Item Coversheet

Staff Report- Chairman and Planning Commission

Subject:Consideration of Conditional Use Permit Application No. CUP 19-01 Approving a Non-Volatile Cannabis Manufacturing Facility at 1717 W. Elm Ave, Building B, Unit 100
Meeting DateMay 14, 2019
Project Location:1717 W. Elm Ave, Building B, Unit 100, Coalinga, CA 93210
Applicant:Simon Berdugo, PEP Partners, LLC, 135 Main Ave, Unit B, Sacramento, CA 95835
Owner:1375/1717 W. Elm Ave, LLC, 135 Main Ave, Unit B, Sacramento, CA 95835
Prepared By:Sean Brewer, Community Development Director


Staff recommends approval of Conditional Use Permit 19-01 by adopting Resolution No. 019P-004 with conditions.


On July 25, 2017, the Planning Commission considered a site plan review application for the development of two (2) industrial buildings to accommodate future cannabis activities at 1717 W. Elm Ave. The proposed uses of the industrial buildings was for commercial cannabis manufacturing, testing, and distribution operations. At the July 25, 2017 meeting the Planning Commission adopted Resolution No. 017P-012 with conditions. The site plan application confirmed that the development proposal was (1) in substantial conformance with the General Plan, zoning ordinance, and any applicable plans adopted by the city, (2) conformed to the requirements of the applicable Zoning Districts, (3) conformed to all applicable design standards and guidelines, as adopted by the City Council, and (4) confirmed that the development would not have significant adverse effects on the public health, safety and welfare.


On April 2, 2019 the Community Development Department received a Conditional Use Permit application from PEP Partners, LLC. (further identified as “applicant”) for a Commercial Cannabis Manufacturing Facility to manufacture non-volatile edible commercial cannabis products.  Staff accepted the application on April 3, 2019 and began processing the application for a conditional use permit.


In accordance with Section 9-5.128(f) of the Coalinga Planning and Zoning Code related to Commercial Cannabis operations, prior to, or concurrently with, applying for a regulatory permit, the applicant shall process a conditional use permit as required by the City's Land Use Regulations. Information that may be duplicative in the two (2) applications can be incorporated by reference. The conditional use permit shall run with the regulatory permit and not the land. The applicant currently has a regulatory permit application under review with the Police Department and pending subsequent City Council approval. The regulations that will apply to Cannabis Manufacturing operations are under the jurisdiction of the California Department of Public Health.  These regulations govern the various cannabis operations within the state in addition to applicable sections of the City of Coalinga’s commercial cannabis ordinance. 


The scope of this application will look at the operational characteristics of the proposed use and ensure that the use is designed, located, and operated in a manner that will not interfere with the use and enjoyment of surrounding properties. The process for review of Conditional Use Permit applications is designed to evaluate possible adverse impacts and to minimize them where possible through the imposition of specific conditions.


Project Summary:  The project applicant proposes to operate out of an approximately 2,100 square foot space at 1717 W. Elm Ave, Building B, Unit 100 to manufacture non-volatile edible cannabis infused gummies/candies. Products will use only natural ingredients, many of which are organic, and no chemical or toxic products are used in our formulation. Applicants manufacturing operations will focus exclusively on creating cannabis infused edible gummy snacks.  As such, Applicant’s operation will only involve cannabis infusion, along with packaging and labeling those products.  Applicant will not engage in the extraction of cannabis oil, instead Applicant will contract with licensed manufacturers and distributors to procure its cannabis extract.  


By definition, a cannabis “Manufacturer” means a licensee that conducts the production, preparation, propagation, or compounding of cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container.


CUP Analysis


This site has an approved site plan which considered the zoning design criteria such as site coverage, building heights, setbacks, parking, landscaping, and lighting. The site is currently under construction and all onsite improvements are being completed in accordance with the approved site plan. In addition to confirming the site plan approvals, the CUP analysis will look at operation criteria such as security, odor control, hours of operation, ect. The regulatory permit reviewed by the Police Chief and approved by the City Council will consider these items in more depth and to ensure full compliance with the city planning and zoning code related to commercial cannabis operations. 


General Plan/Zoning Consistency: The building where the manufacturing facility will be located has a General Plan designation of (MB) Manufacturing and Business with a zoning designation of Manufacturing and Business Light (MBL). The project proposal is consistent with the General Plan and Zoning Designations.  


Location/Setting: 1717 W. Elm Ave, Building B, Unit 100 (Map & Floor Plans Attached).


Operations: Unit 100 is located within Building B at 1717 W. Elm Ave. which is a single story existing industrial building approximately 3,680 square feet. The applicant proposes to occupy approximately 2,100 square feet for their operations. 


The operation is set up to manufacture edible gummies. As indicated in the floorplan, there will be a small office and reception area, a testing and production area, and a temperature-controlled curing/inventory area.




  • Located by the primary entrance/exit door (appx 400 sq.ft.)
  • No cannabis product will be present in either oil or finished product form in this area.
  • All employees will enter/exit every shift through the main door and immediately log/punch in/out.
  • There will be two access-controlled doors (one into the production/testing room and the other into the curing/receiving/inventory room).
  • There will be one small access-controlled office that will house a safe, and a work area for the manager, and all completed records will be kept within and secured.


