SANTA BARBARA COUNTY PLANNING COMMISSION Staff Report Cannabis Land Use Ordinances

SANTA BARBARA COUNTY PLANNING COMMISSION Staff Report Cannabis Land Use Ordinances Staff Report Date: January 3, 2018 Case Nos.: 17ORD-00000-00004 & 17ORD-00000-00010 Environmental Document: Environmental Impact Report 17EIR-00000-00003 Supervisorial District: All Deputy Director: Dan Klemann Division: Long Range Planning Supervising Planner: Mindy Fogg Supervising Planner Phone #: 805-884-6848 Staff Contact: Jessica Metzger Staff Contact Phone #: 805-568-3532 1.0 REQUEST Hearing on the request of the Planning and Development Department that the County Planning Commission (CPC): 1.1 Case No. 17ORD-00000-00004. Recommend that the Board of Supervisors (Board) adopt an ordinance (Case No. 17ORD-00000-00004) amending the Santa Barbara County Land Use and Development Code (LUDC), of Chapter 35, Zoning, of the County Code, as set forth in Exhibit 1, Attachment C. 1.2 Case No. 17ORD-00000-00010. Recommend that the Board adopt an ordinance (Case No. 17ORD-00000-00010) amending Article II, the Santa Barbara County Coastal Zoning Ordinance (CZO), of Chapter 35, Zoning, of the County Code, as set forth in Exhibit 1, Attachment D. 1.3 Case No. 17EIR-00000-00003. Recommend that the Board certify the Cannabis Land Use Ordinance and Licensing Program Final Programmatic Environmental Impact Report (EIR) as set forth in Attachment B (Case No. 17EIR-00000-00003, State Clearinghouse No. 2017071016) and the associated revision letter (RV 01) (Attachment H) for Case Nos. 17ORD-00000-00004 and 17ORD-00000-00010, pursuant to the California Environmental Quality Act (CEQA) Guidelines. The Ordinances would implement new regulations and other revisions regarding the land use activities associated with cannabis. 2.0 RECOMMENDATION AND PROCEDURES Follow the procedures outlined below and recommend that the Board approve the LUDC amendments (Case Nos. 17ORD-00000-00004), and the CZO amendments (17ORD-00000-00010), based on the project s consistency with the Comprehensive Plan, including the Local Coastal Program and the Community Plans, and based on the ability to make the required findings, including CEQA findings. The CPC s motion should include the following: 2.1 Make the required findings for approval (Attachment A), including CEQA findings, and recommend that the Board of Supervisors make the required findings for approval of the proposed amendments to the LUDC and the CZO, for the Cannabis Land Use Ordinance and Licensing Program.

Cannabis Land Use Ordinance and Licensing Program Page 2 2.2 Recommend that the Board certify the Cannabis Land Use Ordinance and Licensing Program Final EIR (State Clearinghouse No. 2017071016) (Attachment B) and the associated revision letter (RV 01) (Attachment H) for, pursuant to the State CEQA Guidelines. 2.3 Adopt a resolution (Attachment C) recommending that the Board adopt an ordinance amending the LUDC (Case No. 17ORD-00000-00004), of Chapter 35, Zoning, of the Santa Barbara County Code (Exhibit 1). 2.4 Adopt a resolution (Attachment D) recommending that the Board adopt an ordinance amending the CZO (Case No. 17ORD-00000-00010), of Chapter 35, Zoning, of the Santa Barbara County Code (Exhibit 1). Please refer the matter to staff if the CPC takes other than the recommended actions for the development of appropriate materials. 3.0 JURISDICTION The CPC is considering this project based on the following: 3.1 Case No. 17ORD-00000-00004. a. Sections 65854 to 65857, inclusive, of the California Government Code and Chapter 35.104 of the LUDC, which require that the CPC, as the designated planning agency for the unincorporated area of the County located outside of the Montecito Community Plan Area, review and consider proposed amendments to the LUDC and provide a recommendation to the Board of Supervisors. b. Government Code Sections 65854 and 65855, which state respectively: The planning commission shall hold a public hearing on the proposed amendment to a zoning ordinance. After the hearing, the planning commission shall render its decision in the form of a written recommendation to the legislative body c. Section 2-25.2(b) of Chapter 2 Administration of the Santa Barbara County Code, which states in part: Recommendations regarding proposed amendments to articles I, II, III, V and VII of chapter 35 of the county Code shall remain within the jurisdiction of the county planning commission. 3.2 Case No. 16ORD-00000-00010. a. The CPC is considering this project in compliance with Section 2-25.2 of Chapter 2 of the Santa Barbara County Code that provides that the CPC makes recommendations to the Board of Supervisors on text amendments to Article II of Chapter 35, Zoning, of the County Code. 4.0 ISSUE SUMMARY In November of 2016, the voters approved Proposition 64, the Adult Use of Marijuana Act (AUMA), which provided for the allowance of adult-use and commercial cannabis, in addition to the previously allowed medical use. In February of 2017, the Board created an Ad hoc subcommittee to review and

