California has 58 counties and 482 incorporated cities across the state, each with the option to create its own rules or ban marijuana altogether. In this California Cannabis Countdown series, we cover who is banning cannabis, who is embracing cannabis (and how), and everyone in between. For each city and county, we’ll discuss its location, history with cannabis, current law, and proposed law to give you a clearer picture of where to locate your California cannabis business, how to keep it legal, and what you will and won’t be allowed to do.
Our last California Cannabis Countdown post was on the City of San Luis Obispo, and before that the City of Redding, the City of San Rafael, City of Hayward, Alameda County, Oakland, San Francisco, Sonoma County, the City of Davis, the City of Santa Rosa, County and City of San Bernardino, Marin County, Nevada County, the City of Lynwood, the City of Coachella, Los Angeles County, the City of Los Angeles, the City of Desert Hot Springs, Sonoma County, the City of Sacramento, the City of Berkeley, Calaveras County, Monterey County and the City of Emeryville.
Today’s post is on the City of Cotati.
Welcome to the California Cannabis Countdown.
Location. Cotati is an incorporated city in Sonoma County and is about a 90 minute drive north of San Francisco. The City was founded in 1893 and is dubbed the “Hub” of Sonoma County because of its central location and hexagonal plaza.
History with Cannabis: Although no one would call Cotati a hub of commercial cannabis activity, the City did pass an ordinance in 2007 (Ord. 787) allowing for one (1) medical cannabis dispensary. One may be a lonely number, but it sure is better than zero. After the passage of Ord. 787 things remained pretty quiet until the state passed the Medical Cannabis Regulation and Safety Act (MCRSA) near the end of 2015. Shortly thereafter, the Cotati City Council adopted a resolution to its Land Use Code to specifically prohibit the cultivation of cannabis in all of the city’s zoning districts (Resolution 2016-4). The City Council then followed up with a moratorium on all commercial cannabis activities. It was clear that the moratorium would be temporary as nearly 79% of Cotati residents voted in favor of a ballot measure establishing a commercial cannabis tax. The tax measure granted the city the authority to tax cannabis cultivators up to $25 per square foot of cultivation area, or up to 8% of gross receipts (all other cannabis businesses would also be subjected to the 8% tax).
New Cannabis Law: On February 13th of this year, the City Council lifted its moratorium and adopted a comprehensive cannabis ordinance to regulate commercial cannabis activities. It’s important to note that prior to enacting the cannabis ordinance, the City Council held public hearings in October and January and made amendments to the ordinance based on public comments. This process and result shows how important it is to show up at local hearings and voice your opinion.
Here are some of the ordinance’s highlights:
- Authorizes both medical and adult-use cannabis activities.
- Authorizes up to two retail licenses (one can be a microbusiness).
- Authorizes one delivery-only retailer license.
- Authorizes up to five indoor cultivation permits.
- Outdoor cultivation is prohibited.
- The City will cap the number of manufacturing, distribution, delivery and testing permits at seven. That’s cumulative across the four license types. However, a distribution license issued in conjunction with another permit will not count against the cap.
- Volatile and non-volatile cannabis manufacturing is allowed, but volatile manufacturers will require an additional permit.
- Edible manufacturers will need to obtain a Sonoma County Health permit.
- On-site consumption is prohibited.
- Permits will be issued for up to two years before renewal.
- Allows for the sale of promotional items such as clothing and hats (the 2007 ordinance banned such sales).
- The City decided on a tax rate of less than the 8% authorized by the tax ballot measure. Cultivators will be taxed at 2% of gross receipts or $5 per square foot of cultivation, manufacturers at 1% of gross receipts, and retailers at 3% of gross receipts.
- Up to two cannabis plants or a maximum of twenty square feet of plant canopy may be cultivated outdoors for personal use, so long as the cultivation is attached to one residential unit (outdoor cultivation is prohibited in multi-family dwelling units).
With the ordinance in place, the City just recently released a request for proposal (RFP) for businesses to apply for a cannabis permit. The RFP will score applications based on the following forty-five point scale:
- Project description, site plan, and community benefit (10 points).
- Environmental Quality (10 points).
- Safety and Security Plan (10 points).
- Operating Plan (10 points).
- Experience (5 points).
Since the total number of cannabis permits is capped at fourteen, the application process is sure to be competitive. Cotati is a small city (approximately 7,300 residents) so starting with a cap and moving cautiously is a reasonable first step for the city – especially considering the fact that Cotati is allowing seed to sale license types. A slow and thoughtful approach, with strong community support, will hopefully prevent political reversals and legislative bans (you know who you are, Calaveras County).
If you’re interested in applying for a commercial cannabis license in Cotati, mark your calendar: the March 26th deadline to submit applications is coming up quickly. And good luck!