ZF #2022-0085: Consider a request for a Cannabis Use Permit to allow issuance of a cannabis cultivation license for up to two acres of canopy for California Grown, Inc., and determine the project falls within the scope of the previously certified Yolo County Cannabis Land Use Ordinance Environmental Impact Report and that no further environmental review is required under the California Environmental Quality Act (CEQA). The project is located on a 98-acre agriculturally-zoned parcel at 38032 Z Line Road, approximately 5.1 miles southwest of unincorporated community of Clarksburg (APN: 043-180-022) (Applicant: Anthony Vasquez/Owner: 2017 Victoria Trust) (Planner: Charlie Tschudin)

The proposed Cannabis Use Permit, if approved, will contain an extensive set of conditions that will regulate the use of the property to conduct cannabis cultivation activities. The project includes a request to expand the existing one-acre canopy to two acres. Staff does not support the expansion of the cultivation area from one acre to two acres for reasons described in the Compliance History of this staff report. The allowance of up to one acre of canopy for California Grown, Inc. (“California Grown”), will provide continued business opportunity for the operator to compete in the regulated cannabis industry. The project, as conditioned, is in compliance with the Countywide General Plan, Cannabis Land Use Ordinance, and Yolo County Code.

The project site is a 97.38-acre agriculturally zoned parcel, located approximately five miles southwest of the town of Clarksburg and immediately east of the Sacramento Deep Water Ship Channel. California Grown first received a license to cultivate cannabis in 2017 and has continually cultivated since then. California Grown currently cultivates up to one acre of cannabis canopy outdoors in hedgerows and nineteen hoop houses. The cannabis operations currently occupy approximately six acres of the site and include two pre-engineered 6,000 sf FEMA-compliant agricultural buildings used for drying and processing cannabis, a 1,000 gallon water tank, a 500 gallon propane tank, two storage containers, a graveled driveway and paved parking area, which are enclosed within a seven-foot-tall chain link fence with tan privacy slats. The remainder of the approximately 98-acre parcel that does not include cannabis uses is planted in grasses and used for cattle grazing and does not contain any other residential or agricultural structures. Security fencing is also installed around the entire project site to corral the cattle that graze on site The site is served by an onsite agricultural well and utilizes seasonal portable toilets and hand-washing stations (4-5 months per year during cannabis cultivation operations). The applicant is in discussions with the Environmental Health Division to determine if a variance from septic system requirements for agricultural operations can be issued. The site does not currently have a permanent source of power—a generator currently powers the pump for the agricultural well.

California Grown currently employs five full-time and 35 seasonal employees during harvest periods to assist with drying and trimming, etc. The employees also are employed by Green Wave Farms and Green Wave, Inc., a co-located cannabis cultivation operation located on the parcel immediately north of the California Grown project site. The operator does not anticipate needing additional employees.

The applicant anticipates 5-12 employee round trip vehicle trips per day, 4-5 pre-cultivation season deliveries of immature plants, fertilizer, soil, and other supplies, and 1-2 trips per day for transportation of finished product at the end of harvest season. The vehicle trips to California Grown, including employees, deliveries, and transportation of finished product, include the deliveries to and from Green Wave Farms and Green Wave, Inc. as well.

California Grown engages in annual outdoor cultivation, with planting generally beginning in ­­­April and the harvesting phases ending in October. California Grown cultivates one cannabis crop per year, with the vegetation period lasting 3-4 weeks and the flowering period lasting approximately 3 months. As required by the CLUO, the applicant has prepared a security plan for the project site. The operation will maintain adequate utilities, access roads, drainage, and sanitation infrastructure in line with County and State regulations, standards, and specifications. All exterior lighting is required to be full cut-off, shielded, and downward facing to prevent spill over onto other properties, structures, or the night sky.