Cannabis Land Use Ordinance and Licensing Program Page 3 create regulations for adult-use and commercial cannabis in the County, including the draft land use regulations described in this report. The Ad hoc subcommittee also set forth direction to (1) create a regulatory structure for annual business licensing, (2) review taxation options, (3) increase enforcement levels, (4) review banking options, and (5) assess public health needs, with regard to cannabis. It is in the CPC s jurisdiction to forward a recommendation to the Board on any amendments to the LUDC and the CZO. The Cannabis Land Use Ordinances for the LUDC and CZO, and the conclusions of the EIR that was prepared for the project, are discussed in this report. 5.0 BACKGROUND 5.1 Federal Regulations The Controlled Substances Act of 1970 (21 United States Code Section 812) lists cannabis, including tetrahydrocannabinols [THC], the psychoactive component of cannabis, as a Schedule 1 narcotic. Schedule 1 narcotics are defined by the federal government as drugs having a high potential for abuse and no currently accepted medical use in treatment. 5.2 State Regulations Between 1996 and 2015, voters and the state legislature took a series of actions to allow individuals, then collectives and cooperatives, to cultivate medical marijuana. In 2015, in response to challenges regarding the regulation of the medical marijuana industry, Governor Brown signed into law the Medical Cannabis Regulation and Safety Act (MCRSA), which increased regulation of medical marijuana across the State of California by creating a state licensing program. As stated above, voters passed the AUMA which legalized non-medical adult use of cannabis. In response, the State began developing licensing requirements and other regulations regarding both medical and non-medical cannabis activities. These efforts culminated in the Cannabis Trailer Bill (SB 94), which Governor Brown signed into law on June 27, 2017. The bill consolidated state statutes that had been enacted through the MCRSA and AUMA, under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). MAUCRSA reconciled the two laws and created one State licensing system for both medical and non-medical cannabis, established methods for collecting taxes, restructured the Bureau of Medical Cannabis Control as the Bureau of Cannabis Control (BCC), and consolidated authority that was previously intended to be dispersed among several state agencies. MAUCRSA also created 12 commercial cannabis license types (which are discussed in Attachment E to this staff report), and created both a temporary license which is valid for 120 days, and an annual license. The BCC, California Department of Food and Agriculture (CDFA), and Department of Public Health (DPH) are the three, State regulatory agencies for commercial cannabis. Each of these agencies adopted its own set of regulations for licensees, which became effective on December 7, 2017. The State began accepting annual license applications on January 1, 2018. Failure to comply with the regulations will prevent initial licensure and, once a licensee obtains a license for a cannabis operation, failure to continue to comply with the State regulations could lead to revocation of the license and/or civil and criminal penalties. Additionally, local government retains the ability to regulate or prohibit medical and non-medical cannabis activities separately or completely. A summary of the State law and regulations is included as Attachment E to this staff report. 5.3 Local Regulations In 2011, the County prohibited medical marijuana dispensaries in all zone districts. In January 2016, after the adoption of MCRSA, the Board prohibited medical marijuana cultivation in all land use zones

Cannabis Land Use Ordinance and Licensing Program Page 4 except for: (1) limited personal medical cultivation of up to 100 square feet, and (2) operations which were in existence prior to January 19, 2016, and compliant with California State law and local zoning ordinances. In February 2017, the Board received a report on the impacts of voter approval of the AUMA on the cannabis industry. The Board directed staff to return with an urgency ordinance prohibiting nonmedical cannabis cultivation and other cannabis activities in unincorporated Santa Barbara County while staff develops an ordinance to prohibit or regulate cannabis. The Board also appointed Supervisors Lavagnino and Williams as an Ad hoc subcommittee on cannabis activities. On April 4, 2017, the Board approved an urgency ordinance to prohibit all non-medical (recreational) cannabis operations in the unincorporated area of Santa Barbara County except for limited amounts of cultivation for non-medical personal use as allowed by State law (Health & Safety Code Sections 11362.1 and 11362.2). The urgency ordinance will expire in March 2019. The purpose of the prohibition was to provide the County with time to develop a local regulatory structure to permit or prohibit cannabis activities. On April 11, 2017, the Board approved an ordinance establishing a limited term Non-Personal Cultivation and Related Activities Registry Program (Cannabis Registry), which is discussed further in Section 5.4 of this staff report (below). The purpose of the registry program was to collect data on past, current, and planned cannabis cultivation or related operations and to inform future cannabis studies including the environmental analysis and an economic impact study. The registry closed on June 30, 2017, as required by the ordinance. In short, the current County ordinances that reference marijuana or cannabis, include the following: 1. County Code Chapter 6 (Outdoor Festivals) states that allowing or permitting the sale, use, or delivery of marijuana could lead to the revocation of an outdoor music festival permit. 2. County Code Chapter 13A (Drug Paraphernalia) defines marijuana as a controlled substance and prohibits the sale of drug paraphernalia which includes equipment that is used for cleaning or refining marijuana to remove seeds and stems, test the potency, manufacture, concentrate or increase the potency of a controlled substance, including marijuana. In addition, Chapter 13A states that it is unlawful to use, possess, deliver, or manufacture any paraphernalia that might be used to plant, propagate, and cultivate a controlled substance. 3. County Code Chapter 35, LUDC Section 35.42.195, MLUDC Section 35.430.125, and CZO Section 35-144I, ban medical marijuana dispensaries. 4. County Code Chapter 35, Article X prohibits medical marijuana cultivation in all land use zones except for (1) limited personal medical cultivation of up to 100 square feet, and (2) operations which were in existence prior to January 19, 2016, and compliant with California law and local zoning ordinances.

