STAFF REPORT - CITY COUNCIL/SUCCESSOR AGENCY/PUBLIC FINANCE AUTHORITY

Staff is requesting additional direction from the City Council regarding a future agenda item requested by Mayor Pro-Tem Ramsey directing staff to develop an ordinance to allow for an additional retail cannabis facility with the on-site consumption of cannabis (consumption lounge).

In March 2020, the City Council directed City Staff to proceed with a zoning text amendment to allow for a second retail facility including the on-site consumption (consumption lounge) in the downtown district. Staff has been working on the draft ordinance and is expected to bring the ordinance before the Planning Commission in late May 2020.

According to the State of California, a consumption lounge/cafe shall only be permitted with a valid cannabis retail permit issued by the State of CA with a specified consumption cafe/lounge designation until a future time the State of California adopts regulations requiring a specific license for a consumption café/lounge.

Currently the City as only permitted one retail facility to open in the City of Coalinga. With the ordinance revision, the permitted retail facilities will be two should Council concur.

The language from the original ordinance authorizing a retail facility in Coalinga which was taken to the voters authorizes a single dispensary.  However, the ordinance itself (the language the voters approved) does not limit the number to a single dispensary indefinitely and allows for future revision by Council.  The only item the Council could not revise in the original ordinance is the amount of tax beyond that originally allowed for by the voters due to state law which limits the raising of local tax without further voter consent.

Once the ordinance is approved by the City Council staff will need to proceed with this issuance of a second retail cannabis permit within the zoning designation identified in the ordinance.

The single existing facility would be allowed to operate a second consumption lounge if desired, assuming they were able to meet all other requirements.

For the City’s initial retail cannabis permit, a request for proposal (RFP) was issued and firms submitted applications. Staff is looking for direction from the City Council as to how they would like to accept and issue the second permit. In order to be fair and impartial the City Council will need to provide Staff with direction as to how they would like to accomplish this.

Options if the Council wishes to move forward with a second retail location:

1. Council could direct the staff to issue an additional RFP for an additional retail location in the downtown area with the consumption lounge component.  Awardees could choose whether to allow consumption or simply maintain a retail location.
2. Instead of an RFP, council could provide the license on a first come, first served basis.
3. Depending on the available locations which could accommodate a retail location with a consumption lounge, the Council could direct staff to seek out a cannabis company and develop a retail development agreement with a particular company/person.