City of Santa Cruz Moves Toward Regulating Adult Use Commercial Cannabis Businesses

Santa Cruz Cannabis
Will Santa Cruz lead on cannabis?

With less than three months until the end of the year and the commencement of California’s medical and adult use cannabis licensing program, most local jurisdictions are still without regulations to govern adult use commercial cannabis businesses. This has created concern throughout the industry that despite the Bureau of Cannabis Control’s (BCC) promise that it will begin issuing licenses on January 1st, few — if any — adult use commercial cannabis businesses will have secured the requisite local approvals for state licensing. Last month San Francisco, for example, introduced legislation confirming the city would not allow recreational cannabis sales by January.

San Francisco’s stance on adult use commercial cannabis activity is echoed across the state, with cities and counties waiting for state guidance before drafting, adopting and implementing their own adult use regulations. Though Proposition 64 gave local jurisdictions broad authority to adopt cannabis regulations, without draft rules from the state, cities and counties are in a tough place. It doesn’t necessarily make sense to put resources into drafting regulations when the state rules could necessitate hefty revisions.

But last week, the City of Santa Cruz recommended to its City Council amendments to the local zoning ordinance and the Local Coastal Program to regulate adult use commercial cannabis businesses. The Bay Area in particular lacks local regulation of adult use commercial cannabis businesses, so adoption of these recommendations could provide opportunity for those looking to open a recreational business.

The City’s recommendations are broken down by retail sales, manufacturing and cultivation, and delivery. Here are the highlights of the proposed regulations for each category:

Retail Sales

  • Retail uses should be limited to the same zoning districts that currently allow medical marijuana dispensaries: CC, CT, IG, and IG-Per 2.
  • There should be a 600-foot buffer between marijuana retail outlets, with the City maintaining discretion to consider smaller separations when certain findings are met;
  • Based on the MAUCRSA locational restrictions (600 feet from any K-12 school, childcare center, or youth center), the definition of “youth center” is broad and should include parks with playgrounds or those that provide youth programs, both athletic and educational. The city has provided a map indicating the locations where retail outlets would be allowed.
  • The city may limit the number of retail outlets to a maximum of five. This would include both medical and adult use retail stores. The two currently operating legal medical marijuana dispensaries in Santa Cruz may be allowed to sell recreational cannabis in addition to medical cannabis.
  • Applications should be reviewed with consideration to factors of importance to the community, including local preference, preference for women- and minority-owned businesses, and treatment of employees (living wage and benefits).
  • Licenses should be non-transferrable.
  • Onsite consumption, including smoking lounges, should not be allowed.

Manufacturing and Cultivation

  • Commercial outdoor cultivation should not be allowed within city limits.
  • Marijuana testing, manufacturing, distribution and warehousing, and indoor cultivation should be allowed in industrial districts only (IG and IG-Per 2) with approval of an Administrative Use Permit at a public hearing by the Zoning Administrator.
  • The 600-foot MAUCRSA buffer would not apply to commercial uses that are not open to the public, except for manufacturing that uses volatile solvents.
  • Indoor cultivation should be limited to a maximum of 10,000 square feet.


  • Deliveries should be prohibited within the City from businesses located outside the City limits. Santa Cruz acknowledges the difficulty of enforcing this rule.
  • The ordinance should specifically prohibit deliveries from other than licensed retailers, microbusinesses or nonprofits.

The City Council will take up this issue this Thursday, October 19th, and we’ll be standing by to see whether the city adopts these proposed cannabis ordinance amendments.

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California, Licensing, News