By: Heather Burke
The County of El Dorado recently enacted an ordinance authorizing all commercial cannabis license types, including cultivation, manufacturing, distribution, testing, and retail, which is super exciting for the Sierra Nevadas. This blog focuses on the process for cultivators, who can obtain up to two (2) acres of commercial cannabis permits, depending on their parcel size and zoning. Here’s the lowdown:
CULTIVATION LICENSE SIZE/ZONING OVERVIEW
- There are 150 total permits, 75 of which are reserved for outdoor and mixed light operations that are less than 10,000 sq ft of canopy.
- 40 of the 75 smaller cultivation licenses are reserved for 3,000 sq ft gardens that is “grown exclusively with natural light and meets organic certification standards or the substantial equivalent.”
- The zones in which cultivation may occur are (1) Rural Lands (“RL”), Planned Agricultural (“PA”), Limited Agricultural (“LA”) and Agricultural Grazing (“AG”).
- RL properties are eligible to use up to 1.5% of their parcel for cultivation, but may not exceed 10,000 sq ft of canopy.
- AG, LA, and PA properties between 10-15 acres are eligible to use up to 1.5% of their parcel for cultivation, but may not exceed .45 acres of canopy.
- AG, LA, and PA properties between 15-25 acres are eligible to use up to 1.5% of their parcel for cultivation, but may not exceed 1.5 acres of canopy.
- AG, LA and PA properties greater than 25 acres are eligible to use up to 5% of their parcel for cultivation, but may not exceed 2 acres of canopy.
- The setback is 800 feet from the property line and 1500 feet from schools, which may knock out a bunch of properties. Folks can get around this setback in some instances if they owned or leased the property before November 1, 2018.
- Parcels under 10 acres are not eligible for permitting.
The application is a full Conditional Use Permit [“CUP”] process, meaning there will be a public hearing on the application. More about CUPs generally HERE. The main thing to know about CUPs is that they are “land use” determinations, which is great in that the permits will “run with the land,” thus increasing the value of the land. However, they are complex, time consuming, costly, and decisions are made on a case-by-case basis depending on the site particulars.
Secondly, El Dorado’s “pre-application” is not yet available, but is expected to be released on September 30. While the Code gives us some insight into what will be required, there are likely to be additional requirements standard in any CUP process, such as an NCIC letter or biological summary, that are not mentioned in the cannabis code. Here’s the rundown of the basic applications requirements:
- Entity applicant information, including articles of organization/incorporation, operating agreement/bylaws, stock agreements, and “any other funding sources for the applicant.”
- Written consent of the owner of the parcel (which may be you as an individual leasing the property to your LLC or corporation), which must be signed in wet ink and notarized within 30 days of the day the application is submitted.
- A Site Plan showing the entire parcel, including (1) easements, (2) streams, springs, ponds, and other surface water features, (3) the area for cultivation in dimensions, (4) setbacks from property lines, (5) all areas of ground disturbance and surface water disturbance, and (6) any areas where cannabis will be stored, handled, or displayed.
- A detailed diagram of the premises, including buildings, structures, fences, gates, parking, lighting and signage;
- Various written plans, including (1) a Theft Prevention/Access to Minor Plan, (2) an Operating Plan, (3) an Organic Certification or Equivalent Plan, (4) a Security Plan;
- For any hoophouses/greenhouses/proposed structures, all applicable building permit applications, which may include commercial plans that show ADA access;
- Most land use applications require an archaeological and biological inquiry. Expect that to be part of the application;
- A copy of the entire state license application, which for some will be copies of multiple state license applications for different “small” licenses because the large (i.e. one acre+) licenses are not available from the state at this time. Each state license application includes the following, as well as a surety bond for each license type:
- A Water Board permit;
- A Waiver Letter or Lake & Streambed Alteration Agreement from the Dept of Fish and Wildlife (which can take months);
- A Property and Premise Diagrams for each separate license;
- A Well Completion Report from the Department of Water Resources;
- The EIN/Seller’s Permit Info for the applicant entity;
- A Lease/Rental Agreement and Landowner Authorization.
Notably, all applicants will have to indemnify the County, consent to a background check, and agree to inspections without a warrant, in addition to a host of other attestations/waivers/agreements.
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT [CEQA]
The County has deferred the required environmental impact analysis to the farmer, which is a huge cost, but will likely allow them to get up and running far sooner than if the County had performed a full Environmental Impact Report.
If someone does not have a CEQA consultant already on retainer, be prepared for a shocking price tag. One can usually expect the CEQA consultants to get overburdened and for projects to get put on a wait list if not at the front of the line. Additionally, both the state and County mandate that CEQA be complete before operations can begin, so I fully expect more than a few licenses to get held up next season because of the lack of a completed CEQA document.
In summary, the list of requirements will be far longer and more cumbersome than what anyone expect. While the applications may scramble once the pre-application is released, those who are working on their diagrams, CEQA/environmental compliance requirements, and have an operating company ready to go will likely be at the front of the line.
I’ll be at the El Dorado Growers Association meeting next Friday, October 3, 2019, at 6:30 p.m. discussing the application, with a focus on entity startup considerations. Hope to see you there. 🙂
Now go get ‘em, Sierra Nevada farmers!