The project site is located in a floodplain, within FEMA Zone A, requiring all construction activities to be flood-proofed and capable of resisting hydrostatic and hydrodynamic loads and effects of buoyancy. Buildings are required to be open on a minimum of two different sides which makes cultivation within greenhouses infeasible as those structures are fully enclosed and equipped with electrical components. The operator cultivates outdoors and will continue to do so as the operations are unable to move into greenhouses because those structures would be required to be elevated at least one foot above the base flood elevation, consistent with the County Floodplain Ordinance requirements.

The proposed project has been reviewed for consistency with the Countywide General Plan and the County Zoning Regulations, including the Cannabis Land Use Ordinance (CLUO). The proposal is also consistent with the CLUO Environmental Impact Report, and no further environmental review is required under the California Environmental Quality Act. As explained below, the project, as conditioned, is consistent with all applicable plans, policies, and regulations.

The project, as conditioned, is consistent with the Countywide General Plan. The requested use is proposed on a property designated as Agriculture (AG) in the Countywide General Plan. Cannabis cultivation uses, which include activities involving the planting, growing, harvesting, drying, curing, grading, storing, and trimming of cannabis grown on site, are called out as agricultural activities under the AG land use designation (Policy LU-1.1, and Table LU-4). Further, Policy AG-3.22 reads:

 

The project furthers policies in the Countywide General Plan that seek to promote a healthy and competitive farm economy to expand the County’s agricultural base, including Policy AG-3.2 which encourages processing on agricultural land subject to appropriate design review and development standards and Policy AG-3.12 that promotes marketplace-initiated conversion from lower to higher value-added crops and agricultural commodities. The project, when considered as a component of the County’s cannabis industry as a whole, furthers Policy AG-5.1 which promotes markets for locally and regionally grown and/or prepared food and other products and services.

The subject property is zoned Agricultural Intensive (A-N). Pursuant to Article 3, of Chapter 2, of Title 8 of the Yolo County Code, cannabis cultivation uses are allowed in the A-N zone upon issuance of a Cannabis Use Permit. The project meets the development requirements and setbacks prescribed for the A-N zone.

CLUO Consistency

As part of the application review process, staff conducted a thorough review of the project against the applicable provisions of the CLUO. The project, as conditioned, is determined to be in compliance with the CLUO. The applicable provisions of the CLUO are included as conditions of approval (Attachment E). The operators are required to submit an annual report on July 1 of each year starting in the year after permit issuance documenting compliance with the Cannabis Use Permit requirements.

Project Design and Operation

The project involves construction of two additional 6,000-sf FEMA-compliant agricultural buildings for additional drying and processing space. The project site is served by a stationary generator and permanent power will be provided by PG&E or some form of a solar array, either ground- or roof-mounted. Power is only required for the onsite agricultural well. The project is conditioned to achieve Valley Clean Energy ultra-green or equivalent standard (100 percent renewable and 100 percent carbon-free) within six months of project approval. The proposed construction will comply with the applicable codes, standards, regulations and guidelines for cannabis cultivation and the proposed development’s general appearance will be compatible with other allowed uses in the A-N zone.

California Grown cultivates outdoors in hedgerows and hoophouses and will continue to do so following project approval. The applicant is unable to construct fully enclosed structures for cultivation due to FEMA regulations related to construction in a flood hazard area. Buildings are required to have structural components capable of resisting hydrostatic, hydrodynamic loads and effects of buoyancy, and designed to allow for the entry and exit of waters in the event of the flood, which is why the 6,000 sf existing and proposed structures have only one wall and otherwise open-aired.

The CLUO addresses odor impacts through limiting the location of cannabis uses, and establishing buffers for outdoor cannabis uses, odor control requirements, and enforcement procedures. However, while these measures may minimize the likelihood of nuisance odors, the potential for odors to occur remains and was considered a significant and unavoidable impact in the CLUO EIR. The applicant submitted an odor control plan that describes the odor emitting activities and the administrative and passive controls to reduce and control odors to the greatest extent possible. If odor nuisances are verified pursuant to the enforcement procedure set forth in the CLUO, the operator(s) may employ active controls, such as odor neutralizers for the outdoor canopy, as well as passive controls such as additional vegetation barriers, different plant strains, or relocation of the outdoor canopy area. The odor control plan identified that the typical winds are expected to blow mainly from the north-northwest and south-southwest.

