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Agenda Report - May 20, 2009 I-01 PH
AGENDA ITEM 71901 A% CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: Hold Public Hearing to Consider Adopting Urgency Ordinance to Extend Interim Ordinance No. 1822, which established a Moratorium on the Establishment and Operation of Medical Marijuana Dispensaries. MEETING DATE: May 20,2009 PREPARED BY: Deputy City Attorney RECOMMENDEDACTION: Adopt Urgency Ordinance to Extend Interim Ordinance No. 1822, which Established a Moratorium on the Establishment and Operation of Medical Marijuana Dispensaries, for a period of 10 - months and 15 -days. BACKGROUND INFORMATION: On April 15, 2009 the Council adopted Interim Ordinance No. 1822 establishing a 45 -day moratorium on the establishment and operation of medical marijuana dispensaries within the City. The Ordinance was adopted in response to the recent inquires from members of the public about opening medical marijuana dispensaries in the City. In addition, the City's Municipal Code does not address the issue, which given undecided questions over the conflict between California and federal marijuana laws may (or may not) mean that such dispensaries are a prohibited use within the City of Lodi. Staff recommends that provisions should be added the City's Municipal Code that either regulate medical marijuana dispensaries or prohibit such uses if that is the desire of the Council. To do so, however, staff will need adequate time to study the current status of State and federal law governing the distribution of medical marijuana, to review the City's General Plan and the zoning ordinances, and to make recommendations for the Council's consideration. Unfortunately, it is clear that the initial 45 days will be inadequateto prepare a comprehensive approach for Council consideration. Continuation of the moratorium does not preclude medical marijuana patients or their primary caregivers from associating in order to collectively or cooperatively cultivate marijuana for medical purposes as provided under existing California law (see Health & Safety Code Section 11362.775). As more fully explained in the guidelines issued by the office of Attorney General Edmund G. Brown, Jr., entitled "Guidelines for the Security and Non -Diversion of Marijuana Grown for Medical Use" (August 2008), "Collectives" and "Cooperatives" are permitted under California law, in contrast to storefront dispensaries which are not (a copy of the Guidelines are attached). Government Code Section 65858 provides that the Council, may, after notice to the public pursuant to Government Code Section 65090 and a public hearing, extend Interim Ordinance No. 1822 for a period of 10 -months and 15 -days. The extension requires a minimum four-fifths vote to be adopted. (An additional one-year extension is permissible under Section 65858(a)). As proposed, the recommended extension of Interim Ordinance No. 1822 would extend the current 45 - day moratorium on the issuance of use permits, variances, building permits, business licenses, or any other entitlement for the establishment or operation of medical marijuana dispensaries to April 14, 2010. APPROVED: /' -- __1 Blair King, ager Without the proposed extension, Ordinance 1822 will be of no further force and effect after May 30, 2009. FUNDING: None. i anice D. agdich Qe City Attorney cc: Rad Bartlam, Community Development Director David Main, Police Chief Attachments: California Attorney General's Guidelines for the Securitized Non -Diversion of Marijuana Grown for Medical Use. EDMUND G. BROWN JR. Attorney General DEPARTMENT OFJUSTICE State of California GUIDELINES FOR THE SECURITY AND NON -DIVERSION OF MARIJUANA GROWN FOR MEDICAL USE August 2008 In 1996, California voters approved an initiative that exempted certain patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana. In 2003, the Legislature enacted additional legislation relating to medical marijuana. One of those statutes requires the Attorney General to adopt "guidelines to ensure the security and nondiversion of marijuana grown for medical use." (Health & Saf. Code, § 11362.81(d).') To fulfill this mandate, this Office is issuing the following guidelines to (1) ensure that marijuana grown for medical purposes remains secure and does not find its way to non -patients or illicit markets, (2) help law enforcement agencies perform their duties effectively and in accordance with California law, and (3) help patients and primary caregivers understand how they may cultivate, transport, possess, and use medical marijuana under California law. I. SUMNIMW OF APPLICABLE LAW A. California Penal Provisions Relating to Marijuana. The possession, sale, cultivation, or transportation of marijuana is ordinarily a crime under California law. (See, e.g., § 11357 [possession of marijuana is a misdemeanor]; § 11358 [cultivation of marijuana is a felony]; Veh. Code, § 23222 [possession of less than 1 oz. of marijuana while driving is a misdemeanor]; § 11359 [possession with intent to sell any amount of marijuana is a felony]; § 11360 [transporting, selling, or giving away marijuana in California is a felony; under 28.5 grams is a misdemeanor]; § 11361 [selling or distributing marijuana to minors, or using a minor to transport, sell, or give away marijuana, is a felony].) B. Proposition 215 - The Compassionate Use Act of 1996. On November 5, 1996, California voters passed Proposition 215, which decriminalized the cultivation and use of marijuana by seriously ill individuals upon a physician's recommendation. (§ 113 62.5.) Proposition 215 was enacted to "ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes where that medical use is deemed appropriate and has been recommended by a physician who has determined that the person's health would benefit from the use of marijuana," and to "ensure that patients and their primary caregivers who obtain and use marijuana for Unless otherwise noted, all statutory references are to the Health & Safety Code. -1- medical purposes upon the recommendation of a physician are not subject to criminal prosecution or sanction." (§ 11362.5(b)(1)(A)-(B).) The Act further states that "Section 11357, relating to the possession of marijuana, and Section 11358, relating to the cultivation of marijuana, shall not apply to a patient, or to a patient's primary caregiver, who possesses or cultivates marijuana for the personal medical purposes of the patient upon the written or verbal recommendation