California Business
and Professions Code, whether or not carried on for profit and including medical cannabis
cooperatives and collectives, except as approved by the U.S. Drug Enforcement Administration or
the U.S. Food and Drug Administration.
“Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or
trimming of cannabis.
“Delivery” means the transfer of cannabis, including the use of any technology platform to arrange for
or facilitate the transfer of cannabis by any business, cooperative, or collective, whether or not
carried on for profit, to or from any location within the city of Carlsbad.
“Delivery personnel” means persons employed by a state and locally licensed cannabis business who
deliver cannabis and cannabis products from the business premises to customers, or in the case
of medicinal cannabis to qualified patients or caregivers, at a physical address location.
“Distribution” means the procurement, sale, and transport of cannabis or cannabis products between
entities licensed pursuant to the MAUCRSA and any subsequent State of California legislation
regarding the same.
“Indoors” means a code compliant space within a building, greenhouse, or other structure which is fully
enclosed, with a complete roof enclosure supported by connecting walls extending from the
ground to the roof that is secured against unauthorized entry and accessible only through one or
more locking doors.
Oct. 24, 2023 Item #3 Page 6 of 18
“MAUCRSA” means the Medical and Adult Use Cannabis Regulation and Safety Act or Senate Bill 94,
signed into state law in 2017.
“Medicinal cannabis” or “medicinal cannabis product” means medicinal cannabis or medicinal cannabis
products, as those terms are defined in Section 26001 of the California Business and Professions
Code. Medicinal cannabis does not include industrial hemp as defined by Section 81000 of the
California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
This definition does not include cannabis accessories, branded merchandise of the licensee, or
promotional materials, which are prohibited from delivery within the city of Carlsbad by medicinal
cannabis delivery service businesses.
“Medicinal cannabis activity” means cultivation, manufacture, processing, laboratory testing,
transporting, delivery, distribution, or sale of medicinal cannabis or a medicinal cannabis product,
within the meaning of California Business and Professions Code Section 19300 et seq.
“Medicinal cannabis delivery service business” means a business or operation, whether for profit or
nonprofit, whose premises are closed to the public and which sells medicinal cannabis and/or
medicinal cannabis products exclusively by delivery, which requires a state license (Type 9-Non-
storefront Retailer) under California Business and Professions Code Section 26000 et seq. and
which requires a medicinal cannabis delivery service license issued by the city of Carlsbad to legally
operate. This definition does not include any storefront component whereby customers purchase
or pick up medicinal cannabis or medicinal cannabis products at the physical premises of a retail
establishment.
“Medicinal cannabis delivery service license” means a city of Carlsbad regulatory license issued
pursuant to Chapter 8.95 of this code to a medicinal cannabis delivery service business.
“Medicinal cannabis delivery service vehicle” means a vehicle used by a medicinal cannabis delivery
service business to deliver medicinal cannabis or medicinal cannabis products. A medicinal
cannabis delivery service vehicle must comply with all requirements of Chapter 8.95 of this code
and California Code of Regulations, Title 4, Division 19, to legally operate.
“Person with an identification card” means a qualified patient, caregiver, or primary caregiver who
possesses a valid identification card as described in California Health and Safety Code Section
11362.7.
“Physical address location” means a real property structure from where a medicinal cannabis delivery
service business conducts its operations. This location may be one of several business locations
and does not need to be the primary business location or headquarters.
“Private residence” means a house, an apartment unit, a mobile home, or other similar dwelling unit.
"Property owner” or “property ownership” means the individual or entity who is the record owner of
the property or premises where a medicinal cannabis delivery service business may be located or
is proposed to be located.
“Public park” means an area created, established, designated, or maintained by a special district,
county, the state, or the federal government for public play, recreation, enjoyment, or for the
protection of natural resources and features at the site.
“Qualified patient” has the same meaning as that term is defined in Section 11362.7 of the California
Health and Safety Code, a person who possesses a physician’s recommendation that complies
with Article 25 (commencing with Section 2525) of Chapter 5 of Division 2 of the California
Business and Professions Code, or a primary caregiver for a qualified patient.
“State license” means a permit or license issued by the State of California, or one of its departments or
divisions, under MAUCRSA to engage in medicinal cannabis activity.
Oct. 24, 2023 Item #3 Page 7 of 18
“Transport” means the transfer of medicinal cannabis or medicinal cannabis products from the licensed
business location of one licensee to the licensed business location of another licensee, for the
purpose of conducting medicinal cannabis activity authorized by the MAUCRSA.
