Agenda Item Wording:
title
Cannabis Ordinance Discussion - Provide staff with initial direction on preliminary Cannabis Ordinance content and structure.
body
Deadline for Action: 5/5/2025
Submitting Department: Community Development
Contact Name and Phone Number:
Devon Jones, Economic Development Manager, devon.jones@visalia.city <mailto:devon.jones@visalia.city>, (559) 713-4190
Paul Bernal, Planning and Community Preservation Director, paul.bernal@visalia.city <mailto:paul.bernal@visalia.city>, (559) 713-4025
Department Recommendation:
Receive staff report and presentation and provide staff with initial direction for the preliminary Cannabis Ordinance and business application process content and structure.
Background Discussion:
On March 3, 2025, the City Council authorized staff to proceed with drafting a cannabis ordinance for adoption, but during the adoption process setting the number of businesses permitted to operate in the City of Visalia to zero, effectively establishing the regulatory framework for such businesses but not yet permitting such businesses to operate within the City. Staff held a kickoff meeting with the City’s consultant, HdL Companies, to establish all departments and divisions including specific staff members that will be involved in the ordinance process but also noted that this endeavor requires some initial input from Council to craft the preliminary concept and framework of the ordinance that will be brought back to Council for a more detailed review at a later date.
It should also be noted that HdL Companies has initiated the apportionment portion of their scope of work as this is essentially a separate task from the overarching cannabis ordinance task itself, though any necessary policy updates will occur as part of the cannabis ordinance adoption process itself. Staff will bring more information about the apportionment component of the cannabis ordinance when staff returns at a later date with more direction on the content and framework of the cannabis ordinance as noted above.
Staff will return at the next Council meeting to review questions #7 through #9 below as they will likely require in-depth discussion on their own. Staff is sharing those questions at this time purely to introduce the concepts to Council.
Items for discussion:
Below is a list of the specific items staff is seeking input and direction from Council on along with initial guidance from HdL and staff:
1. Where in the municipal code should the cannabis business ordinance be placed?
While many elements of the cannabis ordinance can be placed in several separate titles (ex. Title 17: Zoning, Title 5: Business Regulations, Title 3: Revenue and Finance, Title 8: Health and Safety), it may be simpler for staff and the general public to create a new title, similar to the Agricultural Preservation Ordinance (Title 18), that would contain all necessary municipal code updates regarding cannabis in one section of the municipal code. This could make administration for future use more convenient.
Recommendation: Staff recommends placing the entire cannabis ordinance, including moving Chapter 5.66 “Regulations and Requirements for Cannabis Businesses Permitted To Operate Under California State Law” into one of the reserved titles (i.e., Title 4, Title 7, Title 11, or Title 14). This would alleviate having to research multiple sections of the municipal code to understand the rules and regulation governing cannabis businesses.
2. Which uses or business types does the City want included or excluded? (Eventually that is, given the number of business permits allowed at time of ordinance adoption will be zero, regardless of type), and what zones would the City like to allow the various business types in?
There are seven California Department of Cannabis Control (DCC) license types as follows <https://cannabis.ca.gov/applicants/license-types/>:
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1. Cultivation |
2. Manufacturing |
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3. Distribution |
4. Testing laboratory |
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5. Retail |
6. Microbusiness |
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7. Event |
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1. Cultivation: This includes various sub licensee types pertaining to the growing of cannabis. Types of licensees include indoor cultivation, outdoor cultivation, mixed-light cultivation (such as a greenhouse), they are also categorized on the size of the operation, from “Cottage” type operations to “Large” operations, and whether the license is for a “Nursery” meaning cultivators that grow plants, seeds, or other types of cannabis, or a “Processor.” One that may be of particular interest to consider is the ‘Processor’ type of cultivation license which, according to the DCC website is “for cultivators that only trim, sift, cure, dry, grade, package or label cannabis”.