or approval of a physician." (§ I I362.5(d).) Courts have found an implied defense to the transportation of medical marijuana when the "quantity transported and the method, timing and distance of the transportation are reasonably related to the patient's current medical needs." (People v. Trippet (1997) 56 Ca1.App.4th 1532, 1551.) C. Senate Bill 420 - The Medical Marijuana Program Act. On January 1,2004, Senate Bill 420, the Medical Marijuana Program Act (MMP), became law. (§§ 11362.7-11362.83.) The MMP, among other things, requires the California Department of Public Health (DPH) to establish and maintain a program for the voluntary registration of qualified medical marijuana patients and their primary caregivers through a statewide identification card system. Medical marijuana identification cards are intended to help law enforcement officers identify and verify that cardholders are able to cultivate, possess, and transport certain amounts of marijuana without being subject to arrest under specific conditions. (§§ 11362.71(e), 11362.78.) It is mandatory that all counties participate in the identification card program by (a) providing applications upon request to individuals seeking to join the identification card program; (b) processing completed applications; (c) maintaining certain records; (d) following state implementation protocols; and (e) issuing DPH identification cards to approved applicants and designated primary caregivers. (§ 11362.71(b).) Participation by patients and primary caregivers in the identification card program is voluntary. However, because identification cards offer the holder protection from arrest, are issued only after verification of the cardholder's status as a qualified patient or primary caregiver, and are immediately verifiable online or via telephone, they represent one of the best ways to ensure the security and non -diversion of marijuana grown for medical use. In addition to establishing the identification card program, the MMP also defines certain terms, sets possession guidelines for cardholders, and recognizes a qualified right to collective and cooperative cultivation of medical marijuana. (§§ 11362.7, 11362.77, 11362.775.) D. Taxability of Medical Marijuana Transactions. In February 2007, the California State Board of Equalization (BOE) issued a Special Notice confirming its policy of taxing medical marijuana transactions, as well as its requirement that businesses engaging in such transactions hold a Seller's Permit. (http://www.boe.ca.gov/news/pdf/medse11er2007.pdf.)Accordingtothe Notice, having a Seller's Permit does not allow individuals to make unlawful sales, but instead merely provides a way to remit any sales and use taxes due. BOE further clarified its policy in a -2- June 2007 Special Notice that addressed several frequently asked questions concerning taxation of medical marijuana transactions. (http://m.boe.ca.gov/news/pdf/173.pdf.) E. Medical Board of California. The Medical Board of California licenses, investigates, and disciplines California physicians. (Bus. & Prof. Code, § 2000, et seq.) Although state law prohibits punishing a physician simply for recommending marijuana for treatment of a serious medical condition (§ 11362.5(c)), the Medical Board can and does take disciplinary action against physicians who fail to comply with accepted medical standards when recommending marijuana. In a May 13,2004 press release, the Medical Board clarified that these accepted standards are the same ones that a reasonable and prudent physician would follow when recommending or approving any medication. They include the following: 1. Taking a history and conducting a good faith examination of the patient; 2. Developing a treatment plan with objectives; 3. Providing informed consent, including discussion of side effects; 4. Periodically reviewing the treatment's efficacy; 5. Consultations, as necessary; and 6. Keeping proper records supporting the decision to recommend the use of medical marijuana. (http://www.mbc.ca.gov/board/media/releases_2004_05-13_marijuana.html.) Complaints about physicians should be addressed to the Medical Board (1-800-633-2322 or www.mbc.ca.gov), which investigates and prosecutes alleged licensing violations in conjunction with the Attorney General's Office. F. The Federal Controlled Substances Act. Adopted in 1970, the Controlled Substances Act (CSA) established a federal regulatory system designed to combat recreational drug abuse by making it unlawful to manufacture, distribute, dispense, or possess any controlled substance. (21 U.S.C. § 801, et seq.; Gonzales v. Oregon (2006) 546 U.S. 243,271-273.) The CSA reflects the federal government's view that marijuana is a drug with "no currently accepted medical use." (21 U.S.C. § 812(b)(1).) Accordingly, the manufacture, distribution, or possession of marijuana is a federal criminal offense. (Id. at §§ 841(a)(1), 844(a).) The incongruity between federal and state law has given rise to understandable confusion, but no legal conflict exists merely because state law and federal law treat marijuana differently. Indeed, California's medical marijuana laws have been challenged unsuccessfully in court on the ground that they are preempted by the CSA. (County of San Diego v. San Diego NORML (July 31,2008) --- Ca1.Rptr.3d ---, 2008 WL 2930117.) Congress has provided that states are free to regulate in the area of controlled substances, including marijuana, provided that state law does not positively conflict with the CSA. (21 U.S.C. § 903.) Neither Proposition 215, nor the MMP, conflict with the CSA because, in adopting these laws, California did not "legalize" medical marijuana, but instead exercised the state's reserved powers to not punish certain marijuana offenses under state law when a physician has recommended its use to treat a serious medical condition. (See City of Garden Grove v. Superior Court (Kha) (2007) 157 Ca1.App.4th 355,371-373,381-382.) -3- In light of California's decision to remove the use and cultivation of physician - recommended marijuana from the scope of the state's drug laws, this Office recommends that state and local law enforcement officers not arrest individuals or seize marijuana under federal law when the officer determines from the facts available that the cultivation, possession, or transportation is permitted under California's medical marijuana laws. 11. DEFINITIONS A. Physician's Recommendation: Physicians may not prescribe marijuana because the federal