Agenda packet — Barstow City Council, December 19, 2022 (part 8 of 8)

For Office Use Only
-FILEDFile No.: BA20220699475
Date Filed: 8/18/2022

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Packet Pg. 1691 Attachment: Bev Hills View Sec of State (5228 : Beverly Hills View, Inc. Comm. Cannabis App) Type of Business PROPERTY DEVELOPMENT
Email Notifications
Opt-in Email Notifications No, I do NOT want to receive entity notifications via email. I prefer notifications by USPS mail.

Labor Judgment
No Officer or Director of this Corporation has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code.

Electronic Signature
By signing, I affirm that the information herein is true and correct and that I am authorized by California law to sign.

Jon Zimmerman
Signature
08/18/2022
Date
B1031-4209 08/18/2022 9:38 AM Received by California Secretary of State

Page 2 of 2 ends

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Packet Pg. 1692 Attachment: Bev Hills View Sec of State (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 1 -
273128.v17

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

COMMERCIAL CANNABIS BUSINESS DEVELOPMENT

AGREEMENT BETWEEN THE CITY OF BARSTOW AND

BARSTOW OUTLET LLC AND BEVERLY HILLS VIEW INC
THIS DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into this day of December 19, 2022, (the “Execution Date”), by and between the CITY OF BARSTOW, a California municipal corporation (“City”), Barstow Outlet, LLC, a Delaware limited liability company (“Owner”), and Beverly Hills View, Inc., a California corporation (“Operator”). City, Owner, and Operator are sometimes referenced together herein as the “Parties.” In instances when a provision hereof applies to each of the Parties individually, each may be referenced as a “Party.” The Parties hereby jointly render the following statement as to the background facts and circumstances underlying this Agreement:

RECITALS
WHEREAS, the State of California enacted California Government Code Sections 65864 et seq. (“Development Agreement Statutes”) to authorize municipalities to enter into development agreements with those having an interest in real property to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development in connection with the development of real property within their jurisdiction; and WHEREAS, the purpose of the Development Agreement Statutes is to authorize municipalities, in their discretion, to establish certain development rights in real property for a period of years regardless of intervening changes in land use regulations, to vest certain rights in the Owner, and to meet certain public purposes of the local government; and WHEREAS, as authorized by the Development Agreement Statutes, City has adopted Ordinance No. 934-201 to add Barstow Municipal Code Chapter 19.46, establishing the procedures and requirements for the consideration of development agreements with City; and WHEREAS, on November 8, 2016, California voters enacted Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act, also known as the Adult Use of Marijuana Act (“AUMA”), which establishes a comprehensive system to legalize, control, and regulate the cultivation, processing, manufacture, distribution, testing, and sale of nonmedical cannabis, including cannabis products, for use by adults 21 years and older, and to tax the growth and retail sale of cannabis for nonmedical use; and

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Packet Pg. 1693 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 2 -
WHEREAS, on June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), which creates a single regulatory scheme for both medicinal and adult-use cannabis businesses. MAUCRSA retains the provisions in MCRSA and AUMA that granted local jurisdictions control over whether businesses engaged in Commercial Cannabis Activity may operate in a particular jurisdiction; and WHEREAS, on June 7, 2021, the City Council of the City of Barstow adopted Ordinance No. 974-2021 to permit commercial cannabis activities in the City; and WHEREAS, on October 4, 2021, the City Council of the City of Barstow adopted Ordinance No. 977-2021 amending the zoning code to allow for commercial cannabis as a permitted use in certain zones; and
WHEREAS, Operator currently holds a legal or equitable interest in real property considered in this Agreement which has a development area approximately 18,000 rentable square feet located 2594 Mercantile Way, Building # 21, City of Barstow, State of California (the “Premises”), pursuant to a Master Lease Agreement by and between Operator and Barstow Outlet LLC (“Owner”). The Premises is located on Assessor’s Parcel Number: 0428-211-26-000, and is more fully described in Exhibit A and shown on the map in Exhibit B. Both exhibits being attached hereto and incorporated herein by this reference;
WHEREAS, presently, Operator leases the property for the purpose of state and locally licensed commercial cannabis related activities which shall include, but not be limited to cannabis cultivation, manufacturing (type 6 and type 7), distribution, (together, the “Permitted Uses” and individually, a “Permitted Use”). Such Permitted Uses shall operate in accordance with all applicable provisions of Business and Professions Code §§26000-26231.2; California Health and Safety Code Safety Code §§ 11357-11362.9 and 11362.7- 11362.85; Revenue and Taxation Code §§ 34010-34021.5; Vehicle Code §§ 2429.7 and 23222; Water Code §§ 1831, 1847, and 13276; Title 4 of the California Code of Regulations, §§ 15000, et seq.; and the City of Barstow Municipal Code as it applies to such facilities (collectively the “Applicable Cannabis Laws”). Prior to Operator operating one or more Permitted Use, Operator shall be required to obtain approval of this Agreement, a conditional use permit, and a Commercial Cannabis Permit from City, and all related state and other permits and licenses prior to the operation of same, pursuant to Barstow Municipal Code Chapter 19.27, et seq.;
WHEREAS, Operator will obtain a California State License issued, pursuant to Applicable Cannabis Laws, to operate one or more Permitted Use at the Site.

WHEREAS, on March 30, 2022, Operator applied to City for a Conditional Use Permit (“CUP”) for the Premises to permit Commercial Cannabis Activities. No such activities are allowed or authorized without a Development Agreement, the CUP, a Commercial Cannabis Permit (“CCP”), and all requirements pursuant to City Ordinance No. 977-2021, including all applicable requirements pursuant to the Barstow Municipal Code.

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Packet Pg. 1694 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 3 -
WHEREAS, Operator intends to develop a commercial cannabis facilities, each in compliance with one or more of the Permitted Uses on the Premises, consistent with the Applicable Cannabis Laws and Project Approvals (known as the “Project”).

WHEREAS, the Project will consist of: One (1) buildings, located on a single parcel, with a combined 18,000 rentable square feet, as further described in Exhibit B.

The proposed layout of the site is as shown in the attached Site Plan.

Hours of Operation: 6:00 AM to 10:00 PM for retail business hours and 24-hours for internal operations, unless limited further by Barstow Municipal Code. [X] Co-location, check if applicable:

Note MAUCRSA now authorizes a person to apply for and be issued more than one State license at one location provided the licensed premises are separate and distinct.

Operator has applied for a CCP for the following license types:
1) Cultivation – Type – Small Indoor
WHEREAS, all procedures of the California Environmental Quality Act (“CEQA”), California Public Resources Code §21000 et seq., and the CEQA guidelines, title 14 of the California Code of Regulations, chapter 3, §15000 et seq. have been satisfied; WHEREAS, City has given public notice of its intention to adopt this Agreement and has conducted public hearings thereon pursuant to California Government Code §65867. The City has found that the provisions of this Agreement and its purposes are consistent with the objectives, policies, general land uses and programs specified in City’s General Plan, zoning code and municipal ordinances;
WHEREAS, City, in entering into this Agreement, acknowledges that certain City obligations hereby assumed shall survive beyond the terms of the present Council members, that this Agreement will serve to bind City and future Councils to the obligations hereby undertaken, and that this Agreement shall limit the future exercise of certain governmental and proprietary powers of City. By approving this Agreement, the Council has elected to exercise certain governmental powers at the time of entering into this Agreement rather than defer its actions to some undetermined future date. The terms and conditions of this Agreement have undergone extensive review by City and the Council and have been found to be fair, just and reasonable. City has concluded that the pursuit of the Project will serve the best interests of its citizens and that the public health, safety and welfare are best served by entering into this obligation. Owner has represented to City that it would not consider or engage in the Project absent City approving this Agreement;
WHEREAS, City agrees that Owner’s land use entitlements for the Project shall vest for the term of this Agreement as described below;

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Packet Pg. 1695 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 4 -
WHEREAS, After conducting a duly noticed hearing on October 10, 2022, in conjunction with City’s applicable ordinances and resolutions, the Planning Commission of the City reviewed, considered and approved environmental clearance and recommended approval of the execution of this Agreement to City Council. The Planning Commission found the Project: consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with the public necessity, public convenience, general welfare and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on City; WHEREAS, after conducting a duly noticed hearing on December 19, 2022, in conjunction with City’s applicable ordinances and resolutions, and after independent review and consideration, City Council approved the execution of this Agreement by adopting the ordinance that approves this development agreement (the “Enabling Ordinance”). The City Council found the Project:
consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with good land use practices; will not be detrimental to the health, safety and general welfare of City; and is in the best interest of City and its residents.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:

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Packet Pg. 1696 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 5 -

AGREEMENT

1. General Provisions.
a. Findings. The City hereby finds and determines that entering into this Agreement furthers the public health, safety, and general welfare and is consistent with City’s General Plan, including all text and maps in the General Plan. b. Recitals. The Recitals above are true and correct and are hereby incorporated into and made a part of this Agreement. In the event of any inconsistency between the Recitals and the provisions of Sections 1 through 24 of this Agreement, the provisions of Sections 1 through 24 shall prevail.
c. Exhibits. The following “Exhibits” are attached to and incorporated into this Agreement:

Designation Description
Exhibit A Legal Description
Exhibit B Parcel Map
Exhibit C Site and Floor Plans
Exhibit D Reservation for Dedication of Land for Public Purposes (If Applicable)
Exhibit E Operational and Additional Business
Standards (If Applicable)
Exhibit F Indemnification Agreement
Exhibit G Standards and Conditions for Construction (If Applicable)

2. Government Code and Municipal Code Required Elements. a. Owner and Operator each agree to be bound by the terms of this Agreement and shall not operate a cannabis-related business within City without being bound by the terms of this Agreement, including all payment obligations owed to City, of this Agreement. The City reserves the right to reject Operator’s CCP if City finds, at a lawfully noticed public hearing before the Planning Commission, that the proposed Operator is not eligible to operate the proposed commercial cannabis facility due to noncompliance with any applicable law. Each CCP issued by the City shall run with the Premises, to the extent each Operator retain rights thereto, and all Parties covenant that this Agreement is binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of Owner, as landlord, and Operator, as tenant and operator, each as applicable and each as approved by the City via the assignment approval provisions of Section 21.

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Packet Pg. 1697 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 6 -
b. Description of Property. Land situated in the City of Barstow, County of San Bernardino, State of California; whose street address is 2594 Mercantile Way, Building #21, City of Barstow, State of California (the “Premises”). The Premises is located on Assessor’s Parcel Number: 0428-211-26-0000 (the “Property”), the legal description of which is located on Exhibit A.
c. Owner and Other Person with Legal or Equitable Interest.

Owner: Barstow Outlet, LLC
Operator and Lessee: Beverly Hills View, Inc
Nature of Interest held by Master Lessee: Master Lease for 10 years with Option to Renew for an additional 10 years
d. Owner Representations and Warranties. Owner represents and warrants that the Owner has consented in writing to the Permitted Uses (as defined below) and the execution and recordation of this Agreement against the Property. e. Permitted Uses. The Premises may be used for one or more, in any combination, of the permitted uses listed below (together, the “Permitted Uses” and individually, a “Permitted Use”) , as presently authorized under Barstow Municipal Code Chapter 19.27, and for any other use as may be authorized under applicable provisions of the Barstow Municipal Code, if all required City permits and state licenses are approved and maintained in full force and effect under applicable law.

License Description State License Type(s)
Cultivation Indoor Types 1A/2A/3A/5A
Cultivation Nursery Type 4
Cultivation Processor Processor
e. Zoning. Operator represents and warrants such activities outlined in its Commercial Cannabis Permit Application (“Application”) conducted pursuant to this Agreement and under the Commercial Cannabis Permit shall comply with City’s municipal code, including the zoning ordinance and any and all development and construction requirements contained therein. Owner shall not conduct any business under this Agreement or under the Commercial Cannabis Permit without having obtained all necessary permits, licenses, and approvals from City and State of California. f. Reservation or Dedication of Land for Public Purposes. Sufficient roadway, sidewalk, and utility easements shall be reserved or dedicated to City for such purposes, as depicted in Exhibit D.

3. Term, Extensions.

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Packet Pg. 1698 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 7 -
a. Term. This Agreement, along with the issued the Cannabis Business Permit and Conditional Use Permit shall commence on the Effective Date and it shall end five (5) years from the starting date.
b. Extension by Operator. Operator, at its sole and absolute discretion may extend this Agreement for one (1) additional five (5) year period following the expiration of the initial five (5) year term; provided that:
(i) Operator shall give written notice to City no later than one hundred twenty (120) days before the expiration of the initial five (5) year term that the Owner desires to extend this Agreement for an additional five (5) year period; (ii) Operator shows adequate evidence to City that it has a legal and/or equitable interest in the Premises and/or will have such interests for the duration of the extended term of the Agreement;
(iii) Operator shall deposit all fees per the Council-adopted fee schedule necessary for processing the extension request and drafting necessary documentation;
(iv) Operator shall comply with all provisions of Ordinance No. 977- 2021, the additional Ordinance adopting this Agreement, Barstow Municipal Code Chapter 19.27 et seq., all terms imposed by City-issued Commercial Cannabis Permit, and City-Issued Conditional Use Permit, and all other requirements of applicable City law and permits; and
(v) Operator and any approved Operators have completed and built the commercial cannabis facility contemplated by the Agreement and has commenced and continues to operate it in compliance with and shall not be in default of any provision of any applicable law, including Barstow Municipal Code Chapter 19.27, or any agreement between City and Operator relative to the development of the Premises or of any condition of approval imposed upon any entitlement granted by City relative to the development of the Premises or cannabis operations for which Owner has been given a written notice to cure by City and for which Owner has not cured or commenced to cure such default within thirty (30) days, if and as provided by such agreement or condition of approval.
c. Extension by Agreement of the Parties. The Parties may agree to extend this Agreement for additional five (5) year periods, provided that the same conditions in Section 2(a) continue to be met and that City has expressly approved a further five (5) year renewed term. The City reserves the right to conditionally approve and/or shorten the length of additional renewal periods. The City shall give at least 180 days’ notice of any proposed nonrenewal of this Agreement.

4. Development Plans. The following shall comprise the Project’s “Development

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Packet Pg. 1699 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 8 -
Plans”:
a. Site Plan and Floor Plan. Operator’s site plan and floor plan for the facility are attached hereto as Exhibit C and incorporated into the Application. b. Landscape Plan. A preliminary landscape plan shall be prepared by the Operator and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees. A final landscape plan shall be prepared and submitted in conjunction with building and site improvement plans prior to issuance of building permits for construction activities. All final landscape plans must comply with the Building Code.
c. Signage Plan. An exterior signage plan shall be prepared and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees, in accordance with the procedures and requirements of the Barstow Municipal Code.

5. Facility Operations. Operator shall comply with the below operating requirements:
a. Compliance with California Cannabis Laws. Operator will operate at all times in compliance with California Cannabis Laws and all other applicable laws. Prior to Operator conducting any Permitted Use, Operator shall be required to obtain a Commercial Cannabis Permit (a “CCP”) and comply with all requirements pursuant to such entitlements, from City pursuant to the Enabling Ordinance and Chapter 19.27 of the Barstow Municipal Code. Further, Operatorshall conduct any Permitted Use in accordance with (i) California Cannabis Laws, as may be amended, (ii) the Enabling Ordinance, (iii) this Development Agreement and the Conditional Use Permit issued per its terms, (iv) a CCP, (v) the Operational and Business Standards (Exhibit E), and the Barstow Municipal Code.
b. Security Plan. Operator shall secure approval of its proposed security plan by the Barstow Police Department prior to opening. The security plan shall include, at a minimum and as appropriate, provisions for video surveillance, perimeter fencing and security, protection of the building(s) from vehicle intrusion, cash handling procedures, internal accounting controls, product handling and storage procedures, and a professionally monitored alarm system. Equipment and systems used for video surveillance and building alarms shall be approved by City.

The Project will secure the facility against unauthorized entry by installing security lights on the exterior of the building to illuminate the side yards and parking area, installing commercial-grade locks, installing an alarm and video surveillance system, establishing procedures for identifying authorized persons, establish inventory controls, and install a secure surveillance vault to maintain the integrity of records. In addition, Operator will engage a licensed security company to provide and implement an operational security plan.

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Packet Pg. 1700 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 9 -
Video surveillance shall include, at a minimum, all site and facility entrances and access points, all spaces accessible by the public, all secured areas of the facility with restricted access, all interior spaces and rooms where cannabis products are handled and processed, shipping and receiving areas, cash storage areas, and other areas necessary to protect the safety of employees and the public and to ensure cannabis products are received, handled, stored, packaged, shipped, and distributed in compliance with applicable state and local laws and regulations. The video surveillance system shall be web-based with direct access provided to the Barstow Police Department upon request.

The security system shall also include sensors to detect entry and exit from all secure areas, panic buttons in appropriate locations, and a professionally monitored alarm system with glass breakage sensors and motion detectors.

Operator shall employ properly trained and licensed third-party security personnel to protect the welfare and safety of Operator and their respective employees, and to ensure public safety to the neighboring community. Operator shall use security personnel twentyfour (24) hours, seven (7) days a week. Security personnel may be armed so long as proper licensing and insurance requirements are followed and met by the third-party operator providing such security services.
c. Fire Department Approval. Operator shall not operate any facility, and no permit, license, or other approval issued by City shall be valid unless and until the Barstow Fire Protection District has approved Operator’s site plan, floor plan, safety plan, and any other applicable plans that require its approval.
d. Possession of Firearms. Except for licensed and bonded security personnel, no person employed by Operator shall be in possession of any firearm while on the premises or location without having first obtained a license from the appropriate state or local agency authorizing the person to be in possession of such firearm. Every such person in possession of a firearm while on the premises or location must provide City Manager and the Barstow Police Department written notice no less than ten (10) days before bringing such firearm onto the premises, with the following:
1) A copy of the license issued to the person by the appropriate state or local agency authorizing him or her to possess such firearm; 2) A copy of his or her law enforcement identification (if he or she is employed by a law enforcement agency).
3) A copy of his or her California driver’s license or California identification card; and
4) Any other information reasonably required by the Barstow Police Department to show that the individual is in compliance with the provisions of all laws regarding the possession and use of a firearm.

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Packet Pg. 1701 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 10 -
e. Identification Display. Each Operator, their respective manager, employee, and individual member engaged in any Permitted shall at all times while engaged in the duties of his or her position wear in plain sight, on his or her person and at chest level, a valid identification badge, issued by Operator.
f. Employee Background Checks/Procedures for Inventory Control to Prevent Diversion of Cannabis. Only employees who receive clearance from Operator shall be permitted to enter the Premises. Each employee will have to meet a criminal background investigation conducted by the Barstow Police Department, which at minimum shall include a LiveScan criminal history check, which City shall make a good faith effort to facilitate within a reasonable time following the application of a CCP by Operator.

Operator shall take all necessary and reasonable steps to prevent the distribution of any of its cannabis products to minors; prevent revenue from the sale or distribution of its cannabis and/or infused products from going to criminal enterprises, gangs and cartels; prevent the diversion of cannabis from California to any other state; prevent stateauthorized cannabis activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; prevent violence and the use of firearms in the course of conducting any Permitted Use; discourage and educate against drugged driving and the exacerbation of other adverse public health consequences associated with cannabis use; disavow growing cannabis on public lands that creates attendant public safety and environmental dangers posed by such illegal uses; and discourage and educate against cannabis possession or use on federal property.
g. Quality Control and Testing. Operator shall utilize quality control measures and testing to ensure only the highest quality of commercial cannabis and infused products will be produced. Operator shall inspect the product to ensure its identity and quantity and shall have a testing lab perform testing of random samples prior to distribution. Inspection and testing will be conducted by a testing lab off-site. Testing standards and procedures shall be in accordance with applicable state law and regulations.

All commercial cannabis products will undergo a quality assurance review in accordance with state law prior to distribution. Inventory procedures will be utilized for tracking and taxing purposes by the state. Operator shall employ an efficient recordkeeping system to make transparent its financing, testing, and adverse effect recording, as well as recall procedures. Operator shall employ an efficient record-keeping system that will reflect its financing, testing, and adverse effect recording and product recall procedures.
h. Packaging of Commercial Cannabis and Manufactured Cannabis Products.

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products. Infused products shall not be produced, manufactured, stored, or packaged in private homes.
j. Point of Sale Tracking System. Operator shall maintain an inventory control and reporting system that accurately documents the location of cannabis products from inception through distribution, including descriptions, weight, and quantity. The inventory control and reporting system shall comply with the California Cannabis Track and Trace (CCTT) program required by California Cannabis Laws. Operator will make such CCTT records available to City upon request.

Operator shall utilize an electronic point of sale or inventory management system approved by the State of California for all point of sales and inventory tracking from seed or inception to product distribution to other licensed commercial cannabis facilities. Such approved system shall track all commercial cannabis products, each edible, harvested flower, and/or manufactured concentrate, as well as gross sales (by weight and sale).

Operator’s point of sale or inventory management system shall have the capacity to produce historical transactional data in accordance with City's requirements. k. Record Keeping. Operator shall maintain records for all commercial cannabis and/or infused products required by California Cannabis Laws. Operator shall comply with all record-keeping responsibilities that are set forth in Barstow Municipal Code Chapter 19.27, including complete and up-to-date records regarding the amount of commercial cannabis cultivated, produced, manufactured, harvested, stored, tested, distributed, delivered or packaged at Operator’s facility]. l. Processing, Handling, Storing, and Distribution of Commercial Cannabis and Related Products. Commercial cannabis cultivation, handling, storing, and processing shall be concealed from public view at all stages of growth and processing, and there shall be no exterior evidence of cultivation or processing occurring at the premises from a public right-of-way or from an adjacent parcel. Commercial cannabis cultivation, handling, storing, processing, or distribution shall not create offensive odors; create excessive dust, heat, noise, smoke, traffic, or other impacts that are disturbing to people of normal sensitivity residing or present on adjacent or nearby property or areas open to the public; or be hazardous due to use or storage of materials, processes, products, or wastes.

Operator shall store its commercial cannabis and/or commercial cannabis products in a locked safe room with T-card identification access for management only. The safe room shall be constructed of fire-rated walls with numerous cameras installed to view all entries and exits from the safe room, as well as all other activities performed within Operator’s facility. Operator will not conduct outdoor operations except as related to lawful delivery and transportation of medicinal commercial cannabis and infused products.

Operator will not store commercial cannabis or related products in its delivery vehicle outside normal operating hours of the facility.

Commercial cannabis products shall be sold or distributed only to licensed facilities in California. Excess or contaminated product will be securely stored on-site until properly

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Packet Pg. 1703 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 12 -
disposed. Disposal may include composting, incineration, land-fill disposal through the local waste management hauler, or other disposal methodology in accordance with California Cannabis Laws.
m. Odor Control. All structures shall have ventilation and filtration systems installed that prevent commercial cannabis plant odors from exiting the interior of the structure. The ventilation and filtration system shall be approved by the Building Department and installed prior to commencing cultivation or manufacturing within the allowable structure. Facility air intake, exhaust, and recirculating system shall be of industrial grade. Activated charcoal, recirculating, and closed loop aeration systems will be utilized as necessary for effective odor control and management. See minimum requirements, pursuant to Municipal Code Section 5.61.280(12). n. Description of Banking Plan. Operator shall seek to open a bank account under the name of Operator or its associated management company to provide transparency for funds received, operational costs, including payroll, tax payments to the state and federal governments. Should a bank account not be forthcoming, Operator shall implement other industry standard banking and/or other industry standard transactional mechanisms. o. Transportation Plan. Operator shall comply with California Cannabis Laws regarding transportation and delivery of cannabis and cannabis products. Operator shall retain a list of names and cellular contact numbers for all employees engaged in transportation of commercial cannabis products and provide it to the applicable oversight authority, keeping the list current and up to date.

Operator will keep complete and up-to-date records documenting each transfer of commercial cannabis to other lawful cooperative corporations, including the amount provided, the form or product category in which the commercial cannabis was provided, the date and time provided, the name of the employee making the transfer, the name and address of the other lawful cooperative corporation to whom delivery is made, and the amount of any related donation or other monetary transaction.

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Packet Pg. 1704 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 13 -
efforts, funding for enforcement against illegal cannabis operations, public safety, housing programs, economic development, infrastructure, capital improvements, including expansion and/or improvement to existing facilities or other physical improvements that provide a benefit to the community, support of holiday and special community events, and support of local public service, public safety, litigation defense, and special social and community organizations. This community benefits program may be implemented by City.

The City may invite public participation in the decision-making process for identifying and prioritizing community needs and benefits and identifying appropriate projects to be funded by the entity implementing this community benefits program. All projects under the community benefits program must be approved by City.

Operator agrees, as a business expense, to pay City annual payment at a rate of two dollars ($2.00) per square foot of the Premises (the “Public Benefit Fee”) payable upon issuance of each Operator’s CCP and City-issued business license, then annually thereafter upon each anniversary date. Unless initialed below by the City Manager, the Public Benefit Fee shall be deposited in full into a dedicated account set up by City in order to create, fund and implement a City-approved community benefits program. The community benefits program funds shall be spent only as directed by the City Council and shall be separately accounted for within City’s General Fund.
c. Designation of Community Relations Liaison. Pursuant to Ordinance No. 977-2021 at the time of this Agreement, Operator’s day-to-day operations manager, who is to be determined upon commencement of business operations, will be responsible for community inquiries and complaints and on-site management during normal business hours.
d. Interface with Barstow Police Department / Inspections. Operator’s dayto- day operations manager, and/or the Operator’s Community Relations Liaison who is to be determined upon commencement of business operations, will interface with the Barstow Police Department's assigned designee to ensure its operation complies with California Cannabis Laws. The City Manager, or designee, or the Barstow Police Department's assigned designee acting at City Manager’s request and per his specific and limiting instructions, shall have the right to enter all Premises from time to time unannounced during hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this Agreement, without the requirement of a search warrant, subpoena, or court order, and subject to appropriate cost recovery fees set forth in this Agreement, or adopted by City.
e. Local Recruitment, Hiring, and Training Programs. Operator is committed to making a good-faith effort to recruit, hire, and train Local residents for employment by Operator. A good-faith effort means Operator shall take the following or similar actions to recruit and employ City residents: 1) Contact local recruitment sources to identify qualified individuals who are City residents, 2) Advertise for qualified City residents in trade papers and newspapers of general circulation in the area, and 3) Develop a written plan to recruit and employ City residents as a part of its workforce. At a minimum, Operator commits to a good faith local annual hiring goal of 40% of total work hours for permanent and

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Packet Pg. 1705 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 14 -
apprentice employees. This goal shall apply horizontally, across all departments and managerial positions. The Operator shall not be penalized or deemed in default under this Agreement if it is unable to achieve such a goal. “Local” is defined as within a three-mile radius of City’s boundaries. The purpose of the hiring policy is to facilitate the training and employment of Local and disadvantaged job applicants for jobs within City’s jurisdiction, and three-mile radius of City boundaries. The Operator shall report on compliance with the local hiring goals as part of its annual audit report.
f. Full-time Work. Operator shall make its best efforts to fill every position with a full-time employee. However, at no time shall Operator have a labor force that is composed of less than 50% full-time employees within its labor force, and Operator shall make a good faith effort to maintain a full-time employee level of 75%. Operator agrees to provide to its eligible employees leave benefits, health insurance benefits, and other employee benefits to the extent such benefits are required to be paid for by an employer under applicable state and federal employment laws.

7. Indemnification Agreement by each Cannabis Permittee.

Pursuant to Ordinance No 977-2021, and to the fullest extent permitted by local, state and/or federal law, City shall not assume any liability whatsoever with respect to having issued a CCP or executed this Agreement, or the Enabling Ordinance, or otherwise approving the operation of any commercial cannabis business. As a condition to the approval of any CCP and to the execution and approval of this Agreement, Operator (if operating a Permitted Use) and any Operator shall be required to meet all the conditions enumerated in the Barstow Municipal Code before each can receives a CCP and before this Agreement may be executed. The City Manager shall require Operator and each Operator execute the form Indemnification Agreement (Exhibit F) that fully indemnifies the City for all liabilities associated with the CCP, the Commercial Cannabis Permittee’s Commercial Cannabis Activities, and any action taken by the Cannabis Permittee. The Indemnification Agreement shall include the defense of the City and reimbursement of all fees, costs and expenses incurred by the City related to any action arising from this Agreement. Attached as Exhibit F, and incorporated herein by this reference, is true and correct copy of a fully executed Indemnification Agreement.

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reimbursement to City for such costs shall be due and payable within thirty (30) days of receipt. Late Fees shall be assessed pursuant to the Barstow Municipal Code provisions applicable to disputes and shall be resolved pursuant to the Municipal Code. c. Operating Fees. As used herein, “Premises” means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the Commercial Cannabis Permittee where one or more Permitted Uses will be or is conducted. The parties stipulate and agree that the square footage for the Premises upon the Effective Date of this Agreement is and shall be during the term of this Agreement:

As used herein, “Commercial Cannabis Activities” means one or more Permitted Use (e.g., cultivation, possession, manufacture, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or distribution of Cannabis and/or Cannabis Products).

As used herein, “Gross receipts” shall mean the total amount actually received or receivable in the course of business in a calendar year or calendar month from sales or the performance of acts or services for which charge is made or credit allowed. “Gross receipts” include, without limitation, all receipts, cash, credit, property received in lieu of cash, and any other valuable consideration taken in exchange for goods, services, or other valuable consideration.

As used herein, “Production Space” means the area on or within the Premises intended for Commercial Cannabis Activities excluding non-operational common areas such as restrooms, cafeterias, break rooms, hallways, corridors, vestibules, parking structures or surface street lots. The parties stipulate and agree that the square footage for the Production Space shall be determined by the City Manager in his sole and complete discretion as the Project is completed.

The City Manager is specifically authorized to set and adjust the square footage for the Production Space and to determine the corresponding operating fee as the Project is completed.
1) Each Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, the following fees, if holding a Cannabis Cultivation Permit or Cannabis Manufacturing Permit: a yearly operating fee of Five Dollars ($5) per square foot of the Premises. Fees shall be paid no later than December 31st of every year beginning in the year each Operator receives its CCP and shall be prorated commensurate with the number of months such Operator had its CCP. Failure to pay the fee within thirty (30) days after the due date shall result Address Building No. Size (SF)
2594 Mercantile Way Building 21 18,000

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in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.

Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, and shall pay the following fees, if holding a Cannabis NonStorefront Retail Delivery Permit or Cannabis Storefront Retail Permits shall pay:
2) a monthly operating fee(s) of three percent (3%) of Gross Receipts for operations from the Cannabis Non-Storefront Retail Delivery Permits and Cannabis Storefront Retail Permits, to be paid monthly. Fees shall be due to the City on first (1st) of the month. Failure to pay the fee within thirty (30) days after the due date shall result in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.

