It is the purpose and intent of this chapter to regulate the distributing, manufacturing, processing, research and development, retail sale, testing and transporting of cannabis and cannabis-related products in a manner which is responsible, which protects the health, safety, and welfare of the residents of Costa Mesa, and to enforce rules and regulations consistent with state law. In part to meet these objectives, a permit shall be required in order to own and/or to operate a cannabis business within the city. Nothing in this chapter is intended to authorize the possession, use, or provision of cannabis for purposes which violate state or federal law. The provisions of this chapter are in addition to any other permits, licenses, and approvals which may be required to conduct business in the city, and are in addition to any permits, licenses and approvals required under state law.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
Pursuant to sections 5 and 7 of Article XI of the California Constitution and the provisions of Division 10 of the Business and Professions Code, the city is authorized to adopt ordinances that establish standards, requirements and regulations for local licenses and permits for cannabis and cannabis-related activity.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
The city manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this chapter as may be necessary to administer and enforce the provisions of this chapter and any other ordinances, regulations or laws relating to and affecting the permitting and operations of commercial cannabis businesses.
The city manager is authorized to make reasonable rules, policies, and procedures consistent with the intent and spirit of this chapter concerning the applications, the application process, the information required of applicants, the application procedures, and the administration and procedures to be used and followed in the application process for permit applications and requests for permit changes or modifications pursuant to this chapter, and the implementation and administration of social equity programs.
(Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
It is the responsibility of the owners and operators of the cannabis business to ensure that it is, at all times, operating in a manner compliant with all applicable state and local laws, and any regulations promulgated thereunder.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
Unless otherwise defined in this chapter or in Chapter I of Title 13, the words used in this chapter shall have the same definitions ascribed to them in Division 10 of the Business and Professions Code or the definitions of the Health and Safety Code applicable to school and child daycare. Any reference to California statutes includes any regulations promulgated thereunder and is deemed to include any successor or amended version of the referenced statute or regulatory provision.
Cannabis
means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also means marijuana as defined by section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, "cannabis" does not mean industrial hemp as that term is defined by section 81000 of the California Food and Agricultural Code or section 11018.5 of the California Health and Safety Code.
Cannabis business permit
means a regulatory permit issued by the city pursuant to this chapter to a cannabis business, and is required before any cannabis activity may be conducted in the city.
Cannabis goods
means cannabis and/or cannabis products.
Cannabis product or manufactured cannabis product or product
means cannabis that has undergone a process whereby the plant material is transformed into a concentrate for internal consumption or topical application, including, but not limited to, concentrated cannabis, an edible cannabis product, or a topical cannabis product containing cannabis or concentrated cannabis in combination with other ingredients.
Caregiver or primary caregiver
has the same meaning as that term is defined in section 11362.7 of the California Health and Safety Code.
City manager
shall mean the city manager of the city or designee.
Director
shall mean the city's Director of the Economic and Development Services department or designee, unless otherwise specified.
Dispensing
means any activity involving the retail sale of cannabis or cannabis products.
Distributor
means a person or entity that engages in distribution. The direct and/or retail sale, distribution, or furnishing of any cannabis or cannabis product to any consumer or end user by a distributor is expressly prohibited, unless otherwise authorized pursuant to this chapter.
Edible cannabis product
means manufactured cannabis that is intended to be used, in whole or in part, for oral human consumption including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with section 32501) of the California Food and Agricultural Code. An edible cannabis product is not considered food as defined by California Health and Safety Code section 109935 or a drug as defined by California Health and Safety Code section 109925.
Financial interest holder
shall have the same meaning as set forth in Title 4, Division 19, section 15004 of the California Code of Regulations.
Free sample
means any amount of cannabis goods provided to a patron of a business or member of the public without cost or payment or exchange for any other thing of value.
Green Zone
means those portions of the manufacturing park (MP) and planned development industrial (PDI) zones that are located both north of South Coast Drive and west of Harbor Boulevard, excluding any portion of the South Coast Collection.
Homeless shelter
has the same meaning as emergency shelter.
Labor Peace Agreement
has the same meaning set forth in Business and Professions Code section 26001.
Manufacturing site
means a location where cannabis products are manufactured.
Marijuana
means "cannabis," as that term is defined in this chapter.
Marijuana activity and/or cannabis activity
includes manufacture, processing, laboratory testing, research and development, transporting, delivery, dispensing, distribution, furnishing, giving away or sale, or arranging and/or directing any of the foregoing, or any other activity involving cannabis or a cannabis product.