The project relies on groundwater from an onsite agricultural well for cultivation. The applicant estimates using approximately 3-acre feet of water per year if two acres of canopy are cultivated. The CLUO EIR analyzed groundwater use for other non-cannabis crops. The analysis demonstrated that the amount of groundwater used for cannabis activities under each of the CEQA alternatives would be similar to the amount used for other crops likely to be grown on the property in the absence of contemplated cannabis uses. The high end of the analysis estimated the cumulative use of all cannabis operations in the County could reach 424-acre feet per year, which equates to approximately the average groundwater used by an orchard of about 131 acres.

Site Setting

The project site is located in the agricultural area southwest of Clarksburg, at 38032 Z Line Road, situated between Z Line Road to the east and Sacramento River Deep Water Ship Channel to the west. The site is accessed from Z Line Road through a locked gate via graveled driveway that leads to the parking and vehicle turn-around area. The 98-acre parcel is surrounded by barbed fencing to contain the cattle that graze on site.

Cannabis cultivation and associated uses are permitted in agricultural zones with a Cannabis Use Permit. The applicant has been cultivating cannabis on an annual basis under validly-issued county and state licenses since 2017. The project site is in an agriculturally zoned area and is surrounded by land in agricultural production to the north, east, and south, and the Sacramento River Deep Water Ship Channel levee, maintained by Reclamation District 999, is located immediately west of the site. The project site is fenced with 7-foot tall tan privacy slats and cannabis operations are not visible from the portions of Z Line Road that are publicly accessible. The project is conditioned to maintain the fence in good repair. The applicant has prepared a security plan and will implement measures to secure the property, such as security cameras, motion detectors, alarms, security guards (when necessary), and administrative controls. The applicant is also required to provide property owners within 1,000 feet of the property line with an operable method of communication with a local or on-site responsible party having prompt access to the site, operations, and activities. This requirement facilitates communication between neighbors related to conditions at the site and operation of the activities.

Buffers and Setbacks

The project meets the buffer requirements from sensitive land uses as set forth in the CLUO. For Existing Licensees, the buffer requirement is 600 feet from outdoor cannabis uses to sensitive land uses, including off-site individual legal residences. The nearest sensitive land use is an agricultural homesite approximately 1,120 feet to the east the cultivation area. The project parcel extends to Z Line Road and the nearest off-site legal residence is located on the east side of the road. The area between the homesite and the cannabis cultivation area is dominated by grasslands used for cattle grazing and is bisected by a slough.

Pursuant to General Plan Policy CO-2.22 of the General Plan, and as codified in the CLUO and included in the Conditions of Approval, no new development requiring a building permit, including grading activities, shall be located within 100-feet of water bodies or watercourses. The two proposed 6,000 sf buildings will be located in the existing cannabis operational area and will maintain an approximate 130-foot buffer from the bank of the nearest water body (a slough) between the site operational area and the Ship Channel to the west. The project is in compliance with this requirement as all proposed development and grading activities satisfy the 100-foot buffer requirement.

Compliance History

The Department of Community Services, Cannabis Unit, maintains compliance and complaint history dating back to 2019 when the cannabis program moved from the Agriculture Department to the Department of Community Services. The operator received a Notice of Violation on August 20, 2019, for exceeding one-acre of cannabis canopy. The applicant appealed the Notice of Violation, but the violation was upheld by the hearing officer. Therefore, the canopy exceeding the one-acre limit was abated in the presence of Yolo County Cannabis Unit staff. California Grown has not received any other Notices of Violation.