Facilities with multiple licenses must not commingle respective sales proceeds, and blend percentage rate of Gross Receipts.
d. Operator understands and agrees that the fees set forth above shall be paid in a manner and in accordance with a payment schedule set or modified by City. The cultivation, manufacturing, testing, distribution, and delivery space to which the fee applies is as identified on the attached floor plan.
e. If Operator makes any changes to the interior layout of the facility that increases the amount of space allocated to those uses to which the per-square- foot fee applies, Operator shall notify City of such changes at least fourteen (14) calendar days prior to making such changes, and the per-square-foot fee shall be modified accordingly. If Operator fails to give City notice as required herein, Operator shall be responsible for paying to City a per-square-foot fee based on any increase in the amount of space allocated to those uses to which the per-square- foot fee applies retroactive to the date the CCP became effective.

9. Cost Recovery Fee. In addition to the applicable application fees, community benefits payment, and City operating fees, Operator agrees to pay, and City shall assess to each Operator respective fees to recover City’s reasonable processing and monitoring costs (“CRF”) relating to Operator’s business upon issuance of Operator’s Manufacturing, Cultivation, Testing, Distribution, Non-Storefront Retailer Delivery, and Microbusiness Permits or any Additional Permits. CRF is separate and apart from any operating fees set forth in Article 8. Operator shall pay all such fees per the cannabis fee scheduled as adopted by the City Council by Resolution. a. Processing Fees. Processing fees for the Application are based upon the direct and indirect costs that City incurs in reviewing the Application. The processing fees for the Application shall be based only on costs that are reasonably necessary for processing the Application and implementing the Ordinance, including staff time, legal fees, and consultant fees.

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Packet Pg. 1708 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 17 -
b. Annual Regulatory and Monitoring Fees. Annual Regulatory and Monitoring fees for the Manufacturing, Cultivation and Distribution Permits are based upon the direct and indirect costs City incurs in confirming the use of the Premises in accordance with the municipal code, the Ordinance, this Agreement, and the Application.

The monitoring fees shall be based only on costs that are reasonably necessary for conducting these reviews.
c. Billing and Payment. The City may elect to bill the Operator the Initial CRF on the first day of the month following the Effective Date of this Agreement. Thereafter, City shall bill Operator, or Owner if Owner and Operator are the same entity, the CRF on the first day of each Quarter with an invoice providing the time spent by City and its representatives. Operator shall pay the CRF invoice within thirty (30) days of the invoice date.
d. Disputes. If Operator disagrees with the dollar amount provided by City on the CRF invoice, Operator may submit a written request before the disputed fee is due for a substitution of alternative CRF invoice to the City Manager. The written request must include supporting documentation. After review of the written request, Operator and City shall work, in good faith to resolve the dispute.

10. Additional Operator Obligations.
a. Reporting of Gross Receipts from Operations.
1) Quarterly Receipts. No later than three (3) months after execution of this Agreement, , and every three months thereafter, Operator shall deliver to City a report (the “Quarterly Report”) showing the following information for the cannabis business authorized under this Agreement: (i) Gross Receipts from operations for the immediate prior three months received by Operator, and a cumulative total of all amounts of Gross Receipts from Operations received by Operator for the calendar year, (ii) a calculation of the quarterly payment due to City for the prior three months, and (iii) a calculation of the cumulative total of all quarterly payments for the calendar year.
2) Statement of Receipts/Annual Audit. Each Operator shall keep complete, accurate and appropriate books and records of all receipts from all cannabis business operations in accordance with generally accepted accounting principles. For purposes herein, “books and records” shall mean all bookkeeping or accounting documents each Operator typically utilizes in managing its business operations relating to the Project. Such books and records, as well as all other relevant documents as the City Manager may reasonably require, shall, upon reasonable written notice, be open for inspection by City, its auditors, or other authorized representatives. If at any time during the term such books and records prove inadequate in the reasonable judgment of City to record the Gross Receipts from Operations as herein required, each Operator shall, upon the written request of the City, procure and maintain such books and records as shall be of a character

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Packet Pg. 1709 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 18 -
and from adequate for such purpose. City shall have the right to audit and examine such books, records and documents and other relevant items in the possession of such Operator, on no less than an annual basis, or at any time upon reasonable request by the City, to the extent necessary for a proper determination of Gross Receipts from Operations, and all such books, records, documents and other items shall be held available for such audit and examination. The City’s audit shall be performed by a non-contingency fee independent auditor approved in advance by the City. Upon request by City, each Operator shall make all such books, records, and documents available to the City Manager, his designee, or to the City approved auditor, and provide removable copies thereof, within thirty (30) of the date of City’s request. Each Operator shall pay all costs of such audits. Each Operator shall preserve such books, records, documents, and other items in Barstow for a period of not less than one (1) years for the purpose of auditing or re-auditing these accounts upon reasonable notice; except that, if an audit is made within the sevenyear period and each Operator claims that errors or omissions have occurred, the books and records shall be retained and made available until those matters are resolved. City shall keep strictly confidential all statements of revenue furnished by each Operator and all other information concerning such Operator’s operation of the Premises obtained by City as a result of the inspection audit and examination privileges of City hereunder, except as otherwise required by law. If City receives a request for such information pursuant to the Public Records Act (California Government Code Section 6250, et seq.), City shall provide each Operator notice of any such request prior to disclosing any such information and afford such Operator the opportunity to obtain a protective order. Within seven (7) years after the receipt of any statement of receipts under this Agreement, City at any time shall be entitled to carry out an audit of such revenue either by City or agent to be designated by City. If it shall be determined as a result of such audit that there has been a deficiency in any payment due under this Agreement made on the basis of such statement, then such deficiency shall become immediately due and payable within thirty (30) days of such determination.
3) Copies of Tax Filings. Each Operator shall provide the City with courtesy copies of each and every CDTFA Quarterly report such Operator is required to provide to the California Department of Tax and Fee Administration for sales and use tax, Cannabis Excise Tax, and/or Cannabis Cultivation Tax, at the time such filings are made. This reporting obligation is imposed on the cannabis business Operator, or Owner if Owner and Operator are the same entity, and not on the Owner if the Owner is solely a landlord and not also a listed permittee or operator of the cannabis business.
b. Future Revenue Mechanisms. During the term of this Agreement, if the City imposes (by Citizen Initiative or otherwise) an alternative revenue mechanism specifically related to cannabis operations (e.g., a cannabis tax), Operator and City agree to renegotiate in good faith the terms of this Agreement so as to conform the aggregate Public Benefit Fees and Operating Fees payable by an Operator with any alternative revenue mechanism approved by voters. As used in this section, “alternative revenue mechanism” does not

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Packet Pg. 1710 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 19 -
include taxes, fees, or assessments levied on or collected from both cannabis and noncannabis operations.

11. Insurance and Indemnity.
a. Insurance. Each Operator shall require all persons doing work on the Project, including its contractors and subcontractors (“Contractors”)to obtain and maintain insurance of the types and in the amounts described in this section and its subsections with carriers reasonably satisfactory to City.
b. General Liability Insurance. Each Operator shall maintain commercial general liability insurance or equivalent form with a limit of not less than One Million Dollars ($1,000,000) per claim and Two Million Dollars ($2,000,000) each occurrence.

Such insurance shall also:
1) Name City, its elected and appointed councils, boards, commissions, officers, agents, employees, and representatives as “Additional Insureds” by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the abovelisted additional insured. 2) Be primary with respect to any insurance of self-insurance programs covering City, its officials, employees, agents, and representatives. 3) Contain standard separation of insured provisions.
c. Automotive Liability Insurance. Each Operator shall maintain business automobile liability insurance or equivalent form with a limit of not less than One Million Dollars ($1,000,000) for personal injury for each accident for the vehicles Operator operates in connection with its cannabis business. Such insurance shall include coverage for owned, hired, and non-owned automobiles. Such insurance shall also:
1) Name City, and work in good faith with the City and the insurers to name additional insureds as deemed reasonably necessary. “Additional Insureds” by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the abovelisted additional insureds. 2) Be primary with respect to any insurance or self-insurance programs covering City, its officials, employees, agents, and representatives. 3) Contain standard separation of insured provisions.
d. Workers’ Compensation Insurance. Each Operator shall take out and maintain during the term of this Agreement, workers’ compensation insurance for all of such Operator’s employees employed at or on the Project, and in the event any of the work

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is subcontracted, Operator shall require any general contractor or subcontractor similarly to provide workers’ compensation insurance for such contractor’s or subcontractor’s employees, unless such employees are covered by the protection afforded by such Operator.

In case any class of employee engaged in work on the Project is not protected under any workers’ compensation law, such Operator shall provide and shall cause each contractor and subcontractor to provide adequate insurance for the protection of employees not otherwise protected. Each Operator hereby indemnifies City for any damage resulting from failure of such Operator, its agents, employees, contractors, or subcontractors to take out or maintain such insurance. Workers’ compensation insurance with statutory limits and employer’s liability insurance with limits of not less than One Million Dollars ($1,000,000) each accident shall be maintained.
e. Other Insurance Requirements. Operator shall do all of the following:
1) Prior to taking any actions under this Agreement, furnish City with properly executed certificates of insurance that clearly evidenced all insurance required in this Article, including evidenced that such insurance will not be canceled, allowed to expire, or be materially reduced in coverage without thirty (30) days prior written notice to City.
2) Provide to City, upon request, and within seven (7) calendar days of said request, certified copies of endorsements and policies, and properly executed certificates of insurance evidencing the insurance required herein. 3) Replace or require the replacement of certificates, policies and endorsements for any insurance required herein expiring prior the termination of this Agreement.
4) Maintain all insurance required herein from the Effective Date of this Agreement to the earlier of the expiration of the term or the mutual written termination of this Agreement.
5) Place all insurance required herein with insurers licensed to do business in California with a current Best’s Key Rating Guide reasonably acceptable to City.
f. Indemnification. Operator shall execute the form Indemnification Agreement attached as Exhibit F, thereby agreeing to indemnify, defend, and hold City, and its elected and appointed council, boards, commissions, officers, agents, employees, contractors, consultants and representatives, harmless from any and all claims costs and liability for any personal injury or property damage which may arise as a result of any actions or negligent omissions by Operator or Master Lessee’s contractors, subcontractors, agents, or employees in connection with the construction, improvement, or operation of the Project.

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12. Termination.
a. Termination Upon End of Term. This Agreement shall terminate upon the expiration of the Term unless it is terminated earlier pursuant to the terms of this Agreement. Upon termination of this Agreement, City shall record a notice of such termination and this Agreement shall be of no further force or effect except as otherwise set forth in this Agreement.
b. Effect of Termination on Operator’s Obligations. Termination of this Agreement shall eliminate any further obligation of Operator to comply with this Agreement, or some portion thereof, if such termination relates to only part of the Premises or Project. Termination of this Agreement, in whole or in part, shall not, however, eliminate the rights of Operator to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.
c. Effect of Termination on City’s Obligations. Termination of this Agreement shall eliminate any further obligation of City to comply with this Agreement, or any portion thereof. Termination of this Agreement shall not, however, eliminate the rights of City to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.
d. Survival After Termination. The rights and obligations of the Parties set forth in Section 10, Section 16, Section 22, and Section 24 and any right or obligation of the Parties in this Agreement which, by its express terms or nature and context is intended to survive termination of this Agreement, will survive any such termination. e. Termination Upon Failure to Perform. Operator shall have two (2) years after the Effective Date to commence operation of the commercial cannabis facility contemplated by this Agreement. Failure Operator to commence commercial cannabis operations within that two-year time period may constitute a default and City shall have the right, but not the obligation, to exercise its default remedies under Section 15. The Parties agree to negotiate in good faith regarding any reasonably necessary extensions of this deadline for good cause, such as may be shown as a result of circumstances delaying commencement of operations beyond the control of Operator.

13. Resources Efficiency. Each Operator shall endeavor to reduce its environmental impact when possible. The design of the facility shall include reasonable water and energy conservation measures in accordance with applicable State regulations.

14. Standard Conditions for Construction. During any on-site construction activities related to development of the project site and any buildings thereon, or renovation or remodeling of existing buildings, Operator shall comply with all applicable terms and conditions attached hereto and incorporated herein by reference as Exhibit G. The Project shall comply with the applicable parking standards established by the City for cannabis activities.

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15. Defaults and Remedies.
a. Remedies in General. It is acknowledged by the parties that City would not have entered into this Agreement if it were to be liable in damages under this Agreement, or with respect to this Agreement or the application thereof, except as hereinafter expressly provided. Subject to extensions of time by mutual consent in writing, failure to delay by either party to perform any term or provision of this Agreement beyond a reasonable notice and cure period shall constitute a default. In the event of alleged default or breach of any terms or conditions of this Agreement, the party alleging such default or breach shall give the other party not less than thirty (30) day notice in writing specifying the nature of the alleged default and the manner in which said default may be satisfactorily cured during any such thirty (30) day period, the party charged shall not be considered in default for purposes of termination or institution of legal proceedings. Notwithstanding the foregoing to the contrary, if the alleged default is of such a nature that it cannot be cured within thirty (30) days, the alleged defaulting party shall not be deemed in default as long as such party commences to cure such default within such thirty (30) day period and thereafter diligently prosecutes such cure to completion.

After notice and expiration of the thirty (30) day period without a cure of such default, the other party to this Agreement, at its option, may terminate the Agreement or institute legal proceedings pursuant to this Agreement.

In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that City shall not be liable in monetary damages, to Operator, to any mortgagee or lender, or to any successors in interest of Operator or mortgagee or lender, or to any other person, and Operator covenants on behalf of itself and all successors in interest to the Premises or any portion thereof, not to sue for damages or claim any damages.
1) For any breach of this Agreement or for any cause of action which arises out of this Agreement; or
2) For the impairment or restriction of any right or interest conveyed or provided under, with, or pursuant to this Agreement, including, without limitation, any impairment or restriction which Operator characterizes as a regulatory taking or inverse condemnation; or
3) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.
b. Specific Performance. The parties acknowledge that money damages and remedies at law are inadequate, and specific performance and other non- monetary relief are particularly appropriate remedies for the enforcement of this Agreement and should be available to all parties for the following reasons:

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1) Money damages are unavailable against City as provided in Section 15(a) above.
2) Due to the size, nature, and scope of the Project, it may not be practical or possible to restore the Premises to its natural condition once implementation of this Agreement has begun. After such implementation, Operator may be foreclosed from other choices it may have had to use the Premises or portions thereof. Operator has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate Operator for its efforts. By the same token, in the event that City issues any permit or other approval for a structure, and the public facilities, improvements, and infrastructure reasonably necessary to provide an adequate level of public services to that structure are not timely completed or Operator otherwise fails to carry out its obligations under this Agreement, then it would not be possible to determine a sum of money that would adequately compensate City for the resulting hardship.

For the above reasons, City and Operator and agree that, notwithstanding any other language in this Agreement, damages would not be an adequate or appropriate remedy if City fails to carry out its obligations under this Agreement. Therefore, specific performance of this Agreement is the only remedy which would compensate Operator if City fails to carry out its obligations under this Agreement, and City hereby agrees that Operator shall be entitled to specific performance in the event of a default by City hereunder. Further, specific performance of this Agreement is the only remedy which would compensate City if Operator fails to carry out their obligations under this Agreement, and Operator hereby agree that City shall be entitled to specific performance in such event. c. Release. Except for those remedies set forth in Sections 15(a), 15(b), and this 15(c), Operator, for itself, its successors and assignees, hereby releases City, its officers, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, based or asserted, pursuant to Article 1, Section 19 of the California Constitution, the Fifth Amendment of the United States Constitution, or any other law or ordinance which seeks to impose any other liability or damage, whatsoever, upon City because it entered into this Agreement or because of the terms of this Agreement.

Operator acknowledges that it may have suffered, or may suffer, damages and other injuries that are unknown to it, or unknowable to it, at the time of its execution of this Agreement. Such fact notwithstanding, Operator agrees that the release provided in this Section 14(c) shall apply to such unknown or unknowable claims and damages. Without limiting the generality of the foregoing, Operator acknowledges the provisions of California Civil Code Section 1542, which provide:

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Packet Pg. 1715 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 24 -
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
Operator hereby waives, to the maximum legal extent, the provisions of California Civil Code Section 1542 and all other statutes and judicial decisions of similar effect. d. Attorneys’ Fees and Costs. In any action or proceeding between City and Operator brought to interpret or enforce this Agreement, or which in any way arises out of the existence of this Agreement or is based upon any term or provision contained herein, the “prevailing party” in such action or proceeding shall be entitled to recover from the non-prevailing party, in addition to all other relief to which the prevailing party may be entitled pursuant to this Agreement, the prevailing party’s reasonable attorneys’ fees and litigation costs, in an amount to be determined by the court. The prevailing party shall be determined by the court in accordance with California Code of Civil Procedure Section 1032. Fees and costs recoverable pursuant to this Section 14(e) include those incurred during any appeal from an underlying judgment and in the enforcement of any judgment rendered in any such action or proceeding.
e. Default. No building permit shall be issued or building permit application accepted for Operator for any structure on the Premises after Operator is determined by City to be in default of the terms and conditions of this Agreement until such default thereafter is cured such defaulting party or is waived by City. If City terminates this Agreement as to any Operator because of such Operator’s default, then City shall retain any and all benefits, including money or land received by City hereunder.

16. Third Party Litigation.
a. General Plan Litigation. City has determined that this Agreement is consistent with its General Plan and all applicable special plans. Operator has reviewed the General Plan and concurs with City’s determination.

City shall have no liability under this Agreement or otherwise for any failure of City to perform under this Agreement, or for the inability of Operator to develop the Premises as contemplated by the Agreement, including, but not limited to, if such failure to perform or inability to develop is the result of a judicial determination that the General Plan, or portions thereof, are invalid or inadequate or not in compliance with law, or that this Agreement.
b. Hold Harmless Agreement. Operator hereby agrees to, and shall hold City, its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants and employees harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Operator or their respective contractors, subcontractors, agents, or employees’ operations under this Agreement, whether such operations be by Operator, or by any of

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Packet Pg. 1716 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 25 -
Operator’s contractors, subcontractors, agents, or employees operations under this Agreement. Operator agrees to and shall defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damage caused, or alleged to have been caused, by reason of any of the aforesaid operations.
c. Indemnification. Operator shall defend, indemnify, and hold harmless City and its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants, and employees against and from any and all liabilities, demands, claims, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and reasonable attorneys’ fees), which any or all of them may suffer, incur, be responsible for or pay out as a result of or in connection with any challenge to the legality, validity or adequacy of any of the following: (i) this Agreement and the concurrent and subsequent permits, licenses and entitlements approved for the Project or Premises, and all activities conducted under such entitlements; (ii) the environmental impact report, mitigated negative declaration or negative declaration, as the case may be, prepared in connection with the development of the Premises; (iii) any claims based on or alleging inverse condemnation by any person or entity with an interest in the Premises; and (iv) the proceedings undertaken in connection with the adoption or approval of any of the above.

In the event of any legal or equitable action or other proceeding instituted by any third party (including a governmental entity or official) challenging the validity of any provision of this Agreement or any portion thereof as set forth herein, the parties shall mutually cooperate with each other in defense of said action or proceeding. Notwithstanding the above, City, at is sole option, may tender the complete defense of any third-party challenge as described herein. In the event City elects to contract with special counsel to provide for such a defense, City shall meet and confer with Operator regarding the selection of counsel, and Operator shall pay all costs related to retention of such counsel. d. Environmental Contamination. Operator shall indemnify and hold City, its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants and employees free and harmless from any liability, based or asserted, upon any act or omission of Operator, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors, excepting and acts or omissions of City as successor to any portions of the Premises dedicated or transferred to City by Operator, for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Premises, including, but not limited to, soil and groundwater conditions, and Operator shall defend, at its expense, including attorneys’ fees, City, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. City may in its discretion participate in the defense of any such claim, action or proceeding. e. City to Approve Counsel. With respect to Sections 16(a) through 16(d), City shall approve any counsel which Operator selects, hires, or otherwise engages to defend City hereunder, which approval shall not be unreasonably withheld.

17. California Environmental Quality Act. Operator shall reimburse City for any

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Packet Pg. 1717 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 26 -
and all costs incurred by City related to project review under the California Environmental Quality Act (CEQA), Public Resources Code, §§21000-21189.3, and the Guidelines for California Environmental Quality Act, California Code of Regulations, Title 14, §§15000-15387. If reasonably requested by City, Operator shall conduct and pay for any required CEQA reviews and analyses.

18. Rules, Regulations, and Official Policies. Except as otherwise provided in this Agreement, the rules, regulations, and official policies of City governing permitted uses of the land, governing density, and governing the design, improvements, and construction standards and specifications applicable to the development of the Project subject of this Agreement, shall be those rules, regulations, and official policies of City in force at the time of the execution of this Agreement. This Agreement does not prevent City, in subsequent actions applicable to the property, from applying new rules, regulations, and policies which do not conflict with those rules, regulations, and policies applicable to the property as set forth herein, nor does this Agreement prevent City from denying or conditionally approving any subsequent development project application based on such existing or new rules, regulations, or policies.

19. Commercial Cannabis Permit Conditions of Approval. Operator shall comply with all conditions of approval of the City-issued Commercial Cannabis Permit and Conditional Use Permit.

20. Periodic Reviews. This Agreement shall be subject to annual review by the City Manager. Operator and Landlord executing this Agreement, or successor in interest thereto, shall demonstrate good faith compliance with the terms of this Agreement. If, as a result of such periodic review, City finds and determines, based on substantial evidence, that Operator executing this Agreement, or successor in interest thereto, has not complied in good faith with the terms or conditions of this Agreement, City may terminate or modify this Agreement as to such noncompliant Operator (except no modification shall increase Operator’s liability nor reduce Operator’s rights), provided that City shall first provide Operator notice of its intent to terminate, with a detailed explanation as to why, and provide Operator the reasonable right to cure the same. a. Periodic Review. City Manager shall review this Agreement annually, on or before each anniversary of the Effective Date, in order to ascertain Operator’s good faith compliance with this Agreement. During the periodic review Operator shall be required to demonstrate good faith compliance with the terms of the Agreement, through submitting an annual monitoring report, records, or equivalent written materials to the Planning Department. Operatorshall document any request for an extension of the term due to delays beyond the control of Operator under Section 12(e) or Section 24(j). Operator shall submit an annual review and administration fee deposit not to exceed City’s estimated internal and third-party costs associated with the review and administration of this Agreement during the succeeding year, consistent with Section 23(k) (“Deposit with City”) below. City shall provide Operator said estimate a reasonable time in advance of the annual review and administration fee deposit being due.
b. Conditional Use Permit. In addition to the CCP, Operator shall apply for and obtain a CUP for the establishment and operation of the Project. Operator’s operation

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of any business at all times shall be required to comply with the terms of this Agreement and Operator’s CUP and CCP. Operator acknowledges and covenants that the CUP obtained by Operator via this Agreement shall run with the Premises and that this Agreement is binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of the Owner, as landlord, as applicable and approved by the City via the assignment approval provisions of Section 21.
c. Special Review. City Council may order a special review of compliance with this Agreement at any time. The City Manager or his or her designee shall conduct such special review. During a special review, Operator shall be required to demonstrate good faith compliance with the terms of this Agreement. The burden of proof on this issue shall be on Operator.
d. Special Review Hearing. At the time and place set for the review hearing, Operator shall be given an opportunity to be heard. If City Council finds, based upon clear and convincing evidence, that Operator has not complied in good faith with the terms or conditions of this Agreement, City Council may terminate this Agreement as to such party notwithstanding any other provision of this Agreement to the contrary, or modify this Agreement as to such party and impose such conditions as are reasonably necessary to protect the interests of City. The decision of City Council shall be final, subject only to judicial review pursuant to Code of Civil Procedure Section 1094.5. e. Certificate of Agreement Compliance. If, after a periodic or special review, Operator is found to be in compliance with this Agreement, and if Master Lessee and/or any Operator requests it, City shall issue a Certificate of Agreement Compliance (“Certificate”) to such requesting party stating that after the most recent periodic or special review, and based upon the information known or made known to the City Manager and City Council, that (i) this Agreement remains in effect and (ii) Operator is not in default.

City shall not be bound by a Certificate if a default existed at the time of the periodic or special review but was concealed from or otherwise not known to the City Manager and City Council, regardless of whether the Certificate is relied upon by assignees or other transferees or Operator.
f. Failure to Conduct Review. City’s failure to conduct a periodic review of this Agreement shall not constitute a breach of this Agreement. g. Cost of Review. The costs incurred by City in connection with the periodic reviews shall be borne by Operator subject to such review.

21. Assignment by Owner, Master Lessee or Operator. Owneror Operator shall not transfer, delegate, sublet or assign its interest, rights, duties, and obligations under this Agreement without the prior written consent of City Council, which consent shall not be unreasonably withheld. Owner or Operator shall submit a transfer application to the City Manager or City Manager’s designee and pay any applicable transfer fee. The proposed transferee must show proof of lawful transfer of possession of the applicable location as may be acceptable to the City. Owner or Operator acknowledges it may take the City approximately three (3) months to process a transfer

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application.

Any assignment, delegation, subletting or assignment without the prior written consent of City Council shall be null and void. Any transfer, delegation, subletting or assignment by Owner or Operator as authorized herein shall be effective only if and upon the party to whom such transfer, delegation, subletting, or assignment is made is issued a CCP as required under the Barstow Municipal Code.

22. Operating Commercial Cannabis Facility. Any party to this Agreement, or successor in interest thereto, including Operator, shall not operate a commercial cannabis facility authorized under the municipal code unless:
a. It is the holder of a valid CCP issued by City in accordance with the procedures and requirements or the Enabling Ordinance, and Chapter 19.27 of the Barstow Municipal Code; and,
b. It is the holder of a valid license issued by the State of California to operate a commercial cannabis business.

23. Notice. Any notice or communication required hereunder between City and Operator must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by Federal Express, UPS or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered, as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

If to City: City of Barstow
220 E. Mountain View Street, CA 92311
Attention: City Manager
With courtesy copy to: City Attorney
790 E. Colorado Boulevard, Suite 850
Pasadena, California 91101
If to Owner: Barstow Outlet LLC
910 Broadway Ave, Suite 110
Santa Monica, CA 90401
Attn: Farhad Abolfathi

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[email protected]
With courtesy copy to: Baker, Burton & Lundy, P.C.
515 Pier Ave.

Hermosa Beach, CA 90254
Attn: Mary G. Korkodian
[email protected]
If to Operator: Beverly Hills View, Inc.

Attn: F Bari Nejadpour, Esq.
8383 Wilshire Blvd., #630
Beverly Hills, CA 90211
With courtesy copy to: Weinberg Gonser Frost LLP
10866 Wilshire Bvld., Sutie 1650
Los Angeles, CA 90024
Attn: Michael Jensen
[email protected]

24. Miscellaneous Provisions.
a. Amendment or Cancellation. This Agreement may be amended, or canceled in whole or in part, only by the written mutual consent of the parties to this Agreement or their successors in interest, except those minor amendments that do not affect a substantive provision of this Agreement may be approved by the City Manager on behalf of the City.

The decision whether a proposed amendment is “minor” shall be in the exclusive discretion of the City Manager.
b. Waiver. Waiver by City of any one or more of the terms or conditions of this Agreement shall not be construed as waiver of any other term or condition under this Agreement.
c. Enforcement/Reserved Powers. Unless amended or canceled pursuant hereto, this Agreement shall be enforceable by any party hereto, or successor in interest thereto, notwithstanding any subsequent change in any applicable general or specific plan, zoning, subdivision or building regulation, or municipal code amendment adopted by City that conflicts with the terms of this Agreement. However, this Agreement is subject to the City's “Reserved Powers.” For purposes of this Agreement, “Reserved Powers” means the rights and authority excepted from this Agreement's restrictions on the City's police powers and which are instead reserved to the City. The Reserved Powers include the powers to enact regulations or take future discretionary actions after the Effective Date of this Agreement that: (1) are necessary to protect the public health and safety, and are generally applicable on a City-wide basis (except in the event of natural disasters as found by the City Council such as floods, earthquakes and similar acts of God); (2) are amendments to California Cannabis Laws or California Uniform Codes, as adopted by the City of Barstow, and/or the Barstow Municipal Code, as applicable, regarding the construction, engineering

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and design standards for private and public improvements to be constructed on the Premises; (3) are necessary to comply with state or federal laws and regulations; or (4) involve sign and parking ordinances and guidelines, changes to the City’s zoning laws, Specific Plan or the City's General Plan, whether adopted previous or subsequent to the Effective Date of this Agreement).

If any City ordinance, rule or regulation or addition to the Barstow Municipal Code is enacted or imposed by a citizen-sponsored initiative or referendum after the Effective Date that would conflict with this Agreement or an associated Commercial Cannabis Permit, business license or other authorizations and City approvals, or reduce development rights or assurances provided to the Operator in this Agreement, then such changes, additions or deletions to the Barstow Municipal Code shall not be applied to the Premises or Project; provided, however, the parties acknowledge that the City's approval of this Agreement is a legislative action subject to referendum. The parties shall cooperate with each other and undertake such reasonable actions as may be appropriate to ensure this Agreement remains in full force and effect and is implemented in accordance with its terms and to the fullest extent permitted by state or federal law.