“Transporter” means a person authorized to transport medicinal cannabis or medicinal cannabis
products in amounts authorized by the State of California, or by one of its departments or divisions
under the MAUCRSA.
“Youth center” has the same meaning as that term is defined in California Health and Safety Code
Section 11353.1.
SECTION V That Carlsbad Municipal Code Title 8, Chapter 8.90, Section 8.90.030 is amended
to read as follows:
8.90.030 Prohibited activities.
A.Commercial cannabis activity is prohibited within the city of Carlsbad. No person shall engage in
any commercial cannabis activity. No permit, license, or other authorization shall be issued for any
commercial cannabis activity. This prohibition does not apply to licensed medicinal cannabis
delivery service businesses pursuant to Chapter 8.95 of this code, cannabis delivery businesses
pursuant to California Code of Regulations, Title 16, Division 42, Section 5416, and the carriage of
cannabis on public roads in the city of Carlsbad to the limited extent required by Sections 26080(b)
and 26090(e) of the California Business and Professions Code.
B.Cultivation of cannabis is prohibited, except indoors at a private residence as authorized by
Section 11362.2(a) of the California Health and Safety Code. Cannabis grown indoors shall be
completely screened from view from public places and neighboring properties. Nothing in this
chapter is intended to, nor shall it be construed to, preclude any owner of real property from
limiting or prohibiting cannabis cultivation by its tenants.
C.No person shall smoke or ingest cannabis in any public place.
SECTION VI That Carlsbad Municipal Code Title 8 is amended to add Chapter 8.95 to read as
follows:
Chapter 8.95
MEDICINAL CANNABIS DELIVERY SERVICE BUSINESSES
Sections:
8.95.010 Purpose and intent.
8.95.020 Definitions.
8.95.030 License required.
8.95.040 Fees.
8.95.050 Operational standards.
8.95.060 Decision on the application; license suspension and revocation.
8.95.070 Violations, inspections, and enforcement.
8.95.080 Appeals.
8.95.090 Limitations of city’s liability.
8.95.100 Severability.
Oct. 24, 2023 Item #3 Page 8 of 18
8.95.010 Purpose and intent.
The purpose and intent of this chapter is to implement the provisions of Chapter 26 (commencing with
Section 26320) to Division 10 of the California Business and Professions Code, referred to as the
Medicinal Cannabis Patients’ Right to Access Act, which, as of January 1, 2024, prohibits a city from
adopting or enforcing any regulations that prohibit or have the effect of prohibiting the delivery of
medicinal cannabis to patients or their primary caregivers by licensed medicinal cannabis delivery
service businesses in a timely and readily accessible manner. This chapter also imposes a regulatory
licensing scheme and reasonable regulations to protect the city's neighborhoods, residents, and
businesses from negative impacts associated with the transporting, delivery, and distribution of
medicinal cannabis and medicinal cannabis products.
8.95.020 Definitions.
All definitions in Chapter 8.90 of this code also apply to this chapter.
8.95.030 License required.
A.No person shall engage in or conduct any medicinal cannabis delivery service business within the
city without an approved medicinal cannabis delivery service license under this chapter.
B.A separate medicinal cannabis delivery service license shall be required for each physical address
location within the city.
C.An application for a medicinal cannabis delivery service license shall be on forms provided by the
Community Development Department and/or the chief of police or designee, which require all
information, permits, licenses, criminal background check results, and other approvals necessary
to verify compliance with this chapter and all applicable laws. The chief of police or designee
reserves the right to request and obtain additional information from any business owner and
property owner submitting a medicinal cannabis delivery service license application to show
compliance with relevant codes and regulations.
D.The business owner and the property owner, if different, shall sign the medicinal cannabis delivery
service license application form.
8.95.040 Fees.
The city council may impose by resolution a nonrefundable fee to reimburse the city for its reasonable
and necessary costs in receiving, processing, reviewing, and inspecting applications and appeals for a
medicinal cannabis delivery service license. This fee shall be in addition to the business license fees and
taxes required by this chapter and Chapter 5.08 of this code.
8.95.050 Operational standards.
In addition to all applicable state and local codes and regulations, medicinal cannabis delivery service
businesses shall be subject to the following standards. The license application shall specify evidence
required to demonstrate that the applicant meets these standards prior to approval of the medicinal
cannabis delivery service license.