Recommendation on this type of business: Staff would not recommend considering outdoor cultivation of any size as it’s likely not the highest and best use of developable land. Further, indoor cultivation may be difficult given the typically high energy requirements and potentially high-water consumption needs as well as odor and low job creation concerns. For the most part, cultivation may not be a good fit, with the exception of the ‘Processor’ license type as Visalia could offer a competitive location to conduct such activities without the potential concerns of the other cultivation use types. Visalia may be competitive not only because of the central location in California, but also because of the concentration of the food packaging industry in the region.
Potential Zoning considerations: “Processor” only cultivation could potentially be appropriate in the Service Commercial (C-S), Light Industrial (I-L), or Industrial (I) zones given the similarities to distribution and light manufacturing/food processing uses.
2. Manufacturing: This pertains to cannabis containing products as opposed to ‘raw’ cannabis itself; this, too, consists of several sub-types of businesses, all of which could likely operate in an industrial park or service commercial setting.
Recommendation on this type of business: Staff would recommend considering allowing cannabis product manufacturing. For similar reasons as above, including in this case not only the concentration of the food packaging industry but also the food processing industry itself.
Potential Zoning considerations: This use could potentially be appropriate in the Service Commercial (C-S), Light Industrial (I-L), or Industrial (I) zones given the similarities to light manufacturing/food processing uses. Though Type 7 (volatile solvent manufacturing) license holders may be more appropriate in the Industrial (I) zone only given the potential use of flammable gases in the manufacturing process.
3. Distribution: This pertains to the movement and storage of cannabis products.
a. Type 11 - This type of distributor can move cannabis products between cultivation, manufacturing, or distribution premises, provide storage services to other licensees, and arrange for testing of cannabis goods.
b. Type 13 - Transport only, they can only move cannabis and cannabis products between cultivation, manufacturing, or distribution premises.
Recommendation on this type of business: Staff would recommend considering allowing distribution use types for similar reasons as mentioned above, particularly given Visalia’s competitive strategic location in the state.
Potential Zoning considerations: This use could potentially be appropriate in the C-S, I-L, or I zones given the clear similarities to other distribution uses.
4. Testing laboratory: This use is associated with laboratories that test cannabis goods prior to sale of these products at a retailer.
Recommendation on this type of business: Staff would recommend considering allowing laboratory use types, mainly as it could occupy appropriate office settings including potentially Business Research Park properties or other vacant office parks. Further, these facilities likely have the least amount of cannabis goods stored on site amongst the various cannabis use types.
Potential Zoning considerations: Currently, zones where medical laboratories are currently permitted or conditionally permitted include Commercial Mixed Use (C-MU), Downtown Mixed Use (D-MU), Office Professional Administrative (O-PA), and Business Research Park (BRP) while labs pertaining to manufacturing (chemical products, organic or inorganic) are permitted in the BRP, I-L, and I zones.
5. Retail: Per SB 1186, the City is mandated by the state to permit delivery only (non-storefront) of medical marijuana retail businesses (which Council passed Ordinance No. 2023-13 to establish objective standards in order to implement). The other cannabis types of businesses to potentially permit would include storefront retail, storefront medical only, and retail delivery only (non-storefront).
Recommendation on this type of business: Staff would recommend considering allowing retail and medical storefront and delivery only retail businesses, particularly if Council was to consider allowing distribution or manufacturing use types which could also act as fulfillment centers for retail orders. Please note that at this time as the cannabis ordinance is in the early stages of being drafted and Council has directed staff that no businesses would be permitted to operate in the City of Visalia once the ordinance is adopted, staff and the consultant are seeking input, for future consideration, as to how many operations Council may wish to consider at a later time.
The consultant, HdL has initially estimated that retailers in Visalia could potentially have gross receipts of approximately $18 million annually. Based on this estimated level of revenue, HdL believes this could support between five to seven retailers. Staff is providing this information to the City Council so that the Council is aware of the potential number of businesses that this company believes operate in Visalia without too much cannibalization of business. Should the Council decide to allow retail outlets, staff would recommend starting with a smaller number.