Cannabis Land Use Ordinance and Licensing Program Page 5 5. The urgency ordinance (17ORD-00000-00004) prohibiting all non-medical cannabis operations in the unincorporated area of Santa Barbara County is in effect until March 17, 2019. 5.4 Registry The County collected data via the Cannabis Registry, which closed in June 2017. The data collected provides information regarding 506 existing and proposed cannabis cultivation and related cannabis activity operations that either are located or would be located throughout the County. The Cannabis Registry forms were made available to cultivators and manufacturers seeking to obtain a license to engage in commercial cannabis activities in the County once the regulatory and licensing provisions of the proposed Project are adopted. The registration form attempted to capture the location, type, size, number of plants, number of employees, water supply, and other details of each registrant s cannabis operations site, as well as any plans for expansion or relocation in the future. Furthermore, the registry requested information for whether manufacturing of cannabis products would occur on the same site where cultivation would occur, though details of the type of manufacturing were not requested. The Cannabis Registry data varies widely, and many registrants did not provide locations or complete answers to all questions and data requests set forth in the registration form. One of the goals of the registry was to assess the number of potential applicants within the County who may seek licenses for medical cannabis cultivation and/or non-medical cannabis operations. Despite the data limitations, as it was not possible to verify the data provided by registrants, the 2017 Cannabis Registry provides the best available resource to characterize the types and distribution of existing cannabis cultivation, though not necessarily the total number or volume of production. The registry data provides extensive representative information on existing and potential future cannabis activity operators within the County for the economic and environmental analyses. 1 6.0 PUBLIC OUTREACH Public outreach for this project has been substantial. Staff maintained an interested parties email list that was regularly updated regarding the project status. Staff also frequently updated the County s Facebook and Twitter feeds, placed display advertisements in regional newspapers, sent notices to various community organizations and individuals, maintained a project webpage with hearing and meeting information, and held meetings to present information and receive public comment. The public meetings completed to date for the project are listed in Table 1 (below). 1 For a complete data analysis, see Chapter 2 Project Description of the EIR (Attachments B and H to this staff report).

Cannabis Land Use Ordinance and Licensing Program Page 6 Table 1 Cannabis Land Use Ordinance and Licensing Program Public Meetings 1. February 14, 2017 Board of Supervisors Hearing 2. April 4, 2017 Board of Supervisors Hearing 3. April 28, 2017 Ad Hoc Subcommittee Public Meeting 4. May 4, 2017 Board of Supervisors Hearing 5. June 20, 2017 Board of Supervisors Hearing 6. June 30, 2017 Ad Hoc Subcommittee Public Meeting 7. July 11, 2017 Board of Supervisors Hearing 8. July 26, 2017 Environmental Scoping Meeting 9. July 27, 2017 Environmental Scoping Meeting 10. August 11, 2017 Agricultural Preserve Advisory Committee Meeting 11. August 16, 2017 Montecito Planning Commission Hearing 12. August 25, 2017 Ad Hoc Subcommittee Public Meeting 13. September 13, 2017 County Planning Commission Hearing 14. September 19, 2017 Board of Supervisors Hearing 15. October 12, 2017 Draft Program Environmental Impact Report Public Meeting 16. October 17, 2017 Draft Program Environmental Impact Report Public Meeting 17. October 17, 2017 Board of Supervisors Hearing 18. October 18, 2017 Montecito Planning Commission Hearing 19. October 25, 2017 County Planning Commission Hearing 20. November 3, 2017 Agricultural Preserve Advisory Committee Meeting 21. November 14, 2017 Board of Supervisors Hearing 22. November 15, 2017 Montecito Planning Commission Hearing 23. December 1, 2017 Agricultural Advisory Preserve Committee Meeting 24. December 6, 2017 County Planning Commission Hearing 25. December 14, 2017 Board of Supervisors Hearing 26. January 3, 2018 Montecito Planning Commission Hearing 7.0 CANNABIS PERMIT TYPES The State has set forth a licensing regulatory structure for commercial cannabis activities that separates the activities into the following, distinct types: (1) cultivation, (2) manufacturing, (3) testing, (4) retail sales, and (5) distribution. A complete list and descriptions of these activities are included in Attachment E (Summary of License Types, State Law, and State Regulations Regarding Cannabis). 8.0 ORDINANCE DISCUSSION 8.1 County Regulatory Authority