A.Structure and use standards
1.Medicinal cannabis delivery service businesses shall be allowed in zones listed in Title 21 that
expressly authorize “storage, wholesale, and distribution facilities” as a permitted use.
2.Medicinal cannabis delivery service businesses shall be located at least 1,000 feet from the
following sensitive receptors. All measurements shall be taken from the closest property line
of the medicinal cannabis delivery service business to the closest property line of the
sensitive receptor.
a.Residential zones or private residences
b.Public or private schools
Oct. 24, 2023 Item #3 Page 9 of 18
c.Daycare centers
d. Churches
e.Public parks
f.Youth centers
g.Any other medicinal cannabis delivery service business
3.The cumulative size of all structures associated with a medicinal cannabis delivery service
business shall not exceed 3,000 square feet.
4.All medicinal cannabis or medicinal cannabis products shall be stored in an enclosed
permanent structure. Outdoor storage of medicinal cannabis or medicinal cannabis products
is prohibited.
5.No markings or indications of cannabis or cannabis products shall be visible from the public
right-of-way and/or exterior of the structure(s) associated with the medicinal cannabis
delivery service business.
B.Site operations standards.
1.No person shall cause or permit the sale, dispensing, or consumption of alcoholic beverages
or cannabis at or within 200 feet of the physical address location.
2.There shall not be a physician located in or near the physical address location at any time for
the purpose of evaluating patients for the issuance of a medicinal cannabis prescription or
card.
3.Odor control devices and techniques shall be incorporated and maintained in all delivery
businesses to ensure that odors from cannabis are not detectable off-site.
4.All cannabis and cannabis products sold or distributed in the city shall be cultivated,
manufactured, and transported by licensed facilities that maintain operations in full
conformance with state and local regulations.
5.Display of licenses. The original copy of a medicinal cannabis delivery service license issued
by the city pursuant to this chapter, along with the medicinal cannabis delivery business’s
state cannabis license and city-issued business license, shall be readily available upon request
by the chief of police or designee and not visible to the public.
6.Recordkeeping requirements.
a.Medicinal cannabis delivery service businesses shall comply with all provisions of
Chapters 5.04 and 5.08 of this code relating to business license taxes, recordkeeping,
and auditing.
b.Reporting and Tracking of Product and of Gross Sales. Pursuant to California Code of
Regulations, Title 16, Division 42, Section 5048, all medicinal cannabis delivery service
businesses shall use a track-and-trace system to track and report on all aspects of the
medicinal cannabis delivery service business, including, but not limited to such matters
as cannabis tracking, inventory data, and gross sales (by weight and by sale). The system
must have the capability to produce historical transactional data relevant to the city of
Carlsbad for review by the chief of police or designee.
c.In accordance with California Code of Regulations, Title 16, Division 42, Section 5002, all
medicinal cannabis delivery service businesses shall maintain a current register of the
names and contact information (including the address and telephone number) of
anyone owning or holding an interest in the medicinal cannabis delivery service business
and all officers, managers, employees, agents, and volunteers currently employed or
otherwise engaged by the medicinal cannabis delivery service business. The register
Oct. 24, 2023 Item #3 Page 10 of 18
required by this paragraph shall be provided to the chief of police or designee(s) upon a
reasonable request.
d.All medicinal cannabis delivery service businesses shall maintain a record of all persons,
qualified patients, collectives, and primary caregivers served by the business for a period
of no less than four years.
e.All medicinal cannabis delivery service businesses shall maintain records of their
inventory acquired, including the name and address of each supplier, the date of
acquisition and the quantity acquired from each supplier, and the location of the
cultivation of the supplier, and shall maintain a copy of the supplier's state license to
cultivate (if required) for a period of no less than four years.
f.Subject to any restrictions under state or federal law, all medicinal cannabis delivery
service businesses shall allow the chief of police or designee to have access to the
business's books, records, and accounts, together with any other data or documents,
for a period of no less than four years for the purpose of conducting an audit or
examination. Books, records, accounts, and any and all relevant data or documents must
be produced no later than 24 hours after receipt of the city's request, unless otherwise
stipulated by the city.