For additional background, Hanford currently allows three storefront licenses and two non-storefront licenses with no limits on other types of businesses. Farmersville has three retail storefronts and allows other types of uses, and the City of Tulare allows up to five retail storefront licenses but no other types of cannabis businesses. Below is a chart with more information indicating the number of licenses allowed in neighboring communities:
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City |
# Allowed |
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Hanford |
3 storefront, 2 non-storefront retail, no known limit on other use types |
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Lemoore |
No more than 1 storefront per 12,000 residents, No known limits on other uses |
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Woodlake |
1 plus an additional storefront per every 5,000 residents No known limits on other uses |
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Farmersville |
3 storefronts exist, no known limits |
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Tulare |
Up to 5 storefront, no other uses allowed |
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Porterville |
2 plus an additional storefront per 25,000 residents, No limit on other uses |
Potential Zoning considerations: Storefront licenses should likely be considered in the commercial and mixed-use zones (i.e., Neighborhood Commercial [C-N], Regional Commercial [C-R], C-S, C-MU, D-MU) given they are retail operations. However, depending on potential buffer requirements from sensitive land uses, such as schools, parks or housing, the C-N zone district may not be an appropriate zone to consider. Further, if Council does not wish to consider these uses in Downtown Visalia, it would not be appropriate to consider D-MU either. For additional context, Smoke shops are conditionally allowed in C-MU and D-MU zones and Liquor stores (not within 300-feet of residential/public use) are conditionally permitted in C-N, C-R, and C-MU, zones and permitted in D-MU zone.
Non-storefront only retail operations should likely locate in I-L, I, or C-S zones as they would function similar to a distribution or fulfillment center.
6. Microbusiness: This use is unique as license issued for this type of business (i.e., Type 12 license) is for businesses that do at least three of the following activities at one location:
o Cultivation - up to 10,000 total square feet
o Manufacturing - use of non-volatile solvents, mechanical extraction or infusion
o Distribution or distribution transport-only
o Retail - storefront or non-storefront
Recommendation on this type of business: Based on staff recommendations above, staff would recommend considering allowing microbusiness use types that do not include cultivation, other than the ‘Processor’ cultivation license type.
Potential Zoning considerations: Considering the zoning recommendations for the Processor Cultivation license, Manufacturing and Distribution uses and the requirement that a Microbusiness license include at least two of these license types, the zones considered for Microbusiness uses should be limited to I-L, I or C-S zones.
7. Event: Temporary cannabis events are multi-day events where people can sell and consume cannabis. These events last from one to four days at a location approved by a city or county. There are two types of event licenses:
o Event Organizer - for the person hosting cannabis events
o Temporary cannabis event - for the event itself
§ Cannabis events can only be held by a person with an event organizer license
Recommendation on this type of business: Staff recommends that the City Council not allow Cannabis events, at least until the City has some experience with the industry.
3. What sensitive uses would the City like to identify, and what size buffers?
Discussion: The Delivery only medical marijuana retail business ordinance (No. 2023-13) identifies planned or existing schools (through high school) inside and outside of city limits as sensitive uses and establishes a 500-foot buffer requirement. Specifically, “planned” means property designated on the general plan of the city for such use, or other official planning documents of the city, or property owned or leased by the city for such use.
For additional context, Section 38. of SB 94 (the Medicinal and Adult-Use Cannabis Regulation and Safety Act) indicates that a “premises licensed under this division shall not be located within a 600-foot radius of a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center that is in existence at the time the license is issued, unless a licensing authority or a local jurisdiction specifies a different radius.”
Also, the City of Hanford has a buffer distance of 200-feet from residential and 600-feet from other uses such as schools and day care centers, but no other cities have an expressed buffer from residential, though the City of Farmersville has a 300-foot buffer from churches. Below is a chart that details expressed buffers in the neighboring communities.
