In August 2017, the City of Shasta Lake became the first city in Shasta County to sanction the legal recreational cannabis industry to operate within the City limits. Measure A was put to the voters to allow the recreational cannabis-related industry to start effective January 1, 2018.

The 2017-2018 Shasta County Grand Jury investigated the circumstances surrounding the planning, implementation and follow-up of Measure A. The Grand Jury sought to determine what planning took place prior to the vote, and what steps were taken following passage of the measure.

In its rush to become the first Shasta County city to permit recreational cannabis businesses, the City of Shasta Lake ineffectively planned for the increase of cannabis businesses in the City. This resulted in multiple unexpected changes in planning and permitting procedures based upon infrastructure demands, which was exacerbated when the City chose to zone the Shasta Gateway Industrial Park for cannabis-related businesses.

Additionally, all planned development should stop in the Shasta Gateway Industrial Park until the City of Shasta Lake adds a secondary access road to meet its legal and safety obligations. Further, the City of Shasta Lake should increase code enforcement staffing and create safe and effective methods of collecting and transporting the cash it collects.

The Shasta County Grand Jury recommends the City of Shasta Lake complete a secondary
access road into the Shasta Gateway Industrial Park and immediately institute safeguards for the handling, accounting and transportation of cash.

The Shasta County Grand Jury focused on six key areas and how the City of Shasta Lake would handle:
 Laws and regulations that should be passed to oversee the new businesses
 The plans for law enforcement needs
 The proposed collecting and safeguarding of cannabis-related tax monies
 Preventing misuse of cash transaction funds by City officials and employees
2017 – 2018 Shasta County Grand Jury
 Planned additional city services for the incoming businesses
 The conflict between state and federal law relating to the cannabis industry.

BACKGROUND
On November 8, 2016, the voters of California passed Proposition 64, the Adult Use of
Marijuana Act. Subsequently, Senate Bill 94 (2018) combined medical and recreational adult marijuana use with one set of regulations. The term marijuana was replaced with cannabis as the legal term. The California Legislature established rules, procedures and laws to govern the industry, but authorized California counties and cities to establish their own laws and regulations governing the manufacturing, distribution, retail sales and use of recreational cannabis. The cities and counties could establish more stringent and restrictive codes and ordinances but not less than those mandated by State laws and regulations.

Although California voters approved recreational cannabis, it remains a Schedule 1 drug under the Federal Controlled Substances Act and is considered without any medical benefit under federal statutes. This designation creates a conflict between state and federal law. While California cannabis businesses may operate without fear of criminal prosecution from State law enforcement, federal law enforcement can enforce and prosecute those same businesses under federal statutes. In addition, as a federally illicit activity, cannabis businesses cannot utilize federally-insured banking services. As such, all cannabis interactions must be conducted as cash-only transactions. The government agencies receiving cannabis industry taxes and fees accept thousands of dollars in cash, creating safety and logistics issues for the collecting agencies, as well as potential for misuse of cash transaction funds.

Link to the full report