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HomeMy WebLinkAbout17 - Medical Marijuana DispenseriesCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 17 June 28, 2005 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Aaron C. Harp, Assistant City Attorney Ext. 3131, aharp(a ) city.newport- beach.ca.us SUBJECT: Report describing the measures taken to alleviate the conditions which led to the adoption of Interim Urgency Ordinance No. 2005 -7 regulating medical marijuana dispensaries RECOMMENDED ACTION: Receive and file the report. BACKGROUND: On May 24, 2005, after conducting a noticed public hearing, the City Council of the City of Newport Beach enacted Ordinance No. 2005 -7, an interim urgency ordinance making findings and establishing a temporary moratorium on the establishment and operation of medical marijuana dispensaries in the City. Ten days prior to the expiration of the interim urgency ordinance, the City Council must issue a written report describing the measures taken to alleviate the condition which led to the adoption of the ordinance. Accordingly, the City has prepared this report in satisfaction of the requirements of Section 65858. PUBLIC NOTICE: Public notice was provided in accordance with all applicable laws. Prepare by: Submitted by: Aaron C. Harp, Assistant City Attorney Robin Clauson, City Attorney Attachment: Report of the City Council of the City of Newport Beach on the Interim Urgency Ordinance Regulating Medical Marijuana Dispensaries REPORT OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ON THE INTERIM URGENCY ORDINANCE REGULATING MEDICAL MARIJUANA DISPENSARIES I. Introduction On May 24, 2005, after conducting a noticed public hearing, the City Council of the City of Newport Beach enacted Ordinance No. 2005 -7, an interim urgency ordinance making findings and establishing a temporary moratorium on the establishment and operation of medical marijuana dispensaries in the City. Pursuant to Government Code Section 65858, the interim urgency ordinance shall remain in effect for forty -five days, after which it may be extended by the City Council for an additional ten months and fifteen days. Ten days prior to the expiration of the interim urgency ordinance, the City Council must issue a written report describing the measures taken to alleviate the condition which led to the adoption of the ordinance. Accordingly, the City has prepared this report in satisfaction of the requirements of Section 65858. II. Background to the Adoption of the Interim Urgency Ordinance In 1996, the voters of the State of California approved Proposition 215, which was codified as Health and Safety Code Section 11362.5, et seq., and entitled the Compassionate Use Act of 1996. The intent of Proposition 215 was to enable persons who are in need of medical marijuana for medical purposes to obtain and use it under limited, specified circumstances. On January 1, 2004, SB 420 went into effect. SB 420 was enacted by the Legislature to clarify the scope of the Compassionate Use Act and to allow cities and counties to adopt and enforce rules and regulations consistent with SB 420 and the Compassionate Use Act. The Newport Beach Municipal Code does not address or regulate in any manner the existence or location of medical marijuana dispensaries. After receiving inquires from persons interested in establishing medical marijuana dispensaries, the City Council considered and enacted Ordinance No. 2005 -7 establishing a temporary moratorium on the establishment and operation of medical marijuana dispensaries in the City. The City Council adopted Ordinance No. 2005 -7 because it found that: (1) because a significant number of cities, including cities in the County of Orange, have prohibited or heavily regulated medical marijuana dispensaries, there was a substantially increased likelihood that such establishments would seek to locate in the City of Newport Beach; (2) other California cities that have permitted the establishment of medical marijuana dispensaries have witnessed an increase in crime, such as burglaries, robberies, and sales of illegal drugs in the areas immediately surrounding such dispensaries; and (3) the United States Supreme Court was considering the validity of the California Controlled Substances Act in the California case of Raich v. Ashcroft, (2003) 352 F.3d 1222 (subsequently renamed Gonzalez v. Raich). The City Council also found that issuing permits. business licenses, or other applicable entitlements providing for the establishment and /or operation of medical marijuana dispensaries, prior to: (1) the United States Supreme Court resolving the conflict in state and federal law on the subject of medical marijuana, (2) the City's completion of its study of the legality, potential impact, and regulation of such facilities; and (3) resolving any zoning conflicts based on the fact that no zoning currently exists in the City for such dispensaries, would pose a current and immediate threat to the public health, safety, and welfare, and that a temporary moratorium on the issuance of such permits, licenses, and entitlements was thus necessary. III. Pleasures Taken Since the Adoption of the Interim Urgency Ordinance A. The United States Supreme Court's Decision in Gonzalez v. Raich. On June 6, 2005, the United States Supreme Court decided the case of Gonzales v. Raich. (2005) 2005 WL 1321358 U.S., holding that federal laws that ban the use of marijuana for medical purposes are constitutional. Specifically, the Court held that the Commerce Clause grants Congress power to regulate purely local activities that are part of an economic class of activities that have substantial effect on interstate commerce. The United States Supreme Court also held that the application of the Controlled Substances