Cannabis Land Use Ordinance and Licensing Program Page 7 The County has the authority to establish a long-range land use plan and to implement these policies through regulations. The County has adopted a Comprehensive Plan, Coastal Land Use Plan (CLUP), and zoning regulations that direct the location and extent of land uses, as well as provide standards and regulations that serve to differentiate appropriate land uses within each zone district and create regulations for orderly development. Since recreational cannabis was only recently legalized, the land uses associated with cannabis activities have not been addressed previously in the LUDC or CZO. This ordinance project will define the allowable location and type of cannabis activities allowed in the County of Santa Barbara by zone district. 8.2 Ordinance Development Rationale Staff is presenting an EIR and ordinance amendments which would facilitate the licensing, permitting, and regulation of cannabis businesses to safeguard the public health, safety, and general welfare. The proposed development regulations provide standards to address neighborhood compatibility concerns, adequacy of services and utilities, and protection of natural resources. The ordinances include new regulations permitting or prohibiting where cannabis activities including cultivation and processing, product manufacturing, distribution, testing, and retail can occur by zone. Proposed Ordinances After review of all public comments, including decision-maker feedback received at the hearings and meetings listed above, staff has drafted the attached ordinances (Attachment C, Exhibit 1 and Attachment D, Exhibit 1). The ordinances include regulations that specify how and where, by zone, cannabis activities may occur while also safeguarding the public health, safety, and general welfare. The ordinances set forth new regulations governing cannabis activities, including cultivation, manufacturing, distribution, testing, and retail sales, while providing standards to address neighborhood compatibility concerns, adequacy of services and utilities, and protection of natural resources. The proposed ordinances amendments that the CPC is considering are to the LUDC and CZO (Attachment C, Exhibit 1, and Attachment D, Exhibit 1, respectively). The Montecito Planning Commission will also forward recommendations to the Board for the Montecito Land Use and Development Code (MLUDC); however, amendments regarding the MLUDC are not subject to the CPC s review. Table 2 (below) summarizes staff s recommendation regarding the allowed uses and permit level for commercial cannabis activities by zone. Furthermore, the Allowed Cannabis Land Use and Permit Requirements table in Section 35.42.075 (Cannabis Regulations) of the LUDC (Attachment C, Exhibit 1) and Section 35-144U (Cannabis Regulations) of the CZO (Attachment D, Exhibit 1) set forth the following limitations on cannabis-related land uses: a. Commercial cannabis cultivation, nursery, manufacturing, distribution, or retail uses would not be permissible within 600-feet of a school, day care, or youth center. b. Manufacturing and distribution uses would only be permissible as accessory uses to cannabis cultivation in the AG-I and AG-II zones. c. Commercial cannabis cultivation on lots that would be located in an Existing Developed Rural Neighborhood (EDRN), and cultivation that would require the use of a roadway located within an EDRN as the sole means of access to the lot on which the cultivation would occur, would require a CUP.

Table 2 - Allowed Cannabis License Types by Zone District Zones Cannabis Cultivation - Limited Nursery Cannabis Cultivation- Unlimited Permitted Cannabis License Types Non-volatile Manufacturing Volatile Manufacturing Testing Retail Distribution Microbusiness AG-I P P P P CUP -- -- MCUP -- AG-II P P P P CUP -- -- P CUP C-1 -- -- -- P -- -- P -- CUP C-2 -- -- -- P -- -- P -- CUP C-3 P P P P -- P P P CUP CS -- -- -- P -- -- P -- CUP SC -- -- -- P -- -- P -- -- PI -- -- -- -- -- P -- -- -- M-RP P P P P -- P -- P -- M-1 P P P P P P P P CUP M-2 P P P P P P -- P CUP MU -- -- -- P -- -- P -- -- CM-LA -- -- -- P -- -- P -- -- OT-R/LC -- -- -- P -- -- P -- -- OT-R/GC -- -- -- P -- -- P -- -- LUDC & CZO LUDC Only P = Land Use Permit or Coastal Development Permit Required CUP = Major Conditional Use Permit Required MCUP = Minor Conditional Use Permit Required -- = Use prohibited

Cannabis Land Use Ordinance and Licensing Program Hearing Date: January 10, 2017 Page 9 Maps of the zones where cannabis activities may be permitted, as well as buffers around known schools and day cares, are included as Attachment F. Also, additional development standards for each activity are set forth in Attachment C, Exhibit 1 and Attachment D, Exhibit 1. These amendments are within the County s authority to ensure orderly growth and development through zoning. 8.2.1 General Development Standards. The proposed amendments to the LUDC and CZO set forth the following general development standards that would apply to the commercial cannabis activities that would be allowed pursuant to the LUDC and CZO. a. Compliance with state and local regulations. This development standard would require all cannabis activities to be conducted in compliance with all state and local regulations. b. Archaeological and paleontological surveys. This development standard would ensure that resources shall be protected in accordance with applicable cultural resource protection policies from new cannabis activity development. c. Energy Conservation Plan. This development standard would require the applicant for a permit to allow indoor cultivation, mixed-light cultivation, manufacturing (volatile or non-volatile), and/or distribution, to submit an energy conservation plan that demonstrates the proposed operation will result in either an energy reduction (for an existing operation) or a zero net increase in energy demand (for a new operation). d. Fencing and Security Plan. This development standard would require the applicant to submit a fencing plan that encloses the cannabis cultivation area, minimizes the visual impacts and, if applicable, avoids creating impediments to wildlife movement. The fencing type may be chosen by the applicant; however, razor wire, as well as fencing which is made solely of tarps, dust guard fencing, privacy netting, and/or woven or nonwoven polyethylene plastic, would be prohibited. e. Landscape Plan and Screening Plan. This development standard would require the applicant to submit and implement a landscape plan and screening plan for any new development to reduce direct visual impacts resulting from cannabis activities. f. Lighting Plan. This development standard would require the applicant to submit and implement a lighting plan to ensure that all lighting is fully shielded, that the plan meets all other applicable lighting standards (e.g., standards for exterior lighting, standards regarding greenhouse-related development within the Carpinteria Agricultural Overlay District, and/or condition(s) of a major conditional use permit (CUP) for greenhouse development), and that lighting is prohibited in hoop houses. g. Noise Plan. This development standard would require the applicant to submit a noise study that identifies all noise producing equipment and the associated noise levels. This standard would be consistent with the Noise Element by prohibiting sounds that would be greater than 65 decibels as measured at the property boundary. It also would prohibit the use of generators, except on a temporary basis for emergency power. h. Odor Abatement Plan. This development standard would require the applicant for cultivation, manufacturing, and distribution permits, to submit and implement an Odor Abatement Plan. The plan would include the identification of odor sources on the site, phasing of odor emitting activities, and description of odor control measure(s) that

