Prospective business owners seeking to open Adult Use Marijuana businesses within the San Diego city limit may refer to the following information for guidance. Municipal Code Regulations were passed to outline the City’s definition and requirements for Marijuana businesses, as mandated by the passage of Proposition 64 by State of California voters on Nov. 8, 2016.
In 2017, the City introduced amendments to the Land Development Code to include regulations that will allow marijuana outlets, a retail establishment (recreational, medicinal or combination) operating with a Conditional use Permit where marijuana, marijuana products and marijuana accessories are sold to the public. Marijuana outlets may be approved with a Process Three CUP and are limited to no more than four per Council District, 36 citywide. An outlet with a City of San Diego issued permit would be allowed to sell both medicinal and recreational marijuana. However, retail marijuana sales would be prohibited until the State has begun issuing licenses for commercial marijuana activities, as defined in California Business and Professional Code section 26001. The 15 currently approved Medical Marijuana Consumer Cooperatives would become Outlets at that time, and would be allowed retail sale of marijuana as well.
Ordinance No. O-20793, introduced in February 2017, approved amendments to the Land Development Code and the Local Coastal Program and replaced the Medical Marijuana Consumer Cooperative (MMCC) use with a new retail sales use, called a Marijuana Outlet (Outlet). It became effective on April 12, 2017 in areas of the City of San Diego outside of the Coastal Overlay Zone, and became effective on October 12, 2017 within the Coastal Overlay Zone.
Ordinance No. O-20859 was introduced on September 11, 2017 to regulate the marijuana industry including commercial cultivation, distribution and storage, and production of medical and recreational marijuana and marijuana products, and to allow testing labs when new state laws take effect in January 2018.
On November 8, 2016, San Diego voters passed Measure N, Non-Medical Cannabis Tax, which imposes a gross receipts tax on non-medical cannabis businesses that operate or provide services within the City of San Diego. The Cannabis Business Tax applies to non-medical cannabis business activities including but not limited to, transporting, manufacturing, cultivating, packaging, or retail sales. Businesses will be taxed initially at a rate of 5% of monthly gross receipts and will increase to 8% on July 1, 2019 unless City Council, by ordinance, takes action to set a different tax rate, not to exceed 15% of gross receipts. For additional information visit the Cannabis Business Tax website.
Links to the final ordinance language passed by the San Diego City Council for commercial marijuana businesses can be found below:
ORDINANCE NUMBER O-20793- RELATING TO MARIJUANA OUTLETS
ORDINANCE NUMBER O-20858 - RELATING TO MARIJUANA PRODUCTION FACILITIES AND THE DISTRIBUTION AND TRANSPORT OF MARIJUANA AND MARIJUANA PRODUCTS.
ORDINANCE NUMBER O-20859 - RELATING TO TESTING AND MARIJUANA PRODUCTION FACILITIES.
NEW/REVISED USE CATEGORY
Marijuana Production Facilities: Created a new use category for individual or combined facilities engaged in the agricultural raising, harvesting and processing of marijuana; wholesale distribution and storage of marijuana and marijuana products; and production of goods from marijuana and marijuana products consistent with the requirements of the California Departments of Food and & Agriculture, Consumer Affairs, and Public Health. Retail sales and testing are prohibited.
- Separation requirements from sensitive receptors
- 1,000' from public parks, churches, childcare, playgrounds, libraries, minor oriented facilities, residential care facilities and schools
- 100' from residential zones
- No separation requirements from other Marijuana Production Facilities or Marijuana Outlets
Marijuana Outlet: An establishment (retail, medicinal or combination) operating with a Conditional Use Permit (CUP) where marijuana, marijuana products, and marijuana accessories are sold to the public.
Marijuana Testing Facilities: Testing for scientific research (including cannabis testing) that leads to the development of new product and processes is currently an allowed use (Research & Development). A new use category has been introduced allowing commercial testing of marijuana & marijuana products.
Limited Zones: Research & Development is permitted in several industrial and commercial zones. Commercial testing of marijuana will be permitted in those zones where residential use is prohibited. No limitations or restrictions on the number of facilities or proximity from sensitive receptors/other testing facilities. Permitted use.
Marijuana Production Facilities
- Permit process consistent with Marijuana Outlets
- CUP Process Three – Hearing Officer; appealable to Planning Commission
- CUP expiration 5 years / CUP extension 5 years
- Remove from consideration for CUP extensions those sensitive receptors or zone changes occurring AFTER approval of CUP
- 24-month sunset for those existing facilities operating with an approved Zoning Use Certificate and Business Tax Certificate that was issued before January 31, 2017.
SPECIAL OPERATING REQUIREMENTS
Marijuana Production Facilities
- Retail sales strictly prohibited
- Facilities must be entirely enclosed / no outdoor storage or operations
- Lighting/security; include operable cameras, alarms and security guard
- Emergency contact information must be displayed from the public right-of-way
- No signage allowed, address only
- Requirements for fingerprinting, background (similar to Marijuana Outlets)
Conditional Use Permits are required for both Marijuana Outlets and Marijuana Production Facilities.
- Marijuana Production Facility: CUP applications are now being accepted. For more details, including the permit process for Marijuana Production Facilities, refer to Information Bulletin 171.
- Marijuana Outlet: CUP applications are now being accepted. For more details, including the permit process for Marijuana Outlets, refer to Information Bulletin 170.
Prohibitions Under State Proposition 64
The City also proposed the following prohibitions to further clarify what is not permitted:
- Sale and distribution of marijuana and marijuana by-products at special events;
- Outdoor growing of personal residential marijuana; and
- No smoking in public places or on the business premises.
Please contact [email protected] with any questions.