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City |
storefront buffer residential |
storefront buffer all others |
Non-storefront buffer residential |
Non-storefront buffer others |
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Hanford |
200' |
600' |
200' |
600' |
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Lemoore |
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600' |
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600' |
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Woodlake |
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1000' |
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1000' |
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Farmersville |
(churches) 300' |
1000' |
(churches) 300' |
1000' |
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Tulare |
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600' |
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|
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Porterville |
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600' |
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Furthermore, Section 17.62 (Adult-Oriented Business) of the Zoning Ordinance identifies minimum proximity requirements for those types of businesses as follows:
• Within seven hundred fifty (750) feet of any existing schools, including licensed day care facilities, libraries, parks or other recreational facilities where minors congregate, located either inside or outside of the city limits;
• Within seven hundred fifty (750) feet of any existing or planned for park or other recreational facility where minors congregate, located either inside or outside of the city limits;
• Within seven hundred fifty (750) feet of any land that carries a general plan land use designation that contains the words residence or residential within its title.
• Within seven hundred fifty (750) feet of any existing church or religious institution, located either inside or outside of the city limits.
Recommendation on defining sensitive land use and distance requirements: Staff recommends listing the following as sensitive land uses:
• Existing schools, including licensed day care facilities, libraries, parks or other recreational facilities where minors congregate; and
• Any existing or planned for park or other recreational facility where minors congregate; and
• Any land that carries a general plan land use designation that contains the words residence or residential within its title; and
• Any existing church or religious institution, located either inside or outside of the city limits.
To be consistent with Section 17.62, staff would also recommend the distance be established at 750-feet.
4. Hours of operation restrictions?
No such restrictions are required in the existing delivery only medical marijuana retail business ordinance. There are varying hours of operation guidelines in the neighboring communities. Below is a chart indicating those specific guidelines.
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City |
Hours of operation |
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Hanford |
Storefront retail - 9am -9pm |
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Lemoore |
According to underlying zone district and city's noise ordinance |
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Woodlake |
Between 6am and 9pm (non-storefront until 10pm) |
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Farmersville |
Between 6am and 9pm |
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Tulare |
Between 8am and 8pm |
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Porterville |
Storefront - between 10am and 10pm weekdays, and 9am and 11pm weekends |
Recommendation on hours of operation: Staff has several considerations for Council to consider in terms of hours of operation restrictions beyond any underlying zoning or city noise ordinance implications, but is ultimately seeking Council’s input on the issue:
o The recommended buffers from sensitive uses and sensitive uses themselves (particularly land that contains the words residence or residential within its title) stated above should limit potential disruptions to sensitive uses after typical business operating hours.
o According to the CA DCC, retailers can sell cannabis goods between 6:00 a.m. and 10:00 p.m. with delivery drivers returning to the retail premises no later than 10:00 p.m.
o Non-retail operations such as distribution or manufacturing typically operate swing shifts or 24 hours/day and are typically located away from sensitive uses in industrial park settings.
Council can also direct staff to bring back more examples of other communities that permit cannabis bushiness and note the hours those communities permit these types of businesses to operate before deciding on established hours of operation in the draft ordinance.
5. Additional security measures?
There are extensive security requirements included in the delivery only medical marijuana retail business ordinance (see attached for full detail). See sections 5.66.030 (Application requirements), 5.66.050 (Security Plans), and 5.66.090 (Performance standards), sub section I for potential requirements to consider for any of the potential cannabis business types.
Recommendation on security measures: Consider the existing security measures included in the medical marijuana retail business ordinance and also consider including the following:
For uses that may allow for general public/customer access such as retail storefront or microbusinesses that include a retail storefront component:
- Thorough verification measures of age of customer
o 18 or older for medicinal use only - requiring adequate verification of physician’s recommendation
o 21 and over for adult use
- Security personnel or staff monitoring controlled/locked access to the retail portion only, with separate reception/lobby area
o Customers will only have access to retail portion of facility
o Any vendors, contractors or other individuals that have authorized access by business to any limited access areas of the facility must be escorted at all times by an employee of the licensed cannabis business and a log must be maintained of any such individuals gaining access to these limited access areas
- Requirement to provide onsite security personnel during operating hours, or potentially 24 hours a day
- Security cameras monitoring retail portion of facility shall be positioned in order to clearly capture facial features of customers at point of sale locations
For laboratory testing uses, or distributor and manufacturer uses that utilize laboratory testing services, all transfer or transportation of products for testing will need to be performed pursuant to a specified chain of custody protocol that the appropriate business will establish and have approved by the Visalia Police Department.
