HomeMy WebLinkAboutItem No. 11 Status of Cannabis PermittingCity Council Agenda Report
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: ID# 19-699
Agenda Date: 8/11/2020 Status: Approval FinalVersion: 1
File Type: Council Business
Item
In Control: City Council / Successor Agency
Agenda Number: 11)
Status of Cannabis Permitting
At the request of Council Member Johnson, give direction concerning existing limits /thresholds utilized
by the City concerning future cannabis business applications and receive and file the status report
concerning existing cannabis businesses and pending applications.
Page 1 City of Lake Elsinore Printed on 8/6/2020
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared By: Justin Kirk, Assistant Community Development Director
Date: August 11, 2020
Subject: Status of Cannabis Permitting
Recommendation
At the request of Council Member Johnson, give direction concerning existing limits/thresholds
utilized by the City concerning future cannabis business applications and receive and file the
status report concerning existing cannabis businesses and pending applications.
Background
In December 2017 the City Council authorized cannabis-related businesses to operate in the
City.
In 2018, the City Council approved 10 conditional use permits for cannabis business with a total
area of approximately 115,204 SF (later reduced to 105,000 SF). As of the date of this report,
the City Council has approved six (6) additional Cannabis businesses.
In total, the City Council has approved 16 cannabis-related businesses with a combined area of
approximately 150,000 SF. Of those 16 approved business, four (4) have opened for business
and comprise approximately 40,000 SF. A summary of these facilities and their current status
has been included in Attachment #1.
Attachment # 1 also list the six applications currently in process and comprise approximately
31,000 SF.
Discussion
Regulatory Environment
As part of the development of the original ordinance, it was anticipated that most facilities would
utilize the full microbusiness license of 22,000 SF. Additionally, the direction was to place a
“cap” of 10 facilities for an anticipated total development area of 220,000 SF. But the cap
included some flexibility; additional facilities could be approved upon a finding of public
convenience.
Cannabis Uses Update
August 11, 2020
Page 2
To minimize potential environmental impacts, all uses authorized were limited to indoor areas
only and were required to avoid adverse impacts on the surrounding areas. Due to the locations
of these facilities within industrial areas, retail was only allowed as an accessory use thus
avoiding significant vehicle trips and maintaining the existing character of the industrial area.
Illegal Cannabis Operations
Enforcement of the City’s Municipal Code provisions related to cannabis uses also involves the
identification and closure of illegal operations. Illegal operations exist in both residential and
non-residential areas. In the first six (6) months of 2020, a total of 36 facilities have been shut
down, 33 residential and three (3) non-residential by our Code Enforcement and Sheriff’s
Department team.
Unfortunately, this is a continuation of a trend from previous years. These illegal operations
create a significant number of calls to the City and create the most significant impacts on
surrounding businesses. As a result of this trend, the City is continuing to develop modified
strategies to identify the location of illegal cannabis operations and recoup costs consistent with
the nuisance abatement provisions of the Lake Elsinore Municipal Code.
State Licensing
State licensing procedures run parallel to the City processes. The City does not impose a
requirement that an applicant have its State permits prior to seeking City approvals. However,
an operator must have the required State license at the time of opening its business.
Analysis
As the initial application process began, the City noted a departure from the anticipated larger
22,000 SF facilities to smaller facilities. The typical facility size has been closer to 5,000 SF, and
the average based upon the 16 approved facilities is approximately 8,000 SF.
Because of this divergence from the anticipated parameters, staff received direction to continue
to process applications as they are received up to 220,000 SF consistent with the initial
analyses and to obtain further Council Subcommittee direction as needed.
Despite the increase in the number of facilities, the limitation of retail uses within those facilities
held in check the net number of vehicle trips. Also, as anticipated by limiting uses to the internal
areas of the buildings, impacts to air quality, noise, and odors have been restricted.
In general, except for the size of the facilities, the cumulative uses are producing the types of
outcomes anticipated. By utilizing the typical regulatory framework of other industrial uses for
cannabis-related businesses, we know the who, what, where, when, why, and how these uses
function and have adequate recourse to ensure compliance.
The actual buildout of the licensed facilities has been a challenge for several applicants. Only
four (4) out of 16 approved facilities are currently operational. It is anticipated another five (5)
facilities will be open by the end of the year. Staff is continuing efforts to facilitate buildout, but at
this stage the longer construction lead time is a recurring characteristic of these facilities.
Cannabis Uses Update
August 11, 2020
Page 3
As noted above, the City’s practice has been to continue to consider cannabis application
beyond the flexible cap of 10 facilities, reasoning that the program was adopted with an
expectation of having 220,000 SF devoted to cannabis related operations. However, after
taking into account both approved and pending applications, only about 39,000 SF remains
available for future applications.