Food and Drug Administration regulates prescription drugs and, under the CSA, marijuana is a Schedule I drug, meaning that it has no recognized medical use. Physicians may, however, lawfully issue a verbal or written recommendation under California law indicating that marijuana would be a beneficial treatment for a serious medical condition. (§ 11362.5(d); Conant v. Walters (9th Cir. 2002) 309 F.3d 629,632.) B. Primary Caregiver: A primary caregiver is a person who is designated by a qualified patient and "has consistently assumed responsibility for the housing, health, or safety" of the patient. (§ 11362.5(e).) California courts have emphasized the consistency element of the patient -caregiver relationship. Although a "primary caregiver who consistently grows and supplies ... medicinal marijuana for a section 11362.5 patient is serving a health need of the patient," someone who merely maintains a source of marijuana does not automatically become the party "who has consistently assumed responsibility for the housing, health, or safety" of that purchaser. (People ex rel. Lungren v. Peron (1997) 59 Cal.App.4th 1383, 1390, 1400.) A person may serve as primary caregiver to "more than one" patient, provided that the patients and caregiver all reside in the same city or county. (§ 11362.7(d)(2).) Primary caregivers also may receive certain compensation for their services. (§ 11362.765(c) ["A primary caregiver who receives conipensation for actual expenses, including reasonable compensation incurred for services provided ... to enable [a patient] to use marijuana under this article, or for payment for out-of-pocket expenses incurred in providing those services, or both, ... shall not, on the sole basis of that fact, be subject to prosecution" for possessing or transporting marijuana] .) C. Qualified Patient: A qualified patient is a person whose physician has recommended the use of marijuana to treat a serious illness, including cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which marijuana provides relief. (§ 11362.5(b)(1)(A).) D. Recommending Physician: A recommending physician is a person who (1) possesses a license in good standing to practice medicine in California; (2) has taken responsibility for some aspect of the medical care, treatment, diagnosis, counseling, or referral of a patient; and (3) has complied with accepted medical standards (as described by the Medical Board of California in its May 13,2004 press release) that a reasonable and prudent physician would follow when recommending or approving medical marijuana for the treatment of his or her patient. M III. GUIDELINES REGARDING MIMUAL QUALIFIED PA'IIINPS AND PRP ARY CAREGIVM A. State Law Compliance Guidelines. 1. Physician Recommendation: Patients must have a written or verbal recommendation for medical marijuana from a licensed physician. (§ 11362.5(d).) 2. State of California Medical Marijuana Identification Card: Under the MMP, qualified patients and their primary caregivers may voluntarily apply for a card issued by DPH identifying them as a person who is authorized to use, possess, or transport marijuana grown for medical purposes. To help law enforcement officers verify the cardholder's identity, each card bears a unique identification number, and a verification database is available online (www.calmmp.ca.gov). In addition, the cards contain the name of the county health department that approved the application, a 24-hour verification telephone number, and an expiration date. (§§ 11362.71(a); 11362.735(x)(3)-(4); 11362.745.) 3. Proof of Qualified Patient Status: Although verbal recommendations are technically permitted under Proposition 215, patients should obtain and carry written proof of their physician recommendations to help them avoid arrest. A state identification card is the best form of proof, because it is easily verifiable and provides immunity from arrest if certain conditions are met (see section III B.4, below). The next best forms of proof are a city- or county -issued patient identification card, or a written recommendation from a physician. 4. Possession Guidelines: a) MMP:2 Qualified patients and primary caregivers who possess a state - issued identification card may possess 8 oz. of dried marijuana, and may maintain no more than 6 mature or 12 immature plants per qualified patient. (§ 11362.77(a).) But, if "a qualified patient or primary caregiver has a doctor's recommendation that this quantity does not meet the qualified patient's medical needs, the qualified patient or primary caregiver may possess an amount of marijuana consistent with the patient's needs." (§ 11362.77(b).) Only the dried mature processed flowers or buds of the female cannabis plant should be considered when determining allowable quantities of medical marijuana for purposes of the MMP. (§ 11362.77(d).) b) Local Possession Guidelines: Counties and cities may adopt regulations that allow qualified patients or primary caregivers to possess On May 22,2008, California's Second District Court of Appeal severed Health & Safety Code § 11362.77 from the MMP on the ground that the statute's possession guidelines were an unconstitutional amendment of Proposition 215, which does not quantify the marijuana a patient may possess. (See People v. Kelly (2008) 163 Ca1.App.4th 124, 77 Ca1.Rptr.3d 390.) The Third District Court of Appeal recently reached a similar conclusion in People v. Phomphakdy (July 31,2008) --- Ca1.Rptr.3d ---, 2008 WL 2931369. The California Supreme Court has granted review in Kelly and the Attorney General intends to seek review in Phomphakdy. -5- medical marijuana in amounts that exceed the MMP's possession guidelines. (§ 11362.77(c).) c) Proposition 215: Qualified patients claiming protection under Proposition 215 may possess an amount of marijuana that is "reasonably related to [their] current medical needs." (People v. Trippet (1997) 56 Cal.AppAth 1532, 1549.) B. Enforcement Guidelines. 1. Location of Use: Medical marijuana may not be smoked (a) where smoking is prohibited by law, (b) at or within 1000 feet of a school, recreation center, or youth center (unless the medical use occurs within a residence), (c) on a school bus, or (d) in a moving motor vehicle or boat. (§ 113 62.79.) 2. Use of Medical Marijuana in the Workplace or at Correctional Facilities: The medical use of marijuana need not be accommodated in the workplace, during work hours, or at any j ail, correctional facility, or other penal institution. (§ 11362.785(a); Ross v. RagingWire Telecornms.,Inc. (2008) 42 Cal.4th 920,933 [under the Fair Employment and Housing Act, an employer may terminate an employee who tests positive for marijuana use].) 