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8.A. - Page 5 ANALYSIS As part of the City's approach to cannabis regulation, staff recommends that the Council take the following action: 1. Introduce amendments to Article 59 of the Zoning Ordinance, which would go into effect by January 2, 2018 2. Provide direction to staff on the proposed future phases of local cannabis regulation The following narrative provides analysis in relation to these two main items. Existinq Local Conditions As discussed, the City currently allows medicinal cannabis delivery. To date, there are no known impacts to public safety, public health or other community impacts from this allowance. However, adult use of cannabis has been observed in the City before, and after, its legalization. Public safety staff confirms that cannabis use and cannabis - related activity have not required significant public safety resources at this point. City staff is unaware of the specific operators delivering to Redwood City nor whether they are meeting all State requirements. However, per the State code, delivery operations are required to be affiliated with a licensed dispensary. Market data suggests there are between 200 and 300 deliveries per day to patients in Redwood City from a variety of operators. City staff has now heard from several cannabis operators who are interested in locating in Redwood City and are open to responsible regulation and collaborating with the existing business community and City staff. At the June 26 City Council meeting, the San Mateo County Health Department provided information about attitudes in Redwood City towards cannabis (Attachment E). The data is from a public opinion survey conducted throughout San Mateo County in November 2016, and shows that few residents are concerned about adult use, but most are concerned about youth use. Cannabis Market Summary MuniServices provided staff with estimates on the potential cannabis market in Redwood City. They started with a basic estimate of the demand by Redwood City residents for delivery services, assuming no storefront retail presence in the City. MuniServices used data from the Substance Abuse and Mental Health Services Administration (SAMHSA) to estimate that between 8.2%-11% of residents in San Mateo County use cannabis monthly. Applying this percent to the current population of Redwood City (excluding residents under 18), MuniServices estimates that about 2,468 to 3,393 adult Redwood City residents will use delivery services to purchase cannabis. Their estimates assume that 35% of cannabis consumers will cultivate their own personal cannabis and that 30% of cannabis consumers will buy from outside Redwood City, either at a licensed sales site, or from the black market, and will not contribute to the delivery market in Redwood City. 61