Notwithstanding anything to the contrary in this Agreement, site improvements contemplated by this Agreement shall be completed pursuant to the development standards and design guidelines applicable at the time of development. e. Joint and Several Liability. Operator shall be jointly and severally liable for any amount due under this Agreement, and any breach of this Agreement or failure to pay by one Party shall also constitute a breach of this Agreement by the other Party. f. Severability. If any part of this Agreement is found to conflict with applicable state laws or regulations, such part shall be inoperative, null, and void insofar as it conflicts with said laws or regulations or modified or suspended as may be necessary to comply with such state laws or regulations, but the remainder of this Agreement shall continue to be in full force and effect.
g. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual, facsimile, or electronic signature.
h. Jurisdiction. The law governing this Agreement shall be that of the State of California. Any suit brought by any party against any other party arising out of the performance of this Agreement or the breach, termination, enforcement, interpretation, or validity thereof, shall be filed and maintained in the County of San Bernardino Superior Court.
i. Disclaimer. Despite California Cannabis Laws and the terms and conditions of this Agreement, any CUP, or any CCP issued pertaining to Operator, or the Premises, California commercial cannabis cultivators, transporters, distributors, or possessors may

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still be subject to arrest by state or federal officers and prosecuted under state or federal law. The Federal Controlled Substances Act, 21 USC § 801, et seq., prohibits the manufacture, distribution, and possession of cannabis without any exemptions for medical use.
j. Force Majeure. If delays are caused by unforeseen events beyond the control of Operator, such delays will entitle Operator to an extension of time as provided in this section. Such unforeseen events (“Force Majeure”) shall mean war, insurrection, acts of God, local, state or national emergencies, strikes and other labor difficulties beyond the party’s control, or any default by City hereunder, which Force Majeure event substantially interferes with the development, construction or operation of the Project. k. Constructive Notice and Acceptance. Every person who after the Effective Date and recording of this Agreement owns or acquires any right, title, or interest to any portion of the Premises, is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Premises, and all rights and interests of such person in the Premises shall be subject to the terms, requirements, and provisions of this Agreement.
l. Binding Effect of Agreement. The Parties agree that the Recitals above are true and correct and intend to be bound by same. Except as otherwise provided, the burdens of this Agreement are binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of the Parties and constitute covenants which run with the Premises. In order to provide constructive notice thereof, the City Clerk will record this Agreement with the San Bernardino County Recorder within the period required by Government Code Section 65868.5.
m. Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between the City and Operator is that of a government entity regulating the development of private property and developer of such property.
n. Changes to Project. The Parties acknowledge that changes to the Project or Development Plans and related approvals may be appropriate and mutually desirable to carry out the intent and purpose of this Agreement. This Agreement shall not prevent the City from applying, with the consent or at the request of Operator, Subsequent Land Use Regulations or Subsequent Development Approvals that do not directly conflict with the Project, Premises or Development Plan authorized under this Agreement. The granting of one such change, or request shall not obligate the City to grant other similar changes or requests. As used herein, “Subsequent Development Approvals” include, without limitation, all excavation, grading, building, construction, demolition, encroachment or

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street improvement permits, occupancy certificates, utility connection authorizations, or other non-discretionary permits or approvals necessary, convenient or appropriate for the Project. As used herein, “Subsequent Land Use Regulations” means ordinances, resolutions and codes adopted or approved by the City after the Effective Date of this Agreement governing the development and use of the land, including general plan amendments, zone changes, variances or conditional use permits affecting the permitted use of the land including density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions of reservation or Dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Development of the Premises.
o. Conflicting Federal or State Rules. In the event that any conflicting federal or state laws or regulations, enacted after the Effective Date, prevent, or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, this Agreement shall remain in full force and effect as to those provisions not affected; and
(i) Notice of Conflict. Either party, upon learning of any such matter, will provide the other party with written notice thereof and provide a copy of any such law, regulation, or policy together with a statement of how any such matter conflicts with the provisions of this Agreement; and
(ii) Modification Conferences. The parties shall, within thirty (30) days of the notice referenced to in the preceding subsection, meet and confer in good faith and attempt to modify this Agreement to bring it into compliance with any such federal or state law or regulation.
(iii) City Council Hearings. In the event the City believes that an amendment to this Agreement is necessary due to the effect of any federal or state law or regulation, the proposed amendment shall be scheduled for hearing before the City Council. The City Council shall determine the exact nature of the amendment necessitated by such federal or state law or regulation. Operator shall have the right to offer oral and written testimony at the hearing. Any modification ordered by the City Council pursuant to such hearing is subject to judicial review in accordance with California law. (iv) Minor Amendments. A minor modification is a modification that does not modify the material terms of this Agreement including (1) the Term; (2) Facility Operations; (3) Indemnification; and (4) Fees. Minor Modifications shall not require a public hearing prior to execution of the modification to this Agreement. Either Party may propose a minor modification, consent to which shall not be unreasonably withheld, conditioned or delayed by the other Party.

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Packet Pg. 1724 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 33 -
promote the goals of this Agreement. If the City Manager or his/her designee determines that the requested modification is minor modification that is consistent with applicable law and tends to promote the goals of this Agreement, the proposed modification will be approved by the City as a minor modification, and a written modification will be executed by the Parties and attached to this Agreement. Any such minor modification shall not be deemed an “amendment” to this Agreement under Government Code Section 65858.
(v) City Cooperation. The City shall cooperate with Operator in securing any City permits, licenses or other authorizations that may be required as a result of any amendment resulting from actions initiated by the City. As required by this Agreement, Operator shall be responsible to pay all applicable fees in connection with securing of such permits, licenses, or other authorizations.
q. Effective Date. “Effective Date” means the date on which all of the following are true: (i) thirty (30) days have elapsed since the second reading of the Ordinance adopting and approving this Development Agreement and (ii) all Exhibits to this Agreement are finalized, executed and notarized by all affected parties (if applicable) and attached hereto; provided, however, that if these conditions have not been fully satisfied by Operator the Effective Date may not thereafter occur and this Agreement may not thereafter become effective.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

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Packet Pg. 1725 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 34
-
“CITY”
Date: _______________, 2022

CITY OF BARSTOW,
a California Municipal Corporation
By:

Its: Mayor
Attest:
______________________________
City Clerk
Approved to as Form:
______________________________
City Attorney
“OPERATOR”
Date: , 2022
Beverly Hills View, Inc. a California corporation
By:

Its:

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Packet Pg. 1726 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) - 35 -
OWNER

BARSTOW OUTLET, LLC
a Delaware limited liability company
By:

Its:

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Packet Pg. 1727 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT A

LEGAL DESCRIPTION
[INSERT LEGAL DESCRIPTION]

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Packet Pg. 1728 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT B

PARCEL MAP
[INSERT PARCEL MAP]

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Packet Pg. 1729 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT C

SITE AND FLOOR PLANS

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Packet Pg. 1730 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT D

RESERVATION OR DEDICATION OF LAND FOR PUBLIC PURPOSES (IF APPLICABLE)

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Packet Pg. 1731 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT E

OPERATIONAL AND ADDITIONAL BUSINESS STANDARDS (IF APPLICABLE)

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Packet Pg. 1732 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17
EXHIBIT F.

INDEMNIFICATION AGREEMENT

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Packet Pg. 1733 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT G

STANDARDS AND CONDITIONS FOR CONSTRUCTION (IF APPLICABLE)

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Packet Pg. 1734 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT H
[reserved]

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Packet Pg. 1735 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

EXHIBIT I

ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made and entered into this ___ day of _______ , _______, by and between the CITY OF BARSTOW, a municipal corporation of the State of California (“City”), and Beverly Hills View, Inc., a California corporation (“Developer” or “Assignor”), _________________ , a California corporation/limited liability company (“Assignee”). City, Assignors, or Assignee may be referred to herein individually as a “Party” or collectively as the “Parties.” There are no other parties to this Agreement.

RECITALS
A. City and Assignor entered into a development agreement, dated March [*], 2022, for the development of property located in the City of Barstow, County of San Bernardino, State of California, Assessor’s Parcel Number: 0428-211-26-0000, commonly known as 2552 Mercantile Way, Barstow, CA 92311 (“Development Agreement”); B. Pursuant to the Development Agreement, Assignor may transfer all or part of its rights, title, and/or interests in all or a portion of Premises, or Project, as those terms are defined in the Development Agreement, to any person, firm, corporation, or entity during the Term of the Development Agreement only with the advance written consent of the City Council, who shall not unreasonably withhold or condition such consent;
C. Assignor desires to transfer to Assignee some or all of Assignors’ rights and obligations under the Development Agreement, in accordance with Article 9, Section 9.1 of the Development Agreement;
D. Assignee desires to assume some or all of Assignor’s rights and obligations under the Development Agreement;
E. The City Council has agreed to permit Assignors’ transfer of some or all of Assignor’s rights and obligations under the Development Agreement to Assignee, and to Assignee’s assumption of same, subject to the terms and conditions specified in this Agreement; F. The Parties intend through this Agreement to allow Assignors to transfer, and Assignee to assume, some or all of Assignors’ rights and obligations under the Development Agreement.

G. The City Council has conducted all necessary proceedings in accordance with City’s Municipal Code for the approval of this Agreement and this Assignment, including finding that the Development Agreement continues to be in full force and effect and that Assignor and Assignee are not currently in default under the Development Agreement nor the subject of a Notice of Violation regarding violations of any applicable law issued by the City of Barstow or any other government entity with jurisdiction.

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Packet Pg. 1736 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17

AGREEMENT
Section 1. Assignment. Assignors hereby assign to Assignee (all/some) of Assignors’ rights and obligations under the Development Agreement. If Assignor is transferring only some of Assignor’s rights and obligations under the Development Agreement, then the specific rights and obligations subject to transfer shall be specified in Exhibit l, attached hereto and incorporated herein by this reference.

Section 2. Assumption. Assignee hereby accepts and assumes the foregoing transfer or assignment of (all/some) of Assignors’ rights and obligations under the Development Agreement.

Section 3. Consent. In accordance with Section 21 of the Development Agreement, the City Council hereby consents to Assignors’ transfer of, and Assignee’s assumption of, Assignor’s rights and obligations under the Development Agreement, as specified herein, subject to any reasonable terms and conditions the City Council may require, as set forth in Exhibit 2, attached hereto and incorporated herein.

Section 4. Conditions of Assignment. The Parties hereby agree to abide by the terms or conditions of assignment, if any, set forth in Exhibit 2, and acknowledge that City’s consent would not have been provided but for the Parties’ agreement to abide by the terms or conditions of assignment.

Section 4. Effective Date. The assignment and assumption of rights and obligations as specified herein shall be effective on ___________, _____.

Section 5. Terms of the Development Agreement. The terms of the Development Agreement are incorporated herein by this reference. Assignors acknowledge and agrees that the representations, warranties, covenants, agreements and indemnities contained in the Development Agreement shall not be superseded hereby but shall remain in full force and effect to the full extent provided therein.

Section 6. Inconsistency. In the event of any conflict or inconsistency between the terms of the Development Agreement and the terms of this Agreement, the terms of the Development Agreement shall govern.

Section 7. Further Actions. Each of the Parties hereto covenants and agrees, at its own expense, to execute and deliver, at the request of the other Parties hereto, such further instruments of transfer and assignment and to take such other action as such the other Parties may reasonably request to more effectively consummate the assignments and assumptions contemplated by this Agreement.
[Signature appear on following page.]

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Packet Pg. 1737 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 273128.v17
“CITY”
Date: _______________, _____

CITY OF BARSTOW,
a California Municipal Corporation
_____________________________
By:

Its: City Manager
“ASSIGNOR”
Date: _______________, _____
Beverly Hills View, Inc.,
a California corporation
_____________________________
By:

Its: Managing Member
“ASSIGNEE”
Date: _______________, 2022
_____________________________
By:

Its:

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Packet Pg. 1738 Attachment: Attorney Approved Beverly Hills View DA [counsel edits] (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 271527.1
RESOLUTION NO. 563-2022

A RESOLUTION OF THE PLANNING COMMISSION OF THE

CITY OF BARSTOW RECOMMENDING APPROVAL OF CANNABIS LICENSE

APPLICATION FOR MERCHANTS BARSTOW, LLC AND DEVELOPMENT

AGREEMENT WITH MERCHANTS BARSTOW, LLC
WHEREAS, California voters approved Proposition 215 (Health and Safety Code Section 11362.5), entitled the Compassionate Use Act (CUA), in 1996, which exempts patients and their primary caregivers from criminal prosecution or sanctions under H&S Code Sections 11357 and 11358 for qualified use and cultivation of medical cannabis; and WHEREAS, the California Legislature passed Senate Bill 420 (H&S Code Sections 11362.7 et seq.) in 2003 to create the Medical Marijuana Program (MMPA), which established a voluntary program for the issuance of medical cannabis identification cards for qualified patients, set limits on the amount of cannabis any individual could possess, and provided an exemption from state criminal liability for persons "who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes"; and
WHEREAS, in November 2016, California voters approved Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act ("AUMA"), which established a state licensing and regulatory system for commercial cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, labeling, transportation, delivery, or sale of recreational marijuana and marijuana products; and
WHEREAS, on June 27, 2017, the Governor signed the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA"), consolidating the AUMA with previous state law regarding commercial medical marijuana activities to create one state licensing system for commercial activities related to medical and recreational marijuana; and WHEREAS, both the AUMA and MAUCRSA authorize the City to further regulate or completely prohibit the establishment or operation of commercial marijuana activities within its limits, even such activities that may be licensed under state law; and WHEREAS, the City's power to regulate or completely prohibit commercial marijuana activities under the AUMA and MAUCRSA is consistent with the California Supreme Court's decision in City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th 7; and

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Packet Pg. 1739 Attachment: Merchants Barstow Reso. 563-2022 (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 271527.1
WHEREAS, the California Attorney General's August 2008 Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use recognizes that the cultivation or other concentration of marijuana in any location or premises without adequate security increases the risk that nearby homes or businesses may be negatively impacted by nuisance activity such as loitering or crime; and WHEREAS, the California Planning and Zoning Law (Gov. Code, § 65000 et seq.) authorizes the City to adopt and administer zoning laws, ordinances, rules, and regulations; and
WHEREAS, the City of Barstow passed Ordinance No. 974-2021 on June 7th 2021 to begin the process of allowing Cannabis sales; and WHEREAS, the City of Barstow passed Ordinance No. 977-2021 on October 4th 2021, adopting land use laws for Cannabis sales and requiring applicants to execute a development agreement with the City before beginning operation; and WHEREAS, no cannabis business may operate in the City of Barstow unless first issued a permit by the City; and
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the “Development Agreement Statute”), which authorizes the City and an individual with an interest in real property to enter into a development agreement that establishes certain development rights in real property that is subject to a development agreement application; and
WHEREAS, Merchants Barstow, LLC proposes to improve, develop and use real property to operate a Commercial Cannabis Dispensary, Cultivation, Distribution/Transportation, Manufacturing, and Non-Store Front Delivery at 2552 Mercantile Way., Barstow, CA 92311 (APN #0421-211-26-0000) and has properly submitted a completed cannabis license application; and WHEREAS, City and the Merchants Barstow, LLC seek to enter into a development agreement for the Project (the “Development Agreement”) pursuant to the Development Agreement Statute and all applicable local and state laws; and WHEREAS, the Planning Commission finds that an ordinance approving the Development Agreement will allow the City to adequately regulate and address all impacts of the Project in the City in accordance with state law; and WHEREAS, the Planning Commission finds that the ordinance is in the best interest of the health, welfare, and safety of the public.

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Packet Pg. 1740 Attachment: Merchants Barstow Reso. 563-2022 (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 271527.1
NOW THEREFORE, the Planning Commission of the City of Barstow hereby resolves as follows:

1. The foregoing recitals are true and correct.

2. The Planning Commission hereby finds that the proposed Development Agreement is in compliance with Government Code Section 65865.2 and Chapter

19.46 of the Barstow Municipal Code.

3. The Planning Commission hereby finds that the proposed Development Agreement is consistent with the actions, goals, objectives, and policies of the City's General Plan and Zoning Regulations because the project promotes local opportunities for commerce and engagement.

4. The Planning Commission hereby finds that the Development Agreement application to the City was made on forms approved, and contains all information required by the Director and is filed with the Department in compliance with Chapter 19.46

5. The Planning Commission hereby finds that the Development Agreement application was accompanied by all lawfully required documents, materials, and information.

6. The Planning Commission hereby recommends that the City Council approve Ordinance No. _____-2022 approving the cannabis license application for Merchants Barstow, LLC, attached as Exhibit A, and approving a development agreement with Merchants Barstow, LLC, attached as Exhibit B.

PASSED, APPROVED and ADOPTED this 10th day of October, 2022. _______________________ ____________________________
Beatrice Lint, Stephanie Baca
Planning Commission Chair Recording Secretary

ATTEST:

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Packet Pg. 1741 Attachment: Merchants Barstow Reso. 563-2022 (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 271527.1
I, Stephanie Baca Recording Secretary of the Barstow Planning Commission , DO HEREBY CERTIFY UNDER PENALTY OF PERJURY that the foregoing resolution was introduced and duly adopted at its meeting held October 10, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

________________________
Stephanie Baca
Recording Secretary,
City of Barstow Planning Commission

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Packet Pg. 1742 Attachment: Merchants Barstow Reso. 563-2022 (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 271538.1
ORDINANCE NO. XXX-2022

AN ORDINANCE OF THE CITY COUNCIL OF THE

CITY OF BARSTOW APPROVING A CANNABIS LICENSE APPLICATION FOR BEVERLY HILLS VIEW, INC. AND DEVELOPMENT AGREEMENT
WITH BEVERLY HILLS VIEW, INC. FOR COMMERCIAL CANNABIS
CULTIVATION LOCATED AT 2594 MERCANTILE WAY, BUILDING 21 BARSTOW, CA 92311
WHEREAS, California voters approved Proposition 215 (Health and Safety Code Section 11362.5), entitled the Compassionate Use Act (CUA), in 1996, which exempts patients and their primary caregivers from criminal prosecution or sanctions under H&S Code Sections 11357 and 11358 for qualified use and cultivation of medical cannabis; and WHEREAS, the California Legislature passed Senate Bill 420 (H&S Code Sections 11362.7 et seq.) in 2003 to create the Medical Marijuana Program (MMPA), which established a voluntary program for the issuance of medical cannabis identification cards for qualified patients, set limits on the amount of cannabis any individual could possess, and provided an exemption from state criminal liability for persons "who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes"; and
WHEREAS, in November 2016, California voters approved Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act ("AUMA"), which established a state licensing and regulatory system for commercial cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, labeling, transportation, delivery, or sale of recreational marijuana and marijuana products; and
WHEREAS, on June 27, 2017, the Governor signed the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA"), consolidating the AUMA with previous state law regarding commercial medical marijuana activities to create one state licensing system for commercial activities related to medical and recreational marijuana; and WHEREAS, both the AUMA and MAUCRSA authorize the City to further regulate or completely prohibit the establishment or operation of commercial marijuana activities within its limits, even such activities that may be licensed under state law; and WHEREAS, the City's power to regulate or completely prohibit commercial marijuana activities under the AUMA and MAUCRSA is consistent with the California Supreme Court's decision in City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th 7; and
WHEREAS, the California Attorney General's August 2008 Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use recognizes that the cultivation or other concentration of marijuana in any location or premises without adequate security increases the risk that nearby homes or businesses may be negatively impacted by nuisance activity such as loitering or crime; and

32.h
Packet Pg. 1743 Attachment: Bev Hills View CC Ord (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 2 271538.1
WHEREAS, the California Planning and Zoning Law (Gov. Code, § 65000 et seq.) authorizes the City to adopt and administer zoning laws, ordinances, rules, and regulations; and
WHEREAS, the City of Barstow passed Ordinance No. 974-2021 on June 7th 2021 to begin the process of allowing Cannabis sales; and WHEREAS, the City of Barstow passed Ordinance No. 977-2021 on October 4th 2021, adopting land use laws for Cannabis sales and requiring applicants to execute a development agreement with the City before beginning operation; and WHEREAS, no cannabis business may operate in the City of Barstow unless first issued a permit by the City; and
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the “Development Agreement Statute”), which authorizes the City and an individual with an interest in real property to enter into a development agreement that establishes certain development rights in real property that is subject to a development agreement application; and
WHEREAS, the proposed project is consistent with the Barstow General Plan and the California Environmental Quality Act; and
WHEREAS, Beverly Hills View, Inc. proposes to improve, develop and use real property to operate Commercial Cannabis Cultivation located at 2594 Mercantile Way, Building 21, Barstow, CA 92311 (APN# 0428-211-26) and has properly submitted a completed cannabis license application; and WHEREAS, City and Beverly Hills View, Inc. seek to enter into a development agreement for the Project (the “Development Agreement”) pursuant to the Development Agreement Statute and all applicable local and state laws; and WHEREAS, the Planning Commission approved Resolution No. 563-2022 finding that an ordinance approving the Development Agreement will allow the City to adequately regulate and address all impacts of the Project in the City in accordance with state law; and
WHEREAS, the City Council finds that the ordinance is in the best interest of the health, welfare, and safety of the public.

NOW THEREFORE, the City Council of the City of Barstow hereby ordains as follows:

Section 1. Incorporation of Recitals. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full.

32.h
Packet Pg. 1744 Attachment: Bev Hills View CC Ord (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 3 271538.1
Section 2. Finding Regarding the Development Agreement. Based upon the foregoing facts and findings for DA 28 the City Council hereby determines as follows:

A. DA 28 was reviewed and deemed correct and in compliance with Government Code Section 65865.2 and Chapter 19.46 of the Barstow Municipal Code; and B. DA 28, if approved, is in the best interests of the City because the cultivation facility increases commercial vibrancy in the City; and,
C. DA 28 is consistent with the actions, goals, objectives, and policies of the City's General Plan and Zoning Regulations because the project promotes local opportunities for commerce and engagement, and
D. The application to the City was made on forms approved, and contains all information required by the Director and is filed with the Department in compliance with Chapter

19.46; and
E. The application was accompanied by all lawfully required documents, materials, and information; and,
F. With the adoption of this ordinance and development agreement and notwithstanding the requirements in Chapter 19.46 of the Barstow Municipal Code and the City’s Zoning Regulations, the City Council approves the Proposed Project.

Section 3. Approvals. In view of all the evidence and based on the foregoing findings the City Council approves DA 28 and grants a Notice of Exemption for the Proposed Project, subject to the Conditions of Approval in Planning Commission Resolution No. 563-2022 Section 4. Authorization to Execute Development Agreement. Pursuant to Barstow Municipal Code Chapter 19.46, the City Council directs the City Manager and the City Attorney to prepare a development agreement embodying the terms and conditions of the Proposed Project as conditionally approved and authorizes the City Manager to execute the development agreement, which shall be substantially consistent with the proposed development agreement attached as Exhibit "A."
Section 5. CEQA. This ordinance is exempt from the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines§§ 15060(c)(2), 15060(c)(3), 15061(b)(3) and 15378(b)(4). This ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; it does not involve a "project" as defined by CEQA Guidelines § 15378; and it is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. It can be seen with certainty that there is no possibility this ordinance may have a significant effect on the environment. Further the City previously approved Ordinance No. 974-2021 on June 7, 2021 and Ordinance No. 977-2021 on October 4, 2021 and those Ordinances were exempt from CEQA under Business and Professions Code section 26055(h) which exempts from CEQA review the adoption of an ordinance, rule, or

32.h
Packet Pg. 1745 Attachment: Bev Hills View CC Ord (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 4 271538.1
regulation, by a local jurisdiction that requires discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity. This Ordinance now acts to amend the Barstow Municipal Code as to procedural requirements.

Section 6. Severability. Should any provision of this Ordinance, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this Ordinance or the application of this Ordinance to any other person or circumstance and, to that end, the provisions hereof are severable.

Section 7. Effective Date. This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.

Section 8. Construction. To the extent the provisions of the Barstow Municipal Code as amended by this Ordinance are substantially the same as the provisions of that Code as it read prior to the adoption of this ordinance, they shall be read as continuations of those earlier provisions and not as new enactments.

Section 9. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall give notice of its adoption as required by law. Pursuant to Government Code Section 36933, a summary of this Ordinance may be published and posted in lieu of publication and posting of the entire text.

32.h
Packet Pg. 1746 Attachment: Bev Hills View CC Ord (5228 : Beverly Hills View, Inc. Comm. Cannabis App) 5 271538.1
PASSED, APPROVED AND ADOPTED this 17th day of January, 2023 __________________________________
Paul Anthony Courtney, Dr. B.A., Mayor
ATTEST:
______________________________
Andrea Flores, City Clerk
I, Andrea Flores, City Clerk for the City of Barstow, California, and ex-officio Clerk of the City Council, do hereby certify under penalty of perjury that the foregoing is a true and correct copy of Ordinance No. XXX-2022, which was introduced at a regular meeting of the City Council of the City of Barstow held on the 19th day of December, 2022 and adopted at the regular meeting of the City Council of the City of Barstow on the 17th day of January 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
____________________________
Andrea Flores, City Clerk

32.h
Packet Pg. 1747 Attachment: Bev Hills View CC Ord (5228 : Beverly Hills View, Inc. Comm. Cannabis App) Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5229

COUNCIL AGENDA ITEM
AGENDA MATTER:

PUBLIC HEARING - CONSIDERATION OF LA 2 VEGAS, INC. COMMERCIAL CANNABIS

APPLICATION
EXECUTIVE SUMMARY:

Staff requests that the City Council review LA 2 Vegas, Inc. cannabis application and after review, introduce Ordinance No. XXX-2022 approving LA 2 Vegas, Inc. application for Commercial Cannabis Cultivation permit, Cannabis Development Agreement, Conditional Use Permit, and related land use entitlements.

DISCUSSION:

On November 8, 2016, the Control, Regulate, & Tax Adult Use of Marijuana Act (“AUMA”) was approved by California voters via Proposition 64. The AUMA permits local jurisdictions to regulate and/or ban adult use cannabis cultivation, distribution and delivery, transportation, manufacturing, testing laboratories, dispensaries, and microbusiness facilities.

In June 2021, the City Council passed Ordinance No. 974-2021 which added Chapter 19.27 to the Barstow Municipal Code to permit commercial cannabis activities in the City. The ordinance went into effect on July 7, 2021. On October 4, 2021, the City Council adopted Ordinance No. 977-2021, amending the City’s cannabis regulatory program ordinance.

All cannabis businesses must enter into a development agreement with the City that will be subject to council approval through the adoption of an ordinance under Government Code Section 65865. This application came before the Planning Commission for review at its October 10, 2022 meeting as part of consideration of a multi-tenant development agreement for all cannabis businesses coming before the Council tonight as all land use permits and statutory development agreements must first be presented to the Planning Commission. The Planning Commission recommended approval. The City Council considered the development agreement at its November 21, 2022 meeting and directed staff to return with individualized development agreement for each cannabis business that is being proposed.

Application
LA 2 Vegas, Inc. is applying for a permit for Commercial Cannabis Cultivation.

Applicant’s representative, who will be listed on the permit if one is used and will be the point of contract for the Planning Department is Mirgan Berkishian.

Applicant Information
LA 2 Vegas, Inc. is a corporation. They do have a federal tax identification and are properly registered with the California Secretary of State.

The company has the following corporate officers:

Chief Executive Officer - Mirgan Berkishian
33 Packet Pg. 1748
Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5229

COUNCIL AGENDA ITEM
Members of the applicant group have no relevant criminal convictions listed on their permit application.

Members of the applicant group have no listed unfair business practices listed on their permit application.

Location Information
LA 2 Vegas, Inc. is applying for a permit at 2596 Mercantile Way Building 22 Barstow, CA 92311 APN #0428-211-26. The total square feet of each structure on the site is 14,256 square feet.

The applicant is not the owner of the property but has provided the City with a copy of the Landlord Use Disclosure & Authorization for a Cannabis Facility agreement between applicant and owner.

Acknowledgment of City Standards
The managing members of the applicant group have submitted a signed acknowledgment of the City’s Cannabis operating standards as set forth in the City’s Municipal Code.

Information and Release Form
The managing members of the applicant group have signed and consented to the release of information necessary for the City to verify and confirm the information contained in their permit application.

Conditional Use Permit
Applicant has submitted the required conditional use permit, including the following required documents:
seven sets of the plans in 24” x 36”, filing fees, notification packages, title report, existing site plan, proposed site plan, conceptual architectural renderings, conceptual landscape plan, and electronic copy of these plans, and any special studies as determined by the Community Development Department.

Environmental Information and Checklist
Applicant has submitted the required environmental information and checklist.

DOJ Live Scans for Owners, Managers, Employees, Volunteers, and Security Personnel 33 Packet Pg. 1749
Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5229

COUNCIL AGENDA ITEM
Applicant has submitted the required Department of Justice Live Scans for owners, managers, employees, volunteers, and security personnel.

Operations Plans
Applicant has submitted the required Operations Plan in accordance with the City’s Municipal Code. The following features are present in the Operations Plan: limiting access area, keeping cannabis and cannabis products in a secure manner, designating a security representative/liaison, a storage and transportation plan, cooperation with the City, and notification to Police Department with provisions.

Application Fees
Applicant has submitted the required application fees related to this permit application.

Fiscal Impacts
The City Manager is specifically authorized to set and adjust the square footage for the Production Space and to determine the corresponding operating fee as the Project is completed. 1) Each Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, the following fees, if holding a Cannabis Cultivation Permit or Cannabis Manufacturing Permit: a yearly operating fee of Five Dollars ($5) per square foot times total square footage of each Premises. Fees shall be paid no later than December 31st of every year beginning in the year each Operator receives its CCP and shall be prorated commensurate with the number of months such Operator had its CCP. Failure to pay the fee within thirty (30) days after the due date shall result in an additional penalty for nonpayment in a sum equal to twentyfive percent (25%) of the total amount due.

Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, and shall pay the following fees, if holding a Cannabis Non-Storefront Retail Delivery Permit or Cannabis Storefront Retail Permits shall pay:
2) A monthly operating fee(s) of three percent (3%) of Gross Receipts for operations from the Cannabis Non-Storefront Retail Delivery Permits and Cannabis Storefront Retail Permits, to be paid monthly. Fees shall be due to the City on first (1st) of the month. Failure to pay the fee within thirty (30) days after the due date shall result in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.

Facilities with multiple licenses must not commingle respective sales proceeds, and blend percentage rate of Gross Receipts.

FISCAL IMPACT:

RECOMMENDED ACTION:

Staff recommends the City Council introduce Ordinance No. ___-2022 approving LA 2 Vegas, Inc. application for a Commercial Cannabis Cultivation permit, Cannabis Development Agreement, Conditional Use Permit, and related land use entitlements. The Planning Commission recommended 33 Packet Pg. 1750
Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5229

COUNCIL AGENDA ITEM
approval at its October 10, 2022 meeting. The project is exempt from review under the California Environmental Quality Act, per CEQA Guidelines, Cal Code of Regs., tit. 24, sections 15301, 15302, and 15303, 15061, and 15378.
33 Packet Pg. 1751

33.a
Packet Pg. 1752 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1753 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1754 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1755 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1756 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1757 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1758 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1759 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.a
Packet Pg. 1760 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 220 E Mountain View St. Ste A Barstow, CA 92311 (760) 255-5161 https://www.barstowca.org/home

BARSTOW CANNABIS FACILITY

ON-SITE MEMBER CONTACT STATEMENT
The undersigned, on behalf of ____________________________ (Name of Corporation)
hereby designates ____________________________________ as the on-site (Name of On-Site Manager)
problems or issues relating to the Barstow Cannabis Facility. The Cannabis Facility shall make every good faith effort to encourage residents to call this person to try to solve operating problems, if any, before any calls or complaints are made to the Police or Planning Departments.

Signature of On-Site Manager Printed Name & Title
Address Phone Number
Fax Number Email
I declare under penalty of perjury that I have read the forgoing application and all information, statements, verifications, declarations, and authorizations made, attached to and contained herein, and that I have personal knowledge of the information contained in the application, and that the information contained and the application is true and correct, and that the application was completed under supervision of the Management Members.

Executed this ________________ day of ______________ 20______ in Barstow, California. (Day) (Month) (Year)

33.a
Packet Pg. 1761 Attachment: A - General App - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.b
Packet Pg. 1762 Attachment: B - CUP - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.b
Packet Pg. 1763 Attachment: B - CUP - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.b
Packet Pg. 1764 Attachment: B - CUP - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.b
Packet Pg. 1765 Attachment: B - CUP - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.c
Packet Pg. 1766 Attachment: F - Environmental - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.c
Packet Pg. 1767 Attachment: F - Environmental - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.c
Packet Pg. 1768 Attachment: F - Environmental - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App)

33.d
Packet Pg. 1769 Attachment: E - Notice of Acknowledgment - LA 2 Vegas City (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) California Secretary of State
Electronic Filing
Corporation - Statement of Information
Entity Name:

Entity (File) Number:

File Date:

Entity Type: Corporation
Jurisdiction:

Document ID:

Detailed Filing Information

1. Entity Name:

2. Business Addresses:
a. Street Address of Principal
Office in California:
b. Mailing Address:
c. Street Address of Principal
Executive Office:

3. Officers:
a. Chief Executive Officer:
b. Secretary:

Use bizfile.sos.ca.gov for online filings, searches, business records, and resources. : ID Document
7727 Via Napoli
Burbank, California 91506
United States of America
7727 Via Napoli
Burbank, California 91506
United States of America
7727 Via Napoli
Burbank, California 91506
United States of America
Migran Berkishian
7727 Via Napoli
Burbank, California 91506
United States of America
Migran Berkishian
7727 Via Napoli
Burbank, California 91506
United States of America C4849324 CALIFORNIA 02/25/2022 LA 2 VEGAS, INC. LA 2 VEGAS, INC.