3. Criminal Defendants, Probationers, and Parolees: Criminal defendants and probationers may request court approval to use medical marijuana while they are released on bail or probation. The court's decision and reasoning must be stated on the record and in the minutes of the court. Likewise, parolees who are eligible to use medical marijuana may request that they be allowed to continue such use during the period of parole. The written conditions of parole must reflect whether the request was granted or denied. (§ 11362.795.) 4. State of California Medical Marijuana Identification Cardholders: When a person invokes the protections of Proposition 215 or the MMP and he or she possesses a state medical marijuana identification card, officers should: a) Review the identification card and verify its validity either by calling the telephone number printed on the card, or by accessing DPH's card verification website (http://www.calmmp.ca.gov); and b) If the card is valid and not being used fraudulently, there are no other indicia of illegal activity (weapons, illicit drugs, or excessive amounts of cash), and the person is within the state or local possession guidelines, the individual should be released and the marijuana should not be seized. Under the MMP, "no person or designated primary caregiver in possession of a valid state medical marijuana identification card shall be subject to arrest for possession, transportation, delivery, or cultivation of medical marijuana." (§ 11362.71(e).) Further, a "state or local law enforcement agency or officer shall not refuse to accept an identification card issued by the department unless the state or local law enforcement agency or officer has reasonable cause to believe that the information contained in the card is false or fraudulent, or the card is being used fraudulently." (§ 11362.78.) 5. Non -Cardholders: When a person claims protection under Proposition 215 or the MMP and only has a locally -issued (i.e., non -state) patient identification card, or a written (or verbal) recommendation from a licensed physician, officers should use their sound professionaljudgment to assess the validity of the person's medical -use claim: a) Officers need not abandon their search or investigation. The standard search and seizure rules apply to the enforcement of marijuana -related violations. Reasonable suspicion is required for detention, while probable cause is required for search, seizure, and arrest. b) Officers should review any written documentation for validity. It may contain the physician's name, telephone number, address, and license number. c) If the officer reasonably believes that the medical -use claim is valid based upon the totality of the circumstances (including the quantity of marijuana, packaging for sale, the presence of weapons, illicit drugs, or large amounts of cash), and the person is within the state or local possession guidelines or has an amount consistent with their current medical needs, the person should be released and the marijuana should not be seized. d) Alternatively, if the officer has probable cause to doubt the validity of a person's medical marijuana claim based upon the facts and circumstances, the person may be arrested and the marijuana may be seized. It will then be up to the person to establish his or her medical marijuana defense in court. e) Officers are not obligated to accept a person's claim of having a verbal physician's recommendation that cannot be readily verified with the physician at the time of detention. 6. Exceeding Possession Guidelines: If a person has what appears to be valid medical marijuana documentation, but exceeds the applicable possession guidelines identified above, all marijuana may be seized. 7. Return of Seized Medical Marijuana: If a person whose marijuana is seized by law enforcement successfully establishes a medical marijuana defense in court, or the case is not prosecuted, he or she may file a motion for return of the marijuana. If a court grants the motion and orders the return of marijuana seized incident to an arrest, the individual or entity subject to the order must return the property. State law enforcement officers who handle controlled substances in the course of their official duties are immune from liability under the CSA. (21 U.S.C. § 885(d).) Once the marijuana is returned, federal authorities are free to exercise jurisdiction over it. (21 U.S.C. §§ 812(c)(10), 844(a); City of Garden Grove v. Superior Court(Kha) (2007) 157Cal.App.4th 355,369,386,391.) -7- IV. GUIDELINES REGARDING COIIEClIVESAND COOMUTIVES Under California law, medical marijuana patients and primary caregivers may "associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes." (§ 11362.775.) The following guidelines are meant to apply to qualified patients and primary caregivers who come together to collectively or cooperatively cultivate physician-recommendedmarijuana. A. Business Forms: Any group that is collectively or cooperatively cultivating and distributing marijuana for medical purposes should be organized and operated in a manner that ensures the security of the crop and safeguards against diversion for non-medical purposes. The following are guidelines to help cooperatives and collectives operate within the law, and to help law enforcement determine whether they are doing so. 1. Statutory Cooperatives: A cooperative must file articles of incorporation with the state and conduct its business for the mutual benefit of its members. (Corp. Code, § 12201, 12300.) No business may call itself a "cooperative" (or -co - OP") unless it is properly organized and registered as such a corporation under the Corporations or Food and Agricultural Code. (Id. at § 12311(b).) Cooperative corporations are "democratically controlled and are not organized to make a profit for themselves, as such, or for their members, as such, but primarily for their members as patrons." (Id. at § 12201.) The earnings and savings of the business must be used for the general welfare of its members or equitably distributed to members in the form of cash, property, credits, or services. (Ibid.) Cooperatives must follow strict rules on organization, articles, elections, and distribution of earnings, and must report individual transactions from individual members each year. (See id. at § 12200, et seq.) Agricultural cooperatives are likewise nonprofit corporate entities "since they are not organized to make profit for themselves, as such, or for their members, as such, but only for their members as producers." (Food & Agric. Code, § 54033.) Agricultural cooperatives share many characteristics with consumer cooperatives. (See, e.g., id. at § 54002, et seq.) Cooperatives should not purchase marijuana from, or sell io, non-members; instead, they should only provide a means for facilitating or coordinating transactions between members. 