7.Security measures. Medicinal cannabis delivery service businesses shall implement security
measures that comply with all state law requirements, that deter and prevent the
unauthorized entrance into areas containing medicinal cannabis or medicinal cannabis
products, and that deter and prevent the theft of such products. These security measures
include, but are not limited to the following, to the satisfaction of the chief of police or
designee:
a.Ensure that all medicinal cannabis and medicinal cannabis products are kept in a manner
to prevent diversion, theft, and loss.
b.Install and maintain surveillance cameras that comply with California Code of
Regulations, Title 16, Division 42, Section 5044. The medicinal cannabis delivery service
business shall be responsible for ensuring that the security surveillance camera's
footage is accessible by the city manager or designee and the city's police department
upon request, and that it is compatible with the city's software and hardware.
c.Ensure that all entrances and exits of the medicinal cannabis delivery service business
are locked at all times, with entry strictly controlled.
d.Make available a designated security representative/liaison who can meet with the chief
of police or designee regarding any security related measures and/or operational issues.
8.The business owner and property owner may not be convicted of any crimes listed in
California Business and Professions Code Section 19323(b)(5) while operating a medicinal
cannabis delivery service business. A conviction within the meaning of this section means a
plea or verdict of guilty or a conviction or diversion following a plea of nolo contendere.
9.Reporting legal matters. The business owner and property owner shall notify the chief of
police or designee in writing of the following legal matters pending against them, in their
individual capacity or otherwise, within 48 hours of the date of conviction, judgment, order,
or final decision:
a.Criminal conviction. The written notification to the city shall include the date of the
conviction, the court docket number, the name of the court in which the conviction was
entered, and the specific offense(s) resulting in a conviction(s).
Oct. 24, 2023 Item #3 Page 11 of 18
b.Civil penalty or judgment. The written notification shall include the date of verdict, entry
of judgment, or order, the court docket number, the name of the court in which the
matter was adjudicated, and a description of the civil penalty or judgment rendered.
c.Administrative order. The written notification shall include the date of the order, the
name of the agency issuing the order, and a description of the administrative penalty or
decision rendered against the business owner or property owner.
d.Revocation or suspension of a state or local license, permit, or other authorization. The
written notification shall include the name of the local agency involved, a written
explanation of the proceeding or enforcement action, and the specific violation(s) that
led to the revocation or suspension.
C.Delivery operations standards.
1.In accordance with California Code of Regulations, Title 4, Division 19, Section 15417(a), all
medicinal cannabis delivery service vehicles shall not have any marking or other indications
on the exterior of the vehicle that may indicate that the delivery personnel is carrying
cannabis goods for delivery.
2.All deliveries of medicinal cannabis and medicinal cannabis products must be to a physical
address location other than the cannabis delivery business’s physical address location.
3.All deliveries of medicinal cannabis and medicinal cannabis products shall only be made to
the customer’s residence. Deliveries of medicinal cannabis and medicinal cannabis products
are prohibited to schools, day care centers, youth centers, public parks and open space,
public buildings, and commercial establishments, including but not limited to restaurants and
places of work, whether or not members of the public are present.
4.Medicinal cannabis and medicinal cannabis products may be transported by one medicinal
cannabis delivery service business’s physical address location to another medicinal cannabis
delivery service business’s physical address location if the state retail licenses for both
locations are held by the same licensee.
5.Deliveries of medicinal cannabis and medicinal cannabis products are only permitted during
the hours specified under state law.
6.Only direct employees of a medicinal cannabis delivery service business may serve as delivery
personnel. An independent contractor, third-party courier service, or an individual employed
through a staffing agency does not qualify as a direct employee.
7.Before dispensing any medicinal cannabis or medicinal cannabis products to persons
requesting delivery, delivery personnel must verify that the requestor and recipient is 18
years of age or older and is a person with an identification card, as defined in this chapter.
Any person who causes or permits a delivery of medicinal cannabis or medicinal cannabis
products within the city of Carlsbad to be made to a person other than a person with an
identification card may be charged with a violation of this section.
D.Additional standards and regulations. The city manager or designee may adopt any necessary
rules, regulations, and processes governing medicinal cannabis delivery service licenses and the
operations of medicinal cannabis delivery service businesses.
8.95.060 Decision on the application; license suspension and revocation.
A.The chief of police or designee is authorized to approve, deny, suspend, or revoke a medicinal
cannabis delivery service license.
Oct. 24, 2023 Item #3 Page 12 of 18
B.Following receipt of a complete medicinal cannabis delivery service license application, the chief
of police or designee shall notify the applicant of the decision that approves the license,
conditionally approves the license, or denies the license with the reasons for denial stated.