Testing/Production Area:


  • Secured by two access-controlled doors (one from reception/one to curing room) and will be approximately 550 square feet.
  • Within the area, there will be two (2) access-controlled rooms. One of them is the testing and product development office (130 sf.) and the other will be the Kosher/Vegan room (100 sq.ft.). The rest of the space will be designated for production of the edible gummies.


Curing/Inventory Room:


  • This room will have four (4) access control doors (one in/out of the production room, one in/out of the reception area, one for the Vegan cure room, and an entrance/exit door where all raw materials are received, and finished product stored and expedited. (appx. 1,250 sq.ft.).
  • Within the area, there will be an access-controlled room (appx 100 sq.ft.) where only Kosher/Vegan product will cure and be packaged. This is to ensure there is never any cross contamination with our standard product which contains gelatin and would not qualify as Kosher/vegan.
  • The area will have storage racks for raw materials and packaging supplies.
  • All quality control and product packaging will take place in this room.
  • There will be locking inventory cabinets for finished goods.


The operation will utilize three (3) full time employees for the first 4-8 weeks of operation including the manager. The manager will be certified and responsible for track and trace compliance.


Security: The applicants site protection strategy will address all forms of security concerns and will be required to meet all the security requirements of 9-5.128 of the Planning and Zoning Code as it relates to commercial cannabis activities. The police Department has reviewed and verified that the security plan including camera placements, access controls and perimeter security meet the requirements of the code and the satisfaction of the Police Chief (Section 9-5.128).


Building Access: All employees and authorized personnel will enter the building at designated entry area after checking with the 24-hour security personnel at the site entrances who will grant authorization into the facility.


Odor Control: In order to control odor while producing at the above capacity and remaining compliant with §9-5.128(d)(15), the facilities will be equipped with both negative pressure and mass

filtration systems. Odor control systems will be checked and replaced as necessary to prevent odor from escaping the facilities and becoming a nuisance to the applicant’s neighbors.


Hours of Operation: Initially the applicants expect to operate 35 hours a week for the first 6 months. At full production, the applicant plans to operate Monday through Friday 9am – 4pm. In accordance with Section 9-5.128(d)(13) the facility may operate from 6:00am to 10:00pm every day of the week.


Parking: This facility will be accommodated by the 12 parking stalls provided on the approved site plan (SPR 17-01). The proposed project requires three (3) parking stalls in accordance with the parking standards for commercial cannabis operations.


Fuel Storage and other Potential Hazardous Materials: At this time the applicant has no plans to store and hazardous materials on site. The applicant will be required to meet with the Fire Marshall and Building Official to determine the level of safety protection needed if they plan to store any products determined to be hazardous materials in the future.


Water Use: Due to the nature of our business, the applicant will require very little water usage. The applicant estimates using approximately 30-40 gallons of potable water per week (aside from bathroom use) as it relates to the applicants manufacturing process.


Wastewater Disposal: The applicant does not anticipate introducing any chemical products into the waste system. Gummy molds are cleaned using the steam from boiling water used at the end of each production batch. Double boilers are cleaned in National Sanitation Foundation (NSF) certified 3 compartment sinks.


Surrounding Land Use Setting:






City Limits (County Agricultural Land)






Per §9-5.128(d)(12), a Commercial Cannabis Operation shall not be located within 1,800 feet, measured from property boundary to property boundary, of any existing school or proposed school site as  identified in the General Plan. For purposes of this section, school means any public or private school providing instruction in kindergarten or grades 1-12, inclusive, but does not include any private school in which education is primarily conducted in private homes. The applicant meets this set-back requirement.


Public Notification: Public hearing notices were sent to all property owners within 300-feet of the site as required by Local and State law.


Environmental Clearance: The Community Development Director has determined that the proposed project supports a Planning Commission finding that it qualifies for a categorical exemption from the California Environmental Quality Act (CEQA). The project qualifies as a Class 1 exemption under CEQA Guidelines Section 15301 (Existing Facilities). A Notice of Exemption will be filed with the Council Clerk once the project has been considered.


The proposed project will generate both cannabis taxes and annual licensing fee revenues to the City. 


A Conditional Use Permit shall only be granted if the Planning Commission determines that the project as submitted or as modified conforms to all of the following criteria. If the Planning Commission determines that it is not possible to make all of the required findings, the application shall be denied. The specific basis for denial shall be established for the record.


General Plan consistency:  Approval of the proposed project will advance the goals and objectives of and is consistent with the policies of the General Plan and any other applicable plan that the City has adopted;


Neighborhood compatibility:  The location, size, design, bulk, coverage, density, traffic generation and operating characteristics of the proposed project are consistent with the purposes of the district where it is located, and will not have an adverse effect on the neighborhood and surrounding properties;


Asset for the neighborhood:  The nature, use and architectural/design features of the proposed development make it attractive, functional and convenient. The proposed development enhances the successful operation of the surrounding area in its basic community functions, or provides an essential service to the community or region.

CUP 19-01 Site and Floor Plans
CUP 19-01 Lighting Plan
CUP 19-01 Application Package
Resolution 019P-004