H271543 H271543

33.e
Packet Pg. 1770 Attachment: LA 2 VEGAS SEC OF STATE (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) California Secretary of State
Electronic Filing
Officers (cont'd):
c. Chief Financial Officer:

4. Director:

Number of Vacancies on the Board of
Directors:

5. Agent for Service of Process:

6. Type of Business:

By signing this document, I certify that the information is true and correct and that I am authorized by California law to sign.

Electronic Signature:

Use bizfile.sos.ca.gov for online filings, searches, business records, and resources.

Document ID:

Migran Berkishian 0

WEST COAST REGISTERED AGENTS,
INC. (C3219794)
Retail
Migran Berkishian
7727 Via Napoli
Burbank, California 91506
United States of America
Migran Berkishian
7727 Via Napoli
Burbank, California 91506
United States of America
No Officer or Director of this Corporation has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code. H271543

33.e
Packet Pg. 1771 Attachment: LA 2 VEGAS SEC OF STATE (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 1 -
273128.v17

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

COMMERCIAL CANNABIS BUSINESS DEVELOPMENT

AGREEMENT BETWEEN THE CITY OF BARSTOW AND
BARSTOW OUTLET LLC AND LA 2 VEGAS INC
THIS DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into this day of December 10, 2022, (the “Execution Date”), by and between the CITY OF BARSTOW, a California municipal corporation (“City”), Barstow Outlet, LLC, a Delaware limited liability company (“Owner”), and LA 2 Vegas, Inc, a California corporation (“Operator”). City, Owner, and Operator are sometimes referenced together herein as the “Parties.” In instances when a provision hereof applies to each of the Parties individually, each may be referenced as a “Party.” The Parties hereby jointly render the following statement as to the background facts and circumstances underlying this Agreement:

33.f
Packet Pg. 1772 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 2 -
WHEREAS, on June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), which creates a single regulatory scheme for both medicinal and adult-use cannabis businesses. MAUCRSA retains the provisions in MCRSA and AUMA that granted local jurisdictions control over whether businesses engaged in Commercial Cannabis Activity may operate in a particular jurisdiction; and WHEREAS, on June 7, 2021, the City Council of the City of Barstow adopted Ordinance No. 974-2021 to permit commercial cannabis activities in the City; and WHEREAS, on October 4, 2021, the City Council of the City of Barstow adopted Ordinance No. 977-2021 amending the zoning code to allow for commercial cannabis as a permitted use in certain zones; and
WHEREAS, Operator currently holds a legal or equitable interest in real property considered in this Agreement which has a development area approximately 14,256 rentable square feet located 2596 Mercantile Way, Building # 22, City of Barstow, State of California (the “Premises”), pursuant to a Master Lease Agreement by and between Operator and Barstow Outlet LLC (“Owner”). The Premises is located on Assessor’s Parcel Number: 0428-211-26-000, and is more fully described in Exhibit A and shown on the map in Exhibit B. Both exhibits being attached hereto and incorporated herein by this reference;
WHEREAS, presently, Operator leases the property for the purpose of state and locally licensed commercial cannabis related activities which shall include, but not be limited to cannabis cultivation, manufacturing (type 6 and type 7), distribution, (together, the “Permitted Uses” and individually, a “Permitted Use”). Such Permitted Uses shall operate in accordance with all applicable provisions of Business and Professions Code §§26000-26231.2; California Health and Safety Code Safety Code §§ 11357-11362.9 and 11362.7- 11362.85; Revenue and Taxation Code §§ 34010-34021.5; Vehicle Code §§ 2429.7 and 23222; Water Code §§ 1831, 1847, and 13276; Title 4 of the California Code of Regulations, §§ 15000, et seq.; and the City of Barstow Municipal Code as it applies to such facilities (collectively the “Applicable Cannabis Laws”). Prior to Operator operating one or more Permitted Use, Operator shall be required to obtain approval of this Agreement, a conditional use permit, and a Commercial Cannabis Permit from City, and all related state and other permits and licenses prior to the operation of same, pursuant to Barstow Municipal Code Chapter 19.27, et seq.;
WHEREAS, Operator will obtain a California State License issued, pursuant to Applicable Cannabis Laws, to operate one or more Permitted Use at the Site.

33.f
Packet Pg. 1773 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 3 -
WHEREAS, Operator intends to develop a commercial cannabis facilities, each in compliance with one or more of the Permitted Uses on the Premises, consistent with the Applicable Cannabis Laws and Project Approvals (known as the “Project”).

WHEREAS, the Project will consist of: One (1) buildings, located on a single parcel, with a combined 14,256 rentable square feet, as further described in Exhibit B.

The proposed layout of the site is as shown in the attached Site Plan.

Hours of Operation: 6:00 AM to 10:00 PM for retail business hours and 24-hours for internal operations, unless limited further by Barstow Municipal Code. [X] Co-location, check if applicable:

Note MAUCRSA now authorizes a person to apply for and be issued more than one State license at one location provided the licensed premises are separate and distinct.

33.f
Packet Pg. 1774 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 4 -
WHEREAS, After conducting a duly noticed hearing on October 10, 2022, in conjunction with City’s applicable ordinances and resolutions, the Planning Commission of the City reviewed, considered and approved environmental clearance and recommended approval of the execution of this Agreement to City Council. The Planning Commission found the Project: consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with the public necessity, public convenience, general welfare and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on City; WHEREAS, after conducting a duly noticed hearing on December 19, 2022, in conjunction with City’s applicable ordinances and resolutions, and after independent review and consideration, City Council approved the execution of this Agreement by adopting the ordinance that approves this development agreement (the “Enabling Ordinance”). The City Council found the Project:
consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with good land use practices; will not be detrimental to the health, safety and general welfare of City; and is in the best interest of City and its residents.

33.f
Packet Pg. 1775 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 5 -

AGREEMENT

33.f
Packet Pg. 1776 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 6 -
b. Description of Property. Land situated in the City of Barstow, County of San Bernardino, State of California; whose street address is 2596 Mercantile Way, Building #22, City of Barstow, State of California (the “Premises”). The Premises is located on Assessor’s Parcel Number: 0428-211-26-0000 (the “Property”), the legal description of which is located on Exhibit A.
c. Owner and Other Person with Legal or Equitable Interest.

Owner: Barstow Outlet, LLC
Operator and Lessee: LA 2 Vegas, Inc
Nature of Interest held by Master Lessee: Master Lease for 10 years with Option to Renew for an additional 10 years
d. Owner Representations and Warranties. Owner represents and warrants that the Owner has consented in writing to the Permitted Uses (as defined below) and the execution and recordation of this Agreement against the Property. e. Permitted Uses. The Premises may be used for one or more, in any combination, of the permitted uses listed below (together, the “Permitted Uses” and individually, a “Permitted Use”) , as presently authorized under Barstow Municipal Code Chapter 19.27, and for any other use as may be authorized under applicable provisions of the Barstow Municipal Code, if all required City permits and state licenses are approved and maintained in full force and effect under applicable law.

3. Term, Extensions.

33.f
Packet Pg. 1777 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 7 -
a. Term. This Agreement, along with the issued the Cannabis Business Permit and Conditional Use Permit shall commence on the Effective Date and it shall end five (5) years from the starting date.
b. Extension by Operator. Operator, at its sole and absolute discretion may extend this Agreement for one (1) additional five (5) year period following the expiration of the initial five (5) year term; provided that:
(i) Operator shall give written notice to City no later than one hundred twenty (120) days before the expiration of the initial five (5) year term that the Owner desires to extend this Agreement for an additional five (5) year period; (ii) Operator shows adequate evidence to City that it has a legal and/or equitable interest in the Premises and/or will have such interests for the duration of the extended term of the Agreement;
(iii) Operator shall deposit all fees per the Council-adopted fee schedule necessary for processing the extension request and drafting necessary documentation;
(iv) Operator shall comply with all provisions of Ordinance No. 977- 2021, the additional Ordinance adopting this Agreement, Barstow Municipal Code Chapter 19.27 et seq., all terms imposed by City-issued Commercial Cannabis Permit, and City-Issued Conditional Use Permit, and all other requirements of applicable City law and permits; and
(v) Operator and any approved Operators have completed and built the commercial cannabis facility contemplated by the Agreement and has commenced and continues to operate it in compliance with and shall not be in default of any provision of any applicable law, including Barstow Municipal Code Chapter 19.27, or any agreement between City and Operator relative to the development of the Premises or of any condition of approval imposed upon any entitlement granted by City relative to the development of the Premises or cannabis operations for which Owner has been given a written notice to cure by City and for which Owner has not cured or commenced to cure such default within thirty (30) days, if and as provided by such agreement or condition of approval.
c. Extension by Agreement of the Parties. The Parties may agree to extend this Agreement for additional five (5) year periods, provided that the same conditions in Section 2(a) continue to be met and that City has expressly approved a further five (5) year renewed term. The City reserves the right to conditionally approve and/or shorten the length of additional renewal periods. The City shall give at least 180 days’ notice of any proposed nonrenewal of this Agreement.

4. Development Plans. The following shall comprise the Project’s “Development

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Packet Pg. 1778 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 8 -
Plans”:
a. Site Plan and Floor Plan. Operator’s site plan and floor plan for the facility are attached hereto as Exhibit C and incorporated into the Application. b. Landscape Plan. A preliminary landscape plan shall be prepared by the Operator and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees. A final landscape plan shall be prepared and submitted in conjunction with building and site improvement plans prior to issuance of building permits for construction activities. All final landscape plans must comply with the Building Code.
c. Signage Plan. An exterior signage plan shall be prepared and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees, in accordance with the procedures and requirements of the Barstow Municipal Code.

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Packet Pg. 1779 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 9 -
Video surveillance shall include, at a minimum, all site and facility entrances and access points, all spaces accessible by the public, all secured areas of the facility with restricted access, all interior spaces and rooms where cannabis products are handled and processed, shipping and receiving areas, cash storage areas, and other areas necessary to protect the safety of employees and the public and to ensure cannabis products are received, handled, stored, packaged, shipped, and distributed in compliance with applicable state and local laws and regulations. The video surveillance system shall be web-based with direct access provided to the Barstow Police Department upon request.

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Packet Pg. 1780 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 10 -
e. Identification Display. Each Operator, their respective manager, employee, and individual member engaged in any Permitted shall at all times while engaged in the duties of his or her position wear in plain sight, on his or her person and at chest level, a valid identification badge, issued by Operator.
f. Employee Background Checks/Procedures for Inventory Control to Prevent Diversion of Cannabis. Only employees who receive clearance from Operator shall be permitted to enter the Premises. Each employee will have to meet a criminal background investigation conducted by the Barstow Police Department, which at minimum shall include a LiveScan criminal history check, which City shall make a good faith effort to facilitate within a reasonable time following the application of a CCP by Operator.

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Packet Pg. 1781 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 11 -
products. Infused products shall not be produced, manufactured, stored, or packaged in private homes.
j. Point of Sale Tracking System. Operator shall maintain an inventory control and reporting system that accurately documents the location of cannabis products from inception through distribution, including descriptions, weight, and quantity. The inventory control and reporting system shall comply with the California Cannabis Track and Trace (CCTT) program required by California Cannabis Laws. Operator will make such CCTT records available to City upon request.

Operator will not store commercial cannabis or related products in its delivery vehicle outside normal operating hours of the facility.

Commercial cannabis products shall be sold or distributed only to licensed facilities in California. Excess or contaminated product will be securely stored on-site until properly

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Packet Pg. 1782 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 12 -
disposed. Disposal may include composting, incineration, land-fill disposal through the local waste management hauler, or other disposal methodology in accordance with California Cannabis Laws.
m. Odor Control. All structures shall have ventilation and filtration systems installed that prevent commercial cannabis plant odors from exiting the interior of the structure. The ventilation and filtration system shall be approved by the Building Department and installed prior to commencing cultivation or manufacturing within the allowable structure. Facility air intake, exhaust, and recirculating system shall be of industrial grade. Activated charcoal, recirculating, and closed loop aeration systems will be utilized as necessary for effective odor control and management. See minimum requirements, pursuant to Municipal Code Section 5.61.280(12). n. Description of Banking Plan. Operator shall seek to open a bank account under the name of Operator or its associated management company to provide transparency for funds received, operational costs, including payroll, tax payments to the state and federal governments. Should a bank account not be forthcoming, Operator shall implement other industry standard banking and/or other industry standard transactional mechanisms. o. Transportation Plan. Operator shall comply with California Cannabis Laws regarding transportation and delivery of cannabis and cannabis products. Operator shall retain a list of names and cellular contact numbers for all employees engaged in transportation of commercial cannabis products and provide it to the applicable oversight authority, keeping the list current and up to date.

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Packet Pg. 1783 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 13 -
efforts, funding for enforcement against illegal cannabis operations, public safety, housing programs, economic development, infrastructure, capital improvements, including expansion and/or improvement to existing facilities or other physical improvements that provide a benefit to the community, support of holiday and special community events, and support of local public service, public safety, litigation defense, and special social and community organizations. This community benefits program may be implemented by City.

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Packet Pg. 1784 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 14 -
apprentice employees. This goal shall apply horizontally, across all departments and managerial positions. The Operator shall not be penalized or deemed in default under this Agreement if it is unable to achieve such a goal. “Local” is defined as within a three-mile radius of City’s boundaries. The purpose of the hiring policy is to facilitate the training and employment of Local and disadvantaged job applicants for jobs within City’s jurisdiction, and three-mile radius of City boundaries. The Operator shall report on compliance with the local hiring goals as part of its annual audit report.
f. Full-time Work. Operator shall make its best efforts to fill every position with a full-time employee. However, at no time shall Operator have a labor force that is composed of less than 50% full-time employees within its labor force, and Operator shall make a good faith effort to maintain a full-time employee level of 75%. Operator agrees to provide to its eligible employees leave benefits, health insurance benefits, and other employee benefits to the extent such benefits are required to be paid for by an employer under applicable state and federal employment laws.

7. Indemnification Agreement by each Cannabis Permittee.

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Packet Pg. 1785 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 15 -
reimbursement to City for such costs shall be due and payable within thirty (30) days of receipt. Late Fees shall be assessed pursuant to the Barstow Municipal Code provisions applicable to disputes and shall be resolved pursuant to the Municipal Code. c. Operating Fees. As used herein, “Premises” means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the Commercial Cannabis Permittee where one or more Permitted Uses will be or is conducted. The parties stipulate and agree that the square footage for the Premises upon the Effective Date of this Agreement is and shall be during the term of this Agreement:

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Packet Pg. 1786 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 16 -
in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.

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Packet Pg. 1787 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 17 -
b. Annual Regulatory and Monitoring Fees. Annual Regulatory and Monitoring fees for the Manufacturing, Cultivation and Distribution Permits are based upon the direct and indirect costs City incurs in confirming the use of the Premises in accordance with the municipal code, the Ordinance, this Agreement, and the Application.

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Packet Pg. 1788 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 18 -
and from adequate for such purpose. City shall have the right to audit and examine such books, records and documents and other relevant items in the possession of such Operator, on no less than an annual basis, or at any time upon reasonable request by the City, to the extent necessary for a proper determination of Gross Receipts from Operations, and all such books, records, documents and other items shall be held available for such audit and examination. The City’s audit shall be performed by a non-contingency fee independent auditor approved in advance by the City. Upon request by City, each Operator shall make all such books, records, and documents available to the City Manager, his designee, or to the City approved auditor, and provide removable copies thereof, within thirty (30) of the date of City’s request. Each Operator shall pay all costs of such audits. Each Operator shall preserve such books, records, documents, and other items in Barstow for a period of not less than one (1) years for the purpose of auditing or re-auditing these accounts upon reasonable notice; except that, if an audit is made within the sevenyear period and each Operator claims that errors or omissions have occurred, the books and records shall be retained and made available until those matters are resolved. City shall keep strictly confidential all statements of revenue furnished by each Operator and all other information concerning such Operator’s operation of the Premises obtained by City as a result of the inspection audit and examination privileges of City hereunder, except as otherwise required by law. If City receives a request for such information pursuant to the Public Records Act (California Government Code Section 6250, et seq.), City shall provide each Operator notice of any such request prior to disclosing any such information and afford such Operator the opportunity to obtain a protective order. Within seven (7) years after the receipt of any statement of receipts under this Agreement, City at any time shall be entitled to carry out an audit of such revenue either by City or agent to be designated by City. If it shall be determined as a result of such audit that there has been a deficiency in any payment due under this Agreement made on the basis of such statement, then such deficiency shall become immediately due and payable within thirty (30) days of such determination.
3) Copies of Tax Filings. Each Operator shall provide the City with courtesy copies of each and every CDTFA Quarterly report such Operator is required to provide to the California Department of Tax and Fee Administration for sales and use tax, Cannabis Excise Tax, and/or Cannabis Cultivation Tax, at the time such filings are made. This reporting obligation is imposed on the cannabis business Operator, or Owner if Owner and Operator are the same entity, and not on the Owner if the Owner is solely a landlord and not also a listed permittee or operator of the cannabis business.
b. Future Revenue Mechanisms. During the term of this Agreement, if the City imposes (by Citizen Initiative or otherwise) an alternative revenue mechanism specifically related to cannabis operations (e.g., a cannabis tax), Operator and City agree to renegotiate in good faith the terms of this Agreement so as to conform the aggregate Public Benefit Fees and Operating Fees payable by an Operator with any alternative revenue mechanism approved by voters. As used in this section, “alternative revenue mechanism” does not

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Packet Pg. 1789 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 19 -
include taxes, fees, or assessments levied on or collected from both cannabis and noncannabis operations.

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Packet Pg. 1790 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 20 -
is subcontracted, Operator shall require any general contractor or subcontractor similarly to provide workers’ compensation insurance for such contractor’s or subcontractor’s employees, unless such employees are covered by the protection afforded by such Operator.

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In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that City shall not be liable in monetary damages, to Operator, to any mortgagee or lender, or to any successors in interest of Operator or mortgagee or lender, or to any other person, and Operator covenants on behalf of itself and all successors in interest to the Premises or any portion thereof, not to sue for damages or claim any damages.
1) For any breach of this Agreement or for any cause of action which arises out of this Agreement; or
2) For the impairment or restriction of any right or interest conveyed or provided under, with, or pursuant to this Agreement, including, without limitation, any impairment or restriction which Operator characterizes as a regulatory taking or inverse condemnation; or
3) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.
b. Specific Performance. The parties acknowledge that money damages and remedies at law are inadequate, and specific performance and other non- monetary relief are particularly appropriate remedies for the enforcement of this Agreement and should be available to all parties for the following reasons:

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Packet Pg. 1793 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 23 -
1) Money damages are unavailable against City as provided in Section 15(a) above.
2) Due to the size, nature, and scope of the Project, it may not be practical or possible to restore the Premises to its natural condition once implementation of this Agreement has begun. After such implementation, Operator may be foreclosed from other choices it may have had to use the Premises or portions thereof. Operator has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate Operator for its efforts. By the same token, in the event that City issues any permit or other approval for a structure, and the public facilities, improvements, and infrastructure reasonably necessary to provide an adequate level of public services to that structure are not timely completed or Operator otherwise fails to carry out its obligations under this Agreement, then it would not be possible to determine a sum of money that would adequately compensate City for the resulting hardship.

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Packet Pg. 1794 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 24 -
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
Operator hereby waives, to the maximum legal extent, the provisions of California Civil Code Section 1542 and all other statutes and judicial decisions of similar effect. d. Attorneys’ Fees and Costs. In any action or proceeding between City and Operator brought to interpret or enforce this Agreement, or which in any way arises out of the existence of this Agreement or is based upon any term or provision contained herein, the “prevailing party” in such action or proceeding shall be entitled to recover from the non-prevailing party, in addition to all other relief to which the prevailing party may be entitled pursuant to this Agreement, the prevailing party’s reasonable attorneys’ fees and litigation costs, in an amount to be determined by the court. The prevailing party shall be determined by the court in accordance with California Code of Civil Procedure Section 1032. Fees and costs recoverable pursuant to this Section 14(e) include those incurred during any appeal from an underlying judgment and in the enforcement of any judgment rendered in any such action or proceeding.
e. Default. No building permit shall be issued or building permit application accepted for Operator for any structure on the Premises after Operator is determined by City to be in default of the terms and conditions of this Agreement until such default thereafter is cured such defaulting party or is waived by City. If City terminates this Agreement as to any Operator because of such Operator’s default, then City shall retain any and all benefits, including money or land received by City hereunder.

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Packet Pg. 1795 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 25 -
Operator’s contractors, subcontractors, agents, or employees operations under this Agreement. Operator agrees to and shall defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damage caused, or alleged to have been caused, by reason of any of the aforesaid operations.
c. Indemnification. Operator shall defend, indemnify, and hold harmless City and its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants, and employees against and from any and all liabilities, demands, claims, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and reasonable attorneys’ fees), which any or all of them may suffer, incur, be responsible for or pay out as a result of or in connection with any challenge to the legality, validity or adequacy of any of the following: (i) this Agreement and the concurrent and subsequent permits, licenses and entitlements approved for the Project or Premises, and all activities conducted under such entitlements; (ii) the environmental impact report, mitigated negative declaration or negative declaration, as the case may be, prepared in connection with the development of the Premises; (iii) any claims based on or alleging inverse condemnation by any person or entity with an interest in the Premises; and (iv) the proceedings undertaken in connection with the adoption or approval of any of the above.

17. California Environmental Quality Act. Operator shall reimburse City for any

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Packet Pg. 1796 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 26 -
and all costs incurred by City related to project review under the California Environmental Quality Act (CEQA), Public Resources Code, §§21000-21189.3, and the Guidelines for California Environmental Quality Act, California Code of Regulations, Title 14, §§15000-15387. If reasonably requested by City, Operator shall conduct and pay for any required CEQA reviews and analyses.

19. Commercial Cannabis Permit Conditions of Approval. Operator shall comply with all conditions of approval of the City-issued Commercial Cannabis Permit and Conditional Use Permit.

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of any business at all times shall be required to comply with the terms of this Agreement and Operator’s CUP and CCP. Operator acknowledges and covenants that the CUP obtained by Operator via this Agreement shall run with the Premises and that this Agreement is binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of the Owner, as landlord, as applicable and approved by the City via the assignment approval provisions of Section 21.
c. Special Review. City Council may order a special review of compliance with this Agreement at any time. The City Manager or his or her designee shall conduct such special review. During a special review, Operator shall be required to demonstrate good faith compliance with the terms of this Agreement. The burden of proof on this issue shall be on Operator.
d. Special Review Hearing. At the time and place set for the review hearing, Operator shall be given an opportunity to be heard. If City Council finds, based upon clear and convincing evidence, that Operator has not complied in good faith with the terms or conditions of this Agreement, City Council may terminate this Agreement as to such party notwithstanding any other provision of this Agreement to the contrary, or modify this Agreement as to such party and impose such conditions as are reasonably necessary to protect the interests of City. The decision of City Council shall be final, subject only to judicial review pursuant to Code of Civil Procedure Section 1094.5. e. Certificate of Agreement Compliance. If, after a periodic or special review, Operator is found to be in compliance with this Agreement, and if Master Lessee and/or any Operator requests it, City shall issue a Certificate of Agreement Compliance (“Certificate”) to such requesting party stating that after the most recent periodic or special review, and based upon the information known or made known to the City Manager and City Council, that (i) this Agreement remains in effect and (ii) Operator is not in default.

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Packet Pg. 1798 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 28 -
application.

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Packet Pg. 1799 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 29 -
[email protected]
With courtesy copy to: Baker, Burton & Lundy, P.C.
515 Pier Ave.

Hermosa Beach, CA 90254
Attn: Mary G. Korkodian
[email protected]
If to Operator: LA 2 Vegas, Inc
7727 Via Napoli
Burbank, CA 91506
With courtesy copy to: Weinberg Gonser Frost LLP
10866 Wilshire Bvld., Sutie 1650
Los Angeles, CA 90024
Attn: Michael Jensen
[email protected]

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Packet Pg. 1800 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 30 -
Premises; (3) are necessary to comply with state or federal laws and regulations; or (4) involve sign and parking ordinances and guidelines, changes to the City’s zoning laws, Specific Plan or the City's General Plan, whether adopted previous or subsequent to the Effective Date of this Agreement).

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Packet Pg. 1801 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 31 -
law. The Federal Controlled Substances Act, 21 USC § 801, et seq., prohibits the manufacture, distribution, and possession of cannabis without any exemptions for medical use.
j. Force Majeure. If delays are caused by unforeseen events beyond the control of Operator, such delays will entitle Operator to an extension of time as provided in this section. Such unforeseen events (“Force Majeure”) shall mean war, insurrection, acts of God, local, state or national emergencies, strikes and other labor difficulties beyond the party’s control, or any default by City hereunder, which Force Majeure event substantially interferes with the development, construction or operation of the Project. k. Constructive Notice and Acceptance. Every person who after the Effective Date and recording of this Agreement owns or acquires any right, title, or interest to any portion of the Premises, is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Premises, and all rights and interests of such person in the Premises shall be subject to the terms, requirements, and provisions of this Agreement.
l. Binding Effect of Agreement. The Parties agree that the Recitals above are true and correct and intend to be bound by same. Except as otherwise provided, the burdens of this Agreement are binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of the Parties and constitute covenants which run with the Premises. In order to provide constructive notice thereof, the City Clerk will record this Agreement with the San Bernardino County Recorder within the period required by Government Code Section 65868.5.
m. Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between the City and Operator is that of a government entity regulating the development of private property and developer of such property.
n. Changes to Project. The Parties acknowledge that changes to the Project or Development Plans and related approvals may be appropriate and mutually desirable to carry out the intent and purpose of this Agreement. This Agreement shall not prevent the City from applying, with the consent or at the request of Operator, Subsequent Land Use Regulations or Subsequent Development Approvals that do not directly conflict with the Project, Premises or Development Plan authorized under this Agreement. The granting of one such change, or request shall not obligate the City to grant other similar changes or requests. As used herein, “Subsequent Development Approvals” include, without limitation, all excavation, grading, building, construction, demolition, encroachment or street improvement permits, occupancy certificates, utility connection authorizations, or

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Packet Pg. 1802 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 32 -
other non-discretionary permits or approvals necessary, convenient or appropriate for the Project. As used herein, “Subsequent Land Use Regulations” means ordinances, resolutions and codes adopted or approved by the City after the Effective Date of this Agreement governing the development and use of the land, including general plan amendments, zone changes, variances or conditional use permits affecting the permitted use of the land including density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions of reservation or Dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Development of the Premises.
o. Conflicting Federal or State Rules. In the event that any conflicting federal or state laws or regulations, enacted after the Effective Date, prevent, or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, this Agreement shall remain in full force and effect as to those provisions not affected; and
(i) Notice of Conflict. Either party, upon learning of any such matter, will provide the other party with written notice thereof and provide a copy of any such law, regulation, or policy together with a statement of how any such matter conflicts with the provisions of this Agreement; and
(ii) Modification Conferences. The parties shall, within thirty (30) days of the notice referenced to in the preceding subsection, meet and confer in good faith and attempt to modify this Agreement to bring it into compliance with any such federal or state law or regulation.
(iii) City Council Hearings. In the event the City believes that an amendment to this Agreement is necessary due to the effect of any federal or state law or regulation, the proposed amendment shall be scheduled for hearing before the City Council. The City Council shall determine the exact nature of the amendment necessitated by such federal or state law or regulation. Operator shall have the right to offer oral and written testimony at the hearing. Any modification ordered by the City Council pursuant to such hearing is subject to judicial review in accordance with California law. (iv) Minor Amendments. A minor modification is a modification that does not modify the material terms of this Agreement including (1) the Term; (2) Facility Operations; (3) Indemnification; and (4) Fees. Minor Modifications shall not require a public hearing prior to execution of the modification to this Agreement. Either Party may propose a minor modification, consent to which shall not be unreasonably withheld, conditioned or delayed by the other Party.

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Packet Pg. 1803 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 33 -
requested modification is minor modification that is consistent with applicable law and tends to promote the goals of this Agreement, the proposed modification will be approved by the City as a minor modification, and a written modification will be executed by the Parties and attached to this Agreement. Any such minor modification shall not be deemed an “amendment” to this Agreement under Government Code Section 65858.
(v) City Cooperation. The City shall cooperate with Operator in securing any City permits, licenses or other authorizations that may be required as a result of any amendment resulting from actions initiated by the City. As required by this Agreement, Operator shall be responsible to pay all applicable fees in connection with securing of such permits, licenses, or other authorizations.
q. Effective Date. “Effective Date” means the date on which all of the following are true: (i) thirty (30) days have elapsed since the second reading of the Ordinance adopting and approving this Development Agreement and (ii) all Exhibits to this Agreement are finalized, executed and notarized by all affected parties (if applicable) and attached hereto; provided, however, that if these conditions have not been fully satisfied by Operator the Effective Date may not thereafter occur and this Agreement may not thereafter become effective.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

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Packet Pg. 1804 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 34 -
“CITY”
Date: _______________, 2022

CITY OF BARSTOW,
a California Municipal Corporation
By:

Its: Mayor
Attest:
______________________________
City Clerk
Approved to as Form:
______________________________
City Attorney
“OPERATOR”
Date: , 2022
LA 2 VEGAS, INC
a California limited liability company
By:

Its:

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Packet Pg. 1805 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) - 35 -
OWNER

BARSTOW OUTLET, LLC
a Delaware limited liability company
By:

Its:

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Packet Pg. 1806 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

EXHIBIT A

LEGAL DESCRIPTION
[INSERT LEGAL DESCRIPTION]

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Packet Pg. 1807 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

EXHIBIT B

PARCEL MAP
[INSERT PARCEL MAP]

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Packet Pg. 1808 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

EXHIBIT C

SITE AND FLOOR PLANS

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EXHIBIT D

RESERVATION OR DEDICATION OF LAND FOR PUBLIC PURPOSES (IF APPLICABLE)

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Packet Pg. 1810 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

EXHIBIT E

OPERATIONAL AND ADDITIONAL BUSINESS STANDARDS (IF APPLICABLE)

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Packet Pg. 1811 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17
EXHIBIT F.

INDEMNIFICATION AGREEMENT

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Packet Pg. 1812 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

EXHIBIT G

STANDARDS AND CONDITIONS FOR CONSTRUCTION (IF APPLICABLE)

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Packet Pg. 1813 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

EXHIBIT H
[RESERVED]

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Packet Pg. 1814 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

EXHIBIT I

ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made and entered into this ___ day of _______ , _______, by and between the CITY OF BARSTOW, a municipal corporation of the State of California (“City”), and LA 2 VEGAS, INC, a California limited liability company (“Developer” or “Assignor”), _________________ , a California corporation/limited liability company (“Assignee”). City, Assignors, or Assignee may be referred to herein individually as a “Party” or collectively as the “Parties.” There are no other parties to this Agreement.