The operator received a Building Code violation on June 5, 2020, related to the construction of a shade structure between the two onsite shipping containers without building permit approval from Yolo County Building Division. This violation was rectified, and the code enforcement case was closed. There have been two formal complaints lodged against the cannabis operation—one in 2019 and one in 2023. Both complaints were largely related to concerns about cannabis odor. The 2019 complaint noted that there was a continuous odor for 5-6 weeks and light shining through the hoop houses. The Cannabis Unit investigated the complaint and informed the reporting party that there were no flowering plants on the site at the time of the complaint and that there are no lights in the hoop houses, and that they would continue to monitor the situation. The 2023 complaint related to the odors associated with the harvest. The operator was notified of the complaint and said they would consider planting a less odorous strain the following cultivation season. As conditioned, the project will implement best management practices outlined in the Odor Control Plan prepared for the site. The Odor Control Plan prepared for the site lists passive odor control measures including, planting odor-absorbing companion plants such as lavender, basil, or rosemary, strategic pruning of the cannabis plants to reduce the overall odorous biomass, and planting aromatic hedges around the cultivation area to help contain and neutralize cannabis odors if odor meets or exceeds the 7:1 D/T standard.  

There are additional concerns associated with the applicant's delinquent payments of taxes and fees. All operators are required to pay the applicable taxes, described in the Cannabis Land Use Ordinance Section 8-2.1410(E), in a timely manner, as they become due. Failure to pay the monetary obligations can result in the modification or revocation of an approved Cannabis Use Permit, following a noticed public hearing. During the application processing, staff received a comment letter from Reclamation District 999 detailing a history of delinquent payments to the District. The delinquent payments result in Reclamation District 999 staff sending a letter to the property owner detailing the late payments and charging an additional penalty and interest fee on the original amount due, as well as resulting in an additional administrative burden to District staff to produce the letter detailing the late payments and corrective actions. In three separate years, the District filed a lien on the property so that the District’s assessment would be collected as a part of the County’s tax assessment, for which the District is then reimbursed. Staff discussed the RD 999 assessment payment history with the District’s President of the Board of Trustees at length and noted that approval of the Use Permit requires timely payment of all applicable taxes or the applicant/operator risks modification or revocation of the Use Permit.

Staff coordinated with County Department of Financial Services to produce a history of cannabis and property tax payments for the site, which verified that there is also a history of late payments for both cannabis and property taxes. The applicant/operator was notified by staff that the Cannabis Land Use Ordinance requires timely payments of all monetary obligations, including reclamation district assessments, cannabis taxes, and property taxes, or the Use Permit could be modified or revoked. It should be noted that the co-located cannabis operation directly north of California Grown, which is operated by family members of Anthony Vasquez, also have a history of delinquent property tax, cannabis tax, and RD 999 assessments. As of the preparation of this staff report, all cannabis taxes and property taxes have been paid.

Ultimately, the history of late payments informed staff’s recommendation to not recommend approval of the requested canopy expansion, as the additional canopy would result in additional monetary obligations and additional administrative burden to the operator, which are compounded by the fact that the Vasquez family faces these same concerns on the co-located cannabis operation to the north. Staff also informed the applicant that oversights related to past violations, Building Code and Cannabis Notice of Violations, demonstrate a lack of understanding of compliance with Cannabis Land Use Ordinance requirements and contributed to the recommendation to not increase the canopy for the license. Staff communicated this to the operator and made clear that the operator needs to demonstrate that payments will be made on time, and for the correct amount, to all the appropriate entities, and comply with all sections of the Cannabis Land Use Ordinance, or risk enforcement actions by the County. Approval of the existing one-acre canopy does not preclude the applicant from requesting additional canopy space in the future.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) REVIEW

The Cannabis Land Use Ordinance Environmental Impact Report (CLUO EIR) was prepared as a programmatic EIR for adoption of the CLUO and to support streamlined review of individual permit applications pursuant to CEQA Guidelines Sections 15168, 15162, and 15183. If the County finds that an individual project is within the scope of the CLUO EIR, its environmental impacts are adequately addressed in the CLUO EIR, and applicable mitigation measures are applied to the project, then no further environmental review is required. Staff prepared a project-specific CLUO Program EIR Checklist (Attachment C) that examines the conclusions reached in the CLUO EIR for each relevant CEQA impact category identified in the CLUO EIR and Appendix G of the CEQA Guidelines. Staff determined that the proposed project activities are within the scope of the CLUO EIR, that no additional environmental review is required.