Page 10 would be implemented consistent with accepted and available industry-specific best control technologies designed to effectively mitigate odors for all cannabis odor sources. A certified Professional Engineer or a Certified Industrial Hygienist would be required to develop or review the plan to ensure that it would be sufficient to effectively mitigate odors for all cannabis odor sources. In addition, the applicant would be required to provide the contact information of an individual designated to respond to odor complaints, to all owners of property located within 1,000 feet of the lot on which the cannabis premises would be located. i. Signage. Signage would be prohibited at commercial cultivation sites. Other commercial cannabis activities signage would be required to comply with existing signage requirements in other sections of the LUDC or CZO. The LUDC allows a size of one-eighth of the square footage of the structure façade of that portion of a single floor occupied by a business and upon which façade the wall sign is to be located; each sign not to exceed 100 square feet (LUDC Section 35.38.090, Signs Allowed in Commercial and Industrial Zones). The CZO allows one or more wall signs on each street frontage unlighted or indirectly lighted, with a size of one-tenth of the square footage of the structure façade of that portion of a single floor occupied by a business and upon which façade the wall sign is to be located; or 60 square feet, along with other site specific standards (CZO, Section 35-138). j. Tree Protection, Habitat Protection, and Wildlife Movement Plans. This development standard, if applicable, would require applicants to submit and implement a tree protection, habitat protection, and/or wildlife movement plan which demonstrates how the development would preserve natural features, landforms, native vegetation, specialstatus plants, nesting birds and habitat, special-status fish, and other threatened or endangered individuals and habitat, in situations where these resources exist on or within proximity to the project site. In addition to the general development standards summarized above that would apply to all commercial cannabis activities set forth in the LUDC and CZO, the following specific development standards would apply to commercial cannabis cultivation, manufacturing, distribution, and microbusinesses in the LUDC and CZO. 8.2.2 Cultivation The proposed ordinance amendments would include the following development standards that would apply to cultivation on agricultural lands. a. Avoidance of prime soils. This development standard would require new structural development to be located and designed to minimize impacts to prime soils and productive agricultural land, to the maximum extent feasible. This standard would reduce the loss of prime agricultural soils resulting from structural development for cannabis cultivation. b. Cannabis cultivation within an EDRN. Cultivation within an EDRN, or cultivation that would require the use of a roadway located within an EDRN as the sole means of access to the lot on which cultivation would occur, would require the approval of a CUP. c. Cannabis Waste Discharge Requirements General Order. This development standard would ensure that cannabis cultivation would comply with the California Water Board s

Page 11 General Waste Discharge Requirements 2 which would reduce the potential for sediment and pollutants to enter water bodies. d. Prohibition of lighting in hoop structures. This development standard would prohibit lighting of hoop structures to avoid adverse impacts to neighboring residential areas. e. AG-I lots 20 acres or less in size. This development standard would only allow mixed light or indoor (i.e., solely artificial lighting for) cultivation on lots in the AG-I zone that are 20 acres or less in size. Outdoor cultivation, including hoop houses, would be prohibited. f. M-RP Cultivation. This development standard would limit cultivation in the M-RP zone to occur indoors only. g. Mixed-light lighting requirements. This development standard would ensure that mixedlight greenhouses that utilize artificial lighting would include features to shield or otherwise prevent lighting that is visible outside of the greenhouse. h. Post-processing and packaging. This development standard would allow processing of the cannabis plant to occur on-site if it is grown on-site. i. Site transportation demand management. This development standard would require an applicant to prepare a transportation demand management plan that would be tailored to the specific cannabis operation and would include methods to reduce vehicle trips generated by the cultivation operation. j. Water efficiency for cannabis activities. This development standard would require the applicant to implement water-conserving features as part of the proposed cannabis cultivation activities. 8.2.3 Manufacturing a. Manufacturing as an accessory use to cultivation. This development standard would ensure that manufacturing activities would only be allowed as accessory uses to cannabis cultivation on agricultural lands. At least 50% of the cannabis used to manufacture a product would need to be cannabis grown on-site. b. Home occupation. This development standard would prohibit the manufacturing of cannabis products as part of a home occupation or cottage food operation, since these uses primarily occur in residential areas where commercial cannabis activities would be prohibited. c. Volatile manufacturing employee training plan. This development standard would require the operator to implement a training program for employees to minimize any risk associated with volatile manufacturing. 8.2.4 Distributor a. Distribution as an accessory use to cultivation. This development standard would ensure that distribution activities would only be allowed as accessory uses to cannabis cultivation on agricultural lands. At least 50% of the cannabis distributed would need to be cannabis grown on-site. 2 See https://www.waterboards.ca.gov/water_issues/programs/cannabis/docs/finaladoptedcango101717.pdf.