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Packet Pg. 1815 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17

Section 2. Assumption. Assignee hereby accepts and assumes the foregoing transfer or assignment of (all/some) of Assignors’ rights and obligations under the Development Agreement.

Section 4. Effective Date. The assignment and assumption of rights and obligations as specified herein shall be effective on ___________, _____.

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Packet Pg. 1816 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 273128.v17
“CITY”
Date: _______________, _____

CITY OF BARSTOW,
a California Municipal Corporation
_____________________________
By:

Its: City Manager
“ASSIGNOR”
Date: _______________, _____

MERCHANTS BARSTOW LLC,
a California limited liability company
_____________________________
By:

Its: Managing Member
“ASSIGNEE”
Date: _______________, 2022
_____________________________
By:

Its:

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Packet Pg. 1817 Attachment: Attorney Approved LA 2 Vegas DA (Counsel Edits) (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 271527.1
RESOLUTION NO. 563-2022

A RESOLUTION OF THE PLANNING COMMISSION OF THE

CITY OF BARSTOW RECOMMENDING APPROVAL OF CANNABIS LICENSE

APPLICATION FOR MERCHANTS BARSTOW, LLC AND DEVELOPMENT

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Packet Pg. 1818 Attachment: Merchants Barstow Reso. 563-2022 (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 271527.1
WHEREAS, the California Attorney General's August 2008 Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use recognizes that the cultivation or other concentration of marijuana in any location or premises without adequate security increases the risk that nearby homes or businesses may be negatively impacted by nuisance activity such as loitering or crime; and WHEREAS, the California Planning and Zoning Law (Gov. Code, § 65000 et seq.) authorizes the City to adopt and administer zoning laws, ordinances, rules, and regulations; and
WHEREAS, the City of Barstow passed Ordinance No. 974-2021 on June 7th 2021 to begin the process of allowing Cannabis sales; and WHEREAS, the City of Barstow passed Ordinance No. 977-2021 on October 4th 2021, adopting land use laws for Cannabis sales and requiring applicants to execute a development agreement with the City before beginning operation; and WHEREAS, no cannabis business may operate in the City of Barstow unless first issued a permit by the City; and
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the “Development Agreement Statute”), which authorizes the City and an individual with an interest in real property to enter into a development agreement that establishes certain development rights in real property that is subject to a development agreement application; and
WHEREAS, Merchants Barstow, LLC proposes to improve, develop and use real property to operate a Commercial Cannabis Dispensary, Cultivation, Distribution/Transportation, Manufacturing, and Non-Store Front Delivery at 2552 Mercantile Way., Barstow, CA 92311 (APN #0421-211-26-0000) and has properly submitted a completed cannabis license application; and WHEREAS, City and the Merchants Barstow, LLC seek to enter into a development agreement for the Project (the “Development Agreement”) pursuant to the Development Agreement Statute and all applicable local and state laws; and WHEREAS, the Planning Commission finds that an ordinance approving the Development Agreement will allow the City to adequately regulate and address all impacts of the Project in the City in accordance with state law; and WHEREAS, the Planning Commission finds that the ordinance is in the best interest of the health, welfare, and safety of the public.

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Packet Pg. 1819 Attachment: Merchants Barstow Reso. 563-2022 (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 271527.1
NOW THEREFORE, the Planning Commission of the City of Barstow hereby resolves as follows:

1. The foregoing recitals are true and correct.

2. The Planning Commission hereby finds that the proposed Development Agreement is in compliance with Government Code Section 65865.2 and Chapter

19.46 of the Barstow Municipal Code.

5. The Planning Commission hereby finds that the Development Agreement application was accompanied by all lawfully required documents, materials, and information.

PASSED, APPROVED and ADOPTED this 10th day of October, 2022. _______________________ ____________________________
Beatrice Lint, Stephanie Baca
Planning Commission Chair Recording Secretary

ATTEST:

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Packet Pg. 1820 Attachment: Merchants Barstow Reso. 563-2022 (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 271527.1
I, Stephanie Baca Recording Secretary of the Barstow Planning Commission , DO HEREBY CERTIFY UNDER PENALTY OF PERJURY that the foregoing resolution was introduced and duly adopted at its meeting held October 10, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

________________________
Stephanie Baca
Recording Secretary,
City of Barstow Planning Commission

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Packet Pg. 1821 Attachment: Merchants Barstow Reso. 563-2022 (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 271538.1
ORDINANCE NO. XXX-2022

AN ORDINANCE OF THE CITY COUNCIL OF THE

CITY OF BARSTOW APPROVING A CANNABIS LICENSE APPLICATION FOR LA 2 VEGAS, INC. AND DEVELOPMENT AGREEMENT WITH LA 2 VEGAS, INC. FOR COMMERCIAL CANNABIS CULTIVATION LOCATED AT 2596 MERCANTILE WAY, BUILDING 22 BARSTOW, CA 92311
WHEREAS, California voters approved Proposition 215 (Health and Safety Code Section 11362.5), entitled the Compassionate Use Act (CUA), in 1996, which exempts patients and their primary caregivers from criminal prosecution or sanctions under H&S Code Sections 11357 and 11358 for qualified use and cultivation of medical cannabis; and WHEREAS, the California Legislature passed Senate Bill 420 (H&S Code Sections 11362.7 et seq.) in 2003 to create the Medical Marijuana Program (MMPA), which established a voluntary program for the issuance of medical cannabis identification cards for qualified patients, set limits on the amount of cannabis any individual could possess, and provided an exemption from state criminal liability for persons "who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes"; and
WHEREAS, in November 2016, California voters approved Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act ("AUMA"), which established a state licensing and regulatory system for commercial cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, labeling, transportation, delivery, or sale of recreational marijuana and marijuana products; and
WHEREAS, on June 27, 2017, the Governor signed the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA"), consolidating the AUMA with previous state law regarding commercial medical marijuana activities to create one state licensing system for commercial activities related to medical and recreational marijuana; and WHEREAS, both the AUMA and MAUCRSA authorize the City to further regulate or completely prohibit the establishment or operation of commercial marijuana activities within its limits, even such activities that may be licensed under state law; and WHEREAS, the City's power to regulate or completely prohibit commercial marijuana activities under the AUMA and MAUCRSA is consistent with the California Supreme Court's decision in City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th 7; and
WHEREAS, the California Attorney General's August 2008 Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use recognizes that the cultivation or other concentration of marijuana in any location or premises without adequate security increases the risk that nearby homes or businesses may be negatively impacted by nuisance activity such as loitering or crime; and

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Packet Pg. 1822 Attachment: LA 2 VEGAS CC ORD (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 2 271538.1
WHEREAS, the California Planning and Zoning Law (Gov. Code, § 65000 et seq.) authorizes the City to adopt and administer zoning laws, ordinances, rules, and regulations; and
WHEREAS, the City of Barstow passed Ordinance No. 974-2021 on June 7th 2021 to begin the process of allowing Cannabis sales; and WHEREAS, the City of Barstow passed Ordinance No. 977-2021 on October 4th 2021, adopting land use laws for Cannabis sales and requiring applicants to execute a development agreement with the City before beginning operation; and WHEREAS, no cannabis business may operate in the City of Barstow unless first issued a permit by the City; and
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the “Development Agreement Statute”), which authorizes the City and an individual with an interest in real property to enter into a development agreement that establishes certain development rights in real property that is subject to a development agreement application; and
WHEREAS, the proposed project is consistent with the Barstow General Plan and the California Environmental Quality Act; and
WHEREAS, LA 2 Vegas, Inc. proposes to improve, develop and use real property to operate Commercial Cannabis Cultivation located at 2596 Mercantile Way, Building 22, Barstow, CA 92311 and has properly submitted a completed cannabis license application; and
WHEREAS, City and LA 2 Vegas, Inc. seek to enter into a development agreement for the Project (the “Development Agreement”) pursuant to the Development Agreement Statute and all applicable local and state laws; and WHEREAS, the Planning Commission approved Resolution No. 563-2022 finding that an ordinance approving the Development Agreement will allow the City to adequately regulate and address all impacts of the Project in the City in accordance with state law; and
WHEREAS, the City Council finds that the ordinance is in the best interest of the health, welfare, and safety of the public.

NOW THEREFORE, the City Council of the City of Barstow hereby ordains as follows:

Section 1. Incorporation of Recitals. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full.

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Packet Pg. 1823 Attachment: LA 2 VEGAS CC ORD (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 3 271538.1
Section 2. Finding Regarding the Development Agreement. Based upon the foregoing facts and findings for DA 29 the City Council hereby determines as follows:

A. DA 29 was reviewed and deemed correct and in compliance with Government Code Section 65865.2 and Chapter 19.46 of the Barstow Municipal Code; and B. DA 29, if approved, is in the best interests of the City because the cultivation facility increases commercial vibrancy in the City; and,
C. DA 29 is consistent with the actions, goals, objectives, and policies of the City's General Plan and Zoning Regulations because the project promotes local opportunities for commerce and engagement, and
D. The application to the City was made on forms approved, and contains all information required by the Director and is filed with the Department in compliance with Chapter

Section 3. Approvals. In view of all the evidence and based on the foregoing findings the City Council approves DA 29 and grants a Notice of Exemption for the Proposed Project, subject to the Conditions of Approval in Planning Commission Resolution No. 563-2022 Section 4. Authorization to Execute Development Agreement. Pursuant to Barstow Municipal Code Chapter 19.46, the City Council directs the City Manager and the City Attorney to prepare a development agreement embodying the terms and conditions of the Proposed Project as conditionally approved and authorizes the City Manager to execute the development agreement, which shall be substantially consistent with the proposed development agreement attached as Exhibit "A."
Section 5. CEQA. This ordinance is exempt from the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines§§ 15060(c)(2), 15060(c)(3), 15061(b)(3) and 15378(b)(4). This ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; it does not involve a "project" as defined by CEQA Guidelines § 15378; and it is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. It can be seen with certainty that there is no possibility this ordinance may have a significant effect on the environment. Further the City previously approved Ordinance No. 974-2021 on June 7, 2021 and Ordinance No. 977-2021 on October 4, 2021 and those Ordinances were exempt from CEQA under Business and Professions Code section 26055(h) which exempts from CEQA review the adoption of an ordinance, rule, or

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Packet Pg. 1824 Attachment: LA 2 VEGAS CC ORD (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 4 271538.1
regulation, by a local jurisdiction that requires discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity. This Ordinance now acts to amend the Barstow Municipal Code as to procedural requirements.

Section 7. Effective Date. This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.

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Packet Pg. 1825 Attachment: LA 2 VEGAS CC ORD (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) 5 271538.1
PASSED, APPROVED AND ADOPTED this17th day of January, 2023 __________________________________
Paul Anthony Courtney, Dr. B.A., Mayor
ATTEST:
______________________________
Andrea Flores, City Clerk
I, Andrea Flores, City Clerk for the City of Barstow, California, and ex-officio Clerk of the City Council, do hereby certify under penalty of perjury that the foregoing is a true and correct copy of Ordinance No. XXX-2022, which was introduced at a regular meeting of the City Council of the City of Barstow held on the 19th day of December, 2022 and adopted at the regular meeting of the City Council of the City of Barstow on the 17th day of January 2023, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
____________________________
Andrea Flores, City Clerk

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Packet Pg. 1826 Attachment: LA 2 VEGAS CC ORD (5229 : LA 2 Vegas, Inc. Comm, Cannabis App) Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5230

COUNCIL AGENDA ITEM
AGENDA MATTER:

PUBLIC HEARING - CONSIDERATION OF MERCHANTS BARSTOW, LLC COMMERCIAL

CANNABIS APPLICATION
EXECUTIVE SUMMARY:

Staff requests that the City Council review Merchants Barstow, LLC cannabis application and after review, introduce Ordinance No. 000-2022 approving Merchants Barstow, LLC application for a Commercial Cannabis Dispensary, Cultivation, Distribution/Transportation, Manufacturing, Non-Store Front Delivery permit, Cannabis Development Agreement, Conditional Use Permit, and related land use entitlements.

DISCUSSION:

Merchants Barstow, LLC is applying for a permit for a Commercial Cannabis Dispensary, Cultivation, Distribution/Transportation, Manufacturing, and Non-Store Front Delivery throughout buildings one through twenty-four on the property.

Applicant’s representative, who will be listed on the permit and will be the point of contract for the Planning Department is Garnik (Greg) Hakopyan.

Applicant Information
Merchants Barstow, LLC is a Limited Liability Company. They have a federal tax identification number and are properly registered with the California Secretary of State. The company has the following corporate officers:

Managing Director: Garnik (Greg) Hakopyan
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Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5230

COUNCIL AGENDA ITEM
Members of the applicant group have no relevant criminal convictions listed on their permit application.

Members of the applicant group have no listed unfair business practices listed on their permit application.

Location Information
Merchants Barstow, LLC is a applying for a permit at 2552 Mercantile Way Building #1-24 Barstow, CA 92311. APN #0428-211-26. The total square footage of the site is 350,857.

The applicant is not the owner of the property but has provided the City with a copy of the Landlord Use Disclosure & Authorization for a Cannabis Facility agreement between applicant and owner.

Acknowledgement of City Standards
The managing members of the applicant group have submitted a signed acknowledgment of the City’s Cannabis operating standards as set forth in the City’s Municipal Code.

On-Site Member Contact Statement
The applicant has designated Norair Madatian as the on-site manager and the designated representative to whom the public or City can provide notice to if there are operating problems or issues related to the Cannabis Facility. As locations hiring process ensures, on-site manager is subject to change, however the applicant is required to notify the City of Barstow if/when on-site manger contact changes.

Conditional Use Permit
Applicant has submitted the required conditional use permit, including the following required documents:
seven sets of the plans in 24” x 36”, filing fees, notification packages, title report, existing site plan, proposed site plan, conceptual architectural renderings, an electronic copy of these plans, and any special studies as determined by the Community Development Department.

Environmental Information and Checklist
Applicant has submitted the required environmental information and checklist.

Security Plan
The applicant has submitted a security plan which contains: 24-hour security surveillance cameras, sensors, panic buttons, alarm system, 24-hour security personnel, and a lock system not solely controlled by an electronic access panel. Both Barstow Police Department Police Chief and Captain have reviewed the applicant’s security plan and it appears to meet all standards.

DOJ Live Scans for Owners, Managers, Employees, Volunteers, and Security Personnel Applicant has submitted the required Department of Justice Live Scans for owners, managers, employees, volunteers, and security personnel.
34 Packet Pg. 1828
Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5230

COUNCIL AGENDA ITEM
Operations Plans
Applicant has submitted the required Operations Plan in accordance with the City’s Municipal Code. The following features are present in the Operations Plan: limiting access area, keeping cannabis and cannabis products in a secure manner, designating a security representative/liaison, a storage and transportation plan, cooperation with the City, and notification to Police Department with provisions. In addition, both Barstow Police Department and City of Barstow Attorney have reviewed the required Operations Plan.

Application Fee
Applicant has submitted the required application fees related to this permit application.

Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, and shall pay the following fees, if holding a Cannabis Non-Storefront Retail Delivery Permit or Cannabis Storefront Retail Permits shall pay:
2) A monthly operating fee(s) of three percent (3%) of Gross Receipts for operations from the Cannabis Non-Storefront Retail Delivery Permits and Cannabis Storefront Retail Permits, to be paid monthly. Fees shall be due to the City on first (1st) of the month. Failure to pay the fee within thirty (30) days after the due date shall result in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.

Facilities with multiple licenses must not commingle respective sales proceeds, and blend percentage rate of Gross Receipts.

FISCAL IMPACT:

RECOMMENDED ACTION:
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Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Public Hearing
Doc ID: 5230

COUNCIL AGENDA ITEM
Staff recommends the City Council introduce Ordinance No. ___-2022 approving Merchants Barstow, LLC application for a Commercial Dispensary, Cultivation, Distribution/Transportation, Manufacturing, Non-Store Front Delivery permit, Cannabis Development Agreement, Conditional Use Permit, and related land use entitlements. The Planning Commission recommended approval at its October 10, 2022 meeting. The project is exempt from review under the California Environmental Quality Act, per CEQA Guidelines, Cal Code of Regs., tit. 24, sections 15301, 15302, and 15303, 15061, and 15378. 34 Packet Pg. 1830

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Packet Pg. 1831 Attachment: Merchants Barstow_City Application PC Version (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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273128.v19

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

COMMERCIAL CANNABIS BUSINESS MULTI-TENANT DEVELOPMENT

AGREEMENT BETWEEN THE CITY OF BARSTOW AND

BARSTOW OUTLET LLC AND MERCHANTS BARSTOW LLC
THIS MULTI-TENANT DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into this day of ____ [___], 2022, (the “Execution Date”), by and between the CITY OF BARSTOW, a California municipal corporation (“City”), Barstow Outlet, LLC, a Delaware limited liability company (“Owner”), and Merchants Barstow, LLC, a California limited liability company (“Master Lessee. City, Owner, and Master Lessee are sometimes referenced together herein as the “Parties.” In instances when a provision hereof applies to each of the Parties individually, each may be referenced as a “Party.” The Parties hereby jointly render the following statement as to the background facts and circumstances underlying this Agreement:

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Packet Pg. 1856 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. - 2 -
273128.v19
WHEREAS, on June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), which creates a single regulatory scheme for both medicinal and adult-use cannabis businesses. MAUCRSA retains the provisions in MCRSA and AUMA that granted local jurisdictions control over whether businesses engaged in Commercial Cannabis Activity may operate in a particular jurisdiction; and WHEREAS, on June 7, 2021, the City Council of the City of Barstow adopted Ordinance No. 974-2021 to permit commercial cannabis activities in the City; and WHEREAS, on October 4, 2021, the City Council of the City of Barstow adopted Ordinance No. 977-2021 amending the zoning code to allow for commercial cannabis as a permitted use in certain zones; and
WHEREAS, Master Lessee currently holds a legal or equitable interest in real property considered in this Agreement which has a development area approximately 350,857 rentable square feet located 2552 Mercantile Way, City of Barstow, State of California (the “Site”), pursuant to a Master Lease Agreement by and between Master Lessee and Barstow Outlet LLC (“Owner”).

The Site includes Assessor’s Parcel Number: 0428-211-26-000, and is more fully described in Exhibit A and shown on the map in Exhibit B. Both exhibits being attached hereto and incorporated herein by this reference;
WHEREAS, presently, Master Lessee leases the property for the purpose of state and locally licensed commercial cannabis related activities which shall include, but not be limited retail cannabis sales (storefront and delivery), cannabis cultivation, manufacturing (type 6 and type 7), distribution, laboratory testing, temporary cannabis events, and/or cannabis consumption lounge (together, the “Permitted Uses” and individually, a “Permitted Use”). Such Permitted Uses shall operate in accordance with all applicable provisions of Business and Professions Code §§26000- 26231.2; California Health and Safety Code Safety Code §§ 11357-11362.9 and 11362.7- 11362.85; Revenue and Taxation Code §§ 34010-34021.5; Vehicle Code §§ 2429.7 and 23222; Water Code §§ 1831, 1847, and 13276; Title 4 of the California Code of Regulations, §§ 15000, et seq.; and the City of Barstow Municipal Code as it applies to such facilities (collectively the “Applicable Cannabis Laws”). Prior to Master Lessee or any Sublessee operating one or more Permitted Use, Master Lessee shall be required to obtain approval of this Agreement, a conditional use permit, and a Commercial Cannabis Permit from City, and all related state and other permits and licenses prior to the operation of same, pursuant to Barstow Municipal Code Chapter 19.27, et seq.;
WHEREAS, Master Lessee intends to sublease the Site or factions thereof to as-yet unidentified subtenants (“Subtenants”), who intends upon obtaining a California State License issued, pursuant to Applicable Cannabis Laws, to operate one or more Permitted Use at the Site.

WHEREAS, on [__________], 2022, Master Lessee applied to City for a Conditional Use Permit (“CUP”) for the Site to permit Commercial Cannabis Activities. No such activities are allowed or authorized without a Development Agreement, the CUP, a Commercial Cannabis Permit (“CCP”), and all requirements pursuant to City Ordinance No. 977-2021, including all applicable requirements pursuant to the Barstow Municipal Code.

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273128.v19
WHEREAS, Master Lessee intends to develop and sublease a commercial cannabis facilities, each in compliance with one or more of the Permitted Uses on the Site, consistent with the Applicable Cannabis Laws and Project Approvals (known as the “Project”).

WHEREAS, the Project will consist of: twenty-four (24) buildings, located on a single parcel, with a combined 350,857 rentable square feet, as further described in Exhibit B.

The proposed layout of the site is as shown in the attached Site Plan.

Hours of Operation: 6:00 AM to 10:00 PM for retail business hours and 24-hours for internal operations, unless limited further by Barstow Municipal Code. [X] Co-location, check if applicable:

Note MAUCRSA now authorizes a person to apply for and be issued more than one State license at one location provided the licensed premises are separate and distinct.

Subtenants have applied for [#_____] CCPs or intends for the as-yet unidentified Operator to apply for the following license types:
1) Cultivation - Types 1A/2A/3A/5A, Types 1B/2B/3B/5B, Type 1C, Type 4, Processor
2) Manufacturing - Type 6, Type 7, Type N, Type P, Type S 3) Retail Storefront - Type 10
4) Testing - Type 8
5) Non-Storefront Retail – Type 9
6) Distribution - Type 11 and Type 13
7) Temporary Cannabis Events
8) Cannabis Consumption Lounge
WHEREAS, all procedures of the California Environmental Quality Act (“CEQA”), California Public Resources Code §21000 et seq., and the CEQA guidelines, title 14 of the California Code of Regulations, chapter 3, §15000 et seq. have been satisfied; WHEREAS, City has given public notice of its intention to adopt this Agreement and has conducted public hearings thereon pursuant to California Government Code §65867. The City has found that the provisions of this Agreement and its purposes are consistent with the objectives, policies, general land uses and programs specified in City’s General Plan, zoning code and municipal ordinances;
WHEREAS, City, in entering into this Agreement, acknowledges that certain City obligations hereby assumed shall survive beyond the terms of the present Council members, that this Agreement will serve to bind City and future Councils to the obligations hereby undertaken, and that this Agreement shall limit the future exercise of certain governmental and proprietary powers of City. By approving this Agreement, the Council has elected to exercise certain governmental powers at the time of entering into this Agreement rather than defer its actions to

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273128.v19
some undetermined future date. The terms and conditions of this Agreement have undergone extensive review by City and the Council and have been found to be fair, just and reasonable. City has concluded that the pursuit of the Project will serve the best interests of its citizens and that the public health, safety and welfare are best served by entering into this obligation. Owner has represented to City that it would not consider or engage in the Project absent City approving this Agreement;
WHEREAS, City agrees that Owner’s land use entitlements for the Project shall vest for the term of this Agreement as described below;
WHEREAS, After conducting a duly noticed hearing on [date], 2022, in conjunction with City’s applicable ordinances and resolutions, the Planning Commission of the City reviewed, considered and approved environmental clearance and recommended approval of the execution of this Agreement to City Council. The Planning Commission found the Project: consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with the public necessity, public convenience, general welfare and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on City; WHEREAS, after conducting a duly noticed hearing on [date], 2022, in conjunction with City’s applicable ordinances and resolutions, and after independent review and consideration, City Council approved the execution of this Agreement by adopting the ordinance that approves this development agreement (the “Enabling Ordinance”). The City Council found the Project:
consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with good land use practices; will not be detrimental to the health, safety and general welfare of City; and is in the best interest of City and its residents.

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AGREEMENT

2. Government Code and Municipal Code Required Elements. a. Owner and Master Lessee each agree to be bound by the terms of this Agreement and shall not operate a cannabis-related business nor enter into any agreement with an as-yet unidentified Subtenant to operate a commercial cannabis business within City without having the intended Subtenant agree in writing to bound by the terms of this Agreement and sign a form of the Tenant Agreement to Abide by Development Agreement substantially similar to the form attached hereto as Exhibit H, by which Subtenant will agree to be bound by the terms, including all payment obligations owed to City, of this Agreement. A Subtenant may not operate or open a cannabis-related business unless and until such Subtenant has signed the Tenant Agreement to Abide by Development Agreement and agreed to be bound by its terms, including all payment and other obligations owed to City per this Agreement and received a City-issued business license and CCP under

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the terms of Barstow Municipal Code Chapter 19.27 and other applicable law. The City reserves the right to reject any proposed Operator’s CCP if City finds, at a lawfully noticed public hearing before the Planning Commission, that the proposed Operator is not eligible to operate the proposed commercial cannabis facility due to noncompliance with any applicable law. Proposed Operators may receive a CCP with approval by the City’s Community Development Department if the City finds, in writing, that the proposed Operator meets the Accredited Standards noted in Section 2, Subsection 1 below. Each CCP issued by the City shall run with the Site, to the extent each Operator retain rights thereto, and all Parties covenant that this Agreement is binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of Owner, as landlord, and Master Lessee, as master lessee, each as applicable and each as approved by the City via the assignment approval provisions of Section 21.
b. Accredited Standards. Proposed Operators do not need to receive approval from the City’s Planning Commission for a CCP and are eligible to instead apply for and receive a CCP from City staff if they meet the following accredited standards, as determined by City in writing:
(1) Compliance Record. Proposed Operator, its managers (if a limited liability company), directors (if a corporation), and/or officers must have no open code enforcement cases or violations relating to cannabis activity within the last five (5) years by City or any other public agency.

City reserves the right to require an Operator to apply to the Planning Commission to renew its CCP at any time that this requirement is no longer satisfied.
(2) Business License and Corporate Status. Proposed Operator must simultaneously obtain a valid City-issued business license and be registered as a valid corporate or other legal entity authorized to conduct business in the State of California. City reserves the right to require an Operator to apply to the Planning Commission to renew its CCP at any time that this requirement is no longer satisfied.
(3) Valid Lease. Proposed Operator must furnish to City a copy of a valid and binding lease between such Operator, Master Lessee, and Owner, authorizing such Operator to occupy a portion of the Site subject to this Agreement, CUP, and CCP.
(4) Financial Responsibility. Proposed Operator must attest to City that they are financially responsible and have the ability to complete all obligations they proposes to undertake under this Development Agreement, including the Proposed Operator’s legal status and history, taxation status and history, and record of compliance with all applicable obligations; whether the proposed Operator has ever been sued by or declared to be in default on its applicable obligations by any local, state, or federal government or official, and if yes, the status and outcome of such

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proceeding; and whether the proposed Operator or any of its affiliated entities have ever filed for bankruptcy protection or been declared in default under any financial obligation in any civil lawsuit or other official proceeding under law within the last five (5) years. The City reserves the right to require the Operator to apply to the Planning Commission to renew its CCP at any time that this requirement is no longer satisfied. (5) Litigation History. Proposed Operator must attest that such Operator are not involved in any litigation against City or another government entity within the past five (5) years. City reserves the right to require the Operator to apply to the Planning Commission to renew its CCP at any time that this requirement is no longer satisfied. (6) Criminal Background Check. Proposed Operator must attest that such Operator’s managers (if a limited liability company), directors (if a corporation), and/or officers can pass the criminal background check required by City and the California Department of Cannabis Control and are eligible to receive a state cannabis license. City reserves the right to require the Operator to apply to the Planning Commission to renew its CCP at any time that this requirement is no longer satisfied.
b. Description of Property. Land situated in the City of Barstow, County of San Bernardino, State of California; whose street address is 2552 Mercantile Way, City of Barstow, State of California (the “Site”). The Site includes Assessor’s Parcel Number:
0428-211-26-0000.
c. Owner and Other Person with Legal or Equitable Interest.

Owner: Barstow Outlet, LLC
Master Lessee: Merchants Barstow LLC
Nature of Interest held by Master Lessee: Master Lease for 10 years with Option to Renew for an additional 10 years
d. Owner Representations and Warranties. Owner represents and warrants that the Owner has consented in writing to the Permitted Uses (as defined below) and the execution and recordation of this Agreement against the Site. e. Permitted Uses. The Site may be used for one or more, in any combination, of the permitted uses listed below (together, the “Permitted Uses” and individually, a “Permitted Use”) , as presently authorized under Barstow Municipal Code Chapter 19.27, and for any other use as may be authorized under applicable provisions of the Barstow Municipal Code, if all required City permits and state licenses are approved and maintained in full force and effect under applicable law.

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License Description State License Type(s)
Cultivation Indoor Types 1A/2A/3A/5A
Cultivation Mixed-Light Types 1B/2B/3B/5B
Specialty Cottage Mixed-Light – Tier 1
and 2
Type 1C
Cultivation Nursery Type 4
Cultivation Processor Processor
Manufacturing (non-volatile) Type 6
Manufacturing (volatile) Type 7
Testing Type 8
Manufacturing Infusion Type N
Manufacturing Packaging Type P
Manufacturing Shared-Use Type S
Retail Delivery-Only Type 9
Retail Storefront Type 10
Distribution Type 11
Distribution Transport-Only Type 13
Temporary Cannabis Events -
Cannabis Consumption Lounge -
e. Zoning. Master Lessee represents and warrants such activities outlined in its Commercial Cannabis Permit Application (“Application”) conducted pursuant to this Agreement and under the Commercial Cannabis Permit shall comply with City’s municipal code, including the zoning ordinance and any and all development and construction requirements contained therein. Owner shall not conduct any business under this Agreement or under the Commercial Cannabis Permit without having obtained all necessary permits, licenses, and approvals from City and State of California. f. Reservation or Dedication of Land for Public Purposes. Sufficient roadway, sidewalk, and utility easements shall be reserved or dedicated to City for such purposes, as depicted in Exhibit D.

3. Term, Extensions.
a. Term. This Agreement, along with the issued the Cannabis Business Permit and Conditional Use Permit shall commence on the Effective Date and it shall end five (5) years from the starting date.
b. Extension by Master Lessee. Master Lessee, at its sole and absolute discretion may extend this Agreement for one (1) additional five (5) year period following the expiration of the initial five (5) year term; provided that:
(i) Master Lessee shall give written notice to City no later than one hundred twenty (120) days before the expiration of the initial five (5) year term that the Owner desires to extend this Agreement for an additional five (5) year period;

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(ii) Master Lessee shows adequate evidence to City that it has a legal and/or equitable interest in the Property and/or will have such interests for the duration of the extended term of the Agreement;
(iii) Master Lessee shall deposit all fees per the Council-adopted fee schedule necessary for processing the extension request and drafting necessary documentation;
(iv) Master Lessee shall comply with all provisions of Ordinance No. 977-2021, the additional Ordinance adopting this Agreement, Barstow Municipal Code Chapter 19.27 et seq., all terms imposed by City-issued Commercial Cannabis Permit, and City-Issued Conditional Use Permit, and all other requirements of applicable City law and permits; and
(v) Master Lessee and any approved Operators have completed and built the commercial cannabis facility contemplated by the Agreement and has commenced and continues to operate it in compliance with and shall not be in default of any provision of any applicable law, including Barstow Municipal Code Chapter 19.27, or any agreement between City and Master Lessee relative to the development of the Property or of any condition of approval imposed upon any entitlement granted by City relative to the development of the Property or cannabis operations for which Owner has been given a written notice to cure by City and for which Owner has not cured or commenced to cure such default within thirty (30) days, if and as provided by such agreement or condition of approval. c. Extension by Agreement of the Parties. The Parties may agree to extend this Agreement for additional five (5) year periods, provided that the same conditions in Section 2(a) continue to be met and that City has expressly approved a further five (5) year renewed term. The City reserves the right to conditionally approve and/or shorten the length of additional renewal periods. The City shall give at least 180 days’ notice of any proposed nonrenewal of this Agreement.

