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  Regular-General Government   #   54.    
Board of Supervisors County Administrator  
Meeting Date: 07/24/2018  
Brief Title:    Cannabis Interim Ordinance Amendments (second reading) and Program Updates
From: Mindi Nunes, Assistant County Administrator, County Administrator's Office
Staff Contact: Susan Strachan, Senior Management Analyst, County Administrator's Office, x8170

Consider proposed amendments to interim cannabis ordinance allowing cultivation for adult use and the issuance of a limited number of distributor licenses; adopt a resolution establishing a cannabis tax citizen's oversight committee; and receive an update on a general framework for developing a cannabis tax expenditure plan. (No general fund impact) (Nunes/Strachan)
Recommended Action
  1. Consider proposed amendments to interim cannabis ordinance allowing cultivation for adult use and the issuance of a limited number of distributor licenses;
  2. Waive second reading and consider adoption of an ordinance amending Chapter 20 to Title 5 of the Yolo County Code regulating the cultivation of cannabis in the unincorporated areas of Yolo County;
  3. Adopt a resolution establishing a cannabis tax citizen's oversight committee; and
  4. Receive an update and provide direction on a general framework for developing a cannabis tax expenditure plan.
Strategic Plan Goal(s)
Operational Excellence
Safe Communities
Sustainable Environment
Reason for Recommended Action/Background
A.         Interim Ordinance Amendment

On June 26, 2018, the Board directed staff to return with an ordinance amending the County’s interim cannabis ordinance in three ways:
  1. Remove the requirement that commercial cannabis cultivation be for medicinal purposes only. This modification will apply to all licensed cultivators, including those proposing to operate under an early implementation development agreement (“early DA”) and will be incorporated into the Cannabis Land Use Ordinance.
  2. Allow distributor licenses in conjunction with nursery and processing facilities as part of a pilot program. This modification would apply to those who submitted a proposal under the nursery/processing RFP pilot program and also proposed in their early DA letter of intent to operate as a distributor.
  3. Outside the nursery/processing facility pilot program, allow distributor licenses for those who have requested them in an early DA letter of intent as part of vertical integration, but solely to support the business activities on that site and not to serve other licensees.
The State offers two types of distributor licenses, both of which will be allowed under this amendment.
  • Distributor. A distributor is responsible for transporting cannabis goods, arranging for testing of cannabis goods and conducting quality assurance review of cannabis goods to ensure they comply with all packaging and labeling requirements.
  • Distributor-Transport. A distributor transport license allows a licensee to transport cannabis goods between licensed cultivators, manufacturers and distributors.
Additionally, staff recommends two small additional modifications. One, the ordinance erroneously limited light wattage in greenhouses, a requirement that should only apply to outdoor grows. Two, the references to the Cannabis Task Force have been changed to the broader term “the County”, which more accurately encompasses the number of departments involved in implementing the cannabis regulations. 

Current Action
The Board reviewed and discussed the proposed amended ordinance at the July 10, 2018 Board meeting. This is the second reading of that ordinance, which is being presented for adoption. 
An ordinance with the proposed edits tracked is attached as Attachment B and a clean version of the ordinance is attached as Attachment C.

B.       Citizen’s Oversight Committee Resolution and Appointment Process

The cannabis business tax ordinance requires the Board, by resolution, to establish a citizens oversight committee to act in an advisory role to the Board of Supervisors in reviewing the annual revenue and expenditure of funds from the tax, including an annual expenditure plan, and reviewing an annual accounting of the previous year’s expenditures. A resolution establishing the citizens oversight committee is attached as Attachment A.
Pursuant to the Board’s direction on March 6, 2018, the resolution specifies the following:
  • Each Supervisor will appoint one at-large member, to be ratified by the Board;
  • The Committee will nominate two additional at-large members for appointment by the Board;
  • Committee members will serve two year terms; and
  • There will be no term limits.
The following timeline is suggested for appointing committee members:
  • September 2018 – After an application period, Board ratification of appointments made by each Board member (one appointment per Board member).
  • October/November 2018 – The initial five Committee members meet to nominate two additional committee members.
  • December 2018 – Board appoints two at-large members nominated by the Committee.
C.       General Framework for Cannabis Tax Expenditure Plan

Attachment D is a general framework for developing an expenditure plan for cannabis business tax revenues. Based on the input received from the Board, staff will develop the final framework for the expenditure plan and present it to the Board for approval in September.
Collaborations (including Board advisory groups and external partner agencies)
County Counsel, County Administrator's Office

Fiscal Information
No Fiscal Impact
Fiscal Impact of this Expenditure
Total cost of recommended action $0
Amount budgeted for expenditure $0
Additional expenditure authority needed $0
On-going commitment (annual cost)
Source of Funds for this Expenditure
General Fund $0
Att. A. Oversight Comm. Reso
Att. B. Tracked Ordinance
Att. C. Ordinance No. 1502
Att. D. Tax Expenditure Framework
Att. E. Presentation

Form Review
Inbox Reviewed By Date
Mindi Nunes Mindi Nunes 07/13/2018 08:25 AM
Patrick Blacklock Patrick Blacklock 07/16/2018 02:39 PM
Phil Pogledich Phil Pogledich 07/18/2018 04:14 PM
Financial Services Julie Dachtler 07/19/2018 09:44 AM
Financial Services Tom Haynes 07/19/2018 11:12 AM
Form Started By: Susan Strachan Started On: 07/05/2018 02:20 PM
Final Approval Date: 07/19/2018
Level double AA conformance,
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