Here’s what’s next for Mendocino County’s proposed phase three cannabis regulations

MENDOCINO CO., 4/11/21 — The County of Mendocino’s cannabis cultivation permit program is currently closed to new applications, and just what the process and regulations will look like for new applicants has been the source of much debate over the past several months.

A proposal for a new set of cultivation regulations is set to be heard before the Board of Supervisors on April 19. If passed, these new regulations would establish a discretionary use permit process and allow commercial cultivators to apply to grow cannabis on up to 10% of their parcel.

An additional special Board of Supervisors meeting, is being held tomorrow, April 12, covering a range of environmental, enforcement, and program issues. The special Monday meeting will include a presentation from California Department of Fish & Wildlife on cannabis, water, and the environment, CalCannabis, the county’s cannabis program manager, and the Mendocino County Resource Protection district; a discussion of “phase one” applications in process, a proposal to increase county attorney hours and to implement satellite images for cannabis program enforcement, and a presentation from the Mendocino County Sheriff’s Office on future staffing and enforcement plans (see full agenda here).

For the last several years, discussions over cannabis regulation across the state have been long, tedious, and extremely in the weeds, involving multiple state and local agencies, and recent debates at the local planning commission and Board of Supervisors have been no different. As things stand now, the leading proposal would drastically alter the permitting process. On the one hand it would open up more land to cannabis cultivation in specific zones with a major use permit process necessitating public input. On the other hand many holders of provisional licenses could find themselves in the situation of having to stop cultivation and then re-apply for their permits via a discretionary permit process, or even relocate to remain in compliance. But, as we warned, the specific details are complicated.

On March 19, the Mendocino County Planning Commission held a more than 11 hour long hearing on two proposed cannabis ordinances. The “phase three” cultivation ordinance occupied most of the day and the focus of over 400 written comments and over 100 registered speakers at the hearing, the vast majority registering complaints with the potential scale of new cannabis farms, the existing program, or other specific details of proposed changes. The commissioners then made recommendations to the supervisors, including urging a smaller size of permitted cultivation of between one acre and 5% depending on zoning. 

Commissioners also recommended a more streamlined process for earlier program applicants who may want to apply in phase three, in part to address concerns about lengthy timelines for permit approvals once phase three applications begin, and that the county devote adequate resources to planning and building and the Sheriff’s Office for “permitting, enforcement, and oversight.” The vast majority of commenters wanted to see a smaller cap on permitted cultivation, and changes to help existing applicants seeking full compliance. Mendocino County Sheriff Matthew Kendall also called in, reiterating his ongoing stance for increased enforcement of noncompliant farms, and registering concerns about what expanded commercial cultivation could mean for the county. 

At the March 19 meeting, commissioners also heard a proposal for changes to the county’s cannabis facilities ordinance, which regulates retail, farm tours, processing, and other types of cannabis businesses. Those changes would allow certain cannabis farm tours and other cannabis related events and will also be next heard before the supervisors in April. 

The supervisors will consider the planning commission’s recommendations and take up both proposed ordinances on April 19, in what could be a “first reading” of the new regulations, as well as hear public comment on both the cultivation ordinance and the cannabis facilities ordinance. As county law currently stands, applications for “phase three” are supposed to open up on April 1, 2021. However, because the laws are in the process of being revised, the supervisors approved a 45 day urgency ordinance at the Monday, March 22 meeting to delay the start of phase three.

One recurring factor in these discussions has been the fate of the approximately 1100 cannabis cultivators who pursued licenses and entered a new system of commercial regulation in the first two phases of the county’s application process, and who were required to submit “proof of prior” cultivation.

Many of these cultivators have received provisional licenses from the county and state and have secured approval or required permits from numerous state agencies, but many have not yet received annual state licenses due to ongoing confusion around CEQA requirements, despite being in compliance with county-level permit requirements. However, the county has not provided specific data as to how many cultivators are seeking which paperwork, have not responded to queries, or may not have yet received provisional state licenses.

Unless statewide regulations change, (and Senate Bill 59 seeks to may do just that by extending the timeline for thousands of provisional permittees) the annual state licenses that will be required for commercial cannabis cultivation operation in 2022 could be out of reach for many of those in the county program. Supervisors have suggested that some of these initial applicants will need to pursue permits via the phase three process in order to secure annual state licenses. 

However, clear information about the state of these 1100 applicants has not been available from the county since the inception of the program in 2017, with some staff and supervisors implying that cultivators have deliberately not submitted necessary paperwork to use the process as a cover from enforcement action, while many permitted cultivators have stated they have been waiting for direction from the county while resubmitting paperwork per county request many times over without a response. 

In contrast to the earlier application phases, the phase three permit process currently under consideration would be discretionary — meaning that no cultivation could occur until applicants completed and received approval through a more lengthy process, including neighborhood input and planning commission hearings. As they currently stand, the changes under review would not include standard conditions for these permits.

