Regulations on Commercial Cannabis Activities in the City of Tracy

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Cannabis Program Status Update

Cannabis Flower In 2020, for the first time in its history, the City of Tracy accepted applications for Cannabis Business Permits. The application period ran from September 1 to October 15, 2020, and 41 applications were received. Review of the applications consisted of three phases, culminating in the issuance of four Retailer-Storefront (Dispensary) conditional Cannabis Business Permits on June 21, 2021.

In November 2021, the Tracy City Council amended the Application Procedures and Guidelines, resulting in the issuance of additional permits on March 3, 2022, to 13 of the applicants who had submitted applications by the October 15, 2020 deadline. To date, the City of Tracy has issued a total of 17 conditional Cannabis Business Permits. In order to commence operations, these businesses are required to obtain a Conditional Use Permit through the City, in addition to meeting other requirements.

The City is not accepting new Cannabis Business Permit applications at this time, although we may consider opening another application acceptance period at some point in the future.

All information regarding the City’s regulations on commercial cannabis businesses, the cannabis business permit process, and other Frequently Asked Questions (FAQs) can be found in the left-hand column of this page. The best way to stay informed is to periodically check this page. You may also request that your email address be added to the Interested Parties distribution list by sending an email to PlanningAdmin@CityofTracy.org. Any specific questions should also be sent to this email address. The FAQ document is updated periodically based on questions received as appropriate, and those on the Interested Parties email distribution list are notified of such updates.

Chronology of the Establishment of Cannabis Regulations in the City of Tracy

Background

On June 27, 2016, the State enacted the Medical Cannabis Regulatory Safety Act (MCRSA) to protect residents’ use of medical cannabis and to establish regulations for personal and commercial medical cannabis activity. On November 8, 2016, California voters passed Proposition 64, the Adult Use of Marijuana Act (AUMA), to regulate personal and commercial non-medical marijuana activity. On January 1, 2018, the State began issuing temporary commercial licenses for medicinal and non-medicinal cannabis. Many California cities and counties are now implementing local cannabis regulations.

City's Cannabis Regulations

California state law allows local governments to regulate commercial cannabis activities in their respective jurisdictions. On December 3, 2019, the City Council of the City of Tracy adopted Ordinance 1277 (establishing regulations for commercial cannabis activity in the City of Tracy) and Ordinance 1278 (establishing zoning and locational requirements on commercial cannabis activity in Tracy).

Since the ordinances mentioned above were adopted, the City's cannabis regulations have undergone various revisions. Refer to the "Regulatory Documents" section located in the left column of this page for the current regulations, and the Timeline below for milestones in the history of what has occurred with regard to cannabis in the City of Tracy.

