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HomeMy WebLinkAbout021726-01.1 STUDY ADMINISTRATIVE STAFF REPORT 1.1 TO: Mayor and Town Council February 17, 2026 SUBJECT: Discussion of legal issues associated with allowing storefront cannabis retail uses in Danville BACKGROUND At the Town Council’s January 13, 2026 study session, the Council received preliminary information regarding changes in state law regarding the sale of hemp products and the possibility of allowing storefront cannabis retail as a permitted use in Danville. A copy of that report is attached (Attachment A). At the conclusion of the discussion on January 13, the Council requested the subject be continued for another informational discussion at the start of the Council’s regular meeting of February 17. The Council requested additional information on specific questions, which is provided below. As a reminder, as an informational/study session item, no decisions will be made during this meeting. DISCUSSION In response to questions at the January 13th meeting, Town staff is providing the following information: • Copies of ordinances from other cities. The January report contained a summary of local ordinances, highlighting the common provisions of all ordinances. Attached to this report are copies of the cannabis ordinances from San Pablo (the most recent ordinance in Contra Costa) and Benicia (specifically requested on January 13). (Attachment B). These are good illustrations of the common components of an ordinance. • Copies of materials from Martinez showing the format of their permit application and the staff report to their City Council illustrating how city staff analyzed and presented the applications received. (Attachment C) • Maps showing potential buffers for any potential cannabis retail locations in Danville. As pointed out in the January 13 staff report, state law requires that any cannabis use be separated from K-12 schools, day care and youth centers by at least 600 feet. The report also noted that the Town’s existing ordinance limiting tobacco retailers requires those uses to be separated by at least 1,000 feet from Cannabis retail regulations 2 February 17, 2026 schools, parks, playgrounds or libraries. Using those two standards for illustrative purposes, Town staff prepared the attached maps (Attachment D) showing separation from potential commercial properties. The maps show that using either buffer, the impact in the Downtown Business District has a significant impact. In addition to the DBD, cannabis retail could be permitted in the Retail Business and Commercial Districts or in any existing shopping center with the P-1/R-B zoning designation. • An explanation of “public benefit agreements.” Many of the local ordinances require applicants to describe what community or public benefits they would provide if selected. The attachment (Attachment E) points out how these agreements work and illustrates the wide range of community benefits proposed. • Material from the California Department of Cannabis Control (“DCC”) summarizing where cannabis uses are allowed statewide. (Attachment F) In addition to the attached documents, the following information represents answers to Council questions and additional information developed by conversations with other cities which have already implemented cannabis retail: • The state licensing system for storefront retail provides for two different types of retail licenses: the “A” license allows any adult 21 or over to enter the store and purchase, the “M” license allows any individual 18 or over with the proper medical authorization to enter the store and purchase. The Council asked to confirm that any storefront retail in Town could be limited to 21 and over. The staff at the DCC confirmed that this can be done and that the appropriate way to do so would be to allow only the “A” license in a local ordinance. • The state license allows for the storefront retailer to also offer residential delivery to customers The Council asked whether a local ordinance could prohibit such deliveries. The staff at DCC confirmed that a local ordinance could include that prohibition. However, they noted that under the state law, residential deliveries of medical cannabis could still be offered by out-of-town companies competing with any local storefront retailer. It should be noted that the state licensing system provides a different classification for non-storefront retail. These are delivery only businesses but their physical location is still subject to all requirements applicable to storefront retail. • The Council requested information on reports of crime associated with cannabis retail. The Town’s Police Department reached out to other communities in Contra Costa County and the City of Benicia to gain a sense of potential issues. This outreach found that all of the communities contacted did experience some number of violent crimes, including armed robbery, burglary and attempted burglary. These agencies also experienced an increase in calls for service for things like potential customers refusing to leave, etc. While there are no statewide statistics in this category, some cities (such as Los Angeles) have noted that crime associated with cannabis retail and dispensaries has increased. Cannabis retail regulations 3 February 17, 2026 • Additional revenue generated for cities with storefront retail. While no city can release specific sales tax numbers under state law, in general these uses generate sales tax revenue. For those cities adopting a specific cannabis tax they can run in the range of 3-10% of gross sales. Finally, those cities entering into public benefit agreements may realize some additional revenue through those agreements. • One issue not discussed during the January 13th meeting was the staff or consultant time required to implement an ordinance. City staff in Martinez noted that review of the applications submitted as well as additional annual inspections and permit reviews can be extremely staff intensive. The outreach by our Police Department got the same feedback. Some cities address through retaining consultants to assist in this process, the cost of which, along with staff time, can be recouped through the permit application fee. Responding to community groups that oppose cannabis uses has also been noted as requiring considerable Council and/or staff time. PUBLIC CONTACT Posting of the meeting agenda serves as notice to the general public. RECOMMENDATION It is recommended that the Town Council review and discuss these materials and accept any public testimony or written comments. At the conclusion of the discussion, Council should provide direction to Town staff on whether and how to proceed. If the recommendation is to proceed, future steps would include review of a draft ordinance(s) at a future study session, sending a zoning ordinance to the Planning Commission, first and second readings of ordinances at the Town Council level and then implementation of provisions of any such ordinance. Prepared by: Robert B. Ewing City Attorney Dave Casteel Assistant Town Manger & Maintenance Services Director Cannabis retail regulations 4 February 17, 2026 Attachments: A-January 13, 2026 study session memo B-Benicia and San Pablo ordinances C-Martinez application materials D-Mapping of potential buffers in Danville E-Overview of Public Benefit Agreements F-Where are cannabis uses allowed statewide