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8.A. - Page 12 Business Engagement/Enforcement Following the implementation of the four proposed phases, the City will need to dedicate staff time to the ongoing monitoring of cannabis regulations. The Police Department would serve as the lead in enforcing restrictions from cannabis regulations. The Administrative Services Department will need to monitor delivery businesses and will be involved in auditing fees and tax revenues, if approved. The City Manager's Office and Economic Development staff will also be involved in building relationships with any new businesses locating in Redwood City. The proposed cannabis regulatory fees are expected to help cover these additional costs. Cannabis Regulation in California Cities Many of the larger cities in California have been actively regulating cannabis since the legalization of medicinal cannabis. Cities such as San Francisco, Sacramento and San Jose have developed active programs that have allowed licensed medicinal cannabis facilities under various ordinance conditions. Most mid-size and smaller cities have not been active in creating regulations for cannabis businesses, especially in the Bay Area. With the legalization of adult use cannabis, though, more cities in the Bay Area are beginning to look at regulating cannabis and allowing some use in their cities. Attachment H provides a summary of the status of cannabis regulations in cities within San Mateo County. Feedback from Cannabis Operators As mentioned, on September 8, staff held a stakeholder meeting with a cross section of cannabis business operators, the Redwood City Chamber of Commerce, Redwood City School District, Sequoia Hospital, as well as local real estate and property owners. City staff heard various perspectives on the proposed phasing and regulation of cannabis in Redwood City. As part of the discussion, the cannabis businesses expressed interest in operating in Redwood City under reasonable regulations. They stated that proper regulations helped address public health concerns and that they wanted to create a safe operating environment for their customers and employees. Their preference was to keep local regulations aligned with State regulations to create consistency in implementation. The businesses also expressed that the enforcement of regulations was important because it helped prevent illegal operators from undercutting the prices of those who were bearing the expense to comply with regulations. The stakeholders present also shared a few challenges and concerns related to operating in Redwood City, including the challenge of finding a good location given the high local real estate costs. They also mentioned that banking continued to be a challenge due to federal restrictions. However, they shared that operators are taking less cash and for some larger operators, approximately 60-70% of transactions are not 12