Commercial Cannabis

At the May 21, 2024 Monterey City Council Meeting, Council approved the selection committee recommendation to issue storefront retail cannabis business permits, contingent upon successful obtainment of a zone clearance. The four businesses are: 1) Monterey Responsible and Compliant Retail LLC, 2) Element 7 SF4 LLC, 3) Monterey Pacific Retail Holdings, Inc., and 4) OTC Monterey, LLC. Adopted Resolution are Nos. 24-083, 24-084, 24-085, 24-086, and 24-087 C.S. Staff also conducted a random drawing through which applicants selected zones as follows: Element 7 SF4 LLC selected the Downtown zone (CB2); OTC Monterey LLC selected the Lighthouse zone (CB1); Monterey Pacific Retail Holdings, Inc. selected the Cannery Row zone (CB3); and Monterey Responsible and Compliant Retail LLC selected the North Fremont zone (CB4). The business applicants will now go through the zone clearance process, and find properties within their zone. The

Recording (start at 3:15:12) of the May 21, 2024 Monterey City Council Meeting Agenda Item #15 and Agenda Item #16. Details of the application process will be posted at monterey.gov/cannabis.

Phase 3 of the storefront retail application process concluded on Friday, May 3, 2024, when the Selection Committee completed their interviews with the top 8 applicants. The Selection Committee, consisting of the Mayor and Vice Mayor, selected the 4 applicants they will recommend for approval to City Council. The remaining 4 applicants will be placed on the waitlist.

The top 4 and the waitlist will be presented to City Council for approval at the May 21, 2024 regular meeting. The ranking will be available in the agenda report published before the meeting. Once available, this may be found at monterey.gov/agendas.

At the May 21, 2024 meeting, a drawing will be held to determine which zones the selected cannabis businesses will operate in. These zones include the areas of Lighthouse Avenue, Cannery Row, Downtown (Old Monterey), and North Fremont Street. This topic will come up at the 7:00 p.m. session. Information on how to participate can be found at monterey.gov/meetings.

On February 6, 2024, City Council had the opportunity to receive an update on the applications received so far, as well as current crime and revenue trends related to the cannabis industry. Council decided to move forward with the application process according to schedule.

The timeline for the Storefront and Non-Storefront retail application process is as follows (subject to change):

The application window for Storefront Retail Cannabis Business Permits officially closed on January 29, 2024. The City received 13 applications from a diverse group of applicants that includes experienced cannabis retailers with multiple locations throughout California, regional cannabis retailers, and independent cannabis retailers.

On February 6, 2024, City Council will receive an update on the application process, as well as an update on cannabis industry revenue and crime trends. Council will then have the opportunity to consider a 180 day pause on processing Storefront Retail Cannabis Business Permits. Council will also consider adopting a resolution to authorize the use of Live Scan technology to assist the City in implementing its cannabis business permit regulations.

The agenda for the February 6, 2024 City Council meeting may be found at: https://isearchmonterey.org/OnBaseAgendaOnline/Meetings/ViewMeeting?id=5796&doctype=1

The Storefront & Non-Storefront Retail Cannabis Business Permit Application Procedure Guidelines and Review Criteria document has been updated to reflect new language pertaining to PDF File #5. This update may be found on page 5 of the document in the subsection titled "Flash Drive Content."

The previous language stated the following:

"PDF File #5 – Documents relating to other licensed cannabis facilities operated by the applicant, including copies of active state cannabis business license(s), tax compliance documentation (i.e. City business license tax certificates, State sales tax seller’s permits, and recent financial statements and tax returns), annual budget of operations, and list of current prices for all products and services provided, as may be applicable."

The updated language states:

"PDF File #5 – [UPDATED 1/26/2024] Documents relating to other licensed cannabis facilities operated by the applicant, including copies of active state and local cannabis business license(s), local business license tax certificates, State sales tax seller’s permits, and a list of current prices for all products and services provided, as may be applicable."

The updated document may be found at monterey.org/cannabis. Please note that additional questions and answers have been added to the FAQ document as well.

The City is aware of an issue with the Live Scan process that is preventing applicants from adequately completing this requirement. Due to the delay caused by this issue, the deadline for completing the Live Scan requirement is being extended to a date that will be announced soon. This does not affect the deadline for any other Storefront and Non-Storefront Retail Cannabis Business Permit application materials. That deadline is still 4:00p.m. on 1/29/2024. A solution and more details will be provided soon.

Updates will be provided on haveyoursaymonterey.org/cannabis and monterey.org/cannabis when available.

A few updates to the ongoing cannabis business permit process:

• On January 16, 2024, City Council adopted an update to the Cannabis Business Ordinance. This includes clarifying information about the zone clearance and zone of preference selection process, a statement of "No physical address for the proposed cannabis business shall be listed on the retail permit application,” and an update to the definition of "Youth Center."
• There has been an update to the Live Scan process. All Live Scans must include both the DOJ and FBI portions to be considered in compliance with the Live Scan application requirement. Unfortunately, MPD will not be able to conduct Live Scans for this application process prior to the 1/29/2024 deadline. All applicants should visit https://oag.ca.gov/fingerprints/locations to find a DOJ-approved Live Scan facility where they can accomplish this task (some of these locations may not be able to conduct the FBI portion of the Live Scan, so please verify that your agency of choice is able to do so in advance). The Live Scan form provided on this page has been updated to include additional prefilled information.
• The FAQ section of the webpage is updated weekly and may be found at https://files.monterey.org/Document%20Center/CommDev/Planning/Cannabis/Cannabis-FAQ.pdf.

For the most up to date information including links to all of the above, please be sure to visit monterey.org/cannabis.

The City of Monterey is pleased to announce that the application window for Commercial Cannabis Business Permits has officially launched. If you or your party is interested in applying for a Storefront or Non-Storefront Retail Permit, Temporary Cannabis Event Permit, Testing Laboratory Permit, or Out-of-City Retail and Distribution Permit, you will find all required forms and pertinent information at https://monterey.org/cannabis.

On December 15, 2023, City Council will hold a Special Meeting from 2:00pm to 5:00pm. The agenda includes a minor update to the Commercial Cannabis Ordinance. Two (2) amendments are being proposed by staff. One amendment will include a change to the definition of "Youth Centers" to exclude video arcades and similar amusement park facilities in an effort to expand opportunities for commercial cannabis businesses in the available zones. The other amendment clarifies that after the City Council has selected the top four (4) proposals that the City would conduct a lottery to identify the order by which the top four commercial cannabis business applicants choose their preferred zone from the available zone(s).

The agenda report on this topic provided by City Staff may be found here: December 15, 2023 Agenda Report

The ordinance update may be found here: December 15, 2023 Ordinance Update

At the December 5, 2023 meeting, City Council passed the second reading of an ordinance to amend Monterey City Code section 19-103, the Schedule of Fees and Services Charges, to fully recover the cost of administering the Cannabis Business Ordinance and Rental Inventory Ordinance, as well as a resolution to amend the City's 2023-2024 Master Fee Schedule. These changes will be effective beginning January 4, 2024.

The list of fees for all commercial cannabis business permits can be found in the City's updated FY23-24 Master Fee Schedule located here: FY2324 Master Fee Schedule.