If you are looking to secure a California cannabis business license you should start getting ready now for some seriously tough regulatory regimes. Our cannabis lawyers have had to wade through massive bureaucratic red tape in securing marijuana business licenses for our clients in many different states and in even more counties and cities, but we see California — under its Medical Cannabis Regulation and Safety Act and its Adult Use of Marijuana Act — as likely leading the country in red tape. And of all the California counties and cities, Sacramento is right now leading the pack in tough local law marijuana regimes. Marijuana operators should expect to pay a serious premium if they want to operate in the capital of the Golden State.
On February 2, 2016, the Sacramento City Council adopted Section 17.228.127 of the Sacramento City Code allowing non-residential properties to be used for commercial cannabis cultivation with a Conditional Use Permit. As defined in Title 8 of the City of Sacramento City Code, cannabis cultivation means “to plant, grow, harvest, dry, cure, grade or trim marijuana.” Cannabis cultivation can only be done indoors within a fully enclosed building not visible from a public right-of-way.
On November 22, 2016, Sacramento adopted Ordinance No. 2016-0051 to regulate marijuana cultivation businesses. Under this 44-page ordinance (among its many provisions on security, management, record keeping, signage, and general facility restrictions) cultivation permits may be issued for the following three different cultivation permit types:
- Class A for indoor cultivation of no more than 5,000 sq. ft. of total canopy size
- Class B for indoor cultivation of no more than 10,000 sq. ft. of total canopy size
- Class C for indoor cultivation sites up to 22,000 sq. ft. of total canopy size
Cannabis cultivation will be allowed only in Agricultural, General Commercial, Heavy Commercial, Light Industrial, and Heavy Industrial zones.
As of April 3, 2017, prospective marijuana cultivation businesses can begin requesting appointments with the Planning Division at the Community Development Department to file for the required Conditional Use Permits (“CUP”). Contemporaneous with filing for the CUP, applicants must also file for a Business Operating Permit (BOP) with the City’s Revenue Division. Getting your CUP and BOP for cultivating marijuana will be no small task.
You will be required to provide the following for the CUP:
- A completed “Planning Entitlement Application”;
- A draft Security Plan, Community Relations Plan and Odor Control Plan;
- A written description of the project being proposed for development, which must include a description of the project and detailed scope of work for which the CUP review is being requested and how the project will address any potential negative
effects on the community. A Design Concept Narrative is also required for Site Plan and Design Review entitlement.
- Multiple scale developmental plans that are incredibly detailed and are to include site plans with vicinity map, building elevations, landscape plans, floor plans, reduced plans, streetscape drawings, and color photos of the proposed facility, all of which are subject to a design review by the Planning Division.
You will also be required to submit the following for the BOP:
- A Marijuana Cultivation Business Permit Application;
- Proof of non-profit status (until state licenses issue in the future);
- A Neighborhood Responsibility Plan;
- A business operations plan, which must include:
- Business Plan;
- Community Relations Plan;
- State Licenses (once issued);
- Tax Compliance;
- Price List;
- Floor Plan;
- Site Plan;
- Security Plan;
- Water Efficiency Plan;
- Lighting Plan;
- Odor Control Plan;
- Energy Efficiency Plan; and
- Owner’s Statement of Consent.
- Criminal History/Background Check Forms and fingerprinting, which apply to all “interested parties,” none of whom can be convicted felons and which Sacramento defines as follows:
- Persons with at least a 10% interest in the marijuana cultivation business;
- Partners, officers, directors, and stockholders of every corporation, limited
liability company, or general or limited partnership that owns at least 10%
of the stock, capital, profits, voting rights, or membership interest of the
marijuana cultivation business or that is one of the partners in the
marijuana cultivation business;
- The managers of the marijuana cultivation business; and
- The staff of the marijuana cultivation business.
And now for the fees–fees for the CUPs range from $16,640.24 at the Zoning Administrator Level if not making any changes to an existing building or site to $33,610.28 for Planning and Design Commission Site Plan and/or Design Review on buildings 125,000 square feet or greater. Fees for the BOP range from $9,700 for a Class A grow to $28,910 for a Class C grow. And all of these fees have corresponding renewal fees. The bottom line? It’s not going to be cheap or easy to secure a license to operate in Sacramento as a grower.
Applicants have until June 30, 2017 to submit their completed CUPs and BOPs. With the volume of information and compliance proof required, you should begin now if you want a future cultivating cannabis in Sacramento.