Marijuana business and/or cannabis business
means any business or operation which engages in any marijuana or cannabis activity.
Marijuana business permit
has the same meaning as cannabis business permit.
Patient or qualified patient
shall have the same definition as California Health and Safety Code section 11362.7 et seq., as it may be amended, and which means a person who is entitled to the protections of California Health and Safety Code section 11362.5. For purposes of this chapter, a qualified patient shall include a person with an identification card as that term is defined by California Health and Safety Code section 11362.7 et seq.
Person with an identification card
shall have the meaning given that term by California Health and Safety Code section 11362.7.
Playground
shall mean and include both a public playground located in a city park and a private playground. A private playground shall mean a privately-owned outdoor recreation area, including a tot lot, containing playground equipment or amenities such as swings, slides, sandboxes, or similar installations designed for use by minors and serving either the general public or residents of a development where the playground equipment is located, including residential subdivisions and/or developments such as apartments, townhomes and/or condominium complexes, mobile home parks or other similar residential uses, as well as playground equipment serving registered guests at hotels and motels. A private playground does not include a playground or playground equipment installed at a single-family residence, or play equipment that is part of a privately-owned commercial business or place of worship, or a playground that is access-controlled during operating hours or does not have direct access from the public right-of-way. A private playground does not include areas designated for use as a playing field or court, pool, or skate facility.
Premises
shall have the same meaning as set forth in Business and Professions Code section 26001 subsection (ap) for purposes of measuring the required distance from retail storefront uses to those uses set forth in section 13-200.93(e)(1).
Processing and processor
shall have the same meaning as manufacturing and manufacturer, respectively.
Property
shall mean any single development lot that has been subdivided bearing its own assessor's parcel number or with an approved subdivision map or condominium map unless the context clearly indicates a different meaning.
Research and development laboratory
means a facility, entity, or site in the city that performs research into and/or the development of cannabis or cannabis products, where cannabis in any amount is located on site, and that is both of the following:
(1) 
Accredited by an accrediting body that is independent of all other persons involved in the cannabis industry in the state.
(2) 
Registered with the State Department of Public Health, and is owned and operated by a person issued a valid cannabis business permit for laboratory testing from the city and is currently in compliance with all applicable state and local laws and regulations pertaining to the cannabis business and cannabis activities.
South Coast Collection or SoCo
means all properties located at 3303 through 3323, inclusive, Hyland Avenue, in the City of Costa Mesa, commonly known as "SoCo" or "SOCO."
State
means the State of California, including any of its departments, divisions, and/or bureaus.
State license
means a permit or license issued by the state to engage in cannabis activity.
Youth center
means any public or private facility that is primarily used to host recreation or social activities for minors, specifically private youth membership organizations or clubs, social services teenage club facilities, video arcades where 10 or more games or game machines or devices are operated or similar amusement park facilities, but does not include dance studios, tutoring, martial arts studios or similar type of uses.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
(a) 
One or more of the following types of adult (A-license) and/or medical (M-license) cannabis business may be permitted to operate within the city:
(1) 
Cannabis distributor (includes license classification type 11);
(2) 
Cannabis manufacturer (includes license classification type 6 and 7);
(3) 
Cannabis testing laboratory (includes license classification type 8);
(4) 
Cannabis retail - storefront (includes license classification type 10);
(5) 
Cannabis retail - non-storefront (includes license classification type 9); and
(6) 
Cannabis research and development laboratory.
(b) 
Businesses permitted pursuant to this chapter shall not engage in the retail sale, delivery or dispensing of cannabis, cannabis product, hemp or hemp products unless expressly permitted to do so pursuant to the terms of their cannabis business permit.
(c) 
No person may engage in any type of cannabis business that is not specifically authorized pursuant to this section and this Code, including, but not limited to, cultivating cannabis.
(d) 
The city council may by resolution limit and/or restrict the number of cannabis retail permits available for issuance and/or renewal.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
No person may engage in any cannabis business or in any cannabis activity within the city including manufacturing, processing, laboratory testing, transporting, dispensing, distribution, or sale of cannabis or a cannabis product unless the person: (1) has a valid cannabis business permit from the city that authorizes the specific business and activity at specific location; (2) has a valid business license issued to the entity that is listed on the cannabis business permit; and (3) is currently in compliance with all other applicable state and local laws and regulations pertaining to the cannabis business and cannabis activity. All cannabis business permits shall include a copy of a written notice to any existing tenant of the proposed business premises from the owner of the property of the intent to file a cannabis business permit application for those premises.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
No operator shall operate, conduct, manage, engage in, or carry on a cannabis business under any name other than the business name specified in the permit and/or any "doing business as" or "DBA", or "fictitious business name" or "FBN", provided in the permit application and/or business license. Proof of the "DBA" or "FBN" filing with the county clerk recorder shall be required. Any approved changes and/or updates to the permit may require payment of fees as set by resolution of the city council.
(Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
(a) 
A cannabis business permit shall be valid for two years from the date of issue, unless otherwise suspended or revoked, and may be renewed bi-annually thereafter, provided the permittee and application for renewal are in compliance with all of the provisions of this chapter as well as all administrative regulations adopted pursuant to section 9-497.
(b) 
Cannabis business permit application fees and renewal fees shall be established by resolution of the city council as may be amended from time to time. Failure to timely submit fees and/or comply with the administrative regulations governing applications and/or renewals shall be grounds for denial of application and/or renewal.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
Suspension of a license issued by the State of California, or by any of its departments or divisions, shall immediately suspend the ability of a cannabis business to operate within the city, until the State of California, or its respective departments or divisions, reinstates or reissues the state license within 90 days. Should the state license remain suspended for 90 days or longer, any permit issued pursuant to this chapter shall expire and be of no further force and effect. Should the State of California, or any of its departments or divisions, revoke or terminate the license of a cannabis business, such revocation or termination shall also revoke or terminate the ability of a business permitted pursuant to this chapter including the persons and entities set forth in section 9-490(c) to operate any cannabis business within the city for a period of five years from the date of such revocation or termination.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
(a) 
Revocation. A cannabis business permit may be revoked and/or suspended pursuant to the procedures of section 9-120, and/or deemed abandoned or forfeited pursuant to the procedures of section 9-495, for failing to comply with the terms of the permit, the applicable provisions of this chapter, this Code, city regulations, state law or regulations and/or any conditions of any other permit issued pursuant to this Code.
(b) 
Denial. An application for a cannabis business permit may be denied where it fails to provide all required information, documentation and/or fees and/or where it does not or would not be able to comply with the applicable provisions of this chapter, this Code, city regulations and/or state law or regulations and/or where the applicant is otherwise ineligible for such permit.
(c) 
Effect of revocation and denial. Whenever an application for a permit is denied, no other similar application by such applicant or permittee will be considered for a period of one year from the date of the denial of an application. Whenever a permit has been revoked, no other similar application by such permittee shall be considered for a period of five years from either the date the notice of the permit revocation was mailed or the date of the final decision of the city to revoke the permit, whichever is later. The prohibitions of this subsection shall also apply to the following:
(1) 
Any individual whose permit was revoked or whose application was denied who later becomes a director or officer of a corporation, profit or nonprofit, or a member of a partnership or a person owning or possessing any portion of the shares of a corporation seeking to obtain a new permit.
(2) 
A corporation, profit or nonprofit, whose permit was revoked, or application was denied, to any of its directors or officers or to any person who owned any portion of its shares, who attempts by way of a new corporation or using their individual names or becoming a member of a partnership or a director or officer or a person owning or possessing any portion of the shares in another corporation seeking to obtain a new permit.
(d) 
Ineligibility. In addition to any other law, no person or entity shall be eligible for and/or receive a cannabis business permit if that person or entity, or any director or officer of that entity or a person who owned any portion of that entity's shares, or any financial interest holder of that entity, engaged or engages in unpermitted and/or illegal cannabis activity involving sales, delivery and/or dispensing in the city, or had an ownership interest in any property set forth in section 13-200.93(e)(5), in the five years preceding an application under this chapter or during the application process. A determination of ineligibility under this subsection (d) may be made by the city manager and shall be based on the preponderance of the evidence. This prohibition shall not apply to a natural person who would otherwise be ineligible based on a criminal conviction that has been dismissed, withdrawn, expunged or set aside or is otherwise exempted pursuant to sections 9-495(g)(10) and/or 9-496(b).
