The purpose of this Study Session is to provide the City Council  with an  overview and historical account of the City's existing siting and operating regulations as they pertain to marijuana establishments; and seek input on an applicant-initiated amendment to the Zoning Code pertaining to Qualifying Marijuana Dispensary regulations. The proposed Code Amendment is expected to be heard by the Planning & Zoning Commission at the May 4th meeting and then be placed on the June 6th City Council agenda for action.

More specifically, the applicant, Gammage & Burnham, is seeking two (2) amendments to the Peoria City Code as follows:

1. Allow Qualifying Marijuana Dispensaries to securely transport and deliver marijuana and marijuana products to customers, subject to an updated Security Plan, approved by the Police Department; and
   
   
2. Expand the definition of Qualifying Marijuana Dispensary to include operators with an Establishment License (adult use only). Currently, the City only permits operators with a medical marijuana license or a dual license (both medical marijuana and adult use).

Attached is a Narrative Statement furnished by the applicant, that summarizes and justifies the proposed changes.  Please note that these amendments in no way disrupt, alter or change, current zoning restrictions on the siting of Qualifying Marijuana Dispensaries. Moreover, with the exception of the proposed removal on the prohibition of deliveries, the existing operating limitations in the Zoning Code would remain intact. 

At the November 3, 2020, General Election, Arizona voters approved Proposition 207 (“Smart and Safe Arizona Act”), which generally legalized recreational marijuana ("adult use marijuana") for adults over the age of twenty-one (21). This law regulated the production, sale, possession and consumption of recreational marijuana and established the Arizona Department of Health Services (ADHS) as the agency responsible for adopting rules to regulate marijuana, including the licensing of marijuana retail stores, cultivation facilities and production facilities. This law followed the Arizona Medical Marijuana Act (Proposition 203) which was passed by Arizona voters in 2010. 

Key highlights from the 2020 Proposition 207 included the following:

• Permitted a person of at least 21 years of age to lawfully possess and use one ounce or less of marijuana with no more than 5 grams being marijuana concentrate.
• Qualifying adults could cultivate up to six (6) plants at their homes, with no more than twelve (12) in homes with multiple qualifying adults. Cultivation may only occur in an enclosed, locked area within the premises that is not visible from public view.
• Marijuana use remained illegal in Public Places as defined in the Smoke-Free Arizona Act (e.g. places where the public is invited such as hotels, grocery stores, elevators) as regulated by A.R.S. § 36-601.01. Marijuana use also remains illegal in Open Spaces, which includes public parks, sidewalks, walkways, preserves and pedestrian thoroughfares.
• The Act provided that employers may still adopt “drug free workplace” policies and restrict employees from using or possessing marijuana in the workplace.
• Marijuana sales would be subject to sales tax in addition to a 16% excise tax. The revenue would be deposited into the Smart and Safe Arizona Fund, which is split at set percentages to implement the law and between community college districts, police and fire departments, the Highway User Revenue Fund and a Justice Investment Fund.
• As with the medicinal marijuana program, the Arizona Department of Health Services (ADHS) is responsible for adopting rules to regulate the adult use of marijuana, including the licensing of marijuana establishments, testing and cultivation facilities.
• ADHS was responsible to adopt rules to create and implement a Social Equity Ownership Program. The purpose is to promote the ownership and operation of marijuana establishments by individuals from “communities disproportionally impacted by the enforcement of previous marijuana laws.”  At least twenty-six (26) licenses would be required to be issued to Social Equity applicants.
• Dispensaries are required to test their products for potency, contamination, heavy metals, pesticides, herbicides and other contaminants. ADHS is responsible for the licensing of 3^rd party testing facilities.
• The delivery of recreational marijuana was not permitted until ADHS adopts rules. The earliest that ADHS may adopt rules is January 1, 2023; said rules must be in place by January 1, 2025.
• A municipality can enact “reasonable zoning regulations” that generally govern the time, place and manner of marijuana establishments and marijuana testing facilities. However, a municipality may not restrict or interfere with the ability of an entity to operate a nonprofit medical marijuana dispensary and a marijuana establishment at a shared location; and may not adopt a more restrictive ordinance than a comparable ordinance that applies to nonprofit medical marijuana dispensaries.  

Existing Marijuana Regulations (Peoria Zoning Code)

In 2011, the City of Peoria established zoning regulations to address the passage of the 2010 medicinal marijuana law. In constructing its regulations, the City noted that marijuana sales remained a cash-based business, given its status at the federal level. Hence, the City sought to permit dispensaries, with the issuance of a Conditional Use Permit (CUP), in certain visible and well-travelled commercial zoning districts (C-2, C-4 and C-5).  Moreover, it was desired that these uses be intermixed with conventional retail/commercial uses so that the high visibility will deter property crimes and encourage the facilities to maintain a quality appearance and stay in good repair.  Additionally, these commercial areas are designed to accommodate the parking demands that these type of facilities may generate.

Additionally, the City relegated marijuana cultivation and manufacturing facilities to certain industrial zoning districts (BPI, PI-1, I-1 and I-2), subject to the issuance of a Conditional Use Permit (CUP). The Ordinance required that all growing take place at these locked facilities could only be transported to licensed dispensaries from these locations. The City does not currently have any marijuana cultivation and manufacturing facilities.  The Zoning Code also includes very comprehensive siting and operating restrictions for marijuana facilities. 

• Must be at least 2,640 feet (1/2 mile) from another Dispensary or Cultivation Facility.
• Must be at least 1,000 feet from a day care facility, pre-school or school.
• Must be at least 1,000 feet from a retail liquor store, tavern/bar, substance abuse treatment center or adult use.
• Must be at least 500 feet from a residentially-zoned property.
• Delivery and drive-through services are prohibited.
• A Security Management Plan must be approved by the Police Department. A licensed and bonded security guard must be present at the facility during business hours. Additionally, the Plan requires an active alarm system, security cameras and the retention of recordings for a minimum of 60 days.
• Marijuana product must be inaccessible to the general public and located in a manner so that only approved cardholders can access the product.
• Marijuana remnants or by-product must be handled separately from general refuse and must be disposed through an approved refuse plan.
• There cannot be any inordinate emission of dust, fumes, vapors or odors from the premises.
• Signage is limited to the name of the business only and cannot contain any advertising of the goods or services.
• Operating hours limited to 8am – 10pm.

With the passage of Proposition 207 ("recreational marijuana"), the City updated its zoning regulations.  The siting and operating restrictions established in 2011 largely remained intact. However, the City limited Qualifying Marijuana Dispensaries to those with (a) medicinal marijuana license; or (b) a dual licensed facility.  Currently, there are four (4) operating marijuana dispensaries in the City.

• On March 2, 2021, the City Council adopted ORD. 2021-06, amending various sections of the Peoria Zoning Code, in response to the passage of Proposition 207 ("Smart and Safe Arizona Act").  This Ordinance introduced targeted changes to the existing operating and siting regulations for marijuana establishments and cultivation facilities.

• On November 10, 2020, the City Council adopted ORD. 2020-14, amending Chapter 17 of the City Code pertaining to the use and possession of Recreational Marijuana on property occupied, owned, controlled or operated by the City of Peoria.

• On February 15, 2011, the City Council adopted ORD. 2011-05A, amending various sections pf the Zoning Code, in response to the passage of Proposition 203 (":Arizona Medical Marijuana Act").  This ordinance established siting and access regulations for dispensaries and cultivation facilities.