2. Collectives: California law does not define collectives, but the dictionary defines them as "a business, farm, etc., jointly owned and operated by the members of a group." (RandomHouse UnabridgedDictionary; Random House, Inc. © 2006.) Applying this definition, a collective should be an organization that merely facilitates the collaborative efforts of patient and caregiver members — including the allocation of costs and revenues. As such, a collective is not a statutory entity, but as a practical matter it might have to organize as some form of business to carry out its activities. The collective should not purchase marijuana from, or sell to, non-members; instead, it should only provide a means for facilitating or coordinating transactions between members. -8- B. Guidelines for the Lawful Operation of a Cooperative or Collective: Collectives and cooperatives should be organized vdt sufficient structure to ensure security, non -diversion of marijuana to illicit markets, and compliance with all state and local laws. The following are some suggested guidelines and practices for operating collective growing operations to help ensure lawful operation. 1. Non -Profit Operation: Nothing in Proposition 215 or the MMP authorizes collectives, cooperatives, or individuals to profit from the sale or distribution of marijuana. (See, e.g., § 11362.765(a) ["nothing in this section shall authorize .. . any individual or group to cultivate or distribute marijuana for profit"]. 2. Business Licenses, Sales Tax, and Seller's Permits: The State Board of Equalization has determined that medical marijuana transactions are subject to sales tax, regardless of whether the individual or group makes a profit, and those engaging in transactions involving medical marijuana must obtain a Seller's Permit. Some cities and counties also require dispensing collectives and cooperatives to obtain business licenses. 3. Membership Application and Verification: When a patient or primary caregiver wishes to j oin a collective or cooperative, the group can help prevent the diversion of marijuana for non-medical use by having potential members complete a written membership application. The following application guidelines should be followed to help ensure that marijuana grown for medical use is not diverted to illicit markets: a) Verify the individual's status as a qualified patient or primary caregiver. Unless he or she has a valid state medical marijuana identification card, this should involve personal contact with the recommending physician (or his or her agent), verification of the physician's identity, as well as his or her state licensing status. Verification of primary caregiver status should include contact with the qualified patient, as well as validation of the patient's recommendation. Copies should be made of the physician's recommendation or identification card, if any; b) Have the individual agree not to distribute marijuana to non-members; c) Have the individual agree not to use the marijuana for other than medical purposes; d) Maintain membership records on-site or have them reasonably available; e) Track when members' medical marijuana recommendation and/or identification cards expire; and f) Enforce conditions of membership by excluding members whose identification card or physician recommendation are invalid or have expired, or who are caught diverting marijuana for non-medical use. S!1 4. Collectives Should Acquire, Possess, and Distribute Only Lawfully Cultivated Marijuana: Collectives and cooperatives should acquire marijuana only from their constituent members, because only marijuana grown by a qualified patient or his or her primary caregiver may lawfully be transported by, or distributed to, other members of a collective or cooperative. (§§ 11362.765, 11362.775.) The collective or cooperative may then allocate it to other members of the group. Nothing allows marijuana to be purchased from outside the collective or cooperative for distribution to its members. Instead, the cycle should be a closed- circuit of marijuana cultivation and consumption with no purchases or sales to or from non-members. To help prevent diversion of medical marijuana to non- medical markets, collectives and cooperatives should document each member's contribution of labor, resources, or money to the enterprise. They also should track and record the source of their marijuana. 5. Distribution and Sales to Non -Members are Prohibited: State law allows primary caregivers to be reimbursed for certain services (including marijuana cultivation), but nothing allows individuals or groups to sell or distribute marijuana to non-members. Accordingly, a collective or cooperative may not distribute medical marijuana to any person who is not a member in good standing of the organization. A dispensing collective or cooperative may credit its members for marijuana they provide to the collective, which it may then allocate to other members. (§ 11362.765(c).) Members also may reimburse the collective or cooperative for marijuana that has been allocated to them. Any monetary reimbursement that members provide to the collective or cooperative should only be an amount necessary to cover overhead costs and operating expenses. 6. Permissible Reimbursements and Allocations: Marijuana grown at a collective or cooperative for medical purposes may be: a) Provided free to qualified patients and primary caregivers who are members of the collective or cooperative; b) Provided in exchange for services rendered to the entity; c) Allocated based on fees that are reasonably calculated to cover overhead costs and operating expenses; or d) Any combination of the above. 