Timeline

July 25, 2018: An ordinance to allow up to two medical cannabis non-storefront (i.e. delivery only) dispensaries to operate in the City’s industrial locations was prepared by City Staff; it was introduced to the City of Tracy Planning Commission.
September 18, 2018: The proposed cannabis ordinance and operational regulations was presented to the Tracy City Council for further discussion.
February 5, 2019: At the City Council meeting, staff was directed to draft a regulatory ordinance that 1) allows all cannabis businesses except cultivation; 2) allows the location of these businesses in industrial and possibly commercial and other areas of the City; and 3) restricts the number of dispensaries to two with the possibility of more. Council further directed staff to research best practices from other agencies and draft an ordinance with the highest regulatory standards with an emphasis on cost recovery.
August 13, 2019: A Special City Council meeting was held to discuss potential regulations for commercial cannabis activity and provide direction to staff. The workshop had two primary areas of discussion: land use regulations and cost recovery models. City Council provided direction to staff related to locational requirements for various cannabis business types. At that meeting, it was established that storefront retail cannabis businesses (dispensaries) would be permitted in commercial and industrial areas of the City, and that the more industrial-in nature cannabis businesses (distribution, indoor cultivation, micro-businesses, testing laboratories, manufacturing) would be permitted in industrial areas. All businesses would be required to first obtain a Conditional Use Permit from the Planning Commission in order to operate. Full details regarding what happened at this special meeting can be found by watching the Council Meeting video or reading the discussion summary.
September 3, 2019: A Special City Council meeting was held to further discuss land use considerations and begin the policy discussion on the commercial cannabis activity regulatory permit. The City Council provided further direction on types of business activities, including outdoor cultivation and volatile manufacturing. The City Council determined that the regulatory ordinance for commercial cannabis activities should allow for four permits for storefront retail cannabis businesses (dispensaries). In addition, the Council discussed and provided direction for specific regulations that are above the minimums established by State cannabis regulations which include Proposition 64 and implementing laws and regulations such as Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”). Full details regarding what happened at this special meeting can be found by watching the Council Meeting video or reading the discussion summary.
October 1, 2019: A Special City Council meeting was held to highlight the sections of the ordinance that incorporated the Council’s prior direction. To review those details, please read the agenda.
November 5, 2019: At the Regular Council Meeting, the Council introduced Ordinances amending Chapter 6.36 if the Tracy Municipal Code regarding Commercial Cannabis Activity and amending Section 10.08.3196 of the Tracy Municipal Code regarding establishing Zoning and Location Requirements for Commercial Cannabis Businesses
December 3, 2019: At a Regular Council Meeting, the City Council adopted Ordinance 1277 and Ordinance 1278 establishing regulations for commercial cannabis activity in the City of Tracy and Ordinance 1278 establishing zoning and locational requirements on commercial cannabis activity in Tracy.
January 21, 2020: At a Regular Council Meeting, the Council considered and discussed draft procedures and guidelines (“Guidelines”) for the cannabis business permit application process. Staff requested Council direction in order to finalize these proposed Guidelines for cannabis business permit applications. The City’s regulatory ordinance on commercial cannabis activities, contained in Chapter 6.36 of the Tracy Municipal Code (“TMC”), requires that the City Council adopt, by resolution, the procedures to govern the cannabis business permit application process (TMC Section 6.36.050(a).). The Council directed staff to return to Council with revised draft Guidelines. Full details regarding what happened at this Regular Meeting can be found by watching the Council Meeting video.
April 21, 2020: At a Regular City Council meeting, the Council provided further direction on the requirements to include on a Cannabis Business Permit Application. A draft of the Application Procedures and Guidelines (Guidelines) was presented to the Council for consideration and discussion, which resulted in additional direction to produce the Guidelines. This draft identified that there will be two phases to the process including an Eligibility Review and Evaluation of Community Benefit Contribution before the issuance of a Cannabis Business Permit. After receiving this additional direction, staff modified the Guidelines for the Council to consider for adoption at the May 19, 2020 City Council meeting.
May 19, 2020: City staff returned to Council with a revised copy of the Cannabis Business Permit Application Procedure and Guidelines (Guidelines) per the direction provided on April 21, 2020. Council discussed the draft Guidelines and decided to revise sections with respect to the local applicant criteria by providing zip codes as an identifier, and giving more weight to social equity considerations and property owner acknowledgment requirements for applicants seeking consideration based on social equity factors. Staff will return to Council with an updated draft of the Guidelines for further discussion and consideration by the Council.
July 7, 2020: City staff returned to Council to further discuss the procedures and guidelines and introduce Ordinance 1293 to amend Chapter 6.36 of the Tracy Municipal Code to further refine the cannabis cultivation permit requirements.
July 21, 2020: Ordinance 1293 was adopted by Council; and, following additional comments from the public and ensuing discussion, the Cannabis Business Permit Application Procedures and Guidelines were finalized and adopted via Resolution 2020-137.
June 21, 2021: The City issued its first conditional Cannabis Business Permits (four Retailer-Storefront Dispensary type Permits).
October 19, 2021: Following Council discussions on September 7 and 21, 2021 and its introduction on October 5, 2021, Ordinance 1318 was adopted (effective November 18, 2021) amending Chapter 6.36 of the Tracy Municipal Code to increase the limit of Retailer-Storefront (Dispensary) Cannabis Business Permits to one for every 10,000 individuals living within the City of Tracy. Notwithstanding this limit, the ordinance established a maximum of eleven (11) Retailer-Storefront (Dispensary) Cannabis Business Permits for entities that submitted applications for commercial Cannabis Business Permits on or before October 15, 2020. This ordinance became effective on November 18, 2021.
November 2, 2021: Council passed resolutions amending the Cannabis Business Permit Application Procedures and Guidelines in order to: (1) provide additional options to applicants regarding the provision of community benefits (Resolution No. 2021-165); and (2) lower the minimum qualifying score for Phase 1 and 2 of the application review process to 60 percent for permits other than Retailer-Storefront (Dispensary), allowing additional permits to potentially be issued to those applicants who submitted applications for Cannabis Business Permits on or before October 15, 2020 (Resolution No. 2021-164). These resolutions became effective on November 18, 2021.
March 3, 2022: Based on the November 2, 2021 decision by Council, 13 additional Cannabis Business Permits were issued to applicants deemed newly eligible, bringing the total number of Permits issued to 17.
April 5, 2022: Council approved a Community Benefits Agreement template for cannabis businesses, and authorized the City Manager to execute the agreements.
May 17, 2022: Staff presented an informational report to Council regarding the current status of Cannabis permit processing, including fingerprint-based background checks for the operation of cannabis businesses, and information on anticipated future amendments to the Tracy Municipal Code related to Cannabis permits. It was determined that staff will return to Council on June 7, 2022, with an ordinance regulation to allow for tolling and extension of the life of the current permits now so they will not expire within the one-year period currently designated.
June 7, 2022: Council introduced an ordinance amending Tracy Municipal Code Chapter 6.36.080, tolling the expiration date of each existing Cannabis Business Permit for an additional 12 months.