South Lake Tahoe City Council votes to hold off on allowing onsite cannabis consumption

SOUTH LAKE TAHOE, Calif. - Onsite consumption of cannabis at one of the licensed retailers in South Lake Tahoe will not be happening this year. The City Council voted 3-1, with Tamara Wallace voting no, and Councilman Cody Bass absent. The vote also included a change to the maximum square footage of cultivation from 5,000 square feet to 22,000 square feet, and it is now allowed that owners and operators may hold more than one non-retail cannabis permit.

In April 2021, the Council Cannabis Sub-Committee started looking into the ordinance, and a public workshop on possible changes was held in May 2021. The same changes were presented to the Planning Commission who passed the item allowing onsite consumption and an increased cultivation canopy.

Any cultivation business with more than 5,000 sq. ft. is required to use sustainable power and be energy efficient. They must submit an energy efficiency plan showing measures being taken to minimize energy consumption in lighting, HVAC, and dehumidifying equipment, and submit documentation that electrical power used for commercial cannabis activity meets the required average electricity greenhouse gas emissions intensity.

City staff researched other cities in the state that allow onsite consumption but only found West Hollywood to have an ordinance in place that had permitted "cannabis cafes" in operation. They found issues with allowing onsite consumption of edibles, and some businesses there are running into risk management issues such as insurance and higher-than-expected cost of compliance, including expensive air-filtration systems and other nuisance-abatement costs, according to Lexology. Many other communities are waiting on adding consumption cafes, and South Lake Tahoe Mayor Devin Middlebrook said they can look into allowing the activity again in the future.

Mayor pro team Cristi Creegan said looking at West Hollywood's ordinance may not be the exact model South Lake Tahoe should use as an example due to the Southern California town's party image.

The City has been conducting a survey of the community about cannabis and said about 60 percent of those responding so far are in favor of onsite consumption.

South Lake Tahoe Police Chief David Stevenson said he didn't know of any issues at Tahoe Wellness Center which has allowed onsite consumption for the nine years it has operated as a medical marijuana business under Prop 215.

Councilman John Friedrich said there is a sense that the time is right to allow onsite consumption and it was consistent with other adult choices, but he backed whatever the Council decided.

It was determined by the vote that no further environmental analysis is needed, and the second reading of the updated ordinance will be on the Council's April 5 agenda, with it in place 30 days after that.

Another cannabis ordinance-related item on the agenda was the creation of a Cannabis Revenue Policy, with a grant process and guidelines determined. The Council determined that 50 percent of taxes collected from the collected cannabis revenue will be disbursed through a grant process where nonprofits and agencies focused on mitigating the effects of cannabis in the community can apply. The amount to be disbursed will be determined at the mid-year budget review which was held during Tuesday's meeting. They collected over $1M last year and previously awarded the Boys & Girls Club of Lake Tahoe $200,000 for its new building. They will now award $400,000 through an application process that starts April 15.

Grants will be available in amounts of $1,000 to $50,000. The entity applying must be in the South Lake Tahoe community. If an entity is applying in a year after they were awarded funds, they must be in compliance with the annual grant program requirements.

Applications will be accepted for 30 days, and then they will be reviewed by a committee including the mayor, city manager, city finance director, and a staff member.