Title:
Title
Emergency Interim Ordinance Extending the Interim Ordinance Imposing a Moratorium on Hemp Manufacturing for 10 Months and 15 Days (Four-Fifths Vote Required) [Noticed 11/29/2019] {To be published in its entirety upon adoption}
End
FileID
File ID: 2019-01729
Location
Location: Citywide
Recommendation:
Recommendation
Conduct a public hearing and upon conclusion, adopt an Interim Ordinance: 1) extending the term of Ordinance No. 2019-0040 by four-fifths relating to a moratorium on hemp manufacturing for 10 months and 15 days, to expire October 25, 2020; and 2) declaring the ordinance to be an urgency measure to take effect immediately upon adoption.
Contact: Leyne Milstein, Assistant City Manager, (916) 808-8491; Zarah Cruz, Program Specialist, (916) 808-8925, Office of Cannabis Management, Office of the City Manager.
Body
Presenter: Leyne Milstein, Assistant City Manager, (916) 808-8491, Office of the City Manager
Attachments:
1-Description/Analysis
2-Ordinance
Description/Analysis
Issue Detail: On November 5, 2019, the City Council adopted a 45-day moratorium to temporarily prohibit the manufacturing of hemp within the city’s boundaries. This item seeks to extend the moratorium for another 10 months and 15 days, while staff conducts further research on the subject and the potential impacts if the City is to regulate it in the future.
The regulatory scheme for “industrial hemp” continues to evolve. Since 2013, the state of California has regulated the cultivation and sale of industrial hemp for both agriculture and commercial purposes. On December 20, 2018, the federal Agriculture Improvement Act of 2018 (commonly referred to as the “2018 Farm Bill”) was signed into law. The bill immediately removed hemp from the federal Controlled Substances Act of 1970 Schedule I controlled substances list. It also provided that industrial hemp may now be grown and produced for agricultural purposes, subject to local zoning and land use restrictions. In the last five years the definition for “industrial hemp” has changed several times under federal and state law. On October 12, 2019, Senate Bill 153 was signed by the Governor and again modified the rules and definition for industrial hemp. On October 29, 2019, US Department of Agriculture (USDA) released its draft regulations for hemp cultivation. However, the State has yet to release regulations.
Additionally, field-testing equipment that would assist law enforcement with distinguishing cannabis. Industrial hemp and cannabis are from the same plant species that produces cannabidiol (CBD), an increasingly popular ingredient used in alternative medicine. Currently, the level of tetrahydrocannabidiol (THC) present in a cannabis plant is the main legal difference under federal and state law between industrial hemp and cannabis.
In light of the increasing popularity of hemp-derived CBD resulting from the legalization of industrial hemp, there has been a rise in the interest in hemp manufacturing in the city. An assembly bill that would have authorized licensed cannabis manufacturers to also produce hemp-derived products under existing regulations of the California Department of Public Health, failed in the California Legislature.
In addition, industrial hemp in its plant form would be at manufacturing locations before CBD can processed from it and will in its plant form pose the same risks of hiding cannabis as industrial hemp. Based on experiences shared by other jurisdictions, the indistinguishability between hemp and cannabis is creating an opportunity for the illicit operators to enter the market using hemp as a cover. Currently, the City Code does not expressly allow industrial hemp manufacturing. Further, the lack of government oversight also creates health and safety concerns over hemp-derived CBD products being produced in unpermitted and uninspected locations.
In the absence of clear City regulation of industrial hemp, the presence of changing regulatory federal and state regulatory schemes, the lack of the proper field-testing equipment to assist law enforcement with protecting the public from illicit cannabis activity, staff is recommending that Council adopt an interim ordinance extending the moratorium for another 10 months and 15 days, a further research is conducted on the subject and while awaiting clear Federal and State guidelines.
Policy Considerations: There are no immediate local policy considerations associated with extending the moratorium on industrial hemp. However, if the City chooses to regulate industrial hemp in the future, the City may need to create a regulatory framework for specifically for industrial hemp, which may require amendments to the City’s land use (Title 17), business (Title 5), and the health and safety (Title 8) regulations. There may be other amendments to the City Code based on the state Legislature’s adoption of any new legislation on the subject matter.
Economic Impacts: None.
Environmental Considerations: This action is exempt from the California Environmental Quality Act (CEQA) because it is the adoption of an ordinance, rule, or regulation that requires discretionary review, including environmental review, and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity (CEQA Guidelines sections 15061(B)(1), California Business and Professions Code section 26055(h)) and because it does not have the potential for causing a significant effect on the environment (CEQA Guidelines section15061(b)(3)).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable. The item is an emergency ordinance and does not require an action of a commission/committee. (City Charter section 32, Council Rules of Procedure chapter 8(H)(1)(b).)
Rationale for Recommendation: The increasing popularity of hemp-derived CBD products has prompted an interest in manufacturing of these products in the city. While the city may benefit from having more manufacturers, it is premature to make a determination on whatregulations, if any, should be imposed on industrial hemp manufacturing. Extending the temporary interim ordinance will give the City the time it needs to be thorough in its efforts to develop rules that are fair and reasonable to business interests and protect the public’s health and safety, especially with the continuing evolution of federal and state regulations. More time is necessary to develop regulations with the input of stakeholders. Additionally, extending the interim ordinance will prevent manufacturing of hemp within the City’s boundaries. Lastly, it will give additional time for the development of the necessary field-equipment to assist law enforcement in distinguishing industrial hemp from cannabis.
Financial Considerations: None.
Local Business Enterprise (LBE): Not applicable.