Accordingly, this report is also to apprise the Council that the 220,000 SF buildout threshold
may be reached in the near term and we are at a juncture where further consideration of this
program needs to begin. Specifically, direction on the continued processing of new applications
beyond 39,000 SF will be needed along with possible modifications on the regulatory
framework. Such action may include City Council consideration of a change in the square
footage threshold or, alternatively, consideration of a moratorium on the processing of new
applications. Those discussions will begin with consultation among City staff and the Council
Cannabis Ad Hoc Subcommittee comprised of Mayor Tisdale and Mayor Pro Tem Magee.
Fiscal Impact
Applicants pay for the cost of entitlement review, plan check services, and any fees or deposits.
The costs associated with any code enforcement abatement is billed to the property owner.
Also, a community benefits agreement fee of $18 per SF, plus annual escalators, has been
negotiated to help offset the cost of potential fiscal impacts and provided for funding of other
community benefits.
Exhibits
A – Cannabis Status Matrix
Cannabis Businesses
Updated 7/30/20
Corporate Name Contact Address Size Current Status Commencement
Green Origins LE Kim Cousins 504 Central Avenue 6,141.00 Fully operational. 21-Nov-19
The Modern Leaf Josh Grant 31877 Corydon 2,074.00 Fully operational. 16-Jun-19
Medcare Farms Garin Heslop 29395 Collier Building A 28,684.00 Partially operational, ETA to build out 12-18 months. 1-Jan-20
Kind Delivery Jarret Hale 571-H Crane Street 3,754.00 Fully operational. 30-Jul-20
40,653.00
Corporate Name Contact Address Size Current Status
IE Licensing David Hargett 31885 Corydyon 5,000.00
Unit 140 - Last inspection 12/19. Has passed rough electrical, plumbing and fire sprinklers. Units 130 & 150 -
approved, waiting plan check submittal.
Veterans Organic Solutions,
LLC Daniel Wise 31875 Corydon 7,868.00
Original applicant has sold their business, currently reviewing new entity's operations. No permits issued.
Vert.
THT Group, LLC Darren Hagen 480 Third St.20,891.00 Permits issued, last inspection was 6/15/20.
LE Investment Corporation Joesph Martin 311 Minthorn 8,500.00 Permits issued, last inspection was 6/15/20.
Trustin Solutions Travis Campbell 510 Crane Street 5,521.00 Permit issued 10/19, no inspections to date.
The Highest Craft Tommy Tran 571 Crane Avenue 10,723.00 Building Permits applied for 6/30/20. 1st review due back 7/14/20
Brighter Systems, Inc Jarrett Hale 31887 Corydon Unit #150 9,000.00 Under construction. Last inspection 1/31/20
Roots 2 Harvest Ted Kingston 29370 Hunco Way 12,411.00 In plan check. Corrections returned on 4/20/20, no resubmital
Tree Haus David Lemme 18532 Pasadena 4,892.00 CC approved, waiting Plancheck submission.
VISTA PRIME George Sadler 31875 Corydon 5,369.00 CC approved, waiting Plancheck submission.
Rahman and Associates Bill Rahman 18890 Spring Street 17,037.00 CC approved, waiting Plancheck submission.
Alba Systems Gil Alba 31879 Corydon Suite 150 2,350.00 CC approved, waiting Plancheck submission.
109,562.00
Vert Saif Alcar 31875 Corydon, Lake Elsinore 3,300.00 Modification to VOS. Targeting the 8/18/20 and 8/25/20 Public Hearings.
Stellar House Joel Carrillo 570 Central Avenue 6,810.00 FIA routed for DA preperation.
Grant Expansion Joshua Grant 31877 Corydon Road STE 150 4,450.00 FIA routed for DA preperation.
Trucc Brandi Smith NE Corner Central/Pasadena 11,714.00 New construction. FIA routed for DA Preperation.
SCCC Group Hazelina Laskey 31889 Corydon STE 170 4,925.00
31,199.00
181,414.00 Total permitted and in process
220,000.00 Total analyzed originally
38,586.00 Total left in original analysis
731,754$ Operational facilities paying fees
3,265,452$ Currently approved Community Benefit Agreement Fee
3,960,000$ Total Community Benefit Agreement Fee - Based upon assumption of 220,000 SF of space
4 Operational facilities paying fees - Number of Facilities
40,653 Operational facilities paying fees - Total Area of Facilities
12 Permitted, not operational - Number of Facilities
109,562 Permitted, not operational - Total Area of Facilities
5 In process, includes two modifications - Number of Facilities
31,199 In process, includes two modifications - Total Area of Facilities
9,388 Average Size of Facility
4 Projected number of additional facilities.
Total
Total
Total
Operational
Permitted
In Process