Page 12 8.2.5 Microbusiness a. Microbusinesses would be permitted to have a retail component, per the State regulations. This development standard would only allow delivery as a retail option in the AG-II zone. 9.0 RECOMMENDATION OF THE AGRICULURAL PRESERVE ADVISORY COMMITTEE (APAC) On August 11, 2017, November 3, 2017, and December 1, 2017, APAC reviewed and considered the suitability of cannabis uses on lands that are subject to agricultural preserve contracts. On December 1, 2017, by unanimous vote, APAC recommended that the Board adopt amendments to the County s Uniform Rules in order to specify the conditions under which cannabis uses would be allowed on lands that are subject to agricultural preserve contracts (Attachment G). More specifically, APAC recommended that the Board amend the Uniform Rules as follows: 1. Specify that cannabis cultivation and ancillary facilities in support of cannabis cultivation are compatible uses on contracted land. 2. Add definitions related to cannabis. 3. Specify that manufacturing (excluding extraction), retail sales, testing, and marketing of cannabis or cannabis products are prohibited on Williamson Act lands. 4. For contracts involving lands with prime and non-prime soils, specify that cannabis cultivation and ancillary facilities may be located within the designated development envelope and/or outside of the development envelope of a premises. However, the amount of land dedicated to cannabis cultivation and ancillary facilities that are located outside of the development envelope cannot exceed 5% of the premises or 5 acres, whichever is less. 5. For contracts involving superprime lands, specify that all cannabis cultivation and ancillary facilities must be located within the designated development envelope. 6. Specify that processing, distribution, and manufacturing (extraction only) of cannabis from offsite sources is allowed, however it shall be limited to no more than 49 percent of the total volume of cannabis that is processed, distributed, and manufactured on the premises. Pursuant to Government Code Section 51231, the Board is the decision making body for amendments to the Uniform Rules regarding allowed uses on lands that are subject agricultural preserve contracts. Furthermore, pursuant to Government Code Section 51239, APAC advises the Board on the administration of the agricultural preserves in the County. Therefore, the proposed amendments to the Uniform Rules are being presented to the CPC for informational purposes only, and will be forwarded to the Board for a final decision. 10.0 ENVIRONMENTAL REVIEW The Cannabis Land Use Ordinances and Licensing Program EIR was released for a 45-day comment period on October 2, 2017, and public comment hearings were held on October 12, 2017, and October 17, 2017, in Santa Barbara and Santa Maria (respectively). Public comment was received until the end of the comment period on November 16, 2017.

Page 13 Links to the EIR are available on the Long Range Planning Division website at: http://longrange.sbcountyplanning.org/programs/cannabis/cannabis.php The EIR includes comment letters received on the EIR and staff s responses to those comments. Staff made certain text revisions to the EIR based on comments regarding the adequacy and accuracy of the EIR, in order to add context, content, and clarity to the environmental analyses and technical appendices. The comments on the EIR and resulting text revisions to the EIR did not result in significant new information warranting recirculation of the EIR (CEQA Guidelines Section 15088.5). The following sections provide a summary of the EIR environmental analysis. 10.1 Programmatic EIR Given that the project involves (1) a series of actions that can be characterized as one large project and (2) are related in connection with the issuance of rules, regulations, and other general criteria for the future permitting and licensing of cannabis development, a Program EIR was prepared for the project [CEQA Guidelines Section 15168(a)(3)]. As a Program EIR, the level of detail included in the project description and methodology for impact analysis is more general than a project-level EIR, as individual, site-specific cannabis development details are unavailable, and would be considered too speculative for evaluation at more than a programmatic level. This approach allows the Board to consider broad implications and impacts associated with the Project while not requiring a detailed evaluation of individual properties. 10.2 Summary of Environmental Analysis The EIR analyzes impacts from the project with regard to the following: Aesthetics and Visual Resources; Agricultural Resources; Air Quality and Greenhouse Gas (GHG) Emissions; Biological Resources; Cultural Resources; Geology and Soils; Hazards and Public Safety; Hydrology and Water Resources; Noise; Public Services; Transportation and Circulation; Utilities and Energy Conservation; and Population, Employment, and Housing. The full environmental analysis is set forth in the EIR and a revision document to the EIR (Attachments B and H). The following sections provide a summary of the significant and unavoidable (Class I) impacts and significant but mitigable to a less-than-significant level (Class II) impacts associated with the proposed project, as well as a summary of the project alternatives analyzed in the EIR. The EIR also identified a number of environmental impacts that will be less-than-significant without mitigation (Class III) which are not summarized below, but are discussed in detail in the EIR. 10.2.1 Summary of Significant and Unavoidable Impacts (Class I) Agriculture Impacts: The EIR identified significant project-specific and cumulative impacts related to the conversion of prime agricultural soils to a non-agricultural use or the impairment of agricultural land productivity (Impact AG-2). Mitigation: Mitigation Measure AG-2 requires that any new structures proposed for cannabis site development are sited on areas of the property that do not contain prime soils, to the maximum extent feasible. During the review of applications for cannabis site development and licensing, the County Planning and Development Department shall review the proposed