C.A medicinal cannabis delivery service license issued pursuant to this chapter shall expire 12
months after the date of its issuance, after which time a new license application must be
submitted to continue the medicinal cannabis delivery service business. License renewals are not
permitted.
D.License approval and modifications.
1.A medicinal cannabis delivery service license shall not be issued unless the property owner(s)
and business owner(s) successfully pass a criminal background check verifying that they have
not been convicted of any crimes listed in California Business and Professions Code Section
19323(b)(5). The criminal background check shall be conducted by the chief of police or
designee. A conviction within the meaning of this section means a plea or verdict of guilty or
a conviction or diversion following a plea of nolo contendere.
2.The chief of police or designee is authorized to impose additional conditions on a medicinal
cannabis delivery service license as necessary to ensure compliance with state or local laws
and regulations or to preserve the public health, safety, or welfare. Any additional license
conditions will be provided in writing to the applicant by the chief of police or designee and
may be appealed in accordance with Section 8.95.080 of this chapter.
3.Modifications or changes to an approved medicinal cannabis delivery service license,
including but not limited to modifications to the physical address location or premises,
business ownership, or property ownership, require approval of a new medicinal cannabis
delivery service license pursuant to this chapter prior to the modifications or changes taking
effect. Any such modifications or changes made without approval of a new license constitutes
a violation of this chapter.
E.License denial. The chief of police or designee may deny a medicinal cannabis delivery service
license for any of the following reasons:
1.Any of the reasons provided in California Business and Professions Code Section 26057(b).
2.Application deficiencies. The medicinal cannabis delivery service license application
requirements cannot be satisfied by the applicant’s proposed business, the application is
incomplete, supportive documentation was not provided, and/or the applicant failed to
correct deficiencies in the application or provide additional application information within
the response timeframe requested.
3.The applicant made a false or misleading statement on the application.
4.The property owner or business owner has violated any law related to the operations of the
medicinal cannabis delivery service business or laws related to any state or local licensure or
permitting. In considering whether past violations of law warrant denial of a license, the chief
of police or designee may consider the following factors with respect to the property owner
or business owner:
a.The nature of the prior violation(s).
b.The number and/or variety of violations.
c.Whether the violation(s) were willful.
d.All circumstances surrounding the violation(s).
e.Previous sanctions imposed.
f.Any actual or potential harm to the public.
Oct. 24, 2023 Item #3 Page 13 of 18
g.Any corrective action(s) taken.
h.The likelihood of recurrence of the violation(s).
i.The length of time a cannabis license or permit had been held at the time of the
violation(s).
j.Any other factor that makes the situation unique or the violation(s) of greater concern.
5.The property owner has failed to take appropriate action to evict or otherwise remove the
business owner and persons conducting commercial cannabis activities at the medicinal
cannabis delivery service business who do not maintain permits or licenses in good standing
with the city or state.
6.The property owner or business owner has been denied a license, permit, or other
authorization to engage in commercial cannabis activity by a state or local licensing authority,
or such license, permit or other authorization is currently suspended, revoked, or non-
renewable.
7.The city or state has determined, based on substantial evidence, that the property owner or
business owner is currently in violation of the requirements of this chapter, of this code, state
law, or any other applicable law. The property owner or business owner may file a new
application pursuant to this chapter once the city or state authority determines that the
violation has been corrected.
8.Facts or circumstances exist which indicate that the property owner or business owner has
engaged in unlawful, fraudulent, unfair, or deceptive business acts or practices.
9.Facts or circumstances exist which indicate that the medicinal cannabis delivery service
business does or would very likely constitute a threat to public health, safety, and/or welfare.
F.License revocation or suspension.
1.The chief of police or designee may revoke or suspend a medicinal cannabis delivery service
license for any of the reasons listed in Section 8.95.060(E) of this chapter.
2.The issuance of three or more administrative citations, verifiable municipal code violations,
verifiable violations of a state permit, state license or other state law, or hearing officer
determinations concerning medicinal cannabis delivery service license requirements within
a 12-month period shall result in revocation of a medicinal cannabis delivery service license.
In the event of license revocation, an application to reestablish a medicinal cannabis delivery
service license for the same location and/or entity shall not be accepted for a minimum
period of 36 months.