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
Notwithstanding any other provision of this Code, only a decision by the city manager to suspend, revoke or deny a cannabis business permit under this chapter shall be subject to appeal, which shall be governed by the procedures set forth in Chapter IX of Title 2 of this Code.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
In the event a permit holding cannabis business sells or transfers the business to a new owner and/or operates the business under a new entity and/or name not listed on the permit, the new owner must obtain a new cannabis business permit and business license prior to commencing or continuing operations. A cannabis business shall be deemed to have transferred to a new owner within the meaning of this section if person(s) or entities with controlling interest at the time the permit was first issued cease(s) at any time to possess controlling ownership interest and/or hold an ownership interest of less than 51%.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
Prior to commencing operations, a cannabis business shall obtain and thereafter maintain a valid city business license pursuant to Chapter I of this title. Failure to hold a valid business license at all times shall render the cannabis business permit invalid.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
No cannabis business permit shall be issued, and no person shall conduct a cannabis business unless a conditional use permit has been issued therefore pursuant to the provisions of Title 13, Chapter IX, Article 21 of this Code. Approval of a conditional use permit shall not waive any other requirements of state or local law or regulation, including, but not limited, to the requirement to obtain a building permit, certificate of occupancy, cannabis business permit and/or city business license.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
A maximum of 35 storefront retail cannabis business permits may be issued by the city; provided, however, that the city will only process applications which have passed the pre-application phase as of the effective date of the ordinance codified in this chapter. Thereafter, no further storefront retail cannabis business permits for new locations may be issued by the city until the total number of operating licensed storefront retail establishments falls below 10, after which time the city may issue further cannabis business permits not to exceed 10 total active storefront retail cannabis business permits operating at one time.
(Ord. No. 2024-04, 5/7/2024)
(a) 
Records and recordkeeping.
(1) 
Each owner and operator of a cannabis business shall maintain accurate books and records, detailing all of the revenues and expenses of the business, and all of its assets and liabilities. On no less than a quarterly basis or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number of sales by the cannabis business during the previous three month period (or shorter period based upon the timing of the request), provided on a per-month basis. The statement shall also include gross sales for each month, and all applicable taxes paid or due to be paid. Each owner and operator shall keep and preserve for a period of no less than seven years, all records as may be necessary to determine the amount of such tax the operator may have been liable to collect and remit to the city.
(2) 
Each owner and operator of a cannabis business shall maintain a current register of the names and the contact information (including the name, address, telephone number, a copy of that person's government issued identification, and email address) of anyone owning or holding an interest in the cannabis business, and separately of all the officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the cannabis business. The register required by this paragraph shall be provided to the city manager upon a reasonable request.
(3) 
All cannabis businesses shall maintain an inventory control and reporting system that accurately documents the present location, amounts, and descriptions of all cannabis and cannabis products for all stages of the production or manufacturing, laboratory testing and distribution processes.
(4) 
Subject to any restrictions under the Health Insurance Portability and Accountability Act (HIPAA), each cannabis business shall allow city officials to have access to the business's books, records, accounts, together with any other data or documents relevant to its permitted cannabis activities, for the purpose of conducting an audit or examination. Books, records, accounts, and any and all relevant data or documents will be produced no later than 24 hours after receipt of the city's request, unless otherwise stipulated by the city.
(5) 
Each owner and operator of a cannabis business shall disclose to the city the names and addresses of each and every financial interest holder of that business within 10 calendar days of that person becoming a financial interest holder of the cannabis business, and thereafter shall notify the city within 10 business days if that person or entity ceases to be a financial interest holder.
(b) 
Security measures.
(1) 
A permitted cannabis business shall implement sufficient security measures to deter and prevent the unauthorized entrance into areas containing cannabis or cannabis products, and to deter and prevent the theft of cannabis or cannabis products at the cannabis business. These security measures shall include:
a. 
Establishing limited access areas accessible only to authorized cannabis business personnel;
b. 
All cannabis and cannabis products shall be stored in a secured and locked room, safe, or vault, and shall be kept in a manner as to prevent diversion, theft, and loss;
c. 
Sensors shall be installed to detect entry and exit from all secure areas;
d. 
Having a professionally installed, maintained, and monitored alarm system;
e. 
Any bars to be installed on the windows or the doors of the cannabis business for security purposes, if permitted by the city, shall be installed only on the interior of the building;
f. 
Security personnel if utilized must be licensed by the State of California Bureau of Security and Investigative Services Personnel, shall comply with the requirements of California Business and Professions Code Chapters 11.4 and 11.5 of Division 3, and have a valid business license from the city; and
g. 
Each cannabis business shall have the capability to remain secure and operational during a power outage and shall ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage.
(2) 
Each cannabis business shall identify a designated security representative/liaison to the city, who shall be reasonably available to meet with the city manager regarding any security related measures or and operational issues.
(3) 
A cannabis business shall notify the city manager within 24 hours after discovering any of the following:
a. 
Significant discrepancies identified during inventory, as set forth in the city's administrative regulations;
b. 