Page 14 location of any new structures proposed for cannabis-related structural development to ensure that they would avoid prime agricultural soils on-site. No other feasible mitigation measures are known that will further reduce impacts. Under a reasonable buildout scenario for cannabis related development, impacts to prime soils will remain significant and unavoidable. Cumulative impacts to agricultural resources are mitigated to the maximum extent feasible with measure MM AG-2. Program approval would contribute to cumulative agricultural impacts associated with pending and future growth and development projects Countywide. The combined effect of cumulative development is anticipated to result in significant and unavoidable cumulative impacts to agricultural resources. Air Quality and Greenhouse Gas Emissions Impacts: The EIR identified significant project-specific and cumulative impacts related to air quality and greenhouse gas emissions from future cannabis activities permitted by the Project. The following adverse and unavoidable effects were identified: inconsistency with the Clean Air Plan (Impact AQ-1), traffic generated emissions (Impact AQ-3), inconsistency with the Energy and Climate Action Plan (Impact AQ-4), and exposure of sensitive receptors to objectionable odors (Impact AQ-5). Mitigation: The EIR identifies two mitigation measures, MM AQ-3 and MM AQ-5, to reduce impacts associated with traffic-generated emissions and objectionable odors, respectively. MM AQ-3 requires that cannabis permittees implement feasible transportation demand management (TDM) measures that reduce vehicle travel to and from their proposed sites. Each permittee must consider the location, number of employees, hours of operation, site access and transportation routes, and trip origins and destinations, then identify a range of TDM measures as feasible for County review and approval. No other feasible mitigation measures are known that will further reduce impacts. Under a reasonable buildout scenario for cannabis-related development, impacts from traffic-generated emissions will not be fully mitigated and will remain significant and unavoidable. MM AQ-5 requires that cannabis permittees implement feasible odor abatement plans (OAPs) consistent with Santa Barbara County Air Pollution Control District requirements and subject to the review and approval of the County. No other feasible mitigation measures are known that will further reduce impacts. Under a reasonable buildout scenario for cannabis-related development, impacts from objectionable odors will not be fully mitigated and will remain significant and unavoidable. Cumulative impacts related to air quality and GHG emissions are mitigated to the maximum extent feasible with measures MM AQ-3 and MM AQ-5. Since the Project is inconsistent with the Clean Air Plan and the Energy and Climate Action Plan, and the County is anticipated to remain in non-attainment with regard to certain pollutants, the Project s contribution to significant, cumulative air quality impacts would be significant and unavoidable (Class I).

Page 15 Noise Impacts: The EIR identified significant project-specific and cumulative impacts to sensitive receptors from long-term increases in noise from traffic on vicinity roadways (Impact NOI-2). Mitigation: Mitigation Measure AQ-3 requires that cannabis licensees implement feasible TDM measures that reduce vehicle travel to and from their proposed sites. Each applicant must consider the location, number of employees, hours of operation, site access and transportation routes, and trip origins and destinations, then identify a range of TDM measures as feasible for County review and approval. No other feasible mitigation measures are known that will further reduce impacts. Under a reasonable buildout scenario for cannabis-related development, impacts to sensitive receptors from long-term noise increases from Project traffic will not be fully mitigated and will remain significant and unavoidable. Cumulative impacts to sensitive receptors from traffic-generated noise are mitigated to the maximum extent feasible with measure MM AQ-3. The Project has the potential to contribute to significant, cumulative noise impacts from roadway noise. Combined with other development, increased vehicle trips could increase congestion and daily travel on roadways, including roadways in rural areas that have low traffic volumes and ambient noise levels. As the Project s contribution would be cumulatively considerable, even with implementation of MM AQ-3 to require reduced employee trips through TDM measures, the Project s contribution to cumulative noise impacts would be significant and unavoidable. Transportation and Traffic Impacts: The EIR identified significant project-specific and cumulative impacts related to transportation and traffic from future cannabis activities permitted by the Project. The following adverse and unavoidable effects were identified: increases in traffic and daily vehicle miles of travel that affect the performance of the existing and planned circulation system (Impact TRA-1), and adverse changes to the traffic safety environment (Impact TRA-2). Mitigation: The EIR identifies two mitigation measures, MM AQ-3 and MM TRA-1 to reduce impacts associated with traffic. MM AQ-3 requires that cannabis permittees implement feasible TDM measures, as described in this staff report above. No other feasible mitigation measures are known that will further reduce impacts. Under a reasonable buildout scenario for cannabis-related development, impacts from traffic will not be fully mitigated and will remain significant and unavoidable. MM TRA-1 requires that cannabis permittees pay into the County s existing Development Impact Mitigation Fee Program, at an appropriate level (e.g., Retail Commercial and Other Nonresidential Development) in effect at the time of permit issuance for the County, Goleta Planning Area, and Orcutt Planning Area (as applicable) to improve performance of the circulation system. No other feasible mitigation measures are known that will further reduce impacts. Under a reasonable buildout scenario for cannabis related development, impacts from traffic will not be fully mitigated and will remain significant and unavoidable. Cumulative impacts related to traffic are mitigated to the maximum extent feasible with measures MM AQ-3 and MM TRA-1. The Project s contribution to cumulative changes in the