4. Development Plans. The following shall comprise the Project’s “Development Plans”:
a. Site Plan and Floor Plan. Master Lessee’s site plan and floor plan for the facility are attached hereto as Exhibit C and incorporated into the Application. b. Landscape Plan. A preliminary landscape plan shall be prepared by the Master Lessee and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees. A final landscape plan shall be prepared and submitted in conjunction with building and site improvement plans prior to issuance of building permits for construction activities. All final landscape plans must comply with the Building Code.

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c. Signage Plan. An exterior signage plan shall be prepared and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees, in accordance with the procedures and requirements of the Barstow Municipal Code.

5. Facility Operations. Master Lessee shall comply with, and use its best efforts to ensure that each Subtenant complies with, the below operating requirements:
a. Compliance with California Cannabis Laws. Master Lessee and/or any Subtenant (individually referred to as “Operator” and collectively as “Operators”) will operate at all times in compliance with California Cannabis Laws and all other applicable laws. Prior to Operator conducting any Permitted Use, Operator shall be required to obtain a Commercial Cannabis Permit (a “CCP”) and comply with all requirements pursuant to such entitlements, from City pursuant to the Enabling Ordinance and Chapter 19.27 of the Barstow Municipal Code. Further, Operatorshall conduct any Permitted Use in accordance with (i) California Cannabis Laws, as may be amended, (ii) the Enabling Ordinance, (iii) this Development Agreement and the Conditional Use Permit issued per its terms, (iv) a CCP, (v) the Operational and Business Standards (Exhibit E), and the Barstow Municipal Code.
b. Security Plan. Operator shall secure approval of its proposed security plan by the Barstow Police Department prior to opening. The security plan shall include, at a minimum and as appropriate, provisions for video surveillance, perimeter fencing and security, protection of the building(s) from vehicle intrusion, cash handling procedures, internal accounting controls, product handling and storage procedures, and a professionally monitored alarm system. Equipment and systems used for video surveillance and building alarms shall be approved by City.

Video surveillance shall include, at a minimum, all site and facility entrances and access points, all spaces accessible by the public, all secured areas of the facility with restricted access, all interior spaces and rooms where cannabis products are handled and processed, shipping and receiving areas, cash storage areas, and other areas necessary to protect the safety of employees and the public and to ensure cannabis products are received, handled, stored, packaged, shipped, and distributed in compliance with applicable state and local laws and regulations. The video surveillance system shall be web-based with direct access provided to the Barstow Police Department upon request.

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The security system shall also include sensors to detect entry and exit from all secure areas, panic buttons in appropriate locations, and a professionally monitored alarm system with glass breakage sensors and motion detectors.

Operator shall employ properly trained and licensed third-party security personnel to protect the welfare and safety of Operator and their respective employees, and to ensure public safety to the neighboring community. Operator shall use security personnel twentyfour (24) hours, seven (7) days a week. Security personnel may be armed so long as proper licensing and insurance requirements are followed and met by the third-party operator providing such security services.
c. Fire Department Approval. Operator shall not operate any facility, and no permit, license, or other approval issued by City shall be valid unless and until the Barstow Fire Protection District has approved Master Lessee’s and/or any Subtenant’s site plan, floor plan, safety plan, and any other applicable plans that require its approval. d. Possession of Firearms. Except for licensed and bonded security personnel, no person employed by Operator shall be in possession of any firearm while on the premises or location without having first obtained a license from the appropriate state or local agency authorizing the person to be in possession of such firearm. Every such person in possession of a firearm while on the premises or location must provide City Manager and the Barstow Police Department written notice no less than ten (10) days before bringing such firearm onto the premises, with the following:
1) A copy of the license issued to the person by the appropriate state or local agency authorizing him or her to possess such firearm; 2) A copy of his or her law enforcement identification (if he or she is employed by a law enforcement agency).
3) A copy of his or her California driver’s license or California identification card; and
4) Any other information reasonably required by the Barstow Police Department to show that the individual is in compliance with the provisions of all laws regarding the possession and use of a firearm.
e. Identification Display. Each Operator, their respective manager, employee, and individual member engaged in any Permitted shall at all times while engaged in the duties of his or her position wear in plain sight, on his or her person and at chest level, a valid identification badge, issued by Operator.
f. Employee Background Checks/Procedures for Inventory Control to Prevent Diversion of Cannabis. Only employees who receive clearance from Operator shall be permitted to enter the Site or Subtenant’s subleased part thereof. Each employee will have to meet a criminal background investigation conducted by the Barstow Police Department,

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which at minimum shall include a LiveScan criminal history check, which City shall make a good faith effort to facilitate within a reasonable time following the application of a CCP by Operator.

All commercial cannabis and manufactured cannabis products shall be packaged and labeled as required by California Cannabis Laws.
i. Manufactured Cannabis Products. Operator intends to produce manufactured products and shall secure any approval from the County of San Bernardino Health Department, if required, for manufacturing and handling such manufactured products. Infused products shall not be produced, manufactured, stored, or packaged in private homes.
j. Point of Sale Tracking System. Operator shall maintain an inventory control and reporting system that accurately documents the location of cannabis products from inception through distribution, including descriptions, weight, and quantity. The inventory control and reporting system shall comply with the California Cannabis Track and Trace

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(CCTT) program required by California Cannabis Laws. Operator will make such CCTT records available to City upon request.

Operator will not store commercial cannabis or related products in its delivery vehicle outside normal operating hours of the facility.

Commercial cannabis products shall be sold or distributed only to licensed facilities in California. Excess or contaminated product will be securely stored on-site until properly disposed. Disposal may include composting, incineration, land-fill disposal through the local waste management hauler, or other disposal methodology in accordance with California Cannabis Laws.
m. Odor Control. All structures shall have ventilation and filtration systems installed that prevent commercial cannabis plant odors from exiting the interior of the structure. The ventilation and filtration system shall be approved by the Building

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Department and installed prior to commencing cultivation or manufacturing within the allowable structure. Facility air intake, exhaust, and recirculating system shall be of industrial grade. Activated charcoal, recirculating, and closed loop aeration systems will be utilized as necessary for effective odor control and management. See minimum requirements, pursuant to Municipal Code Section 5.61.280(12). n. Description of Banking Plan. Operator shall seek to open a bank account under the name of Operator or its associated management company to provide transparency for funds received, operational costs, including payroll, tax payments to the state and federal governments. Should a bank account not be forthcoming, Operator shall implement other industry standard banking and/or other industry standard transactional mechanisms. o. Transportation Plan. Operator shall comply with California Cannabis Laws regarding transportation and delivery of cannabis and cannabis products. Operator shall retain a list of names and cellular contact numbers for all employees engaged in transportation of commercial cannabis products and provide it to the applicable oversight authority, keeping the list current and up to date.

6. Community Relations, Employment, and Wages.
a. Public Outreach and Education Program. Operator shall coordinate and cooperate with City and other operators of commercial cannabis facilities located within City of Barstow in the establishment and implementation of appropriate public outreach and education programs, including but not limited to joining the local chamber of commerce, meeting neighbors and community partners, donating to local charities, and complying with Local hiring requirements in Section 6(e) below. The public outreach and education programs shall be approved by City.
b. Community Benefits Program. Operator shall coordinate and cooperate with City, Master Lessee, and/or any other Operators of commercial cannabis facilities located within City in the establishment, implementation, and funding of a community benefits program which could include such items as senior citizen programs, City beautification efforts, funding for enforcement against illegal cannabis operations, public safety, housing programs, economic development, infrastructure, capital improvements, including expansion and/or improvement to existing facilities or other physical improvements that provide a benefit to the community, support of holiday and special community events, and support of local public service, public safety, litigation defense, and special social and community organizations. This community benefits program may be implemented by City. The City may invite public participation in the decision-making

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process for identifying and prioritizing community needs and benefits and identifying appropriate projects to be funded by the entity implementing this community benefits program. All projects under the community benefits program must be approved by City.

Master Lessee agrees, as a business expense, to pay City annual payment at a rate of two dollars ($2.00) per square foot of premises spaces for each subtenant (the “Public Benefit Fee”) payable upon issuance of each Operator’s CCP and City-issued business license, then annually thereafter upon each anniversary date. Unless initialed below by the City Manager, the Public Benefit Fee shall be deposited in full into a dedicated account set up by City in order to create, fund and implement a City-approved community benefits program. The community benefits program funds shall be spent only as directed by the City Council and shall be separately accounted for within City’s General Fund. c. Designation of Community Relations Liaison. Pursuant to Ordinance No. 977-2021 at the time of this Agreement, Operator’s day-to-day operations manager, who is to be determined upon commencement of business operations, will be responsible for community inquiries and complaints and on-site management during normal business hours.
d. Interface with Barstow Police Department / Inspections. Operator’s dayto- day operations manager, and/or the Operator’s Community Relations Liaison who is to be determined upon commencement of business operations, will interface with the Barstow Police Department's assigned designee to ensure its operation complies with California Cannabis Laws. The City Manager, or designee, or the Barstow Police Department's assigned designee acting at City Manager’s request and per his specific and limiting instructions, shall have the right to enter all Premises from time to time unannounced during hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this Agreement, without the requirement of a search warrant, subpoena, or court order, and subject to appropriate cost recovery fees set forth in this Agreement, or adopted by City.
e. Local Recruitment, Hiring, and Training Programs. Operator is committed to making a good-faith effort to recruit, hire, and train Local residents for employment by Operator. A good-faith effort means Operator shall take the following or similar actions to recruit and employ City residents: 1) Contact local recruitment sources to identify qualified individuals who are City residents, 2) Advertise for qualified City residents in trade papers and newspapers of general circulation in the area, and 3) Develop a written plan to recruit and employ City residents as a part of its workforce. At a minimum, Operator commits to a good faith local annual hiring goal of 40% of total work hours for permanent and apprentice employees. This goal shall apply horizontally, across all departments and managerial positions. The Operator shall not be penalized or deemed in default under this Agreement if it is unable to achieve such a goal. “Local” is defined as within a three-mile radius of City’s boundaries. The purpose of the hiring policy is to facilitate the training and employment of Local and disadvantaged job applicants for jobs within City’s jurisdiction, and three-mile radius of City boundaries. The Operator shall report on compliance with the local hiring goals as part of its annual audit report.

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f. Full-time Work. Operator shall make its best efforts to fill every position with a full-time employee. However, at no time shall Operator have a labor force that is composed of less than 50% full-time employees within its labor force, and Operator shall make a good faith effort to maintain a full-time employee level of 75%. Operator agrees to provide to its eligible employees leave benefits, health insurance benefits, and other employee benefits to the extent such benefits are required to be paid for by an employer under applicable state and federal employment laws.

7. Indemnification Agreement by each Cannabis Permittee.

Pursuant to Ordinance No 977-2021, and to the fullest extent permitted by local, state and/or federal law, City shall not assume any liability whatsoever with respect to having issued a CCP or executed this Agreement, or the Enabling Ordinance, or otherwise approving the operation of any commercial cannabis business. As a condition to the approval of any CCP and to the execution and approval of this Agreement, Master Lessee (if operating a Permitted Use) and any Operator shall be required to meet all the conditions enumerated in the Barstow Municipal Code before each can receives a CCP and before this Agreement may be executed. The City Manager shall require Master Lessee and each Operator execute the form Indemnification Agreement (Exhibit F) that fully indemnifies the City for all liabilities associated with the CCP, the Commercial Cannabis Permittee’s Commercial Cannabis Activities, and any action taken by the Cannabis Permittee. The Indemnification Agreement shall include the defense of the City and reimbursement of all fees, costs and expenses incurred by the City related to any action arising from this Agreement. Attached as Exhibit F, and incorporated herein by this reference, is true and correct copy of a fully executed Indemnification Agreement.

8. Fees, Costs, and Future Taxes.
a. Fees. Operator agrees to pay all permit fees and charges adopted by City Council by Fee Resolution pursuant to Chapter 19.27 of the Barstow Municipal Code, as well as, any fees set forth in this Agreement. Permit application, processing, and renewal fees shall be due and payable at the time such application is made. The following fee payment obligations shall be imposed on the cannabis business Operator, or Master Lessee if Master Lessee and Operator are the same entity, and not on the Master Lessee if the Master Lessee is solely a landlord and not also a listed permittee or operator of the cannabis business.
b. Costs. Each Operator agrees to reimburse City for all additional reasonable costs of City resulting from the operation of a commercial cannabis facility authorized under applicable provisions of the Barstow Municipal Code, Council resolutions and administrative policies and regulations. City shall invoice such costs monthly, and reimbursement to City for such costs shall be due and payable within thirty (30) days of receipt. Late Fees shall be assessed pursuant to the Barstow Municipal Code provisions applicable to disputes and shall be resolved pursuant to the Municipal Code.

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c. Operating Fees. As used herein, “Premises” means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the Commercial Cannabis Permittee where one or more Permitted Uses will be or is conducted. The parties stipulate and agree that the square footage for the Premises upon the Effective Date of this Agreement is and shall be during the term of this Agreement:

Address Building No. Size (SF)
2865 Lenwood Rd Building 1 12,423
2861 Lenwood Rd Building 2 21,714
2853 Lenwood Rd Building 3 18,634
2845 Lenwood Rd Building 4 18,557
2837 Lenwood Rd Building 5 18,711
2829 Lenwood Rd Building 6 18,225
2817 Lenwood Rd Building 7 18,634
2809 Lenwood Rd Building 8 12,312
2805 Lenwood Rd Building 9 12,312
2813 Lenwood Rd Building 10 12,474
2825 Lenwood Rd Building 11 12,474
2833 Lenwood Rd Building 12 12,474
2849 Lenwood Rd Building 13 12,474
2857 Lenwood Rd Building 14 12,474
2582 Mercantile Way Building 15 14,080
2584 Mercantile Way Building 16 14,080
2586 Mercantile Way Building 17 12,800
2588 Mercantile Way Building 18 A 6,480
2589 Mercantile Way Building 18 B 6,480
2590 Mercantile Way Building 19 A 9,600
2591 Mercantile Way Building 19 B 3,200
2592 Mercantile Way Building 20 14,080
2594 Mercantile Way Building 21 18,000
2596 Mercantile Way Building 22 14,256
2552 Mercantile Way Building 23 14,796
2550 Mercantile Way Building 24 3,456

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As used herein, “Gross receipts” shall mean the total amount actually received or receivable in the course of business in a calendar year or calendar month from sales or the performance of acts or services for which charge is made or credit allowed. “Gross receipts” include, without limitation, all receipts, cash, credit, property received in lieu of cash, and any other valuable consideration taken in exchange for goods, services, or other valuable consideration.

The City Manager is specifically authorized to set and adjust the square footage for the Production Space and to determine the corresponding operating fee as the Project is completed.
1) Each Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, the following fees, if holding a Cannabis Cultivation Permit or Cannabis Manufacturing Permit: a yearly operating fee of Five Dollars ($5) per square foot times total square footage of each Premises. Fees shall be paid no later than December 31st of every year beginning in the year each Operator receives its CCP and shall be prorated commensurate with the number of months such Operator had its CCP. Failure to pay the fee within thirty (30) days after the due date shall result in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.

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cultivation, manufacturing, testing, distribution, and delivery space to which the fee applies is as identified on the attached floor plan.
e. If Operator makes any changes to the interior layout of the facility that increases the amount of space allocated to those uses to which the per-square- foot fee applies, Operator shall notify City of such changes at least fourteen (14) calendar days prior to making such changes, and the per-square-foot fee shall be modified accordingly. If Operator fails to give City notice as required herein, Operator shall be responsible for paying to City a per-square-foot fee based on any increase in the amount of space allocated to those uses to which the per-square- foot fee applies retroactive to the date the CCP became effective.

9. Cost Recovery Fee. In addition to the applicable application fees, community benefits payment, and City operating fees, Master Lessee and/or any Operator agrees to pay, and City shall assess to each Operator respective fees to recover City’s reasonable processing and monitoring costs (“CRF”) relating to Operator’s business upon issuance of Operator’s Manufacturing, Cultivation, Testing, Distribution, Non-Storefront Retailer Delivery, and Microbusiness Permits or any Additional Permits. CRF is separate and apart from any operating fees set forth in Article 8. Operator shall pay all such fees per the cannabis fee scheduled as adopted by the City Council by Resolution.
a. Processing Fees. Processing fees for the Application are based upon the direct and indirect costs that City incurs in reviewing the Application. The processing fees for the Application shall be based only on costs that are reasonably necessary for processing the Application and implementing the Ordinance, including staff time, legal fees, and consultant fees.
b. Annual Regulatory and Monitoring Fees. Annual Regulatory and Monitoring fees for the Manufacturing, Cultivation and Distribution Permits are based upon the direct and indirect costs City incurs in confirming the use of the Property in accordance with the municipal code, the Ordinance, this Agreement, and the Application.

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10. Additional Master Lessee and/or any Operator Obligations. a. Reporting of Gross Receipts from Operations.
1) Quarterly Receipts. No later than three (3) months after execution of this Agreement, and for each Operator three (3) months after execution of Exhibit H, and every three months thereafter each Operator shall deliver to City a report (the “Quarterly Report”) showing the following information for the cannabis business authorized under this Agreement: (i) Gross Receipts from operations for the immediate prior three months received by each Operator, and a cumulative total of all amounts of Gross Receipts from Operations received by each Operator for the calendar year, (ii) a calculation of the quarterly payment due to City for the prior three months, and (iii) a calculation of the cumulative total of all quarterly payments for the calendar year. This reporting obligation is imposed on each Operator, and not on the Master Lessee if the Master Lessee is solely a landlord and not also a listed permittee or operator of the cannabis business.
2) Statement of Receipts/Annual Audit. Each Operator shall keep complete, accurate and appropriate books and records of all receipts from all cannabis business operations in accordance with generally accepted accounting principles. For purposes herein, “books and records” shall mean all bookkeeping or accounting documents each Operator typically utilizes in managing its business operations relating to the Project. Such books and records, as well as all other relevant documents as the City Manager may reasonably require, shall, upon reasonable written notice, be open for inspection by City, its auditors, or other authorized representatives. If at any time during the term such books and records prove inadequate in the reasonable judgment of City to record the Gross Receipts from Operations as herein required, each Operator shall, upon the written request of the City, procure and maintain such books and records as shall be of a character and from adequate for such purpose. City shall have the right to audit and examine such books, records and documents and other relevant items in the possession of such Operator, on no less than an annual basis, or at any time upon reasonable request by the City, to the extent necessary for a proper determination of Gross Receipts from Operations, and all such books, records, documents and other items shall be held available for such audit and examination. The City’s audit shall be performed by a non-contingency fee independent auditor approved in advance by the City. Upon request by City, each Operator shall make all such books, records, and documents available to the City Manager, his designee, or to the City approved auditor, and provide removable copies thereof, within thirty (30) of the date of City’s request. Each Operator shall pay all costs of such audits. Each Operator shall preserve such books, records, documents, and other items in Barstow for a period of not less than one (1) years for the purpose of auditing or re-auditing these accounts upon reasonable notice; except that, if an audit is made within the sevenyear period and each Operator claims that errors or omissions have occurred, the books and records shall be retained and made available until those matters are

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resolved. City shall keep strictly confidential all statements of revenue furnished by each Operator and all other information concerning such Operator’s operation of the Premises obtained by City as a result of the inspection audit and examination privileges of City hereunder, except as otherwise required by law. If City receives a request for such information pursuant to the Public Records Act (California Government Code Section 6250, et seq.), City shall provide each Operator notice of any such request prior to disclosing any such information and afford such Operator the opportunity to obtain a protective order. Within seven (7) years after the receipt of any statement of receipts under this Agreement, City at any time shall be entitled to carry out an audit of such revenue either by City or agent to be designated by City. If it shall be determined as a result of such audit that there has been a deficiency in any payment due under this Agreement made on the basis of such statement, then such deficiency shall become immediately due and payable within thirty (30) days of such determination.
3) Copies of Tax Filings. Each Operator shall provide the City with courtesy copies of each and every CDTFA Quarterly report such Operator is required to provide to the California Department of Tax and Fee Administration for sales and use tax, Cannabis Excise Tax, and/or Cannabis Cultivation Tax, at the time such filings are made. This reporting obligation is imposed on the cannabis business Operator, or Owner if Owner and Operator are the same entity, and not on the Owner if the Owner is solely a landlord and not also a listed permittee or operator of the cannabis business.
b. Future Revenue Mechanisms. During the term of this Agreement, if the City imposes (by Citizen Initiative or otherwise) an alternative revenue mechanism specifically related to cannabis operations (e.g., a cannabis tax), Master Lessee and City agree to renegotiate in good faith the terms of this Agreement so as to conform the aggregate Public Benefit Fees and Operating Fees payable by an Operator with any alternative revenue mechanism approved by voters. As used in this section, “alternative revenue mechanism” does not include taxes, fees, or assessments levied on or collected from both cannabis and non-cannabis operations.

Such insurance shall also:
1) Name City, its elected and appointed councils, boards, commissions, officers, agents, employees, and representatives as “Additional Insureds” by

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endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the abovelisted additional insured. 2) Be primary with respect to any insurance of self-insurance programs covering City, its officials, employees, agents, and representatives. 3) Contain standard separation of insured provisions.
c. Automotive Liability Insurance. Each Operator shall maintain business automobile liability insurance or equivalent form with a limit of not less than One Million Dollars ($1,000,000) for personal injury for each accident for the vehicles Operator operates in connection with its cannabis business. Such insurance shall include coverage for owned, hired, and non-owned automobiles. Such insurance shall also:
1) Name City, and work in good faith with the City and the insurers to name additional insureds as deemed reasonably necessary. “Additional Insureds” by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the abovelisted additional insureds. 2) Be primary with respect to any insurance or self-insurance programs covering City, its officials, employees, agents, and representatives. 3) Contain standard separation of insured provisions.
d. Workers’ Compensation Insurance. Each Operator shall take out and maintain during the term of this Agreement, workers’ compensation insurance for all of such Operator’s employees employed at or on the Project, and in the event any of the work is subcontracted, Operator shall require any general contractor or subcontractor similarly to provide workers’ compensation insurance for such contractor’s or subcontractor’s employees, unless such employees are covered by the protection afforded by such Operator.

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required in this Article, including evidenced that such insurance will not be canceled, allowed to expire, or be materially reduced in coverage without thirty (30) days prior written notice to City.
2) Provide to City, upon request, and within seven (7) calendar days of said request, certified copies of endorsements and policies, and properly executed certificates of insurance evidencing the insurance required herein. 3) Replace or require the replacement of certificates, policies and endorsements for any insurance required herein expiring prior the termination of this Agreement.
4) Maintain all insurance required herein from the Effective Date of this Agreement to the earlier of the expiration of the term or the mutual written termination of this Agreement.
5) Place all insurance required herein with insurers licensed to do business in California with a current Best’s Key Rating Guide reasonably acceptable to City.
f. Indemnification. Master Lessee and each Operator shall execute the form Indemnification Agreement attached as Exhibit F, thereby agreeing to indemnify, defend, and hold City, and its elected and appointed council, boards, commissions, officers, agents, employees, contractors, consultants and representatives, harmless from any and all claims costs and liability for any personal injury or property damage which may arise as a result of any actions or negligent omissions by Master Lessee (or each Operator) or Master Lessee (or each Operator)’s contractors, subcontractors, agents, or employees in connection with the construction, improvement, or operation of the Project.

Termination of this Agreement shall eliminate any further obligation of Master Lessee and each Operator to comply with this Agreement, or some portion thereof, if such termination relates to only part of the Site or Project. Termination of this Agreement, in whole or in part, shall not, however, eliminate the rights of Master Lessee or any Operator to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.

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c. Effect of Termination on City’s Obligations. Termination of this Agreement shall eliminate any further obligation of City to comply with this Agreement, or any portion thereof. Termination of this Agreement shall not, however, eliminate the rights of City to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.
d. Survival After Termination. The rights and obligations of the Parties set forth in Section 10, Section 16, Section 22, and Section 24 and any right or obligation of the Parties in this Agreement which, by its express terms or nature and context is intended to survive termination of this Agreement, will survive any such termination. e. Termination Upon Failure to Perform. The Master Lessee and or any Operator shall have two (2) years after the Effective Date to commence operation of the commercial cannabis facility contemplated by this Agreement. Failure of the Master Lessee and/or any Operator to commence commercial cannabis operations within that twoyear time period may constitute a default and City shall have the right, but not the obligation, to exercise its default remedies under Section 15. The Parties agree to negotiate in good faith regarding any reasonably necessary extensions of this deadline for good cause, such as may be shown as a result of circumstances delaying commencement of operations beyond the control of Master Lessee and/or Operator.

14. Standard Conditions for Construction. During any on-site construction activities related to development of the project site and any buildings thereon, or renovation or remodeling of existing buildings, Master Lessee and/or each Operator shall comply with all applicable terms and conditions attached hereto and incorporated herein by reference as Exhibit G.

The Project shall comply with the applicable parking standards established by the City for cannabis activities.

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days, the alleged defaulting party shall not be deemed in default as long as such party commences to cure such default within such thirty (30) day period and thereafter diligently prosecutes such cure to completion.

In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that City shall not be liable in monetary damages, to Master Lessee and/or any Operator, to any mortgagee or lender, or to any successors in interest of Master Lessee and/or any Operator or mortgagee or lender, or to any other person, and Master Lessee and/or any Operator covenants on behalf of itself and all successors in interest to the Property or any portion thereof, not to sue for damages or claim any damages.
1) For any breach of this Agreement or for any cause of action which arises out of this Agreement; or
2) For the impairment or restriction of any right or interest conveyed or provided under, with, or pursuant to this Agreement, including, without limitation, any impairment or restriction which Master Lessee and/or any Operator characterizes as a regulatory taking or inverse condemnation; or 3) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.
b. Specific Performance. The parties acknowledge that money damages and remedies at law are inadequate, and specific performance and other non- monetary relief are particularly appropriate remedies for the enforcement of this Agreement and should be available to all parties for the following reasons:
1) Money damages are unavailable against City as provided in Section 15(a) above.
2) Due to the size, nature, and scope of the Project, it may not be practical or possible to restore the Property to its natural condition once implementation of this Agreement has begun. After such implementation, Master Lessee and/or any Operator may be foreclosed from other choices it may have had to use the Property or portions thereof. Master Lessee and/or any Operator has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate Master Lessee and/or any

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Operator for their respective efforts. By the same token, in the event that City issues any permit or other approval for a structure, and the public facilities, improvements, and infrastructure reasonably necessary to provide an adequate level of public services to that structure are not timely completed or Master Lessee and/or any Operator otherwise fails to carry out its obligations under this Agreement, then it would not be possible to determine a sum of money that would adequately compensate City for the resulting hardship. For the above reasons, City, Master Lessee, and any Operator and agree that, notwithstanding any other language in this Agreement, damages would not be an adequate or appropriate remedy if City fails to carry out its obligations under this Agreement. Therefore, specific performance of this Agreement is the only remedy which would compensate Master Lessee and/or any Operator if City fails to carry out its obligations under this Agreement, and City hereby agrees that Master Lessee and/or any Operator shall be entitled to specific performance in the event of a default by City hereunder. Further, specific performance of this Agreement is the only remedy which would compensate City if Master Lessee and/or any Operator fails to carry out their obligations under this Agreement, and Master Lessee and/or any Operator hereby agree that City shall be entitled to specific performance in such event.
c. Release. Except for those remedies set forth in Sections 15(a), 15(b), and this 15(c), Master Lessee and/or any Operator, for itself, its successors and assignees, hereby releases City, its officers, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, based or asserted, pursuant to Article 1, Section 19 of the California Constitution, the Fifth Amendment of the United States Constitution, or any other law or ordinance which seeks to impose any other liability or damage, whatsoever, upon City because it entered into this Agreement or because of the terms of this Agreement.

Master Lessee and/or any Operator acknowledges that it may have suffered, or may suffer, damages and other injuries that are unknown to it, or unknowable to it, at the time of its execution of this Agreement. Such fact notwithstanding, Master Lessee and/or any Operator agrees that the release provided in this Section 14(c) shall apply to such unknown or unknowable claims and damages. Without limiting the generality of the foregoing, Master Lessee and/or any Operator acknowledges the provisions of California Civil Code Section 1542, which provide:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
Master Lessee and/or any Operator hereby waives, to the maximum legal extent, the provisions of California Civil Code Section 1542 and all other statutes and judicial decisions of similar effect.

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d. Attorneys’ Fees and Costs. In any action or proceeding between City and Master Lessee and/or any Operator brought to interpret or enforce this Agreement, or which in any way arises out of the existence of this Agreement or is based upon any term or provision contained herein, the “prevailing party” in such action or proceeding shall be entitled to recover from the non-prevailing party, in addition to all other relief to which the prevailing party may be entitled pursuant to this Agreement, the prevailing party’s reasonable attorneys’ fees and litigation costs, in an amount to be determined by the court.

The prevailing party shall be determined by the court in accordance with California Code of Civil Procedure Section 1032. Fees and costs recoverable pursuant to this Section 14(e) include those incurred during any appeal from an underlying judgment and in the enforcement of any judgment rendered in any such action or proceeding. e. Default. No building permit shall be issued or building permit application accepted for Master Lessee and/or any Operator for any structure on the Property after Master Lessee and/or such Operator is determined by City to be in default of the terms and conditions of this Agreement until such default thereafter is cured such defaulting party or is waived by City. If City terminates this Agreement as to any Operator because of such Operator’s default, then City shall retain any and all benefits, including money or land received by City hereunder.

16. Third Party Litigation.
a. General Plan Litigation. City has determined that this Agreement is consistent with its General Plan and all applicable special plans. Master Lessee and/or any Operator has reviewed the General Plan and concurs with City’s determination.

City shall have no liability under this Agreement or otherwise for any failure of City to perform under this Agreement, or for the inability of Master Lessee and/or any Operator to develop the Property as contemplated by the Agreement, including, but not limited to, if such failure to perform or inability to develop is the result of a judicial determination that the General Plan, or portions thereof, are invalid or inadequate or not in compliance with law, or that this Agreement.
b. Hold Harmless Agreement. Master Lessee and/or any Operator hereby agrees to, and shall hold City, its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants and employees harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Master Lessee and/or any Operator or their respective contractors, subcontractors, agents, or employees’ operations under this Agreement, whether such operations be by Master Lessee and/or any Operator, or by any of Master Lessee and/or any Operator’s contractors, subcontractors, agents, or employees operations under this Agreement. Master Lessee and/or any Operator agree to and shall defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damage caused, or alleged to have been caused, by reason of any of the aforesaid operations.

