Santa Rosa City Council weighs new pot zoning

KEVIN MCCALLUM

Santa Rosa is poised to welcome more marijuana businesses to the city, and to encourage those already here to step out of the shadows.

The City Council today will consider allowing medical cannabis support businesses that provide lab testing, oil production and transportation services to set up shop in specific nonresidential areas of the city while it works on a comprehensive set of regulations for the industry.

“What we’re trying to do is say these uses are OK, but they’re only going to be OK in these areas,” said David Guhin, director of the city’s Planning and Economic Development department.

City staff will also seek guidance on whether the council wants to allow existing marijuana businesses without permits to obtain them without negative repercussions. Such a “safe harbor” provision has been proposed by the industry, but it’s unclear what form it would take.

The city has allowed medical cannabis dispensaries to operate in industrial and commercial zones outside the downtown since 2005. Two were permitted, but none has been granted since pending an update of the city’s policy.

In May, the city allowed commercial cultivation of marijuana to take place in industrial zones in the city, as long as the businesses got a permit from the Planning Commission. To date, just three people have applied to grow pot legally in the city and no permits have been granted.

Now, the city is preparing to declare that certain cannabis businesses will be allowed in specific zoning districts in the city, allowing operators in those zones as long as they follow various rules, such as getting a business license and a fire inspection.

If approved, the move would allow cannabis businesses to operate in areas they have never been allowed in before, with permit requirements that vary depending on potential impacts to surrounding land uses.

Uses that would be allowed include:

Testing and laboratories: Permitted in business parks and light industrial areas, with a minor use permit in commercial office zones.

Manufacturing using nonvolatile processes: Allowed in business parks, light industrial and general industrial zones. Parcels next to residential areas would need a minor use permit.

Distributor: Allowed in light industrial and general industrial areas, or in business parks if it is ancillary to another primary use.

Transporter: Allowed in light industrial areas, or, in general industrial areas with a minor use permit.

One use that would not be allowed is manufacturing that uses a process considered volatile. That was a hot topic at last week’s cannabis policy subcommittee meeting.

The state has yet to outline exactly what is considered volatile versus nonvolatile, explained Allen Hopper, a cannabis rights attorney with the Denver-based law firm Vicente Sederberg, which is advising the city.

But at the moment, is appears that cannabis oil extraction using highly flammable butane, for example, will have one type of license, while processes using carbon dioxide will be considered nonvolatile and will have a separate license type, Hopper explained.

“Beyond that there is not a lot of information yet,” Hopper said, noting that the state hasn’t finished drafting its rules.

The topic of cannabis manufacturing is a closely watched one in Sonoma County since city police raided a large cannabis oil manufacturer, CBD Guild, and arrested its manager, Dennis Franklin Hunter, only to have him released without charges. The case remains under investigation.

The operation had a zoning clearance to, among other things, extract oils from a “non-processed agricultural product” using CO2. But the city said the clearance did not permit CBD Guild to manufacture cannabis products, nor did it have other required permits, such as fire inspections.

The subcommittee made a number of last-minute clarifications to its draft rules, which have provoked plenty of questions from people in the industry, Guhin said.

The rules outline a host of regulations on cannabis businesses, including requirements for building permits, fire alarms and sprinkler systems, odor control systems, security cameras and alarm systems.

One change made it clearer that businesses would be allowed to operate in the designated zones only if they also received required permits from the state once they become available. Businesses would be allowed to operate locally until state permits become available in 2018.

Also, an earlier draft of proposed rules included language barring owners or managers from having felony convictions or misdemeanors involving “moral turpitude.”

But that requirement was removed by city staff, who noted that such businesses will be required to get background checks through the state licensing process.

Another change was the addition of a section making it clear that permit-holders who transfer ownership or control of a cannabis business to another person must get the approval of the city for zoning clearance to be valid.

If approved by the city, the zoning guidelines would go into effect immediately. They would be revisited in coming months as part of the comprehensive cannabis policy, Guhin said.