3.Any attempt to transfer a medicinal cannabis delivery service license, or any transfer of
business ownership, property ownership, or possession or control of either a medicinal
cannabis delivery service business or the real property in the city of Carlsbad where the
business is located and continued use of a previously issued medicinal cannabis delivery
service license, shall result in revocation of the medicinal cannabis delivery service license.
4.Revocation or suspension of a license is subject to a 10-calendar day prior written notice and
an opportunity to appeal, if the appeal is requested within 10 calendar days of the date of
the written revocation or suspension notice. The appeal procedures shall follow those
outlined in Section 8.95.080 of this chapter.
5.Suspension or expiration without timely renewal of a license issued by the State of California,
or by any of its departments or divisions, shall immediately suspend the ability of a medicinal
cannabis delivery service business to operate within the city until the State of California, or
any of its departments or divisions, reinstates or reissues the state license. Revocation or
Oct. 24, 2023 Item #3 Page 14 of 18
termination of the license of a medicinal cannabis delivery service business by the State of
California, or any of its departments or divisions, shall immediately revoke or terminate the
ability of a medicinal cannabis delivery service business to operate within the city without
notice. If the city becomes aware that a state license has expired or been suspended,
revoked, or terminated, it will initiate proceedings under subsection (F)(4) of this section to
suspend or revoke a medicinal cannabis delivery service license.
8.95.070 Violations, inspections, and enforcement.
A.Violations declared a public nuisance. Each and every violation of the provisions of this chapter is
deemed unlawful and a public nuisance.
B.Each violation a separate offense. Each and every violation of this chapter shall constitute a
separate violation, and the city may pursue any and all remedies and actions available under state
and local law for any violations committed by a medicinal cannabis delivery service business, a
business owner, a property owner, or any other persons related to or associated with any
commercial cannabis activity, including suspension or revocation of any license pursuant to
Section 8.95.060(F) of this code. Additionally, as a nuisance per se, any violation of this chapter
shall be subject to disgorgement and payment to the city of any monies unlawfully obtained, costs
of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law
or in equity.
C.Remedies are cumulative and not exclusive. The remedies provided in this chapter or this code
are not to be construed as exclusive remedies. The city is authorized to pursue any proceedings
or remedies provided by law.
D.Business owner and property owner responsible for violations. The business owner and property
owner shall be responsible for all local and state law violations that occur in or about a physical
address location, a medicinal cannabis delivery service vehicle, or related to delivery personnel,
whether or not the violations occur within the presence of the business owner or property owner.
E.Inspections and enforcement.
1.The chief of police or designee(s), including code enforcement officers and peace officers,
are charged with enforcing the provisions of this code and shall be authorized to enter a
medicinal cannabis delivery service business or a medicinal cannabis delivery service vehicle
operating in the city of Carlsbad at any time during the business’s hours of operation with or
without notice, subject to constitutional limitations, to do either or both of the following:
a.Inspect the medicinal cannabis delivery service business and medicinal cannabis delivery
service vehicle as well as any recordings and records required to be maintained pursuant
to this chapter or under applicable provisions of state law.
b.Obtain cannabis product samples to test for public safety purposes. Any samples
obtained by the city shall be logged, recorded, and maintained in accordance with the
police department’s standards for evidence.
2.The building official and fire marshal, or their designee, reserve the right to schedule a
building code or fire code inspection at any time before, during, or after the medicinal
cannabis delivery service licensing process.
3.It is unlawful for any person having responsibility over the operation of a medicinal cannabis
delivery service business to impede, obstruct, interfere with, or otherwise not allow the city
to conduct an inspection, review or copy records, recordings, or other documents required
to be maintained by such business under this chapter or under state or local law. It is also
unlawful for a person to conceal, destroy, deface, damage, or falsify any records, recordings,
Oct. 24, 2023 Item #3 Page 15 of 18
or other documents required to be maintained by a medicinal cannabis delivery service
business under this chapter or under state or local law.
8.95.080 Appeals.
A.Whenever an appeal is provided for in this chapter from a decision of the chief of police or
designee, the appeal shall be conducted as prescribed in this section.
B.Within 10 calendar days after the date of a decision of the chief of police or designee to revoke,
suspend or deny a license, or to add conditions to a medicinal cannabis delivery service license,
an aggrieved party may appeal such action by filing a written appeal with the city clerk setting
forth the reasons why the decision was not proper. The notice of appeal shall specify:
1.The name and address of the appellant;
2.The date that the medicinal cannabis delivery service license application was filed with the
city;
3.The date of the decision to deny, suspend, revoke, or condition the license which is being
appealed; and
4.The factual basis for the appeal.