7. Possession and Cultivation Guidelines: If a person is acting as primary caregiver to more than one patient under section 11362.7(d)(2), he or she may aggregate the possession and cultivation limits for each patient. For example, applying the MMP's basic possession guidelines, if a caregiver is responsible for three patients, he or she may possess up to 24 oz. of marijuana (8 oz. per patient) and may grow 18 mature or 36 immature plants. Similarly, collectives and cooperatives may cultivate and transport marijuana in aggregate amounts tied to its membership numbers. Any patient or primary caregiver exceeding individual possession guidelines should have supporting records readily available when: a) Operating a location for cultivation; b) Transporting the group's medical marijuana; and c) Operating a location for distribution to members of the collective or cooperative. -10- 8. Security: Collectives and cooperatives should provide adequate security to ensure that patients are safe and that the surrounding homes or businesses are not negatively impacted by nuisance activity such as loitering or crime. Further, to maintain security, prevent fraud, and deter robberies, collectives and cooperatives should keep accurate records and follow accepted cash handling practices, including regular bank runs and cash drops, and maintain a general ledger of cash transactions. C. Enforcement Guidelines: Depending upon the facts and circumstances, deviations from the guidelines outlined above, or other indicia that marijuana is not for medical use, may give rise to probable cause for arrest and seizure. The following are additional guidelines to help identify medical marijuana collectives and cooperatives that are operating outside of state law. 1. Storefront Dispensaries: Although medical marijuana "dispensaries" have been operating in California for years, dispensaries, as such, are not recognized under the law. As noted above, the only recognized group entities are cooperatives and collectives. (§ 11362.775.) It is the opinion of this Office that a properly organized and operated collective or cooperative that dispenses medical marijuana through a storefront may be lawful under California law, but that dispensaries that do not substantially comply with the guidelines set forth in sections IV(A) and (B), above, are likely operating outside the protections of Proposition 215 and the MMP, and that the individuals operating such entities may be subject to arrest and criminal prosecution under California law. For example, dispensaries that merely require patients to complete a form summarily designating the business owner as their primary caregiver — and then offering marijuana in exchange for cash "donations" — are likely unlawful. (Peron, supra, 59 Cal.AppAth at p. 1400 [cannabis club owner was not the primary caregiver to thousands of patients where he did not consistently assume responsibility for their housing, health, or safety].) 2. Indicia of Unlawful Operation: When investigating collectives or cooperatives, law enforcement officers should be alert for signs of mass production or illegal sales, including (a) excessive amounts of marijuana, (b) excessive amounts of cash, (c) failure to follow local and state laws applicable to similar businesses, such as maintenance of any required licenses and payment of any required taxes, including sales taxes, (d) weapons, (e) illicit drugs, (f) purchases from, or sales or distribution to, non-members, or (g) distribution outside of California. ORDINANCE NO. 1823 AN UNCODIFIED INTERIM URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODI EXTENDING ORDINANCE NO. 1822 IMPOSING A TEMPORARY MORATORIUM ON THE ESTABLISHMENT OR OPERATION OF MEDICAL MARIJUANA DISPENSARIES IN THE CITY OF LODI ------------------------------------------------------------------------- ------------------------------------------------------------------------- WHEREAS, in 1996, the voters of the State of California approved Proposition 215, which was codified as Health and Safety Code Section 11362.5, et seq. and entitled the Compassionate Use Act of 1996 ("the Act"); and WHEREAS, the intent of Proposition 215 was to enable persons who are in need of marijuana for medical purposes to obtain and use it under limited, specified circumstances; and WHEREAS, on January 1, 2004, Senate Bill 420 became effective to clarify the scope of the Act and to allow cities and counties to adopt and enforce rules and regulations consistent with SB 420 and the Act; and WHEREAS, under the U.S. Controlled Substances Act, marijuana is classified as a Schedule 1 drug, meaning it has no accepted medical use; and WHEREAS, the City of Lodi (the "City") has received inquiries from members of the public as to the permitting process and zoning regulations for operating medical marijuana dispensaries within the City; and WHEREAS, medical marijuana dispensaries raise issues of first impression for the City, which currently does not address or regulate in any manner the existence or location of medical marijuana dispensaries in its Municipal Code; and WHEREAS, based on recent trends, the City believes that it may receive a growing number of inquiries for such businesses, including an application in the immediate future; and WHEREAS, other California cities that have permitted the establishment of medical marijuana dispensaries have witnessed an increase in crime, such as burglaries, robberies, and the sale of illegal drugs in the areas immediately surrounding such dispensaries; and WHEREAS, the City must study and analyze concerns about the potential negative impacts on the public health, safety, and welfare arising from medical marijuana dispensaries, including, but not limited to, criminal incidents, loitering, disturbing the peace, and property damage; and WHEREAS, the City must study the scope of the City's police power and draft the necessary municipal code provisions; and WHEREAS, if medical marijuana dispensaries were allowed to be established in the City without appropriate regulation, such uses might be established in areas that would conflict with the General Plan currently under consideration by the Planning Commission and the City Council, be inconsistent with surrounding uses, or be detrimental to the public health, safety, and welfare; and if such uses were allowed to proceed as allowed under the current zoning, such uses could conflict with, and defeat the purpose of, the proposal to study and adopt new regulations regarding medical marijuana dispensaries; and WHEREAS, the issuing of permits, business licenses, or other applicable entitlements providing for the establishment and/or operation of medical marijuana dispensaries, prior to the completion of