Diversion, theft, loss, or any criminal activity involving the cannabis business or any agent or employee of the cannabis business; or
c. 
The loss or unauthorized alteration of records related to cannabis, registering qualifying patients, primary caregivers, or employees or agents of the cannabis business and/or cannabis sales.
(c) 
Restriction on alcohol sales. No person shall cause or permit the sale, dispensing, or consumption of alcoholic beverages on or about the premises of the cannabis business.
(d) 
Compliance with laws. It is the responsibility of the owners and operators of the cannabis business to ensure that it is, at all times, operating in a manner compliant with all applicable state and local laws, and any regulations promulgated thereunder. Nothing in this chapter shall be construed as authorizing any actions which violate state law or local law with respect to the operation of a cannabis business or any site-specific, additional operating procedures or requirements which may be imposed as conditions of approval of the location of the cannabis business.
(e) 
Taxes. All cannabis businesses authorized to operate under this chapter shall pay all sales, use, business and other applicable taxes, and all license, registration, and other fees required under federal, state and local law. Each cannabis business shall cooperate with the city with respect to any reasonable request to audit the cannabis business's books and records for the purpose of verifying compliance with this section, including, but not limited to, a verification of the amount of taxes required to be paid during any period.
(f) 
Insurance. Permittee shall obtain and maintain at all times during the term of the permit comprehensive general liability insurance and comprehensive automotive liability insurance protecting the permittee in an amount of not less than $1,000,000 per occurrence, combined single limit, including bodily injury and property damage and not less than $1,000,000 aggregate for each personal injury liability, products-completed operations and each accident, issued by an insurance provider rated at least A-:VIII in A.M. Best and Company's Insurance Guide and either admitted and authorized to do business in California or is listed on the California Department of Insurance's List of Approved Surplus Line Insurers.
(g) 
Miscellaneous operating requirements.
(1) 
Restriction on consumption. Cannabis shall not be consumed on the premises of any cannabis businesses or elsewhere in the city other than within private residences.
(2) 
No cannabis or cannabis products or graphics depicting cannabis or cannabis products shall be visible from the exterior of any property issued a cannabis business permit, or on any of the vehicles owned or used as part of the cannabis business except as otherwise expressly allowed by this chapter. No outdoor storage of cannabis or cannabis products is permitted at any time.
(3) 
Reporting and tracking of product and of gross sales. Each cannabis business shall have in place a point-of-sale tracking system to track and report on all aspects of the cannabis business including, but not limited to, such matters as cannabis tracking, inventory data, and gross sales (by weight and by sale). The cannabis business shall ensure that such information is compatible with the city's record-keeping systems. The system must have the capability to produce historical transactional data for review by the city manager.
(4) 
All cannabis and cannabis products sold, distributed or manufactured shall be cultivated, manufactured, and transported by licensed facilities that maintain operations in full conformance with all state and local regulations.
(5) 
There shall not be a physician located in or around any cannabis business at any time for the purpose of evaluating patients for the issuance of a cannabis prescription or card.
(6) 
Signage, notices, and advertising.
a. 
In addition to the requirements otherwise set forth in this section, business identification signage for a cannabis business shall conform to the requirements of this Code, including, but not limited to, seeking the issuance of a city sign permit.
b. 
Each entrance to a cannabis retail business shall be visibly posted with one clear and legible notice up to 12 inches by 18 inches in size, indicating that smoking, ingesting, or otherwise consuming cannabis on the premises or in the areas adjacent to the cannabis business is prohibited. The word "cannabis" is allowed to be used up to two times on each of these specific notices. Letter height in the notice shall be limited to up to two inches in size. All notice lettering shall be the same font and color.
c. 
Business identification signage shall be limited to that needed for identification only.
d. 
The business shall at all times comply with the advertising and marketing restrictions of Business and Professions Code sections 26150-26156, in addition to the requirements of this Code.
e. 
Cannabis business advertising and/or marketing materials in the city shall comply with advertising, marketing and merchandising restrictions provided in California Code of Regulations sections 15040-15041.1 and California Business and Professions Code sections 26150-26156.
(7) 
Minors.
a. 
Persons under the age of 21 years shall not be allowed on the premises of a cannabis business, except as otherwise specifically provided for by state law. It is unlawful and a violation of this chapter for any person to employ any person at or for a cannabis business who is not at least 21 years of age.
b. 
The entrance to the cannabis business shall be clearly and legibly posted with a notice that no person under the age of 21 years of age is permitted to enter upon the premises of the cannabis business except as specifically provided for herein.
