Proposition 64 and Cannabis Policies


California voters approved Proposition 64 – The Adult Use of Marijuana Act (AUMA) - November 8, 2016, allowing for the recreational possession, sale, and use of marijuana. Since that time, the City of Morgan Hill has spent a significant amount of time researching and consulting with industry experts about, the effects marijuana activities would have on the Morgan Hill community. The City has several options for regulating cannabis cultivation, cannabis-related business activity, and fees and taxes charged in connection with cannabis-related activity. 

What is Cannabis?

Cannabis refers to all parts and varieties of the cannabis plant. Cannabis is also commonly referred to as marijuana, pot, or weed. Commercial cannabis includes medical or non-medical/adult-use cannabis and associated products.

Commercial Cannabis Activity in Morgan Hill

Commercial cannabis activity is currently illegal in Morgan Hill. Commercial cannabis activity includes cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, or sale of cannabis and cannabis products.

Morgan Hill Regulations

The City's current regulations can be found in the City of Morgan Hill Municipal Code.

State of California Regulations

California voters legalized adult-use cannabis by approving Proposition 64 in November 2016. While personal adult-use cannabis activity became immediately legal upon the passage of Proposition 64, commercial cannabis activity requires a State license. On January 1, 2018, the Bureau of Cannabis Control began issuing temporary commercial cannabis licenses; however, local jurisdictions retain the ability to prohibit and regulate all commercial cannabis activity.

Community Survey

Due to limited data being available and the complexity and varying degrees of regulation around cannabis-related activities, the City Council provided staff direction on February 7, 2018, to conduct a statistically valid survey to better understand the community's receptiveness to cannabis-related industries. Thank you to all who participated in the survey.

Survey results were shared at the April 18, 2018, City Council Meeting. View survey results (PDF)

City Council Meetings and Workshops

On March 17, 2021, Council Member Spring requested the Council revisit the cannabis discussion. Check back for more information on the meeting date.

12/4/2019 City Council Meeting

The City Council voted to 3-2 to continue maintaining the prohibition of non-store front (delivery only) cannabis retail ordinance.  The video stream of the meeting is available online if you wish to watch the Council comment/discussion.

11/6/2019 City Council Meeting 

The Council voted 3-2 to continue maintaining the prohibition of commercial cannabis within City limits. The video stream of the meeting is available online if you wish to watch the Council comment/discussion. One Council Member requested the Council revisit non-store front (delivery only) ordinance options at a later date. 

8/27/2019 Planning Commission Meeting 

On August 27, 2019, Planning Commission conducted a public hearing on amending Section 18.92.090 of Chapter 18.92 Supplemental Standards of Title 18 regarding the incorporation of Cannabis land use standards. The Planning Commission voted unanimously to recommend the ordinance to City Council for consideration. 

7/23/19 Planning Commission Cannabis Workshop

The Planning Commission held a workshop to discuss land use standards for potential future cannabis businesses. The uses explored were retail, manufacturing, testing, and distribution. City Council directed not to consider cultivation and micro-business. There were no decisions made at the meeting. Each Commissioner gave comments on their preferences for buffering per use, appropriate zoning for each use and whether a Conditional Use Permit should be required. 

02/27/19 City Council Cannabis Policy Workshop

City Council heard from law enforcement officials, cannabis experts, and community members regarding the possibilities for cannabis business in Morgan Hill. The Council ultimately directed staff to report back with potential ordinance options and answers to council questions about retail, manufacturing, and testing. The Planning Commission, which serves as an advisory body to the City Council, is currently evaluating cannabis business-related issues and will report back to the City Council in the near future.

On November 16, 2018, Morgan Hill residents voted to approve Measure I. Measure I does not allow cannabis business in Morgan Hill but allows for the taxing of cannabis business if the city decides to approve commercial cannabis.

5/16/18 Potential Next Steps on Cannabis Regulations and Taxation, Increase to Transient Occupancy Tax, and Establishment of Tourism Business Improvement District

Policy Questions:

  1. Does the City Council desire for cannabis to be medicinally available to those 18 years or older and/or available for recreational use to those 21 years or older in Morgan Hill?
  2. Should the City Council decide to allow cannabis sales and other related industries (recreational and/or medicinal), shall a cannabis tax measure be placed on the November 2018 ballot to fund city services?
  3. Does City Council want to consider implementing cannabis regulations and fees in connection with cannabis-related activities prior to a potential November cannabis tax ballot measure?
  4. Shall an increase of the Transient Occupancy Tax (TOT) measure be placed on the November 2018 ballot to fund city services?
  5. Should the City continue to support the efforts to establish a Tourism Business Improvement District (TBID) to promote the area as a sports/recreation and wine tourism destination?

04/18/18 Cannabis and Transient Occupancy Tax Community Survey Results Staff Report 

02/07/18 Cannabis and Community Survey Update

01/17/18 Provide Direction on Any Potential Changes to Cannabis Prohibition Staff Report  

Policy Questions:

  1. Should the City enact a registration program for residential cultivators?
  2. Do the potential benefits associated with allowing the cultivation, manufacturing, distribution, or sales of marijuana products outweigh the potential risks?
  3. Should the City allow commercial marijuana activities, and if so, what activities should be permitted and regulated?
  4. If the City allows commercial marijuana activities, should those activities be taxed, and at what rate?

09/27/17 Cannabis Policy Workshop

07/19/17 Proposition 64 Update Staff Report, Policy Question: 

  1. Should the City consider allowing marijuana manufacturing, cultivation, retail sales, and/or delivery services? 

02/15/17 Proposition 64, Adult Use of Cannabis, Workshop Follow-up Staff Report  

Policy Questions:

  1. Knowing the level of resources necessary to achieve the Council’s desired process as communicated during the Prop 64 workshop, does the Council still want to comprehensively evaluate its existing marijuana ordinance?
  2. Does the Council want to perform a statistically valid community opinion survey?
  3. Does the Council want to immediately move forward with revising its secondhand smoke ordinance to not allow any smoking on public sidewalks?

02/01/17 Proposition 64 and Policy Issues