C.Upon receipt of a complete and timely filed notice of appeal, the police chief or designee shall
schedule a hearing and send written notice to the appellant at the address provided in the notice
of appeal, by means of registered mail, certified mail, or hand delivery, that within a period of not
less than five days nor more than 14 days from the date of the filing of the notice of appeal with
the city clerk, a hearing shall be conducted to determine the existence of any substantial evidence
which would refute the grounds for the denial of, suspension of, revocation of, or conditions
imposed on a medicinal cannabis delivery service license. The hearing notification shall include
the date, time, and place of the hearing.
D.An administrative hearing officer contracted with the city shall be assigned to the hearing in
accordance with the city’s administrative order governing administrative hearing officers. The
hearing shall be conducted pursuant to Chapter 1.10 of this code and any corresponding
administrative orders. If the appellant or their legal counsel fails to present any evidence at the
hearing, any evidence supporting facts which constitute grounds for the medicinal cannabis
delivery service license’s denial, suspension, revocation, or additional conditions placed on the
license shall be deemed uncontested. Any issue not raised in the hearing is waived. The hearing
officer’s decision is final.
8.95.090 Limitations of city’s liability.
To the fullest extent permitted by law, the city shall not assume any liability whatsoever with respect
to having issued a medicinal cannabis delivery service license pursuant to this chapter or otherwise
approving the operation of any medicinal cannabis delivery service business. As a condition to the
approval of any medicinal cannabis delivery service license, the applicant shall be required to meet all
of the following conditions before they can receive the medicinal cannabis delivery service license:
A.Execute an agreement, in a form approved by the city attorney, agreeing to the fullest extent
permitted by law to indemnify, defend (at the applicant's sole cost and expense), and hold the city
of Carlsbad, and its officers, elected and appointed officials, employees, volunteers, and agents
harmless, from any and all claims, losses, damages, injuries, including death, liabilities or losses
which arise out of, or which are in any way related to, the city's issuance of the medicinal cannabis
delivery service license, the city's decision to approve the medicinal cannabis activity, the process
Oct. 24, 2023 Item #3 Page 16 of 18
used by the city in making its licensing decision, or the alleged violation of any laws by the
medicinal cannabis delivery service business or any of its officers, employees, or agents.
B.Maintain insurance at coverage limits established by the city’s risk manager and with conditions
determined necessary and appropriate from time to time by the city attorney.
C.Reimburse the city for all costs and expenses, including but not limited to attorneys fees and costs
and court costs, which the city may be required to pay as a result of any legal challenge related to
the city's approval of the applicant's medicinal cannabis delivery service license, or related to the
city's approval of a medicinal cannabis activity. The city may, at its sole discretion, participate at
its own expense in the defense of any such action, but such participation shall not relieve any of
the obligations imposed under this section.
D.Nothing in this chapter creates a mandate to issue a medicinal cannabis delivery service license to
a medicinal cannabis delivery service business.
8.95.100. Severability.
If any portion of this chapter, or its application to particular persons or circumstances, is held to be
invalid or unconstitutional by a final decision of a court of competent jurisdiction, the decision shall not
affect the validity of the remaining portions of this chapter or the application of the chapter to persons
or circumstances not similarly situated.
EFFECTIVE DATE: This ordinance shall be effective Jan. 1, 2024; and the City Clerk shall certify
the adoption of this ordinance and cause the full text of the ordinance, or a summary of the ordinance
prepared by the City Attorney to be published at least once in a newspaper of general circulation in the
City of Carlsbad within fifteen days after its adoption.
Oct. 24, 2023 Item #3 Page 17 of 18
INTRODUCED AND FIRST READ at a Regular Meeting of the Carlsbad City Council on the 17th
day of October, 2023, and thereafter
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 24th day of October, 2023, by the following vote, to wit:
AYES:
NAYS:
Blackburn, Bhat-Patel, Acosta, Burkholder, Luna.
None.
ABSTAIN: None.
ABSENT: None.
APPROVED AS TO FORM AND LEGALITY:
��-� CINDIE K. McMAHON, City Attorney
KEITH BLACKBURN, Mayor
SHERRY FREISINGER, City Clerk
(SEAL)
Oct. 24, 2023 Item #3 Page 18 of 18