Page 16 transportation environment as a result of generation of new vehicle trips could still result in exceedances of acceptable road segment or intersection Level of Service, as well as inconsistency with the Regional Transportation Plan-Sustainable Communities Strategy. Therefore, the proposed Project would make a cumulatively considerably contribution to a significant cumulative impact, and impacts are considered significant and unavoidable. Aesthetics/Visual Resources (Cumulative Impacts) Impacts: Although the EIR identifies that project-specific impacts to County scenic resources would be mitigated to a less-than-significant level, it also found that Project-related future development in combination with other County projects and plans may be found to contribute considerably to significant aesthetic and visual cumulative impacts. Thus, potential cumulative impacts resulting from changes to scenic resources and existing character would be significant. Mitigation: Mitigation Measure MM AV-1 would reduce direct visual impacts associated with hoop or greenhouse structures and ancillary development for cannabis cultivation (e.g., fencing) by requiring appropriate screening in compliance with the land use entitlement (e.g., LUP, CDP, or CUP) that would be required for such development. To the maximum extent feasible, screening for cannabis cultivation sites shall consist of natural barriers and shall be visually consistent, to the maximum extent possible, with surrounding lands. Screening requirements shall be noted on final permitting conditions and any site plans for cannabis development. While project-specific impacts to aesthetics/visual resources would be less-thansignificant with implementation of this mitigation measure, the project s contribution to cumulative impacts would remain significant and unavoidable. 10.2.2 Summary of Impacts Mitigated to a Less-Than-Significant Level (Class II) The EIR identifies several areas in which the project is considered to cause or contribute to significant, but mitigable environmental impacts (Class II), including Aesthetics/Visual Resources; Agricultural Resources; Biological Resources; Hydrology and Water Resources; Utilities and Energy Conservation; and Land Use. For each of these Class II impacts set forth in the EIR, feasible changes or alterations have been required in, or incorporated into, the Project that would reduce these impacts to a less-than-significant level. 10.2.3 Summary of Alternatives The EIR evaluated four alternatives: (1) No Project Alternative, (2) Alternative 1 - Exclusion of Cannabis Activities from the AG-I Zone District, (3) Alternative 2 - Preclusion of Cannabis Activities from Williamson Act Land, and (4) Alternative 3 - Reduced Registrants. Each alternative is discussed in relation to the objectives of the Project. No Project Alternative The No Project Alternative addresses the potential environmental impacts that could result if the proposed Project is not adopted and the mitigation measures of the Project are not implemented. Under the No Project Alternative, the direct impacts associated with licensing of an expanded cannabis industry would not occur. However, this alternative would not address unregulated and illegal cannabis activities, and would not offer an avenue for licensing and permitting; it is likely that some level of illegal cannabis activities would continue to exist. Under the No Project Alternative, existing County law enforcement would continue on a

Page 17 primarily response-to-complaints and call-for-service basis. In addition, pending State-level regulations and enforcement programs may also be increased. However, over the more than three decades of local, State, and federal law enforcement activities, cannabis cultivation and related activities have not been eradicated. Even with local, State, and federal participation in cannabis law enforcement, as well as pending State-level regulations and programs developed from MAUCRSA, the illicit cultivation of cannabis in California and the County would likely continue to be a major business. Therefore, there would be no orderly development, nor oversight of cannabis activities within the County, with potential for expanded illegal activities. Thus, many of the potential impacts related to air quality, biology, cultural resources, geology and soils, hazards, hydrology, land use, public services, transportation, and utilities/energy would be more severe under the No Project Alternative. Alternative 1 - Exclusion of Cannabis Activities from the AG-I Zone District Under Alternative 1 - the Exclusion of Cannabis Activities from the AG-1 Zone District, cannabis-related activities would not be allowed within the AG-I zone districts throughout the County. This would reduce the areas of eligibility in the County, particularly within the Carpinteria Valley and the Santa Ynez Valley. Alternative 1 would reduce the total amount of eligible area and sites as compared to the proposed Project, and would require substantial relocation or abandonment of existing cannabis operations. Existing cultivators would need to find locations within the reduced area of eligibility. The classification of all impacts under Alternative 1 would be similar to those under the proposed Project, including significant and unavoidable impacts to aesthetics and visual resources; agricultural resources; air quality and GHG emissions; noise; and transportation and traffic. Adoption of Alternative 1 would achieve most of the Project objectives, which include regulating cannabis activities within the County including: providing an efficient and clear cultivation and manufacturing permit process and regulations; and regulating sites and premises to avoid degradation of the visual setting and neighborhood character, odors, hazardous materials, and fire hazards. However, adoption of Alternative 1 would not achieve Project objectives related to development of a robust and economically viable legal cannabis industry, encouraging businesses to operate legally and secure a license to operate in full compliance with County and State regulations, minimization of adverse effects of cultivation and manufacturing and distribution activities on the natural environment, and maximization of the proportion of licensed activities by minimization of unlicensed activities. Alternative 2 - Preclusion of Cannabis Activities from Williamson Act Land Alternative 2 considers environmental impacts that would result from a modified set of licensing regulations that would reduce the area of eligibility on lands that are subject to a Williamson Act contract in the County where licenses may be issued for cannabis cultivation activities. Cannabis activities would be precluded from Williamson Act provisions that govern agricultural preserve contracted lands, and instead would be considered a compatible use. Cannabis cultivation activities would be prohibited on all Williamson Act lands with the exception of a maximum of 22,000 square feet of cannabis canopy cover for each premise that is the subject of a Williamson Act contract. Lands used for the purpose of cultivating, producing, or manufacturing cannabis would not count toward the minimum productive acreage and annual production value requirements set forth in the Uniform Rules for Williamson Act lands.