the City's study of the potential impact of such facilities, poses a current and immediate threat to the public health, safety, and welfare, and that a temporary moratorium on the issuance of such permits, licenses, and entitlements is thus necessary; and WHEREAS, this Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and Section 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; it prevents changes in the environment pending the completion of the contemplated General Plan adoption and zoning ordinance review; and WHEREAS, California Government Code $65858 authorizes cities to adopt moratoriums on land use entitlements in order to study any uses that may be in conflict with a contemplated general plan, specific plan, or zoning proposal; and WHEREAS, for the protection of the public's health, safety, and general welfare, the City Council on April 15, 2009, adopted Ordinance No. 1822 entitled an Uncodified Urgency Interim Ordinance of the City Council of the City of Lodi making findings and imposing a forty-five (45) day moratorium on the establishment or operation of medical marijuana dispensaries in the City of Lodi; and WHEREAS, the City Council desires to extend Ordinance No. 1822 for a period of ten (10) months and fifteen (15) days, as permitted by Government Code Section 65858, to maintain the current status quo and to provide time for the City to study applicable law, a permit or licensing procedure, the appropriate zoning districts for such uses, and adopt regulatory standards and conditions to be imposed on such operations. NOW, THEREFORE, BE IT ORDAINED BYTHE LODI CITY COUNCIL AS FOLLOWS: Section 1. The City Council finds that in accordance with the terms and provisions of Section 65858 of the Government Code, and following notice given in the time and manner required by law, it held a public hearing on the extension of Ordinance No. 1822 on May 20, 2009. After hearing all applicable evidence, the City Council finds that the conditions and findings cited in Ordinance 1822 continue to exist and that further study by City staff is necessary in order to study applicable law, a permit or licensing procedure, the appropriate zoning districts for such uses, and to adopt regulatory standards and conditions to be imposed on such operations. i� Section 2. Imaositionof Moratorium. A. In accordance with Government Code Section 65858, from and after the date of the expiration of Ordinance No. 1822, no use permit, variance, building permit, business license, or other applicable entitlement for use shall be approved or issued for the establishmentor operation cf a medical marijuana dispensaryfor a period of ten (10) months and fifteen (15) days. B. For purposes of this Ordinance, "medical marijuana dispensary" shall mean any facility or location where a primary caregiver intends to or does make available, sell, transmit, give, or otherwise provide medical marijuana to two or more of the following: a qualified patient, a person with an identification card, or a primary caregiver. For purposes of this ordinance, the terms "primary caregiver," "qualified patient," and "identification card" shall have the same meaning as that set forth in Health and Safety Code Section 11362.7, et seq. C. For purposes of this Ordinance, a medical marijuana dispensary shall not include the following uses, as long as the location of such uses is otherwise regulated by applicable law and as long as such use complies strictly with applicable law, including, but not limited to, Health and Safety Code Section 11362.7, et seq.: (1) a clinic, licensed pursuant to Chapter 1 ,Division 2 of the Health and Safety Code (commencing with §1200); (2) a health care facility, licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code (commencing with $1250); (3) a residential care facility for persons with chronic life-threatening illness, licensed pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code (commencing with $1568.01); (4) a residential care facility for the elderly, licensed pursuant to Chapter 3.2 of Division 2 of the Health and Safety Code (commencing with $1569); or (5) a hospice or home health agency licensed pursuant to Chapter 8 of Division 2 of the Health and Safety Code (commencing with §1725), the owner or operator, or no more than three employees who are designated by the owner or operator, of the clinic, facility, hospice, or home health agency, if designated as a primary caregiver by that qualified patient or person with an identification card. D. This Ordinance is an urgency ordinance adopted pursuant to the authority granted to the City of Lodi by Government Code Section 65858 and is for the immediate preservation of the public health, safety, and welfare. The City Council of the City of Lodi hereby finds and declares that there is a need to enact an urgency ordinance establishing a moratorium on medical marijuana dispensaries, based upon the following findings: (1) California cities that have permitted the establishment of medical marijuana dispensaries have found that such dispensaries have resulted in negative and harmful secondary effects, such as an increase in crime, including robberies, burglaries, and sales of illegal drugs in the areas immediately surrounding medical marijuana dispensaries. This potential for increased risk of crime and violence presents a clear and immediate danger to the public health, safety and welfare of the residents of the City of Lodi; and (2) The City has recently received inquiries from members of the public as to the permitting process and zoning regulations for operating medical marijuana dispensaries within the City; and (3) The City does not currently have standards in its Municipal Code relating to the location, operation, and concentration of medical marijuana dispensaries within the City; and (4) If medical marijuana dispensaries were allowed to be established without appropriate review of location and operational criteria and standards, such uses might be established in areas that would conflict with the General Plan under consideration by the Planning Commission and the City Council, be inconsistent with surrounding uses, or could have potential adverse secondary effects on neighborhoods in the City and be detrimental to the public health, safety, and welfare; and (5) The failure to extend the existing moratorium may result in significant irreversible change in the character of the community and the neighborhood surrounding any marijuana dispensary that would be allowed to open under the City's Municipal Code; and (6) Permitting a marijuana dispensary to open while the City is studying and considering a new General Plan as well as zoning regulations to regulate and/or prohibit this use would defeat the purpose of studying these impacts in the first place; and (7) As a result of the negative and harmful secondary effects associated with medical marijuana dispensaries and the current and immediate threat such secondary effects pose to the public health, safety, and welfare, it is necessary to extend the existing moratorium on the establishment and operation of medical marijuana dispensaries in the City for a period of ten (10) months and fifteen (15) days from and after the date of the expiration of Ordinance No. 1822, to allow for the completion of the City's study of the potential impacts of medical marijuana dispensaries and possible amendments to the City's Municipal Code. Section 3. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance or any part thereof is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council of the City of Lodi hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared unconstitutional or invalid or ineffective. Section 4. No Mandatory Dutv of Care. This Ordinance is not intended to and shall not be construed or given effect in a mannerwhich imposes upon the City, or any officer or employee thereof, a mandatory duty of care towards persons or property within the City or outside of the City so as to provide basis of civil liabilityfor damages, except as otherwise imposed by law. 4 Section 6. Conflict. All ordinances and parts of ordinances in conflict herewith are repealed insofar as such conflict may exist. Section 7. Effective Date. This urgency Ordinance shall be published one time in the "Lodi News Sentinel," a daily newspaper of general circulation printed and published in the City of Lodi, and shall be in force and take effect immediately upon its passage and approval by at least four-fifths vote of the City Council the expiration of Ordinance No. 1822 (May 30, 2009), and shall be in effect for a period of ten (10) months and fifteen (15) days (April 14, 2010), unless repealed or extended by further action of the City Council as provided by Government Code Section 65858 Apnrcved this 20th day of May, 2009 LARRY D. 4ANSEN Mayor ATTEST: J NIFER U. PERRIN Assistant City Clerk State of California County of San Joaquin, ss. I, Jennifer M. Perrin, Assistant City Clerk of the City of Lodi, do hereby certify that Ordinance No. 1823 was adopted as an urgency ordinance at a regular meeting of the City Council of the City of Lodi held May 20, 2009, and was thereafter passed, adopted, and ordered to print by the following vote: AYES: COUNCIL MEMBERS — Hitchcock, Johnson, Katzakian, Mounce, and Mayor Hansen NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS — None further certify that Ordinance No. 1823 was approved and signed by the Mayor on the date of its passage and the same has been published pursuant to law. 4JAproved to Form: NICE . MAGDICH ity Attorney 5 NIFE . PERRJN Assistant City Clerk ;yOF� 0 �9t ofR`'�P Please immediately confirm receipt df this fax by calling 333-6702 CITY OF LODI P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 ADVERTISING INSTRUCTIONS SUBJECT: PUBLIC HEARING TO CONSIDER EXTENDING INTERIM ORDINANCE NO. 1822, AN UNCODIFIED URGENCY INTERIM ORDINANCE TO ESTABLISH A MORATORIUM ON THE ESTABLISHMENT AND OPERATION OF MEDICAL MARIJUANA DISPENSARIES PUBLISH DATE: SATURDAY, MAY 9,2009 TEAR SHEETS WANTED: Three (3) please SEND AFFIDAVIT AND BILL TO: RANDI JOHL, CITY CLERK City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 DATED: THURSDAY, MAY 7,2009 ORDERED BY: RANDI JOHL CITY CLERK "u NIFER PERRIN, CMC ASSISTANT CITY CLERK MARIA BECERRA ADMINISTRATIVE CLERK Verify Appearance of this Legal in the Newspaper — Copy to File Faxed to the Sentinel at 369-1084 at 1 ' .0Mrr,rtirnel on ]_(date) (pages) LNS Phoned to confirm receipt of all p qes at __ (time) CF MBJMP (initials) fon-nAadvins.doc DECLARATION OF POSTING PUBLIC HEARING TO CONSIDER EXTENDING INTERIM ORDINANCE NO. 1822, AN UNCODIFIED URGENCY INTERIM ORDINANCE TO ESTABLISH A MORATORIUM ON THE ESTABLISHMENT AND OPERATION OF MEDICAL MARIJUANA DISPENSARIES On Friday, May 8, 2009, in the City of Lodi, San Joaquin County, California, a copy of a Notice of Public Hearing to consider extending interim Ordinance No. 1822, an uncodified urgency interim ordinance to establish a moratorium on the establishment and operation of medical marijuana dispensaries (attached hereto, marked Exhibit "A") was posted at the following four locations: Lodi Public Library Lodi City Clerk's Office Lodi City Hall Lobby Lodi Carnegie Forum declare under penalty of perjury that the foregoing is true and correct. Executed on May 8, 2009, at Lodi, California. JF&RIFER M. IgERRIN, CMC ASSISTANT CITY CLERK N:\Administration\CLERK\Forms\DECPOST 1.D0C ORDERED BY: RANDIJOHL CITY CLERK MARIA BECERRA ADMINISTRATIVE CLERK • CITY OF LODI Carnegie Forum 305 West Pine Street, Lodi NOTICE OF PUBLIC HEARING Date: May 20,2009 Time: 7:00 p.m. For information regarding this notice please contact: Randi Johl City Clerk Telephone: (209) 333-6702 ICE OF PUBLIC HEA [ - Ekp i i B A NOTICE S HEREBY GIVEN that on Wednesday, May 20, 2009, at the hour of 7:00 p.m., or as soon thereafter as the matter may be heard, the City Council will conduct a public hearing at the Carnegie Forum, 305 West Pine Street, Lodi, to consider the following item: a) Extend interim Ordinance No. 1822, an uncodified urgency interim ordinance to establish a moratorium on the establishment and operation cf medical marijuana dispensaries. Information regarding this item may be obtained in the City Attorney's Office, 221 West Pine Street, Lodi, (209) 333-6701. All interested persons are invited to present their views and comments on this matter. Written statements may be filed with the City Clerk, City Hall, 221 West Pine Street, 2nd Floor, Lodi, 95240, at any time prior to the hearing scheduled herein, and oral statements may be made at said hearing. F you challenge the subject matter in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice or in written correspondence delivered to the City Clerk, 221 West Pine Street, at or prior to the close cf the public hearing. B r of the Lodi City Council: Randi Johl City Clerk Dated: May 6,2009 D. Stephen Schwabauer City Attorney CLERK\PUBHEAR\NOTICES\NOT MedicafMarijuana.DOC 5/5/09