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Cannabis Regulations - Prop 64

California State law allows local governments to regulate commercial cannabis activities in their respective jurisdictions. The City of Tracy is currently taking steps to implement local cannabis health and safety regulations to protect citizens and conform with new state regulations.

The City will continue to update this webpage as part of our ongoing effort and encourages the public to participate throughout the process by attending meetings and offering constructive input.


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.

In July 2017, the City hired HDL to implement an education and outreach program with Council and the community. On September 5, 2017, the City Council approved an ordinance prohibiting outdoor cultivation, commercial cultivation and manufacturing, and sales of marijuana (cannabis) and delivery of adult use marijuana (cannabis), to allow time for the City Council to consider reasonable regulations for such uses and to gather community input. A community outreach workshop was held on Tuesday, October 3, 2017.

During a regular meeting of the Tracy City Council on December 5, 2017, the Council directed staff to prepare an ordinance to allow up to two medical cannabis non-storefront (i.e. delivery only) dispensaries to operate in the City’s industrial locations, subject to a high level of regulation and oversight by the City. Council also voted in favor of placing a sales tax on the November 2018 ballot for voters to approve a tax on commercial cannabis activity in Tracy.

Staff is working diligently to prepare the ordinance and expects to return to Council in September 2018 for further action. Until such ordinance is adopted by Council, all commercial medical and adult-use cannabis activity is prohibited in Tracy, including manufacturing, cultivation, distribution, testing and any other cannabis activity licensed by the State, in accordance with Tracy Ordinance 1240, effective October 19, 2017.

Ordinance Timeline and Next Steps

  • 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 on Wednesday, July 25, 2018. 

  • Tracy voters decided on a special cannabis sales tax that appeared on the November 6, 2018 ballot. If the sales tax is approved, the cannabis ordinance will go before the City Council for approval in November 2018. Until the Tracy City Council takes action on the ordinance, all commercial medical and adult-use cannabis activity is prohibited in Tracy. This includes the manufacturing, cultivation, distribution, testing, and any other cannabis activity licensed by the State of California.

  • The proposed cannabis ordinace and operational regulations was presented to council on Tuesday, September 18, 2018 for further discussion.

  • At the February 5, 2019 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) restrict 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.

  • On Thursday 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-innature 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 video or reading the discussion summary.

  • A Special City Council meeting was held on Tuesday, September 3, 2019 to further discuss land use considerations and begin the policy discussion on the regulatory permit. the City Council provided further direction on types of business activities, including outdoor cultivation and volatile manufacturing. 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 andregulations 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 video or reading the discussion summary

  • On Tuesday, October 1, 2019 a special 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 PH to Approve an Amendment to TMC Section 10.08.3196 establishing Zoning and Location Requirements for Commercial Cannabis Businesses

  • On December 3, 2019 the City Council adopted Ordinance 1277 and Ordinance 1278 regarding Cannabis Zoning, Planning, and Business. For more information about those ordinances, please read agenda items.

  • At the Regular City Council Meeting on January 21, 2020 ,Staff repared draft procedures and guidelines (“Guidelines”) for the cannabis business permit application process for Council review and discussion. Staff requested Council direction in order to finalize these proposed Guidelines for cannabis business permit applications. Staff anticipates receiving applications for cannabis business permits beginning in April 2020, and the enclosed  (see item 3.A) draft Guidelines provide prospective applicants with the guidance necessary to file an application and obtain a permit. The proposed Guidelines describe a three-step process to obtain a permit involving 1) the filing of an application, 2) the review of the application by staff for eligibility, and 3) the award of a permit, which involves a lottery for the retail-storefront (dispensary) permits. The process includes additional opportunities for locally-owned businesses. Staff requests Council direction on whether the application process should be modified or expanded in any area of interest. 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).)

Helpful Information

  • To view the December 5, 2017 Tracy City Council meeting where cannabis regulations were discussed, please click here. 
  • To view the Cannabis Policy Community Outreach PowerPoint presentation, please click here.

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