WATSONVILLE >> Seven years after adding a chapter to the Watsonville Municipal Code regarding the regulation of medical cannabis cultivation and manufacturing within the city, the City Council will consider amendments regarding the cannabis equity program at its Tuesday meeting.

According to a staff report by Community Development Director Suzi Merriam and Associate Planner Ivan Carmona, added a new chapter to the municipal code providing regulations for medical cannabis cultivation and manufacturing in the city in 2017 and repealed its prohibition on recreational cannabis businesses a year later. In 2019, the council adopted an ordinance establishing a cannabis equity program “to provide opportunities for those who have been negatively impacted by the War on Drugs to enter into the legal cannabis marketplace,” Merriam and Carmona wrote.

However, the city did not undertake a cannabis equity assessment until 2022 when the council voted to amend the municipal code to align it with recommendations outlined in the assessment prepared by the California Center for Rural Policy at Cal Poly Humboldt, which allowed the city to apply for state cannabis equity grant funding, Merriam and Carmona wrote.

Once the assessment was completed and Watsonville became eligible for state grant funding, the city received a $767,436 grant to support businesses eligible for the cannabis equity program in the 2022-23 fiscal year. A total of $690,699 was issued to local cannabis businesses.

However, the Cannabis Equity Program grant was modified at the state level in 2023 as more cities developed their own programs, making the grant more competitive. Despite going through an equity assessment the previous year, Merriam and Carmona wrote that the state found two deficiencies in Watsonville’s program. One was a subsection of the municipal code that violated the Equal Protection Clauses of the U.S. and California constitutions, which guarantee equal treatment under the law for people of all genders. The subsection reportedly violated these clauses it allowed businesses at least 50% women-owned to be eligible for the program.

The other inadequacy cited was the limitation of one cannabis equity permit being set aside for each business category, which the California Governor’s Office of Business and Economic Development found to be too limiting and in conflict with the goals of the program.

In response, staff have modified code language to remove the eligibility criteria for women-owned businesses as well as the et-aside permits for cannabis equity businesses. Definitions referring to approvals by the city as licenses or licensees have also been modified to refer to them as permits and permittees, in keeping with the industry’s terminology.Finally, certain sections of the code have been modified to align with the equity programs in cities such as Sacramento and San Jose, both of which have equity programs that have been competitive for state cannabis equity grant funding.

“Their programs do not differentiate application processes for equity and non-equity permittees, nor do they limit the number of permits set aside for equity businesses,” Merriam and Carmona wrote. “They do provide funding and technical assistance as needed to their eligible equity businesses.”

The proposed changes went before the Planning Commission at its Oct. 1 meeting. The commission voted 4-0 to recommend the council approve these changes. Commissioners Lucy Rojas and Brando Sencion were absent, and the District 4 seat remains vacant.

In other business, the council will consider density bonuses and tentative maps for a 13-lot subdivision on a Habitat for Humanity-owned vacant parcel on Airport Road and will also take part in a study session on restricting drive-thru facilities in the municipal code.

The council will meet publicly at 4:30 p.m. Tuesday in the Council Chambers on the top floor of the Watsonville Civic Plaza, 275 Main St., Watsonville. The meeting will begin with reports by the Parks and Community Services Department’s summer program highlights by Recreation Superintendent Imelda Negrete and the Pavement Management Plan by Public Works Director Courtney Lindberg, followed by a closed session to discuss legal matters at 5:30 p.m. and the regular public meeting at 6:30, where the bulk of the agenda items will take place.