March 20, 2017
Hon. Vito Chiesa, 2nd District, Chair
Stanislaus County Board of Supervisors
1010 10th Street, Suite 6700
Modesto, CA 95354
RE: Recommended Stanislaus County “Letter of Good Standing and Compliance with Local Jurisdiction Requirements” for Cannabis Businesses
Dear Chairman Chiesa:
The purpose of this letter is to respectfully offer our views on establishing a responsible criteria for vetting cannabis businesses in Stanislaus County in anticipation of the issuance of state licenses.
The State of California Bureau of Marijuana Control (Bureau) is charged under both the Medical Cannabis Regulation and Control Act (MCRSA) and Proposition 64, the Adult Use of Marijuana Act (AUMA), with issuing licenses to eligible cannabis business beginning in January 2018.
The Bureau shall give priority to licensing cannabis businesses based upon guidelines provided by law. Under MCRSA, a “premises or person that is operating in compliance with local zoning ordinances and other state and local requirements on or before January 1, 2018, may continue its operations until its application for licensure is approved or denied” by the Bureau.1 To establish priority of review, the Bureau will examine evidence whether an applicant has operated “in good standing with the local jurisdiction by January 1, 2016.”2 Under AUMA, the Bureau will require to applicants to “demonstrate to the authority’s satisfaction that the applicant operated in compliance with the Compassionate Use Act and its implementing laws before September 1, 2016, or currently operates in compliance with Chapter 3.5 (commencing with Section 19300)of Division 8 (MCRSA).”3
Under AUMA, the Bureau requests that “local jurisdictions identify for the bureau potential applicants for licensure based on the applicants’ prior operation in the local jurisdiction in compliance with state law, including the Compassionate Use Act and its implementing laws, and any applicable local laws.”4
In addition, or in lieu of identification of potential applicants by local jurisdictions who are operating in compliance with state and local laws, applicants may also “furnish other evidence to demonstrate operation in compliance with the Compassionate Use Act or Chapter 3.5 (commencing with Section 19300)of Division 8 (MCRSA).”5
In view of this public policy challenges facing local jurisdictions seeking to establish cannabis regulation and control ordinances, including Stanislaus County, we respectfully suggest that consideration be given to the providing for an “Indication of Good Standing and Compliance with Local Jurisdiction Requirements” document as part of a cannabis regulation and control ordinance. Based upon the experience of other counties and that of other states6 which have legalized cannabis, such a tool can provide a workable vetting process for determining which individual, entities, and businesses have been consistently compliant with state law, and hence eligible for a state cannabis license.
Among the criteria to consider to include in a Good Standing and Compliance with Local Jurisdiction Requirements document would include:
* Registration with the State Board of Equalization, and a history of remitting sales and use taxes
* Possession of an employer identification number.
* Submitting Invoices or sales receipts which indicate operation.
* Proof of operating as a medical cannabis collective with contracts with cannabis providers.
* Public indication of operation, including, for example: a website, phone number, publicized place of business address.
* A local business license (if available for cannabis businesses).
* Use of odor reduction technology (cultivators and dispensaries).
* A written security operations plan.
One way to establish that cannabis businesses have been operating in compliance with MCRSA or AUMA would be for the County to establish a mechanism for cannabis businesses to file a form, under penalty of perjury, indicating compliance with the vetting criteria listed above, along with sufficient documentation. Upon review of the submitted forum and attachments by an appropriate County agency, cannabis businesses could be issued a “Letter of Good Standing and Compliance with Local Jurisdiction Requirements.” This Letter of Good Standing would simply indicate that the cannabis business in question has operated consistently with state law, as required by MCRSA and AUMA; and would not mean that the County could not also require compliance with additional requirements enacted at some future date.
We hope that this suggestion has been helpful, and look forward to providing additional information as Stanislaus County proceeds to regulate cannabis businesses.
Very truly yours,
Enclosure: Washington State Liquor and Cannabis Board Priority Criteria for Processing Cannabis Licenses
cc: Hon. Jim DeMartini, 5th District, Vice-Chair
Hon. Kristin Olsen, 1st District
Hon. Terry Withrow, 3rd District
Hon. Dick Monteith, 4th District
c/o Clerk of the Board of Supervisors
Stan Risen, Chief Executive Officer
Mary Ann Lee, Managing Director, Health Services Agency
Milton O’Haire, Agricultural Commissioner/Sealer of Weights & Measures
Angela Freitas, Planning Director
John Doering, County Counsel
Tim Bazar, Public Defender
Hon. Birgit Fladager, District Attorney
Hon. Adam Christianson, Sheriff–Coroner
1 See Business and Professions Code section 19321(b)
2 See Business and Professions Code section 19321(b)
3 See Business and Professions Code section 26054.2(a)
4 See Business and Professions Code section 26054.2(b)
5 See Business and Professions Code section 26054.2(c)
6 See the Washington State Liquor and Cannabis Board (WSLCB) Priority Criteria, attached here, and linked at: http://lcb.wa.gov/mjlicense/priority-criteria