(8) 
Odor control. Odor control devices and techniques shall be incorporated in all cannabis businesses to ensure that odors from cannabis are not detectable off-site.
(9) 
Display of permit and city business license. The original copy of the cannabis business permit issued by the city pursuant to this chapter and the city-issued business license shall be posted inside the cannabis business in a conspicuous location.
(10) 
Background check. Every owner, manager, supervisor or employee of the cannabis business must submit fingerprints and other information deemed necessary by the city manager for a background check by the Costa Mesa police department to verify that person's criminal history. No person shall be issued a permit to operate a cannabis business who has been convicted of a felony within the past seven years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law.
(11) 
Loitering. The owner and/or operator of a cannabis business shall prohibit loitering by persons outside the facility both on the premises and within 50 feet of the premises.
(12) 
Permits and other approvals. Prior to the establishment of any cannabis business or the operation of any such business, the person intending to establish a cannabis business must first obtain all applicable planning, zoning, building, and other applicable permits from the relevant governmental agency which may be applicable to the zoning district in which such cannabis business intends to operate.
(13) 
Free samples. No cannabis business shall provide or cause to be provided any free sample of cannabis goods to any person within the city.
(14) 
A licensed retailer may only sell cannabis goods, cannabis accessories, and licensees' branded merchandise or promotional materials.
(h) 
Additional operating requirements for retail sale (storefront) businesses. In addition to every other requirement of this section, other than those set forth in subsection (i) (retail sale, non-storefront) that are expressly inapplicable, every business that sells cannabis as a storefront retailer shall comply with the following requirements:
(1) 
All cannabis retail storefront operators are encouraged to have a licensed private security guard present at the premises 24 hours per day. The security plan shall include at least one licensed private security guard or guards who shall be present at the premises at all times during operations, deliveries of any cannabis product to or from the premises, and transportation of cash to or from the premises, exterior lighting, and continuous video monitoring and recording of the interior and exterior of the premises. Video surveillance recordings must also include video of all entryways and exits of the premises. All video recordings shall be maintained for a minimum of 90 days. At the request of the chief of police or designee, based upon site-specific concerns or safety incidents, at least one licensed private security guard or guards may be required to be present at the premises 24 hours per day.
(2) 
Both the private security guard and the business personnel shall monitor the premises and the immediate vicinity of the premises to ensure that patrons immediately leave the premises and do not consume cannabis in the vicinity of the retail business or on the property or in the parking lot, and shall ensure that persons do not loiter, linger, or otherwise congregate within 50 feet of the premises.
(3) 
There shall be no on-site sales of alcohol or tobacco products, (excluding rolling papers and lighters) and no on-site consumption of food, alcohol, cannabis or tobacco by patrons.
(4) 
Hours of operation shall be limited to: 7:00 a.m. to 10:00 p.m. daily, unless further restricted by conditions of approval. No licensed retail business shall be open to the public between the hours of 10:01 p.m. and 6:59 a.m. of any day.
(5) 
The cannabis retail business shall notify patrons of the following both verbally and through posting of a sign in a conspicuous location:
a. 
Unlawful sale, barter or distribution of cannabis is a crime and subject to a fine or arrest.
b. 
Loitering on and around the retail premises is prohibited by California Penal Code section 647 and that patrons must immediately leave the premises and not consume cannabis in the vicinity and/or on the property or in the parking lot.
c. 
A warning that patrons and/or employees may be subject to prosecution under federal cannabis laws, if applicable.
d. 
That the use of cannabis may impair a person's ability to drive a motor vehicle or operate machinery and that doing so is illegal.
(6) 
No one under the age of 21 shall be allowed to enter the premises of a cannabis business unless the business holds a retail medical cannabis license (M-license) issued by the State.
(7) 
No person shall be permitted to enter the premises without government-issued identification, and cannabis goods may not be provided to any person, whether by purchase, trade, gift, or otherwise, who does not possess a valid government-issued identification and who does not meet the age requirements of this chapter.
(8) 
Electronic age verification device required. Proof of age of every person other than employees entering the business shall be verified with an electronic age verification device, prior to entry of the retail area or delivery to that person. The electronic age verification device may be mobile or fixed, and shall be able to retain a log of all scans that includes the following information: date, time, and age. Said log shall be kept for a minimum of 180 business days and all records shall be made available to the city manager upon request.