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c. Indemnification. Master Lessee and/or any Operator shall defend, indemnify, and hold harmless City and its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants, and employees against and from any and all liabilities, demands, claims, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and reasonable attorneys’ fees), which any or all of them may suffer, incur, be responsible for or pay out as a result of or in connection with any challenge to the legality, validity or adequacy of any of the following:
(i) this Agreement and the concurrent and subsequent permits, licenses and entitlements approved for the Project or Property, and all activities conducted under such entitlements; (ii) the environmental impact report, mitigated negative declaration or negative declaration, as the case may be, prepared in connection with the development of the Property; (iii) any claims based on or alleging inverse condemnation by any person or entity with an interest in the Property; and (iv) the proceedings undertaken in connection with the adoption or approval of any of the above. In the event of any legal or equitable action or other proceeding instituted by any third party (including a governmental entity or official) challenging the validity of any provision of this Agreement or any portion thereof as set forth herein, the parties shall mutually cooperate with each other in defense of said action or proceeding. Notwithstanding the above, City, at is sole option, may tender the complete defense of any third-party challenge as described herein. In the event City elects to contract with special counsel to provide for such a defense, City shall meet and confer with Master Lessee and/or any Operator regarding the selection of counsel, and Master Lessee and/or any Operator shall pay all costs related to retention of such counsel. d. Environmental Contamination. Master Lessee and/or any Operator shall indemnify and hold City, its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants and employees free and harmless from any liability, based or asserted, upon any act or omission of Master Lessee and/or any Operator, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors, excepting and acts or omissions of City as successor to any portions of the Property dedicated or transferred to City by Master Lessee and/or any Operator, for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions, and Master Lessee and/or any Operator shall defend, at its expense, including attorneys’ fees, City, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. City may in its discretion participate in the defense of any such claim, action or proceeding. e. City to Approve Counsel. With respect to Sections 16(a) through 16(d), City shall approve any counsel which Master Lessee and/or any Operator selects, hires, or otherwise engages to defend City hereunder, which approval shall not be unreasonably withheld.

17. California Environmental Quality Act. Master Lessee and/or any respective Operator shall reimburse City for any and all costs incurred by City related to project review under the California Environmental Quality Act (CEQA), Public Resources Code, §§21000-21189.3, and the Guidelines for California Environmental Quality Act, California Code of Regulations, Title 14,

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§§15000-15387. If reasonably requested by City, Master Lessee and/or any Operator shall conduct and pay for any required CEQA reviews and analyses.

19. Commercial Cannabis Permit Conditions of Approval. Master Lessee and/or any Operator shall comply with all conditions of approval of the City-issued Commercial Cannabis Permit and Conditional Use Permit.

20. Periodic Reviews. This Agreement shall be subject to annual review by the City Manager. Master Lessee and/or any Operator and Landlord executing this Agreement, or successor in interest thereto, shall demonstrate good faith compliance with the terms of this Agreement. If, as a result of such periodic review, City finds and determines, based on substantial evidence, that Master Lessee and/or any Operator executing this Agreement, or successor in interest thereto, has not complied in good faith with the terms or conditions of this Agreement, City may terminate or modify this Agreement as to such non-compliant Operator (except no modification shall increase Master Lessee and/or any Operator’s liability nor reduce Master Lessee and/or any Operator’s rights), provided that City shall first provide Master Lessee and/or any Operator notice of its intent to terminate, with a detailed explanation as to why, and provide Master Lessee and/or any Operator the reasonable right to cure the same.
a. Periodic Review. City Manager shall review this Agreement annually, on or before each anniversary of the Effective Date, in order to ascertain Master Lessee and/or any Operator’s good faith compliance with this Agreement. During the periodic review Master Lessee and/or any Operator shall be required to demonstrate good faith compliance with the terms of the Agreement, through submitting an annual monitoring report, records, or equivalent written materials to the Planning Department. Master Lessee and/or any Operator shall document any request for an extension of the term due to delays beyond the control of Master Lessee and/or any Operator under Section 12(e) or Section 24(j). Master Lessee and/or any Operator shall submit an annual review and administration fee deposit not to exceed City’s estimated internal and third-party costs associated with the review and administration of this Agreement during the succeeding year, consistent with Section 23(k) (“Deposit with City”) below. City shall provide Master Lessee and/or any such Operator said estimate a reasonable time in advance of the annual review and administration fee deposit being due.

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b. Conditional Use Permit. In addition to the Commercial Cannabis Permit, Master Lessee shall apply for and obtain a CUP for the establishment and operation of the Project. Operator’s operation of any business at all times shall be required to comply with the terms of this Agreement and the Master Lessee’s CUP and the Operator’s respective CCP. Master Lessee acknowledges and covenants that the Conditional Use Permit obtained by the Master Lessee via this Agreement shall run with the Site and that this Agreement is binding upon, and the benefits of this Agreement inure to, all authorized successors-ininterest of the Owner, as landlord, and Master Lessee, as master lessee, each as applicable and each as approved by the City via the assignment approval provisions of Section 21. c. Special Review. City Council may order a special review of compliance with this Agreement at any time. The City Manager or his or her designee shall conduct such special review. During a special review, Master Lessee and/or any Operator shall be required to demonstrate good faith compliance with the terms of this Agreement. The burden of proof on this issue shall be on Master Lessee and/or any Operator. d. Special Review Hearing. At the time and place set for the review hearing, Master Lessee and/or any Operator shall be given an opportunity to be heard. If City Council finds, based upon clear and convincing evidence, that Master Lessee and/or any Operator has not complied in good faith with the terms or conditions of this Agreement, City Council may terminate this Agreement as to such party notwithstanding any other provision of this Agreement to the contrary, or modify this Agreement as to such party and impose such conditions as are reasonably necessary to protect the interests of City. The decision of City Council shall be final, subject only to judicial review pursuant to Code of Civil Procedure Section 1094.5.
e. Certificate of Agreement Compliance. If, after a periodic or special review, Master Lessee and/or any Operator is found to be in compliance with this Agreement, and if Master Lessee and/or any Operator requests it, City shall issue a Certificate of Agreement Compliance (“Certificate”) to such requesting party stating that after the most recent periodic or special review, and based upon the information known or made known to the City Manager and City Council, that (i) this Agreement remains in effect and (ii) Master Lessee and/or any Operator is not in default. City shall not be bound by a Certificate if a default existed at the time of the periodic or special review but was concealed from or otherwise not known to the City Manager and City Council, regardless of whether the Certificate is relied upon by assignees or other transferees or Master Lessee and/or any Operator.
f. Failure to Conduct Review. City’s failure to conduct a periodic review of this Agreement shall not constitute a breach of this Agreement. g. Cost of Review. The costs incurred by City in connection with the periodic reviews shall be borne by Master Lessee and/or any Operator subject to such review.

21. Assignment by Owner, Master Lessee or Operator. Owner, Master Lessee and/or any Operator shall not transfer, delegate, sublet or assign its interest, rights, duties, and

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obligations under this Agreement without the prior written consent of City Council, which consent shall not be unreasonably withheld. Owner, Master Lessee and/or any Operator shall submit a transfer application to the City Manager or City Manager’s designee and pay any applicable transfer fee. The proposed transferee must show proof of lawful transfer of possession of the applicable location as may be acceptable to the City. Owner, Master Lessee and/or any Operator acknowledges it may take the City approximately three (3) months to process a transfer application.

Any assignment, delegation, subletting or assignment without the prior written consent of City Council shall be null and void. Any transfer, delegation, subletting or assignment by Owner, Master Lessee and/or any Operator as authorized herein shall be effective only if and upon the party to whom such transfer, delegation, subletting, or assignment is made is issued a CCP as required under the Barstow Municipal Code.

22. Operating Commercial Cannabis Facility. Any party to this Agreement, or successor in interest thereto, including Master Lessee and each Operator, shall not operate a commercial cannabis facility authorized under the municipal code unless:
a. It is the holder of a valid CCP issued by City in accordance with the procedures and requirements or the Enabling Ordinance, and Chapter 19.27 of the Barstow Municipal Code; and,
b. It is the holder of a valid license issued by the State of California to operate a commercial cannabis business.

23. Notice. Any notice or communication required hereunder between City and Master Lessee and/or any Operator must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by Federal Express, UPS or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered, as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

If to City: City of Barstow
220 E. Mountain View Street, CA 92311
Attention: City Manager
With courtesy copy to: City Attorney
790 E. Colorado Boulevard, Suite 850

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Pasadena, California 91101
If to Owner: Barstow Outlet LLC
910 Broadway Ave, Suite 110
Santa Monica, CA 90401
Attn: Farhad Abolfathi
[email protected]
With courtesy copy to: Baker, Burton & Lundy, P.C.
515 Pier Ave.

Hermosa Beach, CA 90254
Attn: Mary G. Korkodian
[email protected]
If to Master Lessee: Merchants Barstow LLC
2594 Mercantile Way, Bldg. 21
Barstow, CA 92311
Attn: Greg Hakopyan
[email protected]
With courtesy copy to: Weinberg Gonser Frost LLP
10866 Wilshire Bvld., Sutie 1650
Los Angeles, CA 90024
Attn: Michael Jensen
[email protected]

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enact regulations or take future discretionary actions after the Effective Date of this Agreement that: (1) are necessary to protect the public health and safety, and are generally applicable on a City-wide basis (except in the event of natural disasters as found by the City Council such as floods, earthquakes and similar acts of God); (2) are amendments to California Cannabis Laws or California Uniform Codes, as adopted by the City of Barstow, and/or the Barstow Municipal Code, as applicable, regarding the construction, engineering and design standards for private and public improvements to be constructed on the Site; (3) are necessary to comply with state or federal laws and regulations; or (4) involve sign and parking ordinances and guidelines, changes to the City’s zoning laws, Specific Plan or the City's General Plan, whether adopted previous or subsequent to the Effective Date of this Agreement).

If any City ordinance, rule or regulation or addition to the Barstow Municipal Code is enacted or imposed by a citizen-sponsored initiative or referendum after the Effective Date that would conflict with this Agreement or an associated Commercial Cannabis Permit, business license or other authorizations and City approvals, or reduce development rights or assurances provided to the Master Lessee and/or any Operator in this Agreement, then such changes, additions or deletions to the Barstow Municipal Code shall not be applied to the Site or Project; provided, however, the parties acknowledge that the City's approval of this Agreement is a legislative action subject to referendum. The parties shall cooperate with each other and undertake such reasonable actions as may be appropriate to ensure this Agreement remains in full force and effect and is implemented in accordance with its terms and to the fullest extent permitted by state or federal law.

Notwithstanding anything to the contrary in this Agreement, site improvements contemplated by this Agreement shall be completed pursuant to the development standards and design guidelines applicable at the time of development. e. Joint and Several Liability. Master Lessee and/or any Operator shall be jointly and severally liable for any amount due under this Agreement, and any breach of this Agreement or failure to pay by one Party shall also constitute a breach of this Agreement by the other Party.
f. Severability. If any part of this Agreement is found to conflict with applicable state laws or regulations, such part shall be inoperative, null, and void insofar as it conflicts with said laws or regulations or modified or suspended as may be necessary to comply with such state laws or regulations, but the remainder of this Agreement shall continue to be in full force and effect.
g. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual, facsimile, or electronic signature.
h. Jurisdiction. The law governing this Agreement shall be that of the State of California. Any suit brought by any party against any other party arising out of the

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Packet Pg. 1888 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. - 34 -
273128.v19
performance of this Agreement or the breach, termination, enforcement, interpretation, or validity thereof, shall be filed and maintained in the County of San Bernardino Superior Court.
i. Disclaimer. Despite California Cannabis Laws and the terms and conditions of this Agreement, any CUP, or any CCP issued pertaining to Master Lessee and/or any Operator, or the Site, California commercial cannabis cultivators, transporters, distributors, or possessors may still be subject to arrest by state or federal officers and prosecuted under state or federal law. The Federal Controlled Substances Act, 21 USC § 801, et seq., prohibits the manufacture, distribution, and possession of cannabis without any exemptions for medical use.
j. Force Majeure. If delays are caused by unforeseen events beyond the control of Master Lessee and/or any Operator, such delays will entitle Master Lessee and/or any Operator to an extension of time as provided in this section. Such unforeseen events (“Force Majeure”) shall mean war, insurrection, acts of God, local, state or national emergencies, strikes and other labor difficulties beyond the party’s control, or any default by City hereunder, which Force Majeure event substantially interferes with the development, construction or operation of the Project.
k. Constructive Notice and Acceptance. Every person who after the Effective Date and recording of this Agreement owns or acquires any right, title, or interest to any portion of the Site, is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Site, and all rights and interests of such person in the Site shall be subject to the terms, requirements, and provisions of this Agreement.
l. Binding Effect of Agreement. The Parties agree that the Recitals above are true and correct and intend to be bound by same. Except as otherwise provided, the burdens of this Agreement are binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of the Parties and constitute covenants which run with the Site. In order to provide constructive notice thereof, the City Clerk will record this Agreement with the San Bernardino County Recorder within the period required by Government Code Section 65868.5.
m. Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between the City and Master Lessee and/or any Operator is that of a government entity regulating the development of private property and Master Lessee and/or any Operator of such property.

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Packet Pg. 1889 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. - 35 -
273128.v19
n. Changes to Project. The parties acknowledge that changes to the Project or Development Plans and related approvals may be appropriate and mutually desirable to carry out the intent and purpose of this Agreement. This Agreement shall not prevent the City from applying, with the consent or at the request of Master Lessee and/or any Operator, Subsequent Land Use Regulations or Subsequent Development Approvals that do not directly conflict with the Project, Site or Development Plan authorized under this Agreement. The granting of one such change, or request shall not obligate the City to grant other similar changes or requests. As used herein, “Subsequent Development Approvals” include, without limitation, all excavation, grading, building, construction, demolition, encroachment or street improvement permits, occupancy certificates, utility connection authorizations, or other non-discretionary permits or approvals necessary, convenient or appropriate for the Project. As used herein, “Subsequent Land Use Regulations” means ordinances, resolutions and codes adopted or approved by the City after the Effective Date of this Agreement governing the development and use of the land, including general plan amendments, zone changes, variances or conditional use permits affecting the permitted use of the land including density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions of reservation or Dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Development of the Property.
o. Conflicting Federal or State Rules. In the event that any conflicting federal or state laws or regulations, enacted after the Effective Date, prevent, or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, this Agreement shall remain in full force and effect as to those provisions not affected; and
(i) Notice of Conflict. Either party, upon learning of any such matter, will provide the other party with written notice thereof and provide a copy of any such law, regulation, or policy together with a statement of how any such matter conflicts with the provisions of this Agreement; and
(ii) Modification Conferences. The parties shall, within thirty (30) days of the notice referenced to in the preceding subsection, meet and confer in good faith and attempt to modify this Agreement to bring it into compliance with any such federal or state law or regulation.
(iii) City Council Hearings. In the event the City believes that an amendment to this Agreement is necessary due to the effect of any federal or state law or regulation, the proposed amendment shall be scheduled for hearing before the City Council. The City Council shall determine the exact nature of the amendment necessitated by such federal or state law or regulation. Master Lessee and/or any Operator shall have the right to offer oral and written testimony at the hearing. Any modification ordered by the City Council pursuant to such hearing is subject to judicial review in accordance with California law.

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Packet Pg. 1890 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. - 36 -
273128.v19
(iv) Minor Amendments. A minor modification is a modification that does not modify the material terms of this Agreement including (1) the Term; (2) Facility Operations; (3) Indemnification; and (4) Fees. Minor Modifications shall not require a public hearing prior to execution of the modification to this Agreement. Either Party may propose a minor modification, consent to which shall not be unreasonably withheld, conditioned or delayed by the other Party.

Upon the written request of Developer for a modification to this Agreement, the City Manager or his/her designee shall determine: (1) whether, in his/her reasonable judgment, the requested modification constitutes a minor modification as defined herein; (2) whether the requested modification is consistent with applicable law (other than that portion of this Agreement sought to be modified); and (3) whether, in his/her reasonable judgment, the requested modification tends to promote the goals of this Agreement. If the City Manager or his/her designee determines that the requested modification is minor modification that is consistent with applicable law and tends to promote the goals of this Agreement, the proposed modification will be approved by the City as a minor modification, and a written modification will be executed by the Parties and attached to this Agreement. Any such minor modification shall not be deemed an “amendment” to this Agreement under Government Code Section 65858.
(v) City Cooperation. The City shall cooperate with Master Lessee and/or any Operator in securing any City permits, licenses or other authorizations that may be required as a result of any amendment resulting from actions initiated by the City. As required by this Agreement, Master Lessee and/or any Operator shall be responsible to pay all applicable fees in connection with securing of such permits, licenses, or other authorizations. q. Effective Date. “Effective Date” means the date on which all of the following are true: (i) thirty (30) days have elapsed since the second reading of the Ordinance adopting and approving this Development Agreement and (ii) all Exhibits to this Agreement are finalized, executed and notarized by all affected parties (if applicable) and attached hereto; provided, however, that if these conditions have not been fully satisfied by Master Lessee and/or any Operator the Effective Date may not thereafter occur and this Agreement may not thereafter become effective.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

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Packet Pg. 1891 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. - 37 -
273128.v19
“CITY”
Date: _______________, 2021

CITY OF BARSTOW,
a California Municipal Corporation
By:

Its: Mayor
Attest:
______________________________
City Clerk
Approved to as Form:
______________________________
City Attorney
“MASTER LESSEE”
Date: , 2021

MERCHANTS BARSTOW, LLC
a California limited liability company
By:

Its:

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Packet Pg. 1892 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. - 38
-
273128.v19
OWNER

BARSTOW OUTLET, LLC
a Delaware limited liability company
By:

Its:

34.b
Packet Pg. 1893 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT A

LEGAL DESCRIPTION
[INSERT LEGAL DESCRIPTION]

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Packet Pg. 1894 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT B

PARCEL MAP
[INSERT PARCEL MAP]

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Packet Pg. 1895 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT C

SITE AND FLOOR PLANS

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Packet Pg. 1896 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT D

RESERVATION OR DEDICATION OF LAND FOR PUBLIC PURPOSES (IF APPLICABLE)

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Packet Pg. 1897 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT E

OPERATIONAL AND ADDITIONAL BUSINESS STANDARDS (IF APPLICABLE)

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Packet Pg. 1898 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19
EXHIBIT F.

INDEMNIFICATION AGREEMENT

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Packet Pg. 1899 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT G

STANDARDS AND CONDITIONS FOR CONSTRUCTION (IF APPLICABLE)

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Packet Pg. 1900 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT H

TENANT AGREEMENT TO ABIDE BY DEVELOPMENT AGREEMENT

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Packet Pg. 1901 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

EXHIBIT I

ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made and entered into this ___ day of _______ , _______, by and between the CITY OF BARSTOW, a municipal corporation of the State of California (“City”), and MERCHANTS BARSTOW LLC, a California limited liability company (“Developer” or “Assignor”), _________________ , a California corporation/limited liability company (“Assignee”). City, Assignors, or Assignee may be referred to herein individually as a “Party” or collectively as the “Parties.” There are no other parties to this Agreement.

RECITALS
A. City and Assignor entered into a development agreement, dated March [*], 2022, for the development of property located in the City of Barstow, County of San Bernardino, State of California, Assessor’s Parcel Number: 0428-211-26-0000, commonly known as 2552 Mercantile Way, Barstow, CA 92311 (“Development Agreement”); B. Pursuant to the Development Agreement, Assignor may transfer all or part of its rights, title, and/or interests in all or a portion of Site, or Project, as those terms are defined in the Development Agreement, to any person, firm, corporation, or entity during the Term of the Development Agreement only with the advance written consent of the City Council, who shall not unreasonably withhold or condition such consent;
C. Assignor desires to transfer to Assignee some or all of Assignors’ rights and obligations under the Development Agreement, in accordance with Article 9, Section 9.1 of the Development Agreement;
D. Assignee desires to assume some or all of Assignor’s rights and obligations under the Development Agreement;
E. The City Council has agreed to permit Assignors’ transfer of some or all of Assignor’s rights and obligations under the Development Agreement to Assignee, and to Assignee’s assumption of same, subject to the terms and conditions specified in this Agreement; F. The Parties intend through this Agreement to allow Assignors to transfer, and Assignee to assume, some or all of Assignors’ rights and obligations under the Development Agreement.

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Packet Pg. 1902 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19

Section 2. Assumption. Assignee hereby accepts and assumes the foregoing transfer or assignment of (all/some) of Assignors’ rights and obligations under the Development Agreement.

Section 4. Effective Date. The assignment and assumption of rights and obligations as specified herein shall be effective on ___________, _____.

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Packet Pg. 1903 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 273128.v19
“CITY”
Date: _______________, _____

CITY OF BARSTOW,
a California Municipal Corporation
_____________________________
By:

Its: City Manager
“ASSIGNOR”
Date: _______________, _____

MERCHANTS BARSTOW LLC,
a California limited liability company
_____________________________
By:

Its: Managing Member
“ASSIGNEE”
Date: _______________, 2021
_____________________________
By:

Its:

34.b
Packet Pg. 1904 Attachment: Multi-Tenant Cannabis Development Agreement (City ready for PC 092322)(273128.19) (5230 : Merchants Barstow, LLC Comm. 1 271538.1
ORDINANCE NO. XXX-2022

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BARSTOW,

CALIFORNIA APPROVING A CANNABIS LICENSE APPLICATION FOR

MERCHANTS BARSTOW LLC AND DEVELOPMENT AGREEMENT

WITH MERCHANTS BARSTOW LLC FOR A COMMERCIAL CANNABIS

DISPENSARY, CULTIVATION, DISTRIBUTION/TRANSPORTATION,

MAUNUFACTURING, AND NON-STORE FRONT DELIVERY LOCATED
AT 2552 MERCANTILE WAY, BARSTOW, CA 92311
WHEREAS, California voters approved Proposition 215 (Health and Safety Code Section 11362.5), entitled the Compassionate Use Act (CUA), in 1996, which exempts patients and their primary caregivers from criminal prosecution or sanctions under H&S Code Sections 11357 and 11358 for qualified use and cultivation of medical cannabis; and
WHEREAS, the California Legislature passed Senate Bill 420 (H&S Code Sections 11362.7 et seq.) in 2003 to create the Medical Marijuana Program (MMPA), which established a voluntary program for the issuance of medical cannabis identification cards for qualified patients, set limits on the amount of cannabis any individual could possess, and provided an exemption from state criminal liability for persons "who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes"; and WHEREAS, in November 2016, California voters approved Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act ("AUMA"), which established a state licensing and regulatory system for commercial cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, labeling, transportation, delivery, or sale of recreational marijuana and marijuana products; and WHEREAS, on June 27, 2017, the Governor signed the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA"), consolidating the AUMA with previous state law regarding commercial medical marijuana activities to create one state licensing system for commercial activities related to medical and recreational marijuana; and
WHEREAS, both the AUMA and MAUCRSA authorize the City to further regulate or completely prohibit the establishment or operation of commercial marijuana activities within its limits, even such activities that may be licensed under state law; and WHEREAS, the City's power to regulate or completely prohibit commercial marijuana activities under the AUMA and MAUCRSA is consistent with the California Supreme Court's decision in City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th 7; and

34.c
Packet Pg. 1905 Attachment: CC Ord. 000-2022 Merchants Barstow LLC (5230 : Merchants Barstow, LLC Comm. Cannabis App) 2 271538.1
WHEREAS, the California Attorney General's August 2008 Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use recognizes that the cultivation or other concentration of marijuana in any location or premises without adequate security increases the risk that nearby homes or businesses may be negatively impacted by nuisance activity such as loitering or crime; and WHEREAS, the California Planning and Zoning Law (Gov. Code, § 65000 et seq.) authorizes the City to adopt and administer zoning laws, ordinances, rules, and regulations; and
WHEREAS, the City of Barstow passed Ordinance No. 974-2021 on June 7th 2021 to begin the process of allowing Cannabis sales; and WHEREAS, the City of Barstow passed Ordinance No. 977-2021 on October 4th 2021, adopting land use laws for Cannabis sales and requiring applicants to execute a development agreement with the City before beginning operation; and WHEREAS, no cannabis business may operate in the City of Barstow unless first issued a permit by the City; and
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the “Development Agreement Statute”), which authorizes the City and an individual with an interest in real property to enter into a development agreement that establishes certain development rights in real property that is subject to a development agreement application; and
WHEREAS, the proposed project is consistent with the Barstow General Plan and the California Environmental Quality Act; and
WHEREAS, Merchants Barstow, LLC proposes to improve, develop and use real property to operate a Commercial Cannabis Dispensary, Cultivation, Distribution/Transportation, Manufacturing, and Non-Store Front Delivery located at 2552 Mercantile Way Barstow, CA 92311 (APN #0428-211-26) and has properly submitted a completed cannabis license application; and WHEREAS, City and Merchants Barstow, LLC seek to enter into a development agreement for the Project (the “Development Agreement”) pursuant to the Development Agreement Statute and all applicable local and state laws; and WHEREAS, the Planning Commission approved Resolution No. 563-2022 finding that an ordinance approving the Development Agreement will allow the City to adequately regulate and address all impacts of the Project in the City in accordance with state law; and

34.c
Packet Pg. 1906 Attachment: CC Ord. 000-2022 Merchants Barstow LLC (5230 : Merchants Barstow, LLC Comm. Cannabis App) 3 271538.1
WHEREAS, the City Council finds that the ordinance is in the best interest of the health, welfare, and safety of the public.

NOW THEREFORE, the City Council of the City of Barstow hereby ordains as follows:

Section 1. Incorporation of Recitals. The above set forth recitals and findings are true and correct and incorporated herein by reference, as if set forth herein in full.

Section 2. Finding Regarding the Development Agreement. Based upon the foregoing facts and findings for DA 6 the City Council hereby determines as follows:

A. DA 6 was reviewed and deemed correct and in compliance with Government Code Section 65865.2 and Chapter 19.46 of the Barstow Municipal Code; and B. DA 6, if approved, is in the best interests of the City because the dispensary increases commercial vibrancy in the City; and,
C. DA 6 is consistent with the actions, goals, objectives, and policies of the City's General Plan and Zoning Regulations because the project promotes local opportunities for commerce and engagement, and
D. The application to the City was made on forms approved, and contains all information required by the Director and is filed with the Department in compliance with Chapter 19.46; and
E. The application was accompanied by all lawfully required documents, materials, and information; and,
F. With the adoption of this ordinance and development agreement and notwithstanding the requirements in Chapter 19.46 of the Barstow Municipal Code and the City’s Zoning Regulations, the City Council approves the Proposed Project.

Section 3. Approvals. In view of all the evidence and based on the foregoing findings the City Council approves DA 6 and grants a Notice of Exemption for the Proposed Project, subject to the Conditions of Approval in Planning Commission Resolution No. 563-2022.

Section 4. Authorization to Execute Development Agreement. Pursuant to Barstow Municipal Code Chapter 19.46, the City Council directs the City Manager and the City Attorney to prepare a development agreement embodying the terms and conditions of the Proposed Project as conditionally approved and authorizes the City Manager to execute the development agreement, which shall be substantially consistent with the proposed development agreement attached as Exhibit "A."

34.c
Packet Pg. 1907 Attachment: CC Ord. 000-2022 Merchants Barstow LLC (5230 : Merchants Barstow, LLC Comm. Cannabis App) 4 271538.1
Section 5. CEQA. This ordinance is exempt from the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines§§ 15060(c)(2), 15060(c)(3), 15061(b)(3) and 15378(b)(4). This ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment; it does not involve a "project" as defined by CEQA Guidelines § 15378; and it is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. It can be seen with certainty that there is no possibility this ordinance may have a significant effect on the environment. Further the City previously approved Ordinance No. 974-2021 on June 7, 2021 and Ordinance No. 977-2021 on October 4, 2021 and those Ordinances were exempt from CEQA under Business and Professions Code section 26055(h) which exempts from CEQA review the adoption of an ordinance, rule, or regulation, by a local jurisdiction that requires discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity. This Ordinance now acts to amend the Barstow Municipal Code as to procedural requirements.

Section 7. Effective Date. This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.

34.c
Packet Pg. 1908 Attachment: CC Ord. 000-2022 Merchants Barstow LLC (5230 : Merchants Barstow, LLC Comm. Cannabis App) 5 271538.1
PASSED, APPROVED AND ADOPTED this 5th day of December, 2022 ________________________________
Paul Anthony Courtney, Dr. B.A., Mayor
ATTEST:
________________________________
Andrea Flores, City Clerk
I, Andrea Flores, City Clerk for the City of Barstow, California, and ex-officio Clerk of the City Council, do hereby certify under penalty of perjury that the foregoing is a true and correct copy of Ordinance No. XXX-2022, which was introduced at a regular meeting of the City Council of the City of Barstow held on the 21st day of November 2022, and adopted at the regular meeting of the City Council of the City of Barstow on the 5th day of December 2022, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
________________________________
Andrea Flores, City Clerk

34.c
Packet Pg. 1909 Attachment: CC Ord. 000-2022 Merchants Barstow LLC (5230 : Merchants Barstow, LLC Comm. Cannabis App) 271527.1
RESOLUTION NO. 563-2022

A RESOLUTION OF THE PLANNING COMMISSION OF THE

CITY OF BARSTOW RECOMMENDING APPROVAL OF CANNABIS LICENSE

APPLICATION FOR MERCHANTS BARSTOW, LLC AND DEVELOPMENT

34.d
Packet Pg. 1910 Attachment: Merchants Barstow Reso. 563-2022 (5230 : Merchants Barstow, LLC Comm. Cannabis App) 271527.1
WHEREAS, the California Attorney General's August 2008 Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use recognizes that the cultivation or other concentration of marijuana in any location or premises without adequate security increases the risk that nearby homes or businesses may be negatively impacted by nuisance activity such as loitering or crime; and WHEREAS, the California Planning and Zoning Law (Gov. Code, § 65000 et seq.) authorizes the City to adopt and administer zoning laws, ordinances, rules, and regulations; and
WHEREAS, the City of Barstow passed Ordinance No. 974-2021 on June 7th 2021 to begin the process of allowing Cannabis sales; and WHEREAS, the City of Barstow passed Ordinance No. 977-2021 on October 4th 2021, adopting land use laws for Cannabis sales and requiring applicants to execute a development agreement with the City before beginning operation; and WHEREAS, no cannabis business may operate in the City of Barstow unless first issued a permit by the City; and
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the “Development Agreement Statute”), which authorizes the City and an individual with an interest in real property to enter into a development agreement that establishes certain development rights in real property that is subject to a development agreement application; and
WHEREAS, Merchants Barstow, LLC proposes to improve, develop and use real property to operate a Commercial Cannabis Dispensary, Cultivation, Distribution/Transportation, Manufacturing, and Non-Store Front Delivery at 2552 Mercantile Way., Barstow, CA 92311 (APN #0421-211-26-0000) and has properly submitted a completed cannabis license application; and WHEREAS, City and the Merchants Barstow, LLC seek to enter into a development agreement for the Project (the “Development Agreement”) pursuant to the Development Agreement Statute and all applicable local and state laws; and WHEREAS, the Planning Commission finds that an ordinance approving the Development Agreement will allow the City to adequately regulate and address all impacts of the Project in the City in accordance with state law; and WHEREAS, the Planning Commission finds that the ordinance is in the best interest of the health, welfare, and safety of the public.

