State allows cannabis delivery sales in Visalia

(Rigo Moran)

A state law taking effect in 2024 requires Visalia city staff to update zoning ordinances to permit delivery-only cannabis businesses within the city

VISALIA – Due to a state mandate that goes into effect next year, the city of Visalia must join other local jurisdictions in adapting their ordinances so they allow for delivery-only medical cannabis businesses to operate in the city.

In order to comply with California Senate Bill (SB) 1186, also known as the “Medicinal Cannabis Patients’ Right of Access Act,” the city will need to update its zoning ordinances that currently prohibit the operation of any cannabis business in Visalia. During a work session July 17, Visalia City Council authorized city staff to begin drafting the zoning ordinance updates and hire a consultant to assist in cannabis regulation revisions and the creation of a potential tax measure for cannabis sales.

“I wish the state wasn’t forcing us to do this, but here we are, so I’ll be fully supportive of everything that we’re doing tonight,” Mayor Brian Poochigian said.

Most council members said that although they are unhappy with the state mandate, they are in favor of city staff working through these details and hiring a consultant to ensure they create thorough regulations. They also said they are prepared for further possible changes to state law or a local desire to legalize additional types of cannabis sales in Visalia.

Starting Jan. 1, 2024, SB 1186 will prohibit a local jurisdiction from “adopting or enforcing any regulation” that prohibits the “sale by delivery” of medicinal cannabis, or has the effect of prohibiting such a sale “in a timely and readily accessible manner,” according to the bill text. This is a shift in state policy that gave localities near-total control over cannabis business regulations, including the prohibition of any sale or production operation.

Jim Koontz, an attorney for the city, explained that a few years after recreational cannabis was first legalized in 2016, the state added regulations to stipulate that local agencies could not prohibit deliveries within their boundaries; however, they could still prohibit sales within their boundaries.

“Visalia does not allow the sale of marijuana but, under state law, if a sale occurs outside of Visalia, then they’re allowed to make deliveries into Visalia,” Koontz said. “So what (SB 1186) does is that it kind of broadens that. So now, once it goes into effect, medicinal marijuana delivery-only businesses … would be allowed to set up shop within Visalia.”

These delivery-only businesses would not have retail storefronts that grant public access, but would instead only be able to take orders remotely and then distribute the product. Under SB 1186, the city will still be able to regulate where and how these businesses operate, but it cannot cap the number of delivery-only dispensaries allowed.

In the coming months, Visalia Community Development Director Paul Bernal said that city staff will work with city council to determine which zoning designations these delivery-only cannabis businesses can operate within and any other “reasonable” regulations allowed under SB 1186 the city wishes to impose.

Council members discussed which zones they could allow the dispensaries in and what other regulations they may want to include, such as odor control and security requirements. But overall, the work session report was primarily to authorize city staff to begin work on the topic and official proposals will come later on.

“Like most zoning implementation requirements, your staff would look to draft some of these comments and then use the planning commission as our technical advisory committee, presenting them with what we believe are reasonable zoning accommodations before we bring anything back to council for final adoption,” Bernal said.

The presence of delivery-only cannabis businesses in the city also means that the city can impose a special tax on cannabis sales within its jurisdiction. Thanks to council approval, the city will be able to hire a consultant to assist staff with preparation of a tax presentation for the 2024 general election.

Koontz said that the tax will still need to be approved and detailed by the city council before it goes on the ballot and it will only cover the types of cannabis that will be legalized for sales within Visalia. However, he said the city would also like to “get ahead of the curve” and make sure that these updates can easily adapt to hypothetical future changes in Visalia cannabis regulations.

“If state law stops at medicinal marijuana, then the idea would be that the proposed tax measure would stop at medicinal marijuana,” Koontz said. “But if the state law were to change to allow for recreational sales by state mandate instead of by local authorization, then that tax ordinance would potentially authorize a higher tax on the sale for recreational marijuana as well, if it were approved by voters.”

Due to the nature of California tax law, the city cannot enact a cannabis sales tax until it gets voter approval in the November 2024 general election. This leaves at least 10 months of delivery-only cannabis businesses being able to operate in Visalia without an additional sales tax that could benefit the city.

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