(9) 
Point-of-sale tracking required. The business shall facilitate the sale, making available, furnishing and/or delivery of cannabis goods with a technology platform that uses point-of-sale technology to track, and database technology to record and store, the following information for each transaction involving the exchange of cannabis goods between the business and consumer:
a. 
The date and time of transaction.
b. 
The first name and employee number of the employee who processed the sale of cannabis goods on behalf of the business.
c. 
A list of all the cannabis goods purchased, including the quantity purchased.
d. 
The total amount paid for the sale, including the individual prices paid for cannabis or cannabis products purchased, and any amounts paid for taxes.
(10) 
Cannabis retail businesses shall also record on the video surveillance system point-of-sale areas and areas where cannabis goods are displayed for sale.
(11) 
Adequate signage shall clearly state who has inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location.
(12) 
Shipments of cannabis goods may only be accepted during regular business hours.
(13) 
Inventory shall be secured using a lockable storage system during non-business hours.
(14) 
No cannabis product shall be visible from the exterior of the business.
(15) 
All required labelling shall be maintained on all product, as required by state law, at all times.
(16) 
A permitted commercial cannabis retail business shall have 180 days after permit issuance by the city to commence operations, after which the permit shall be void and of no further force and effect. A cannabis retail business shall be considered nonoperational and abandoned after failing to report income and/or reporting no income to the city in any one quarter, ceasing to operate, losing the right to occupy the permitted premises or otherwise failing to maintain an on-going permitted business at the premises for a total of 90 days in any 12 month period. A notice of determination of abandonment shall be delivered to the premises of the retail business and is subject to appeal pursuant to Chapter IX of Title 2. The forgoing notwithstanding, a permitted commercial cannabis business may temporarily suspend operations for a period of time not to exceed 90 days as may be reasonably required to affect upgrades, modifications, repairs, and/or to remedy other real property related problems, as approved in writing by the director or city manager.
(17) 
Obtain and maintain at all times during the term of the permit the insurance required pursuant to subsection (f) of this section in the minimum amounts of $2,000,000 and enter into an agreement approved by the city attorney to defend, with attorneys of city's choosing, indemnify, release and hold harmless the city, its city council, boards, commissions, officers and employees from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to the permittee or the permittee's activities. This indemnification shall include, but not be limited to, damages awarded against the city, if any, costs of suit, attorneys' fees, and other expenses incurred in connection with such claim, action, or proceeding whether incurred by the permittee, city, and/or the parties initiating or bringing such proceeding, and shall not be limited by the types and/or amounts of insurance required herein;
(18) 
For an applicant with two or more employees, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and abide by the terms of a labor peace agreement as otherwise required by Business and Professions Code section 26105.5.
(i) 
Additional operating requirements for retail sale (non-storefront) delivery businesses. In addition to every other requirement of this section, except only for subsection (h)(1) through (5) and (10) (retail sale, store-front), every business that sells and/or delivers cannabis as a non-store front retailer shall comply with the following requirements:
(1) 
Commercial cannabis retail deliveries may be made only from a commercial cannabis retail business permitted by the city in compliance with this chapter, and in compliance with all state regulations.
(2) 
All employees who deliver cannabis shall have valid identification and a copy of the retail business' cannabis business permit and state license at all times while making deliveries.
(3) 
All commercial cannabis retail businesses shall maintain proof of vehicle insurance for any and all vehicles being used to transport cannabis goods as required by state law.
(4) 
Deliveries may only take place during normal business hours of the commercial cannabis retail business.
(5) 
During delivery, the delivery employee shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The delivery request documentation shall comply with state law.
(6) 
A licensed delivery employee shall not leave the State of California while possessing cannabis products while performing his or her duties for the cannabis retailer.
(7) 
A commercial cannabis retail business shall maintain a list of all deliveries, including the address delivered to, the amount and type of product delivered, and any other information required by the state.
(8) 
A manifest with all information required in this section shall accompany any delivery person at all times during the delivery process and delivery hours.
(9) 
Any delivery method shall be made in compliance with state law, as amended, including use of a vehicle that has a dedicated GPS device for identifying the location of the vehicle (cell phones and tablets are not sufficient).
(10) 
Each delivery request shall have a receipt prepared by the commercial cannabis retail business with the following information:
a. 
Name and address of the commercial cannabis retail business.
b. 
The name of the employee who delivered the order.
c. 
The date and time the delivery request was made.
d. 
The complete delivery addresses.
e. 
A detailed description of the cannabis goods requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested.
f. 
The total amount paid for the delivery including any fees or taxes.
g. 