Opponents to the proposed changes have raised concerns about the impacts on staff time, how adequate enforcement would be conducted, and how a potential glut of applications would delay the planning process both for current permittees forced to re-apply, other industries, and real estate prices in the county. If all phase one permittees must re-apply in the phase three process along with new cultivators and others seeking county discretionary permits in other industries, the process could be a lengthy one, requiring some existing cultivators to stop commercial operations in the meantime. 

As of now, officials have stated that there are four county planning employees dedicated to the permit program, and have estimated that the program has brought in between five and six million dollars, stating the majority of provisional permittees have been paying taxes as outlined through the program. The Cannabis Ad Hoc Committee has requested the specific amount of average individual revenue per permittee and how the funds are being used be provided by the auditor as of the March 23 supervisors meeting.

• Agendas will be posted here, will also include links to submitting written public comment, or registering to speak at the meeting
• Videos of Board of Supervisors meetings will be livestreamed on Mendocino County’s Youtube here
• You can write to the full Board of Supervisors at [email protected] 

We’ve put together an overview of the current ordinance process and timeline to help you follow along and participate:

• December 10, 2020 Cannabis Ad Hoc committee meeting, watch full video here
• January 26, 2021 Board of Supervisors approve changes, 4 – 1 (Hachak dissenting), see agenda item and documents here, watch full video here
• February 10, 2020 Cannabis Ad Hoc committee meeting, watch full video here, read our article preceding the meeting here
• March 18 coverage prior to the planning commission meeting, including links to a panel moderated The Mendocino Voice and The Cannabis Hour on KZYX
• March 19 Planning Commision meeting — here’s a link to the proposed ordinances and public comments, watch video here
  • Planning Commission recommended this for the proposed phase three changes, including a cap of between one acre and 5% of a parcel, with one commissioner suggesting 10% could be allowed in designated rangeland zones. Commissioners also suggested a more streamlined process for certain phase one applicants, including an administrative permit instead of a major use permit for some applicants, the chance to reapply for certain applicants, and a 30 – 60 window for phase one applicants to apply before applications are fully opened.  Full redlined version of the recommendations here, and the staff report is here
  • Public commenters were primarily opposed to aspects of the proposed phase three ordinance as currently written, read them here, here’s Supervisor Haschak’s editorial
  • Planning Commission recommended this redlined version for the proposed cannabis facilities ordinance changes, including a major use permit requirement for cannabis events at locations without a public frontage road, those with a public frontage road being limited to events with 25 people each each week, and recommended no cannabis events in zones
• March 22 and March 23 Board of Supervisors meetings, full agendas and videos here 
  • Supervisors unanimously adopt planning and building and county counsel’s urgency ordinance proposal to delay the opening of phase three applications from April 1 for at least 45 days (read related documents and public comments here, watch videos here)
  • Supervisors schedule special meetings for April 12 and April 19 for upcoming cannabis items
  • Supervisors approve a cannabis program consent calendar item (read here)
  • Cannabis Ad Hoc Committee requested the county auditor provide an anonymized amount of taxes paid per applicant per year since the program began, and information as to how that money has been allocated, as per an tax advisory measure (AJ) passed by voters in 2016. 

• April 12 special meeting of Board of Supervisors 
• presentation from CDFW staff on cannabis cultivation 
• presentation from CalCannbis and Mendocino County’s Ad Hoc Cannabis committee and new cannabis program manager, Kristin Nevedal
• presentation from MCSO on hiring plan for unfilled positions (at least 12 vacant positions as of March 22) and future enforcement strategy for cannabis in light of the potential opening of a new permit process
• item to extend urgency ordinance of the start of Phase 3, continued from March 
• presentation on county’s code enforcement efforts
• “Discussion and Possible Direction Regarding Phase 1 Cannabis Permit Applications Including: (1) Encouraging Denial of Non-Compliant Phase 1 Cannabis Cultivation Applications; (2) Approving Increased Scope of Work for Existing Outside Counsel Abbott & Kindermann to Assist with Phase 1 Cannabis Cultivation Denials; (3) Obtaining Satellite Imagery Subscription for Cannabis Program and Code Enforcement with Budgetary Request Returning on Consent; (4) Requiring Phase 1 Cannabis Permit and Embossed Receipt Holders to Demonstrate State Provisional License or Attest to Non-Cultivation Within 45 days”
• additional items including potential workshop on water resources and drought, crisis training workshops for MCSO
• April 19 meeting of Board of Supervisors — expected to include a discussion of the proposed phase three cultivation ordinance and the proposed cannabis facilities ordinance heard by the planning commission, full agenda is typically posted late Thursdays prior to regular Tuesday meetings