The first item up for a vote was repealing and replacing an ordinance the city council originally passed in Oct. 2017. City Administrator Frank Kennedy said that the revamped ordinance was an effort to streamline the permitting process for both the city and prospective cannabis business operators at the Canna-Hub development in town. Essentially, the updated ordinance changes the mechanism by which the city generates revenue from the Canna-Hub development, City Attorney Ann Siprelle explained to the council.
When the past council passed the original ordinance, it established fees as a provision of the conditional use permit process for individual cannabis operators.
Staff worked with Canna-Hub and decided instead to make the same fees a condition of the development agreement with the developer, Siprelle said.
“That way, (the fees) will be much more legally defensible,” she added. “As a condition of the (Condition Use Permit), they could be challenged, because it is not a legal method to use the Use Permit for the fees.”
Kennedy said that the revenue to the city would remain the same, and that the development agreement with Canna-Hub would come before the council for approval in the near future.
“Part of our problem is when we first started these ordinances, everything was brand new,” Kennedy said. “After we got into the weeds of it and started to look at the finite details of how we would levy those fees, develop an agreement and a conditional use permit and all the other things that go into land use for something like this, it was determined that some things needed to change. It can’t be a tax. It has to be a negotiated development agreement, and everybody has to sign onto that – so that’s where the fees are moving to.”
He added it also made more sense from a logistical standpoint for the city, removing unnecessary “red tape” from the permitting process.
“It didn’t make a lot of sense to have 100 to 110 different businesses to come in, go through the planning commission phase, then the city council phase,” Kennedy said. “That adds 2-3 months onto the process, and it’s not really conducive to conducting business… (The changes are) just made to really be more practical.”
The council also approved a new ordinance that established a commercial cannabis regulatory permit process for the city. City Planner Monica Stegall said that the ordinance establishes an application process for all of the operators in the cannabis overlay zone.
“It’s going to be similar to a business license, but for the cannabis operators,” she said.
The new ordinance establishes an application fee of $500. The permit would be good for two years, with a renewal fee of $100 after that. Applications will include a lot of information, Stegall said, including site plans, floor plans, security and odor plans, and a requirement for the applicant/operator and all management personnel at each business to submit fingerprints for a LiveScan background check. The ordinance also establishes criteria for denials and suspensions for operator permits.
The background checks being limited to management personnel and the operator/applicant is one notable change from the city’s initially stated goal of having all employees undergo backgrounds at the cannabis business park. The city initially considered implementing a ‘work permit’ process for all employees – a permit that would have been contingent upon them undergoing a background check – but it was nixed due to legal concerns.
“There may be some legal basis to challenge the city’s ability to say who can and cannot work in any privately owned business,” Kennedy said. “…We initially wanted to have all employees go through a background check, but we had to move off that position for legal reasons.”
He added that all employees would still be required to register with the city.
“We will know who they are,” Kennedy said.
The third and final ordinance approved by the council on Dec. 12 also effectively streamlined the permitting process for cannabis operators. It changes the approval process for issuing conditional use permits within the cannabis overlay zone, allowing for a Master Conditional Use Permit that will cover multiple operators. The ordinance also moved approval authority to the hands of the city administrator, rather than a recommendation from the planning commission and approval by the council. Each individual operator will still be required to get a regulatory permit from the city. ■