At the time of the delivery, the date and time delivery was made, and the signature of the person who received the delivery.
h. 
No cannabis delivery vehicle shall display signs, decals or any other form of advertisement.
i. 
Inspections by an authorized city representative may be conducted anytime during regular business hours.
(11) 
Delivery must be made to a physical address that is not on publicly owned land, a school, a day care, or a youth center.
(12) 
The delivery employee shall not carry cannabis goods valued in excess of $5,000 at any time with no more than $3,000 of cannabis goods that are not already part of a customer order that was processed prior to leaving the premises.
(13) 
Delivery must be made in person by a direct employee of the licensed retailer. An independent contractor, third-party courier service, or an individual employed through a staffing agency would not be considered directly employed by the licensed retailer.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
(a) 
Any person who is an employee or who otherwise works within a cannabis business must be legally authorized to do so under applicable state law.
(b) 
No cannabis business or owner thereof may employ any person who has been convicted of a felony within the past seven years, unless that felony has been dismissed, withdrawn, expunged or set aside pursuant to Penal Code section 1203.4, 1000 or 1385, or who is currently on probation or parole for the sale, distribution, possession or manufacture of a controlled substance. Exempted from this prohibition is a conviction for a felony involving cannabis and/or marijuana for which the underlying cannabis or marijuana offense has subsequently been designated a misdemeanor or infraction or decriminalized pursuant to the provisions of the Control, Regulate and Tax Adult Use of Marijuana Act or federal law.
(c) 
All employees must wear an identification badge while on the premises of the business, in a format authorized by the city manager. Any person employed by a single employer at multiple locations in the City may be required to obtain only one identification badge.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
(a) 
The city manager is also authorized to establish any additional administrative rules, regulations, policies, procedures and/or standards governing the issuance, denial or renewal of cannabis business permits, or concerning any other subject necessary to carry out the purposes of this chapter.
(b) 
Regulations promulgated by the city manager shall become effective upon the date of publication. Cannabis businesses shall be required to comply with all state and local laws and regulations, including, but not limited to, any rules, regulations policies, procedures and/or standards adopted by the city manager.
(c) 
Such administrative rules, regulations and/or standards may include establishing standards and timing for application processing, including but not limited to providing priority for existing licensees in good standing.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
(a) 
The city manager is charged with enforcing the provisions of the Costa Mesa Municipal Code, or any provision thereof, and may enter the location of a cannabis business at any time during the hours of operation without notice, and inspect the location of any cannabis business as well as any recordings and records required to be maintained pursuant to this title or under applicable provisions of state law.
(b) 
It is unlawful for any person having responsibility for the operation of a cannabis business, to impede, obstruct, interfere with, or otherwise not to allow, the city to conduct an inspection, review or copy records, recordings or other documents required to be maintained by a cannabis business under this chapter or under state or local law. It is also unlawful for a person to conceal, destroy, deface, damage, or falsify any records, recordings or other documents required to be maintained by a cannabis business under this chapter or under state or local law.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)
(a) 
Violations declared a public nuisance. Each and every violation of the provisions of this chapter is hereby deemed unlawful and a public nuisance.
(b) 
Each violation a separate offense. Each and every violation of this chapter shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by the Costa Mesa Municipal Code. Additionally, as a nuisance per se, any violation of this chapter shall be subject to injunctive relief, any permit issued pursuant to this chapter being deemed null and void, disgorgement and payment to the city of any monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or in equity. The city may also pursue any and all remedies and actions available and applicable under state and local laws for any violations committed by the cannabis business or persons related to, or associated with, the cannabis activity. Additionally, when there is determined to be an imminent threat to public health, safety or welfare, the city manager, or the chief of police, may take immediate action to temporarily suspend a cannabis business permit issued by the city, pending a hearing before the city council.
(c) 
Criminal penalties. Each and every violation of the provisions of this chapter may be prosecuted as a misdemeanor and upon conviction be subject to a fine not to exceed $1,000 or imprisonment in the county jail for a period of not more than 12 months, or by both such fine and imprisonment. Each day a violation is committed or permitted to continue shall constitute a separate offense.
(d) 
Remedies cumulative and not exclusive. The remedies provided herein are not to be construed as exclusive remedies. The city is authorized to pursue any proceedings or remedies provided by law.
(Ord. No. 16-15, § 4, 11-18-16; Ord. No. 18-04, § 2, 4-3-18; Ord. No. 21-09, § 3, 6-15-21; Ord. No. 2024-04, 5/7/2024)