6. Term of license?
One year is standard for these types of licenses. See chart below for verified stated license terms for neighboring communities.
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City |
Term of license |
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Hanford |
Expire Dec 31 annually |
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Lemoore |
No more than 1 year |
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Woodlake |
Expire Dec 31 annually |
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Farmersville |
Annual |
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Tulare |
Expire Dec 31 annually |
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Porterville |
Expire Dec 31 annually |
Recommendation on license renewal term: Require annual terms to expire June 30th annually to align with our regular business tax term.
As previously indicated, the following questions are to be discussed at the next Council meeting with more detailed background information provided by staff. Staff is sharing at this time purely to introduce the concepts to Council:
7. What kind of business application and selection process is preferred, and does the City want to define it within the ordinance or by resolution?
HdL strongly recommends the business application and selection process be defined and approved separately by resolution. In the local region, HdL has assisted the Cities of Hanford, Farmersville, Porterville, Fresno, and Firebaugh with developing their application and review processes. Additionally, HdL conducted the reviews for these cities with the exception of Fresno.
HdL has indicated that selection processes for any such uses that may require limiting the number of licenses to issue (e.g., retail storefront) that include a lottery drawing method are less exposed to potential litigation by unselected applicants. The process should also include thorough application requirements and thorough quality assurance review for submitted applications should more applicants apply than licenses can be issued. As noted above, staff will return at the next Council meeting to review this question with more in-depth analysis and examples for Council’s consideration.
8. Who would approve the licenses (Planning Director, City Manager, City Council)?
HdL has indicated that communities in which the City Manager or their designee, or other city staff that approve licenses, as opposed to the City Council, are typically less exposed to litigation. As noted above, staff will return at the next Council meeting to review this question with more in-depth analysis and examples for Council’s consideration.
9. Who would hear appeals?
In the delivery only medical marijuana retail business ordinance, the City Manager or designee is who hears the appeal after a written notice of appeal is filed with the city clerk within 10 business days of receipt of business license denial. There is no appeal to the City Council. As noted above, staff will return at the next Council meeting to review this question with more in-depth analysis and examples for Council’s consideration.
10. Any other input not discussed above?
Next Steps:
Staff will return to the next Council meeting to review questions #7 through #9 in detail. Staff will then work with HdL to format and structure the draft cannabis ordinance and business application and selection process resolution with the appropriate content as directed by Council. Staff will then return to Council at a later date for further review of these materials and also to review the apportionment policy suggestions.
Staff will also seek input from several business group partnerships such as the Visalia Chamber, Downtown Visalians, the Tulare Kings Hispanic Chamber of Commerce and the Visalia EDC, as well as the Citizens Advisory Committee. Any input received will be presented to Council in future presentations.
Fiscal Impact: None at this time
Prior Council Action: March 3, 2025 - Council authorized staff to proceed with drafting a cannabis business ordinance for adoption but during the adoption process, set the number of businesses permitted to operate in the City to zero effectively establishing the regulatory framework for such businesses but not yet permitting such businesses to operate.
Other: N/A
Alternatives: Per Council direction
Recommended Motion (and Alternative Motions if expected):
recommendation
No formal action required. All comments, feedback, and any unanswered questions received will be brought back to the City Council as a future Work Session as staff and the consultant work on drafting the cannabis ordinance.
end
Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments:
1. Staff PowerPoint Presentation
2. Ordinance No. 2023-13 (portions pertaining to potential security measures for consideration)
3. Resolution No. 2024-24 (Cannabis Business Tax Measure Ordinance)