Sec. 7-7.12. Retail and cannabis business permit issuance.
a.The City Council, after receiving the application and the required information, shall grant the retail or testing laboratory permit if it finds all the following:
1.Granting the permit would not exceed the number of cannabis businesses authorized under Section 7-7.06(c).
2.The applicant has not knowingly made a material misrepresentation or omission in the application.
3.The applicant has not had a cannabis business permit denied or revoked by the state, County, City, City and County, or any other state within five (5) years of the date of the application.
4.The cannabis business, as proposed by the applicant, would comply with all applicable provisions of state law and this code, including but not limited to this Article, and all health, zoning, fire, and safety requirements.
5.No grounds for denial exist under Section 7-7.13.
b.Applicants that are approved by the City Council and have obtained a zone clearance from the City may be issued a cannabis permit. Any permit awarded under this section may include conditions of approval requiring the cannabis business permittee to comply with the objective review criteria set forth in its application.
c.If any of the selected storefront or nonstorefront retail applicants fail to exercise a cannabis business permit under the time specified in subsection (h) of this section, all rights to the permit shall terminate and be forfeited.
d.If the City Council authorizes additional cannabis businesses, or if any of the top four (4) ranked applicants have not exercised a storefront or nonstorefront retail commercial cannabis permit within twelve (12) months after selection, or within eighteen (18) months if the City Manager granted an extension under subsection (h) of this section, the City Manager shall invite the next ranked applicant from the results of the City’s initial screening application process in the applicable license category to apply for City Council approval of a cannabis permit; however, the waitlist shall expire on January 1, 2026. Once the waitlist applicant is notified of the right to apply for a vacant permit, the applicant shall secure a permit within the time frame specified in subsection (h) of this section. If the waitlist applicant fails to exercise a cannabis business permit within that time, they are removed from the waitlist.
e.To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to having issued a cannabis business permit pursuant to this Article or otherwise approving the operation of any cannabis business. As a condition to the approval of any cannabis business permit, the applicant shall be required to meet all the following conditions prior to receiving the cannabis business permit:
1.Execute an agreement, in a form approved by the City Attorney, agreeing to indemnify, defend (at applicant’s sole cost and expense), and hold the City of Monterey, and its officers, officials, employees, representatives, and agents, harmless, from any and all claims, losses, damages, injuries, liabilities or losses which arise out of, or which are in any way related to, the City’s issuance of the cannabis business permit, the City’s decision to approve the operation of the cannabis business or activity, the process used by the City in making its decision, or the alleged violation of any federal, state or local laws by the cannabis business or any of its officers, employees or agents. The permittee will sign an acknowledgement that the permit is expressly limited in term without a right to renewal.
2.Maintain insurance at coverage limits determined necessary and appropriate from time to time by the City’s Risk Manager or designee.
3.Reimburse the City for all costs and expenses, including but not limited to legal fees and court costs, which the City may be required to pay because of any legal challenge related to the City’s approval of the applicant’s cannabis business permit or related to the City’s approval of a cannabis activity. The City, at its sole discretion, may participate at its own expense in the defense of any such action, but such participation shall not relieve the applicant of any of the obligations imposed hereunder.
f. Duration.
1.A cannabis business permit is valid for one (1) year from the date of issuance and renewal of the permit is not guaranteed.
2.A cannabis business permit must be renewed by the permittee annually. A permittee may apply for a renewal of a permit sixty (60) calendar days prior to the expiration of the permit.
3.Permit renewals shall be granted if the information upon which the original application was granted remains unchanged, no violations of this Article have been committed, the renewal fee is paid, and the City Council has not reduced the number or eliminated cannabis businesses as an authorized use. In all other situations, the City Manager shall approve or deny the application within sixty (60) calendar days. A cannabis business may continue to operate under the terms of the previous permit if a timely renewal application has been received and is awaiting a determination by the City Manager.
4.If a renewal cannabis business permit application is not timely filed, or the required fees are not paid prior to the expiration date of the permit, the permit shall be deemed expired and no privilege to operate a cannabis business shall exist after the expiration date.
5.The City Manager is authorized to impose additional conditions to a renewal license to ensure compliance with state or local laws or to preserve the public health, safety, or welfare.
6.If a renewal application is denied, one (1) year from the date of the denial, a person may file a new application at the next permit application screening period set forth in Section 7-7.10.
g.Cannabis permits issued under this Article are valid only as to the approved permittee at the specified approved location, and is nontransferable to other persons, entities, projects, or locations. The assignment of or the attempt to assign any permit issued pursuant to this Article is unlawful and any such assignment or attempt to assign a permit shall render the permit null and void. 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 cannabis business permit was first issued ceases at any time to possess or control ownership interest and/or an ownership interest of less than fifty-one (51) percent.
h.A cannabis business permit shall be exercised within twelve (12) months of issuance. Upon a showing of significant and diligent progress towards exercising the cannabis business permit, the City Manager may provide one (1) six (6) month extension of time. A cannabis business permit shall be considered exercised when any of the following occur:
1.A certificate of occupancy has been issued.
2.The permitted use has commenced on the site.
3.A City building permit is secured, and construction lawfully commenced.
i.Prior to commencing operations, a cannabis business permittee shall be subject to a mandatory building inspection.
j.The permittee may apply to amend the permit on a form provided by the City Manager. The application shall not be granted unless the City determines that the terms of the amended permit comply with all requirements of this Article and all other state and local laws. An amended permit shall retain its original expiration date. A cannabis business may continue to operate under the terms of the previous permit while an application for an amended permit is awaiting a determination.
k.No permittee may operate a commercial cannabis business under any name other than the name specified in the permit and business license certification without first obtaining approval to amend the permit pursuant to subsection (j) of this section. (Ord. 3674 § 11, 2023)