Act provisions criminalizing manufacture. distribution, or possession of marijuana to intrastate growers and users of marijuana for medical purposes, as otherwise authorized by the California Compassionate Use Act. did not exceed Congress' authority under the Commerce Clause to prohibit intrastate growth and use of marijuana. B. Response to the Gonzalez v. Raich Decision. On June 6, 2005, California Attorney General Bill Lockyer issued an opinion that the decision in Gonzales did not overturn California law permitting the use of medical marijuana and that Californian's should contact their Congressional Representatives and Senator's and ask them to take a fresh look at the federal laws that ban its use. A possible response by the United States Congress to the decision in Gon-zales is that federal laws that ban medical marijuana use may be modified. Because California law was not overturned by the decision in Gonzales, any modification of the federal law's would have a direct impact on the City. C. Analysis of Proposition 215 and SB 420. The City Attorney's Office has been conducting analysis of Proposition 215 and SB 420. Currently. City Attorney's Office is still conducting its analysis; however. the City Attorney's Office initial research has raised several issues regarding whether California law permits the establishment of commercial facilities designed to dispense marijuana. Specifically, Proposition 215 and SB 420 do not expressly provide for commercial establishments designed to dispense marijuana, nor do they provide for other similar establishments set up for the dispensing of marijuana. At this time, legal challenges have been filed against cities that have enacted legislation banning medical marijuana dispensaries. A resolution of these cases should shed light on the interpretation of Proposition 215 and SB 420. -2- J D. Impact of Medical Marijuana Dispensaries. The City Attorney's Office and Planning Department has been conducting additional research regarding the secondary impacts of medical marijuana dispensaries that have been permitted in other cities. As noted at the time Ordinance No 2005 -7 was adopted, the United States Department of Justice's (DOJ) California Medical Marijuana Information report provided that large -scale drug traffickers have been posing as "care givers" to obtain and sell marijuana. This opinion appears to be supported by a recent action taken by the Los Angeles Police Department ( "LAPD ") and Federal Internal Revenue Service (IRS) in Los Angeles. Specifically, on May 11, 2005, after an eight -month investigation, LAPD Narcotics Squad officers and IRS agents raided a medical cannabis club operating in West Hollywood, arresting 14 people and seizing 300 pounds of marijuana product (wholesale value, $2.5 million; retail value over S5 million) and between 5300,000 to 500,000 in cash. According to LAPD spokesperson Sergeant Plow. surveillance found that the club allegedly sold large amounts of marijuana to customers on a regular, sometimes daily, basis. Sergeant Plow stated that the LAPD had "formed the opinion that the club was in violation of Health & Safety Code 11360 (transportation, distribution or importation of controlled substances) through the surveillance." Sergeant Plow told reporters that the establishment regularly sold between 3 ounces to 1 pound quantities to people who made sometimes daily buys. Apparently, there was an average of 235 visits a day to the club. Sergeant Plow concluded that the establishments actions constituted "drug dealing, not medicine dispensing." Other secondary effects can be seen by the increases in illegal drug activity, illegal drug sales, robbery of persons leaving dispensaries. loitering around dispensaries, falsely obtaining "identification cards" to qualify for medical marijuana, and other increases in criminal activity. For example, on December 27, 2003, five anned masked men burst into the Alternative Herbal Health Services clinic in the 400 block of Haight Street in San Francisco. According to the owner Jason Beck. the robbers grabbed 23 eight vials of marijuana from behind the counter, worth as much as 51,500. When Beck leaned over to see what the suspects looked like and pressed the alarm behind the counter, lie was then pistol- whipped in the head five times by different suspects, as they tried to get him to stop pressing the alarm and open the cash register. In response to the incident, Captain Tim Hettrich, the City of San Francisco's head of narcotics, said he has long worried about potential robberies at medical marijuana clubs. Captain Tim Hettrich stated that "[o]ne of my major concerns has been that these people are vulnerable and there is a tremendous amount of cash on hand." On a related note, on or about May 16, 2004, Mr. Beck was robbed at his home. Specifically, two intruders kicked down the door of his house, put a gun to his head and fleeced the place of several thousand dollars' worth of marijuana along with other valuables. Other examples include: (1) the robbery of the University Medical Marijuana Club which was robbed three times in one year resulting in the closure of the club; (2) men who kicked in the window of a medical marijuana dispensary in Oakland and tried to rob the dispensary; and (3) -3 (J thieves that broke into a medical marijuana dispensary in Alameda County robbing the safe as well as persons present. E. Regulation of Medical Marijuana Dispensaries. The City Attorney's Office and Planning Department has conducted additional research regarding how other cities are regulating medical marijuana dispensaries. Specifically, the City Attorney's Office and Planning Department are currently reviewing regulations adopted by Huntington Beach, Oakland, Berkley, Elk Grove, and Citrus Heights. -4- J