SOUTH LAKE TAHOE, Calif. — Drafting of the ordinance governing cannabis in South Lake Tahoe is underway despite some inter-council disagreement on certain aspects of the code.

At a Feb. 20 public workshop, South Lake Tahoe City Council directed staff to begin writing a commercial cannabis ordinance based on recommendations from a working group comprised of 15 city and county residents.

The recommendations, previously presented to council at the Feb. 6 meeting and again at the workshop, call for a pilot program that would allow up to three cannabis retailers to open under approved development agreements. The agreements would stipulate a percentage of revenue sharing until residents vote on a tax measure.

The subcommittee also suggested permitting delivery from storefronts only, banning outdoor cultivation, allowing on-site consumption, and limiting the size of greenhouses to 5,000 square feet.

Distribution licenses would be limited, manufacturing would be restricted to not allow for on-site extraction, and microbusiness licenses — an umbrella license that covers a minimum of three cannabis related activities — wouldn’t be allowed. The subcommittee noted that these topics could be revisited in the future as the industry progresses.

Several individuals from the cannabis industry spoke out against the recommendations to limit distribution and manufacturing and not allow for microbusinesses.

Nobia Kubby, CEO of Kubby Cryogenics in South Lake Tahoe, said that without the ability to get a license for non-volatile extraction (there is a separate license for volatile extraction) her business would be drastically impacted.

Kubby cultivates patented strains of cannabis and extracts concentrates using a proprietary method of non-volatile extraction. The concentrates are then turned into edibles or oils for medical marijuana patients.

“There is nothing dangerous about that. That’s why I’m so adamant about the Type 6 [non-volatile extraction] and microbusiness licenses because one or both of those is the only way I can continue to do business,” said Kubby.

A microbusiness could be permitted for up to three activates under one license, such as cultivation, non-volatile extraction and distribution.

“There is nobody who can match my product anywhere unless I drove up to Humboldt. It’s not sustainable for me to drive so far away to get the concentrate that will go into my edibles or my oils that I give to very sick people,” explained Kubby.

Tahoe Wellness Cooperative executive director Cody Bass — who was denied a state microbusiness license due to the city withholding local authorization — asserted that the recommendations on distribution and microbusiness licenses would result in greater costs to small businesses, ultimately driving up the prices for consumers and possibly pushing them to the black market.

At Tuesday’s meeting, councilmember Austin Sass opposed beginning the draft ordinance, stating that there were still policy issues that the council needed to discuss and make decisions on.

“I don’t support going to an ordinance right now,” said Sass. “There are too many big issues like the microbusiness issues, the zoning … We’ve got some major policy decisions as a council that need to be made and until those are made I don’t see the use of putting our city attorney to work on an ordinance that the basics haven’t been agreed to by council …”

Sass also expressed concern over on-site consumption and the location of the cannabis businesses, citing Breckenridge, Colorado’s decision to move all operations to the industrial district due to smell.

Councilmember Brooke Laine noted that by drafting an ordinance off of the subcommittee’s recommendations, council would have a “working document” that it could then discuss and amend as council saw fit.

“We agree on about 90 percent of it,” she said.

With a majority of council in favor, Laine directed the city attorney to begin drafting the language of the ordinance.

“At such time that it is thoughtfully ready, we would ask for the planning commission to perhaps convene a special meeting,” added Laine.

After the planning commission reviews it, City Council would begin more in-depth discussions on the areas of the ordinance on which they don’t agree, according to Mayor Wendy David. No specific meeting was selected for this to take place.

The next City Council meeting is Tuesday, March 6. A report on SnowGlobe Music Festival’s economic impact is expected to be the main agenda item.