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Regular-Community Services # 33.
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| Board of Supervisors |
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| Subject |
| Introduce ordinance amending the interim cannabis ordinance to allow distribution licenses, broaden penalties and implement early implementation development agreements; and provide direction to staff regarding options for applying disclosure requirements to members of the Cannabis Business Tax Citizen’s Oversight Committee members. (No general fund impact) (Echiburu/Strachan) |
| Recommended Action |
- Introduce by title only, waive first reading, and receive public comment regarding a proposed ordinance amending Chapter 20 to Title 5 of the Yolo County Code regulating the cultivation of cannabis in the unincorporated areas of Yolo County; and
- Provide direction to staff regarding options for applying disclosure requirements to members of the Cannabis Business Tax Citizen’s Oversight Committee members.
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| Strategic Plan Goal(s) |
Operational Excellence
Safe Communities
Sustainable Environment |
| Reason for Recommended Action/Background |
A. Proposed Amendments to Interim Cannabis Ordinance
Staff is proposing amendments to the interim cannabis ordinance based on feedback from County-licensed cultivators, experience in implementing the program, and Board approval of the Early Implementation Development Agreement program. Each of the proposed amendments is described below.
1. Distribution Licenses
The first amendment is to allow for the issuance of distribution licenses for existing County licensed cultivators. On July 24, 2018, the Board approved the issuance of distribution licenses in conjunction with projects under the nursery/processing pilot and the Early Implementation Development Agreement programs. Based on feedback provided by cultivators, the ability to distribute their own cannabis would provide them with more control over the testing of their product (distributors are responsible for testing of cannabis) and where their product is sold. It would also provide the County with more oversight regarding the disposition of the harvested cannabis. The license would be limited to support the business activities of the individual cultivator and not to serve other licensees (self-distribution). The State offers two types of distributor licenses, both of which would be allowed as activities ancillary to cultivation licenses under the proposed 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 Only. A distributor transport license allows a licensee to transport cannabis goods between licensed cultivators, manufacturers, and distributors, but not to retailers.
2. Penalties
The second amendment is to broaden the scope of penalties to provide greater deterrence for the majority of the violations that are occurring. Under the existing ordinance, administrative penalties are as follows:
- Up to $500, per plant, per day; or
- Up to $25 per square foot of garden canopy that exceeds the garden canopy allowed by license of applicable law.
The scope of the penalties needs to be broadened to cover activities not directly related to plants or garden canopy to include penalties for any non-compliance with a standard or condition and for unlicensed cannabis activities other than cultivation. The penalties would escalate with repeat violations.
The proposed penalties are as follows:
| Violation |
First Offense |
Second Offense |
Third Offense |
| Exceedance of Allowed Permitted Cultivation Area |
$20 per square foot |
$30 per square foot |
$50 per square foot |
| Non-compliance with Standard or Requirement |
$1,000 |
$2,500 |
$10,000 |
| Unlicensed Cannabis Use Other than Cultivation Area |
$10,000 |
$25,000 |
$50,000 |
3. Early Implementation Development Agreements
The third proposed amendment to the interim ordinance pertains to procedural revisions to provide an onramp for the adoption of Early Implementation Development Agreements. This amendment is similar to those previously adopted to authorize development agreements for nursery and processing facilities. It incorporates the Early Implementation Development Agreement policy adopted by the Board on March 6, 2018, as later amended, and states that all aspects of “early” development agreements shall be governed by that policy.
Lastly, the interim cannabis ordinance amendment includes procedural and language clarifications that do not constitute substantive revisions.
An ordinance with the proposed edits tracked is attached as Attachment A and a clean version of the ordinance is attached as Attachment B.
B. Citizen’s Oversight Committee Disclosure Requirements
On July 24, 2018, the Board of Supervisors established a Cannabis Business Tax Citizens Oversight Committee to act in an advisory role to the Board of Supervisors on certain matters relating to the tax. At that time, the Board directed staff to bring back a proposed approach to addressing potential conflicts of interest for Committee members. Because the committee is purely advisory, it is not subject to the Political Reform Act or a Form 700 filing requirement under the County’s conflict of interest code.
Staff returned to the Board on January 15, 2019 to recommend adoption of a Code of Ethics and Values for the Cannabis Business Tax Citizens Oversight Committee. The proposed Code of Ethics and Values was based on the code adopted by the Board in 2009 for local general plan advisory committees. The Board rejected the staff recommendation and asked staff to return with a procedure that would obligate Committee members to annually prepare and file a disclosure form similar to the Form 700 used to implement state and local conflict of interest reporting requirements.
Although the Board clearly contemplated an alternative to a Form 700 filing requirement, staff have struggled to develop an alternative reporting approach that is less intrusive or easier to implement. The range of interests included for Category 1 filers (including elected and appointed officials) includes gifts above a reporting threshold as well as business and real property interests. All of these categories of interests are at least arguably appropriate for Committee members to disclose, consistent with the Board’s expressed interest in assuring that potential conflicts of interest can be readily determined.
Staff thus propose that the Board select from one of the following approaches:
- Direct staff to revise the County’s conflict of interest code to include Committee members as Category 1 filers and return to the Board for adoption of the revised code;
- Adopt the Code of Ethics and Values included as an attachment to this staff report (presented on January 15, 2019); or
- Determine that no disclosure requirements should apply to Committee members in light of their advisory role.
While there is scant precedent for applying a Form 700 filing requirement to members of an advisory body, the past application of a Code of Ethics and Values to local general plan advisory committees demonstrates a longstanding concern with the integrity of advisory committee recommendations on land use matters. If the Board concludes a higher level of reporting is appropriate in the context of funding recommendations, the Form 700 filing requirement is a “tried and true” means of ensuring disclosure of the range of interests that could be implicated in a funding recommendation. Such an approach is not unprecedented, as Community Services Action Board members are also subject to the Form 700 filing requirement yet the CSAB has mostly (though not exclusively) advisory authority over matters relating to the expenditure of Community Services Block Grant funding. |
| Collaborations (including Board advisory groups and external partner agencies) |
| County Administrator's Office, County Counsel's Office, Department of Community Services, Cannabis Task Force |
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