On February 24, 2014, the City Council directed staff to prepare for the Council’s future consideration amendments to Title 5 to allow for the (business) licensing and regulation of medical marijuana establishments which propose to operate within Sparks in compliance with Nevada Senate Bill 374 (2013) and the State of Nevada’s regulations for medical marijuana establishments. On June 9, 2014, staff presented a draft of the proposed amendments to the City Council. The City Council directed staff to prepare a Business Impact Statement and bring forth the proposed ordinance, including the proposed fee structure.  On August 11, 2014 the City Council accepted the Business Impact Statement (BIS) and entered a finding, in compliance with NRS 237.080 and .090, that the BIS was properly prepared and that as proposed Bill No. 2679 does not impose a direct and significant economic burden upon a business nor directly restrict the formation, operation or expansion of a business.  The first reading of this bill was also conducted during the August 11, 2014 City Council meeting.

The proposed amendments to Chapter 5 of the Sparks Municipal Code (S.M.C.) provide for the addition of a new section, 5.80, for the licensing of Medical Marijuana Establishments (MMEs). The City would not issue a business license for a MME until the applicant has been provisionally approved by State of Nevada.  In addition, a City (zoning) Administrative Review application must be approved before a Sparks business license can be issued. Notable provisions of the proposed regulations include:

• All MMEs operating in Sparks must be licensed per this new section (5.80) of the S.M.C.  Only individuals (i.e., not business entities) may be licensed.

• Persons qualifying for a “compassionate exception for self-cultivation” are required to register annually with the City but are not subject to fees.

• The City Council may revoke a MME business license.

• The license expires if the individual holding the State registration certificate loses their certification.

• The Chief of Police is delegated certain duties, as is the case for certain other privilege licenses, as follows:

• Inspect MMEs;

• Verify State-issued MME employee and agent registration cards;

• Establish “Safety Plan and Operational Requirements” and regulate MMEs for compliance; and

• Recommend license revocation to City Council when warranted.

• Other City officials and officers (e.g., Fire Marshall) may also inspect MMEs.

• The proposed business license fees are as follows:

• Medical marijuana independent testing laboratories shall pay license fees in accordance with those charged most Sparks businesses per Section 5.12.100 of the S.M.C. ($80.00 per year and $1.00 for each $1,000.00 in gross receipts, or portion thereof, in excess of $10,000.00).

• For medical marijuana cultivation, a base fee of $3,000.00 per year plus, for each quarter based on the MME’s gross receipts for the previous quarter, an additional $1.00 for each $1,000.00 in gross receipts (or portion thereof) in excess of $10,000.00.

• For a medical marijuana facility for the production of edible marijuana products or marijuana-infused products, a base fee of $3,000.00 per year plus, for each quarter based on the MME’s gross receipts for the previous quarter, an additional $1.00 for each $1,000.00 in gross receipts (or portion thereof) in excess of $10,000.00.

• For a medical marijuana dispensary, a base fee of $5,000.00 per year plus, for each quarter based on the MME’s gross receipts for the previous quarter, an additional $5.00 for each $1,000.00 in gross receipts (or portion thereof) in excess of $10,000.00.

Because the license fees proposed are higher than those the City charges other businesses, NRS 237 is applicable and so staff prepared a Business Impact Statement (BIS).  NRS 237.090 requires that the BIS be available and considered by the City Council at its regular meeting next preceding the regular Council meeting at which this proposed ordinance may be adopted.  On August 11, 2014, the City Council accepted the Business Impact Statement (BIS) and entered a finding, in compliance with NRS 237.080 and .090, that the BIS was properly prepared and that as proposed Bill No. 2679 does not impose a direct and significant economic burden upon a business nor directly restrict the formation, operation or expansion of a business.

The City Council can opt to not approve this ordinance, change one or provisions of this ordinance (which could trigger the need for a new Business Impact Statement) or provide other direction to staff.

I move to approve Bill No. 2679 to amend Chapter 5 of the Sparks Municipal Code to provide for the licensing of Medical Marijuana Establishments.