SUMMARY OF PUBLIC CORRESPONDENCE

A Request for Comments was distributed to reviewing agencies on ­­­­­­­­­­­July 7, 2023. Comments received from reviewing agencies were incorporated in the Conditions of Approval (Attachment E) where applicable. A Courtesy Notice was also distributed on July 7, 2023, to the Planning Division’s interested parties list and mailed to property owners within 1,000 feet of the property boundary of the subject parcel, which included the agricultural homesite located on the eastern side of Z Line Road. The Courtesy Notice summarized the existing and proposed operations as provided in the application materials.

Staff received comments from two members of the public who raised concerns about expanding the cultivation area from one to two acres of canopy and thereby increasing the cannabis odors in the area, which are not contained due to the nature of outdoor cultivation. The comment letter also questioned whether there had been considerations for the operator to install charcoal and HEPA filters to reduce the odor traveling offsite. As discussed in the Analysis section, the project site is located in a flood hazard area making the use of greenhouses equipped with charcoal and HEPA filters infeasible due to FEMA building restrictions in a flood zone. The comments also raised concerns about the potential for adjacent parcels’ property values to decrease and for crime to increase in the area, and noted that the County’s Sheriff Deputies response to the site could be delayed due to the site’s remote location and limited number of deputies. The remaining concerns addressed in the neighbors’ comment letters can be alleviated to the greatest extent possible by operational oversight of odor control measures, as needed, site maintenance, and security measures as required in the Conditions of Approval. The applicant was made aware of the concerns in the comment letters.

Staff also received comments from two local agencies. The Delta Stewardship Council received the request for comments and determined, based on the project description and location, that a covered action comment letter is not applicable to the project and therefore provided no comments. Reclamation District 999 commented that the District does not support any expansion of current operation, noting past issues related to maintaining the levee in coordination with Department of Water Resources, issues with the operator installing a gate with a private lock which prevented levee maintenance at various times, and failure to pay their annual RD 999 assessment fees and noted the administrative burden caused by delinquency of assessment fees. Staff discussed RD 999’s comments with the president of the District’s Board of Trustees and the District’s concerns with the project request with the operator at length. All comments letters are included as Attachment F.

The project site is located in the Clarksburg Citizens Advisory Committee comment area and the project was discussed at their May 23, 2024, meeting. The meeting was attended by staff, applicant/property owner, and members of the public. The Clarksburg Citizens Advisory Committee recommended approval of the proposed project to the Planning Commission (Ayes: 3, Noes: 2), with discussion around cannabis and agricultural odors, floodplain development restrictions, and the importance of timely payment of RD 999 assessments, as well as other taxes and fees to the County.

A public hearing notice was mailed to property owners within 1,000 feet of the project site and interested parties on September 27, 2024, and published in the Davis Enterprise on September 29, 2024.

Staff consulted with the Agricultural Commissioner's Office, Building Division, Public Works Division, Environmental Health Division, various agencies and interested parties, and has received input from the Office of County Counsel.

Any person who is dissatisfied with the decisions of this Planning Commission may appeal to the Board of Supervisors by filing a notice of appeal with the Clerk of the Board within fifteen (15) days from the date of the action. A Planning Commission Appeal Form and appeal fee immediately payable to “County of Yolo” must be submitted at the time of filing. The Board of Supervisors may sustain, modify or overrule this decision. The Planning Commission Appeal Form can be accessed at the following link: https://www.yolocounty.org/government/board-of-supervisors/clerk-of-the-board/planning-commission-appeal