South Lake Tahoe to start accepting cannabis business applications March 11 | TahoeDailyTribune.com

South Lake Tahoe to start accepting cannabis business applications March 11

Customers line up inside the Harborside cannabis dispensary Thursday, Jan. 4, 2018, in Oakland, California.

SOUTH LAKE TAHOE, Calif. — After more than a year of debate that involved a prior regulatory attempt being subjected to a referendum, City Council on Tuesday adopted regulations allowing adult use cannabis businesses to legally operate within the city.

The regulations would allow a limited number of legal cannabis businesses to operate within the city. It lays out the limitations as it pertains to zoning and requirements as far as licensing. It was approved on a 3-1 vote, Councilor Tamara Wallace voted against the ordinance.

Council then separately approved a resolution containing the guidelines for development agreements with each new cannabis business. The guidelines include a scoring rubric that will be used to determine which applicants will receive the necessary license from the city. The resolution was approved by council 4-0.

Adoption of both items came with little fanfare and discussion.

The only public comments came from Councilor Cody Bass, who recused himself from the dais due to his stake in a cannabis entity, and Christy Wilson, who served on a subcommittee formed in 2018 to help provide input on cannabis regulations.

Bass, who later told the Tribune he was disappointed with the decision, raised concerns about a directive from the state allowing cannabis deliveries to homes statewide, even into communities that have banned commercial pot sales.

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Bass urged council to require delivery drivers from outside the city to have the same public safety license that businesses inside city limits will be required to have under the new ordinance.

Wilson, on the other hand, urged council to avoid delaying the matter further and adopt the regulations.

There are lots of changing factors, Wilson noted, but those can be addressed later through additional ordinances or amendments.

Asked to respond to some of the comments, City Attorney Heather Stroud said she expected the state regulation allowing statewide deliveries to be challenged in court. Regardless, the city's business license tax would already apply to deliveries from outside the city.

The city is now poised to start the application process March 11, with the window closing April 5. Under that timeline, the city could begin issuing permits later this year.

Whether that happens, however, hinges partially on what Tahoe Wellness Cooperative, the only legally operating cooperative in the city which was founded by Bass, decides to do.

James Anthony, an attorney representing Tahoe Wellness, told the Tribune on Thursday that they have not decided on a specific course of action.

"We're still talking to the city attorney," Anthony said.

Tahoe Wellness, which was granted a three-year grace period to either change the zoning or find a new location, was seeking several assurances through the city in the new ordinance.

Specifically, they wanted the ability to expand the business footprint, should they choose to do, and to be recognized as an adult-use cannabis business, which would allow for a change in the corporate structure.

Neither of those issues were clarified in the ordinance.

Anthony said they are still assessing all options, including a potential legal challenge or referendum.

When the previous City Council adopted cannabis regulations in 2018 — regulations that Tahoe Wellness argued would essentially put them out of business — Anthony spearheaded a successful referendum, which effectively forced the repeal of the regulations.

Under state law, a governing body cannot adopt similar regulations within a year of the referendum unless it has made substantive changes.

Tahoe Wellness could file a legal challenge arguing the changes made were not substantive enough under the law.

Yet another option could be to operate under the regulations as adopted and see what the impact is, Anthony said.