34.d
Packet Pg. 1911 Attachment: Merchants Barstow Reso. 563-2022 (5230 : Merchants Barstow, LLC Comm. Cannabis App) 271527.1
NOW THEREFORE, the Planning Commission of the City of Barstow hereby resolves as follows:

1. The foregoing recitals are true and correct.

2. The Planning Commission hereby finds that the proposed Development Agreement is in compliance with Government Code Section 65865.2 and Chapter

19.46 of the Barstow Municipal Code.

5. The Planning Commission hereby finds that the Development Agreement application was accompanied by all lawfully required documents, materials, and information.

PASSED, APPROVED and ADOPTED this 10th day of October, 2022. _______________________ ____________________________
Beatrice Lint, Stephanie Baca
Planning Commission Chair Recording Secretary

ATTEST:

34.d
Packet Pg. 1912 Attachment: Merchants Barstow Reso. 563-2022 (5230 : Merchants Barstow, LLC Comm. Cannabis App) 271527.1
I, Stephanie Baca Recording Secretary of the Barstow Planning Commission , DO HEREBY CERTIFY UNDER PENALTY OF PERJURY that the foregoing resolution was introduced and duly adopted at its meeting held October 10, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

________________________
Stephanie Baca
Recording Secretary,
City of Barstow Planning Commission

34.d
Packet Pg. 1913 Attachment: Merchants Barstow Reso. 563-2022 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

HIGH PERIOR LLC

CULTIVATION
Sky Club HD, LLCDispensary
Winners Circle HD, LLCDispensary
KHG Group LLCCultivation
1919 Building Inc.Cultivation
2119 Building Inc.Manufacturing
Barstow Company, Inc.Cultivation
LA 2 Vegas, IncCultivation
Beverly Hills View Inc.Cultivation

HIGH PERIOR LLC CULTIVATION

DESERT BLOOM HOLDINGS,
LLC Cultivation MERCHANTS BARSTOW 14, LLC
Cultivation
MERCHANTS BARSTOW 13, LLCCultivation
GROW ORGNAICS 12, INC
Cultivation
GROW ORGANICS 5, INC
Cultivation
MERCHANTS BARSTOW 4, LLCCultivation
MERCHANTS BARSTOW 3, LLCCultivation
Zengrow Inc.Cultivation, Manufacturing, Distribution
Grow Organic 6 Inc.Cultivation
Grow Organic 11 Inc.Cultivation
Grow Organic 7 Inc.Cultivation
Grow Organic 10 Inc.Cultivation
Grow Organic 9 Inc.Cultivation
Grow Organic 8 Inc.Manufacturing
Grow Organic Inc.Cultivation
MERCHANTS BARSTOW 23, LLCCultivation
Merchants Barstow

34.e
Packet Pg. 1914
Attachment: Buildings-Site Plan 6 22 CDFW (5230 : Merchants Barstow, LLC Comm. Cannabis App) Im
agerydate: 8/30/14–newerCamera: 990m34°51'07"N117°04'48"W742m DataSIO,NOAA,U.S. Navy,NGA,GEBCOLandsat/Copernicus
60m
9 8
7 10
6 5
4 3
2 1
11 12
13 14
15 16
17 19
18 20
21 22
23 34.f
Packet Pg. 1915 Attachment: Merchants Barstow Google Earth 3d (1) (5230 : Merchants Barstow, LLC Comm. Cannabis

34.g
Packet Pg. 1916 Attachment: Exterior 1 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.h
Packet Pg. 1917 Attachment: Exterior 2 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.i
Packet Pg. 1918 Attachment: Exterior 3 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.j
Packet Pg. 1919 Attachment: Exterior 4 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.k
Packet Pg. 1920 Attachment: Exterior 5 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.l
Packet Pg. 1921 Attachment: Render image 1 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.m
Packet Pg. 1922 Attachment: Render image 2 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.n
Packet Pg. 1923 Attachment: Render image 3 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

34.o
Packet Pg. 1924 Attachment: Render image 4 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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Packet Pg. 1925 Attachment: Shop 1 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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Packet Pg. 1926 Attachment: Shop 2 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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Packet Pg. 1927 Attachment: Corridor 1 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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Packet Pg. 1928 Attachment: Corridor 2 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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Packet Pg. 1929 Attachment: Dry room 1 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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Packet Pg. 1930 Attachment: Grow room 1 (5230 : Merchants Barstow, LLC Comm. Cannabis App)

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Packet Pg. 1931 Attachment: Plant Room 1 (5230 : Merchants Barstow, LLC Comm. Cannabis App) EX.
1-STORY

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11 DATE REVISIONS
SCALE
DATE
PROJECT NO.

DRAWN BY

CHECKED BY
SHEET NO.

OF 1 SHEETS TWO TREES DESIGN, INC. E-mail: [email protected] LANDSCAPE PLANTING PLAN - PROPERTY FENCE 8-24-2022
CP
L-1LANDSCAPE ARCHITECTURAL DESIGN SERVICES CALIFORNIA RLA#5840 1832 SAN DIEGO ST. WEST COVINA, CA. 91790 P2238
1/64"=1'-0"
CP CANNABIS FACILITY 2552 MERCANTILE WAY BARSTOW, CA. 92311 LI CEN SED LAN D SCAP E AR C HITECT S T A T E O F C A L I F O R N I A CHIACHENG PERNG NO. 5 8 40 12-31-2022 8-24-2022

34.w
Packet Pg. 1932 Attachment: P2238_Siteplan 36X24_08242022 (1) (5230 : Merchants Barstow, LLC Comm. Cannabis App) Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Personnel
Doc ID: 5207

COUNCIL AGENDA ITEM
AGENDA MATTER:

APPROVAL OF CODE COMPLIANCE OFFICER I POSITIONS, SR. COMMUNITY DEVELOPMENT INSPECTOR, ADMINISTRATIVE ASSISTANT AND OFFICE ASSISTANT.

EXECUTIVE SUMMARY:

DISCUSSION:

In June 2021, the City Council passed Ordinance No. 974-2021 that added Chapter 19.27 to the Barstow Municipal Code to permit commercial cannabis activities in the City. The ordinance went into effect on July 7, 2021. On October 4, 2021, the City Council adopted Ordinance No. 977-2021, amending the City’s cannabis regulatory program ordinance. All cannabis businesses must enter into a development agreement with the City that will be subject to council approval through the adoption of an ordinance under Government Code Section 65865.

At previous council meeting’s, five (5) cannabis permits were approved. In total, there have been thirtyone (31) various types of applications submitted at $18,644.85 totaling $577,990.35 collected. Once in operation, each cannabis operation is required to pay $550 each quarter for an inspection totaling $2,200 a year in inspection fees per permit. In addition, each cannabis operation is required to pay $14,107.85 for the license renewal. Once in operation, there will be 31 permits issued and the total permitting fees and inspection fees will be $16,307.85 each license. For thirty-one (31) annual permits, the total collected will equal $505,543.35 per year.

The annual permit fees and quarterly inspection fees should cover the cost of the inspection, administrative duties, paper, and postage for mail, Finance support and I.T. support. Support from other departments is estimated at approximately $100,000 per year. Additional staff will be required to conduct the annual inspections. Staff believes adding two (2) Code Compliance Officers to the current Code Compliance Department will be sufficient to complete the quarterly inspections and regular monitoring of the facilities. The Senior Community Development Inspector Position will oversee the Cannabis inspections. The addition of a Senior Community Development Inspector will provide the needed knowledge to perform and provide oversite of complex inspections that will take place at the facilities for the extraction/volatile process of the manufacturing of cannabis. In addition, an Administrative Assistant will coordinate and schedule inspection for the Cannabis Division. The Office Assistant will help manage the phones and the increase in desk traffic that is associated with the Cannabis Division. The Administrative Assistant and Office Assistant will be assigned to the Community Development Department.

FISCAL IMPACT:

The fiscal impact will be covered by fees associated with the Cannabis Permit and Inspection fee. Staff is proposing the addition of two (2) Code Compliance Officer I positions, one (1) Administrative Assistant position, one (1) Office Assistant and one (1) Sr. Community Development Inspector. The total cost for (2) Code Compliance I positions will be approximately $137,034.80 at their A step and $167,558.48 at their F step with all benefits included. In addition, an Administrative Assistant position will cost approximately $73,521.47 at the A step and $90,380.01 at the F step with all benefits included. An Office Assistant will cost approximately $65,044.67 at the A step and $79,565.73 at the F step with all benefits included. The 35 Packet Pg. 1933
Joint Special Council/BFPD
12/19/22 07:00 PM
Building
Christopher Heldreth
Personnel
Doc ID: 5207

COUNCIL AGENDA ITEM
cost for a Senior Community Development Inspector will be approximately $103,561.69 at the A step and $128,536.25 at the F step. Total for all positions needed will be approximately $379,162.63 at their A steps and $466,040.47 at their F step. Support from other departments for administrative duties, paper, and postage for mail, Finance support and I.T. support is estimated at approximately $100,000 per year.

Permit fees will be approximately $505,543.35. Staff anticipates covering all cost’s associated with the program with the fees collected. If the need for additional staff presents itself after the program is underway, staff will notify the City Manager and return to the City Council with recommendations.

RECOMMENDED ACTION:

Staff is recommending Council approve the additional positions to be hired at the discretion of the City Manager.
35 Packet Pg. 1934
Joint Special Council/BFPD
12/19/22 07:00 PM
City Manager Department
Matthew Summers
Resolution
Doc ID: 5192

AGENDA ITEM
AGENDA MATTER:

REQUEST FOR VOTE OF NO CONFIDENCE IN MAYOR COURTNEY
EXECUTIVE SUMMARY:

Councilmember Rose and Mayor Pro Tem Noble have requested that the City Council consider adopting a Resolution expressing a vote of no confidence in Mayor Courtney related to his conduct.

DISCUSSION:

On December 20, 2021, the City Council for the City of Barstow initiated a third-party investigation into allegations that Mayor Courtney was or had been interfering with the administration of City personnel and threatening the employment of several City employees. The City arranged for an outside third-party investigator to conduct the investigation, under the supervision of outside counsel. The Investigator interviewed the Mayor and 19 other individuals and reviewed relevant documents.

On November 7, 2022 the City released a public summary of the results of the third-party investigation of Mayor Courtney’s conduct. The public summary stated that the Investigator made the following findings based on the preponderance of evidence standard:

1. Mayor Courtney engaged in inappropriate behavior regarding the hiring of ha City employee and provided false information to the former interim City Manager about the matter.

2. Mayor Courtney also engaged in intimidating behavior, threatening to terminate the employment of several City employees who he did not favor or who were connected to his political rivals and/or opponents. Of the several City employees who alleged having their jobs threatened by the Mayor, the Investigator found that only one of the employees did not have their job threatened by the Mayor.

3. Mayor Courtney engaged in inappropriate operational activities and direction on matters that are reserved for the City Manager.

4. Mayor Courtney attempted to elicit the City of Barstow Chief of Police to arrest and/or issue citations to Mayor Courtney's political rivals and to arrest those who spoke out against Mayor Courtney at City Council meetings.

5. Mayor Courtney revealed confidential and sensitive City Council Closed Session Meeting information to others who had no need or right to know the information.

6. Mayor Courtney made inappropriate comments concerning City employees.

7. Mayor Courtney used various manipulation tactics on employees to pit one employee against another to engender loyalty to himself.

8. Mayor Courtney employed heavy-handed communication techniques with various employees leaving the employees feeling that their jobs were in danger.

In response to these findings, in closed sessions the City Council took the following steps:
36 Packet Pg. 1935
Joint Special Council/BFPD
12/19/22 07:00 PM
City Manager Department
Matthew Summers
Resolution
Doc ID: 5192

AGENDA ITEM

1. Directed the Mayor to refrain from communicating with any City employees, except for the City Manager, the 911 system, or as allowed by the First Amendment or other applicable law;

2. Directed that the Mayor be barred from City Hall except as his physical presence is legally required by applicable law, such as for Council Meetings;

3. Directed the Mayor to not provide any direction to any City employees other than the City Manager, and then, only as part of a City Council majority vote in a lawful meeting;

4. Directed the Mayor to not retaliate against any individual who he knows or who he may reasonably anticipate made a complaint, was a witness or otherwise participated in this investigation, nor to attempt to influence any individual who he knows or who he may reasonably anticipate made a complaint, was a witness or other person who otherwise participated in this investigation; and

5. Referred the matter to the San Bernardino County District Attorney’s Office.

At the November 21, 2022 City Council meeting, Councilmember Rose and Mayor Pro Tem Noble requested that the City Council consider a vote of no confidence in Mayor Courtney. Council Member Rose has provided the attached written statement of reasons for the requested vote of no confidence, City’s Censure Policy and Procedures
The City Council has previously considered and adopted censure motions regarding Mayor Courtney’s past conduct. The City’s Censure Policy is intended to provide “the mechanism by which the City Council, acting as a whole, can discipline and punish any of its members who violate state or federal laws, city ordinances, or policies.” City staff recommends that the proposed No Confidence Resolution be treated similarly to how the City treats censure motions. The censure policy was itself adopted by Resolution, and thus could be amended by a Council majority vote, on a future agenda item.

A No Confidence Resolution, akin to Censure, by the City Council constitutes an official expression of disapproval and extends to constitute a declaration by the Council, if adopted, that the Council lacks confidence in the Mayor to continue to serve as Mayor. Although a censure represents the opinion of at least a two-thirds majority of the members of the City Council stating an official reprimand, it is not a suspension, nor does it result in removal of the Mayor from the Office of Mayor. The City Council separately has the power to remove the Mayor from certain positions within the control of the City Council, i.e. seats on certain outside agency governing boards, and may do so only after separately considering any proposed specific position in a noticed public meeting under the Brown Act. At this City Council meeting, the City Council will only be considering a potential No Confidence Resolution.

This hearing is not a judicial proceeding and is not subject to judicial rules of evidence, crossexamination, or admissibility of evidence. A Councilmember or Mayor who is the subject of a censure or no confidence request is entitled to due process, with notice and an opportunity to respond and provide a defense. Mayor Courtney was provided with a copy of this Agenda Report once completed and distributed to the City Council and the public.

The City Council acts as a factfinder in a censure proceeding; and as such, like other City Council hearings, Councilmembers may ask questions of staff, each other, or any public speakers. Members of the public are not under oath and may freely refuse to answer any questions. Any motion to censure, or as here, adopt a No Confidence Resolution, as to the Mayor or a Councilmember should recite clear and fact-supported reasons for the proposed action and should include direction to adopt a resolution setting 36 Packet Pg. 1936
Joint Special Council/BFPD
12/19/22 07:00 PM
City Manager Department
Matthew Summers
Resolution
Doc ID: 5192

AGENDA ITEM
forth those reasons. Any motion to censure and adopt a No Confidence Resolution must be adopted by a two-thirds majority vote of the City Council, under the current Censure Policy.

The City’s Censure Policy creates a procedure for how censure motions are to be handled. At the hearing, the member of Council subject to the censure request must be given an opportunity to make an opening and closing statement and to question their accusers. The member of the Council subject to censure may be represented by another party who may speak on their behalf or may speak for themselves.

Proposed Procedure for No Confidence Resolution
The following procedure is recommended to be followed for a No Confidence Resolution, with this item to be chaired by Mayor Pro Tem Noble, implementing these policies. • Councilmembers Rose and Mayor Pro Tem Noble should be provided the opportunity to summarize their no confidence request.
• Mayor Courtney should be provided the opportunity to present an initial response or rebuttal to the no confidence resolution.
• Public testimony on the resolution should be allowed. Upon the completion of such testimony, the opportunity for public input should be closed.
• Councilmembers Rose and Noble should be provided the opportunity to present final comments on the resolution.
• Mayor Courtney should be provided the opportunity to present a final response or rebuttal to the resolution.
• Any Councilmember may then ask questions.
• Any Councilmember may then provide comments regarding the matters presented.

At this point in the proceedings, any Councilmember who wishes to make a motion can do so. The primary options for a motion include (a) take no action on the resolution, either by motion or by default, (b) deny the resolution, or (c) approve the resolution. As indicated above, a motion to adopt the resolution expressing no confidence in Mayor Courtney should recite clear and fact-supported reasons for the proposed action. The City’s current Censure Policy, adopted via Resolution No. 4289-2006, requires a vote to adopt a Resolution making findings formally censuring a Councilmember be approved by a twothirds vote of the City Council.

Subject to a second, any motion made should be deliberated and, upon the completion of deliberations, a vote should be taken on the resolution. The Mayor, as the subject of the resolution that may be made, is advised to abstain from any vote on any resolution involving himself. 1 1 This is under the general due process rule that no person may serve as a judge in their own case. (See In re Murchison (1955) 349 U.S. 133, 136 [“A fair trial in a fair tribunal is a basic requirement of due process. Fairness of course requires an absence of actual bias in the trial of cases. But our system of law has always endeavored to prevent even the probability of unfairness. To this end no man can be a judge in his own case and no man is 36 Packet Pg. 1937
Joint Special Council/BFPD
12/19/22 07:00 PM
City Manager Department
Matthew Summers
Resolution
Doc ID: 5192

AGENDA ITEM
permitted to try cases where he has an interest in the outcome.”].) FISCAL IMPACT:

There are no fiscal impacts as a result of this item.

RECOMMENDED ACTION:

Staff recommends that the City Council consider Councilmember Rose and Mayor Pro Tem Noble’s request for a vote of no confidence, and in so doing consider any response or rebuttal from Mayor Courtney, hear public testimony and take any action determined to be appropriate based on the matters presented and deliberated.

Attachments:

Exhibit A -Resolution No. _____-2022 Expressing a Vote of No Confidence in the Mayor Exhibit B - Resolution No. 4289-2006 [Adopted Ethics Code and Censure Policy] Exhibit C - Councilmember Rose’s Written Request for a No Confidence Resolution 36 Packet Pg. 1938
296531.v1
296531.v1
RESOLUTION NO. XXXX - 2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BARSTOW,

CALIFORNIA EXPRESSING A VOTE OF NO CONFIDENCE IN THE
MAYOR
WHEREAS, the City of Barstow (the “City”) hired an independent third-party investigator to investigate allegations of misconduct against Mayor Paul Antony Courtney; and
WHEREAS, the City Council received a report from the third-party investigator during a closed session meeting of the City Council on November 7, 2022; and WHEREAS, the City released a public summary of the information it received from the third-party investigator at its November 7, 2022 closed session meeting, which included the following findings:

1. Mayor Courtney engaged in inappropriate behavior regarding the hiring of ha City employee and provided false information to the former interim City Manager about the matter.

3. Mayor Courtney engaged in inappropriate operational activities and direction on matters that are reserved for the City Manager.

5. Mayor Courtney revealed confidential and sensitive City Council Closed Session Meeting information to others who had no need or right to know the information.

6. Mayor Courtney made inappropriate comments concerning City employees.

7. Mayor Courtney used various manipulation tactics on employees to pit one employee against another to engender loyalty to himself.

8. Mayor Courtney employed heavy-handed communication techniques with various employees leaving the employees feeling that their jobs were in danger.

36.a
Packet Pg. 1939 Attachment: Reso re No Confidence in Mayor(296531.1) (5192 : Censure of Mayor Courtney Pursuant to Ethics Code) 296531.v1
296531.v1
WHEREAS, in response to these findings, the City Council took the following steps:

1. Directed the Mayor to refrain from communicating with any City employees, except for the City Manager, the 911 system, or as allowed by the First Amendment or other applicable law;

2. Directed that the Mayor be barred from City Hall except as his physical presence is legally required by applicable law, such as for Council Meetings;

3. Directed the Mayor to not provide any direction to any City employees other than the City Manager, and then, only as part of a City Council majority vote in a lawful meeting;

5. Referred the matter to the San Bernardino County District Attorney’s Office.

WHEREAS, on December 19, 2022 the City Council conducted a duly noticed and advertised public meeting on this resolution and received testimony from the public; and WHEREAS, the City Council now desires to express no confidence in the Mayor due to the findings that were delivered to the City Council by the third-party investigator and for the reasons stated at the December 19, 2022 hearing on this resolution by the City Council.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BARSTOW DOES HEREBY FIND, RESOLVE AND ORDER AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are a substantive part of this resolution.

SECTION 2. The City Council affirms a vote of No Confidence in Mayor Paul Anthony Courtney, finding a lack of confidence in his ability to continue to serve as Barstow’s Mayor, for the reasons stated above and in the attached request for a Resolution for a Vote of No Confidence.

SECTION 3. The City Clerk shall certify to the adoption of this resolution.

36.a
Packet Pg. 1940 Attachment: Reso re No Confidence in Mayor(296531.1) (5192 : Censure of Mayor Courtney Pursuant to Ethics Code) 296531.v1
296531.v1
PASSED, APPROVED AND ADOPTED this 19th day of December, 2022, by the following vote:
__________________________________
James M. Noble, Mayor Pro Tem

ATTEST:
__________________________________
Andrea Flores, City Clerk
I, Andrea Flores, City Clerk of the City of Barstow, do hereby certify that the foregoing Resolution No. XXXX-2022 is the actual Resolution duly and regularly adopted by the City Council at a regular meeting on the 19th day of December, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
__________________________________
Andrea Flores, City Clerk

36.a
Packet Pg. 1941 Attachment: Reso re No Confidence in Mayor(296531.1) (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

36.b
Packet Pg. 1942
Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

36.b
Packet Pg. 1943
Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Packet Pg. 1949
Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Packet Pg. 1951
Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Packet Pg. 1952
Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

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Packet Pg. 1953
Attachment: Ethics Code Censure Policy Reso (5192 : Censure of Mayor Courtney Pursuant to Ethics Code) At the November 21, 2022, City Council meeting, I requested and Mayor Pro-Tem James Noble seconded my request that the City Council consider a resolution for a vote of no confidence in Mayor Courtney.

In order to follow the proper procedural process please see my following request:

I am requesting in writing and asking for Mayor Pro-Tem James Noble, to second this request expressing a resolution for a vote of no confidence in Mayor Courtney in his leadership ability as mayor. There have been numerous allegations of ethical misconduct, in particular the results of the third-party investigator findings as prescribed below. In addition to the third-party findings, I am requesting that the council also consider in part, the mayor’s failure to lead by example in respect to unprofessional conduct in his continuous violation of the Parliamentary Rules which results in highly dysfunctional, chaotic, and opaque Council meetings. Bullying, patronizing, and cutting off Councilmembers during discussion if he disagrees with them and chastising, patronizing, and even calling a public speaker a disparaging name when he disagrees with them is a form of abuse of power. Mayor Courtney has gone as far as referring to councilmembers and those who oppose him as having a mental illness.

As elected official of the City of Barstow, we are held to a higher standard and in order to restore trust between city employees, the residents of Barstow, and its government, I am requesting a resolution for a vote of no confidence in Mayor Courtney because we cannot ignore the ethical misconduct of the mayor of past and more importantly we should not condone his current ethical misconduct.

Third-party Investigation:

1. Mayor Courtney engaged in inappropriate behavior regarding the hiring of a City employee and provided false information to the former interim City Manager about the matter.

36.c
Packet Pg. 1954 Attachment: CM Rose No Confidence Reso Request(297465.1) (5192 : Censure of Mayor Courtney Pursuant to Ethics Code)

3. Mayor Courtney engaged in inappropriate operational activities and direction on matters that are reserved for the City Manager.

5. Mayor Courtney revealed confidential and sensitive City Council Closed Session Meeting information to others who had no need or right to know the information.

6. Mayor Courtney made inappropriate comments concerning City employees.

7. Mayor Courtney used various manipulation tactics on employees to pit one employee against another to engender loyalty to himself.

8. Mayor Courtney employed heavy-handed communication techniques with various employees leaving the employees feeling that their jobs were in danger.

In response to these findings, in closed sessions the City Council took the following steps:

Directed the Mayor to refrain from communicating with any City employees, except for the City Manager, the 911 system, or as allowed by the First Amendment or other applicable law;

2. Directed that the Mayor be barred from City Hall except as his physical presence is legally required by applicable law, such as for Council Meetings;

3. Directed the Mayor to not provide any direction to any City employees other than the City Manager, and then, only as part of a City Council majority vote in a lawful meeting;

5. Referred the matter to the San Bernardino County District Attorney’s Office.

36.c
Packet Pg. 1955 Attachment: CM Rose No Confidence Reso Request(297465.1) (5192 : Censure of Mayor Courtney Pursuant to Ethics Code) Joint Special Council/BFPD
12/19/22 07:00 PM
City Clerk / Records
Christina Rudsell
Other
Doc ID: 5200

AGENDA ITEM
AGENDA MATTER:

JOINT ITEM - CITY COUNCIL/BARSTOW FIRE PROTECTION DISTRICT BOARD OF DIRECTORS

REORGANIZATION AND SELECTION OF COMMITTEE REPRESENTATIVES AND ALTERNATES EXECUTIVE SUMMARY:

Mayor Paul Anthony Courtney is asked to reorganize the City Council/Barstow Fire Protection District Board of Directors. The Mayor and Council Members are also requested to make changes to the current committee appointments as needed, establish new committees and delete non-functioning committees.

DISCUSSION:

As a result of the November 8, 2022 Election, Carmen Hernandez was elected as the Council Member for District 1 and James Noble was re-elected as the Council Member for District 2. As a result of these changes to the Council, Mayor Paul Anthony Courtney is asked to reorganize the City Council/Barstow Fire Protection District Board of Directors.

The Mayor and Council Members are also requested to review the attached committee/appointment list, and after discussion, make changes to the current appointments as needed, establish new committees and delete non-functioning committees. To assist the Council in their discussion for the reorganization and selection of committee representatives, a summary of the current City Council Committees is attached.

FISCAL IMPACT:

None.

RECOMMENDED ACTION:

The City Council/Barstow Fire Protection Board of Directors are asked to 1) approve the reorganization of the City Council/Barstow Fire Protection District Board of Directors and 2) determine committee representatives and alternates, establish new committees if needed, and delete non-functioning committees.
37 Packet Pg. 1956

CITY COUNCIL REORGANIZATION / COMMITTEES
2023
Reorganized & approved __/__/22

CITY COUNCIL
Mayor Paul Anthony Courtney
Mayor Pro Tem James Noble

BARSTOW FIRE PROTECTION DISTRICT (BFPD)
BFPD Chair Paul Anthony Courtney
BFPD Vice Chair James Noble
OUTSIDE COMMITTEES Representative Alternate
Barstow Area Chamber of Commerce Paul Anthony Courtney James Noble League of Cities Paul Anthony Courtney James Noble
Military Affairs James Noble Barbara Rose
Mojave Desert Air Quality Management
District (MDAQMD) Vacant James Noble
San Bernardino County Transportation
Authority (SBCTA) Paul Anthony Courtney Barbara Rose
Solid Waste Advisory Task Force
(SWAT) / Solid Waste Joint Powers
Authority (JPA)
Marilyn Dyer Kruse James Noble
Southern CA Association of
Governments (SCAG) Paul Anthony Courtney Vacant
Southern California Edison Government
Advisory Panel (GAP) Vacant Marilyn Dyer Kruse
Victor Valley Transit Authority (VVTA) James Noble Vacant Waste Water Reclamation Facility
Improvement Project Subcommittee Marilyn Dyer Kruse Vacant INTERNAL CITY COMMITTEES Representatives
Barstow Gaming Committee Vacant Paul Anthony Courtney
Finance / Audit Committee Marilyn Dyer Kruse Vacant
Homeward Bound Ad Hoc Committee Barbara Rose
Vacant
Public Members: Angela
Pasco-Ortez, Edith
Seehafer, Elaine Villareal
Rules & Policies / Health & Safety
Committee Barbara Rose Vacant
Street Committee Marilyn Dyer Kruse
Vacant
Public Members:

Mike Hernandez

37.a
Packet Pg. 1957 Attachment: Council Committees Reorg Assignments 12 19 22 Update_draft (5200 : City Council/Barstow Fire Protection District Updated Council Reorganization __/__/2022
1 CITY COUNCIL COMMITTEE DESCRIPTIONS
Barstow Area Chamber of Commerce
The Barstow Area Chamber of Commerce and Visitors Bureau is a voluntary organization of businesses and professionals with mutual interests in promoting commerce and tourism throughout the region. The City’s liaison with the Barstow Area Chamber of Commerce is a Council Member who serves as the link between the Council and the Chamber. The individual selected represents the City on the Barstow Area Chamber of Commerce and Visitor’s Bureau Board of Directors as a non-voting, advisory member.

The Chamber Board of Directors meets monthly on the second Wednesday at 7:00 a.m. at the Chamber. The Economic Development meeting is the last Wednesday of the month at 8:00 a.m. via Zoom. The Chamber breakfast is held on the third Tuesday at 7:30 a.m. at the Los Domingos Restaurant.

Barstow Gaming Committee
The Barstow Gaming Committee is charged with representing the City in certain meetings with State and Federal officials in connection with gaming negotiations with Indian Tribes in connection with their respective proposals for a Casino Resort Project in the City of Barstow. Attendance at these meetings will be coordinated with City staff.

Finance/Audit Committee
The Finance Committee's function is to review matters pertaining to the finances of the City. These matters include, but are not limited to, reviewing interim financial statements, cash and investment reports, the City's annual independent audit, City fees and service charges and budgets.

The Finance Committee meets as needed.

Homeward Bound Ad Hoc Committee
The Homeward Bound Ad Hoc Committee's functions are to: 1) Examine issues within the City of Barstow related to homelessness and food insecurity; and 2) to review policy issues related to the City of Barstow homeless population and response functions as referred by the City Council or the City Manager.

The Homeward Bound Ad Hoc Committee meets on the second Wednesday of each month at 5:00 p.m. in the Council Chambers.

League of California Cities
The League of California Cities is an association of California city officials who work together to enhance their knowledge and skills, exchange information, and combine

37.b
Packet Pg. 1958 Attachment: City Council Committee Descriptions 12 19 22 Update draft (5200 : City Council/Barstow Fire Protection District Reorganization) Updated Council Reorganization __/__/2022
2 resources so that they may influence policy decisions that affect cities. The state is divided into divisions, and Barstow is part of the Desert Mountain Division.

Meetings are quarterly in one of the desert or mountain cities on a division level and quarterly on the state level. City pays expenses.

Military Affairs Committee
The purpose of the Military Affairs Committee is to foster support and commit to the needs of military members and families who are assigned, attached to, or retired in our area by showcasing a military-inclusive community and the business community.

The Committee will focus on good will among the military installations and a shared understanding of “what it is like to serve in the military away from home” to create an atmosphere of understanding among the military and the local business community.

Meetings are held monthly on the second Tuesday of each month at 8:00 a.m. at the Quality Inn, Barstow.

Mojave Desert Air Quality Management District (MDAQMD) Board of Directors The MDAQMD's Board is the decision-making-body for the District. The Board is responsible for adopting rules, setting policies and providing direction on important air quality issues that affect the Mojave Desert. This thirteen-member body is comprised of representatives for each municipality and County supervisorial districts located within the MDAQMD’s boundaries, and one public member appointed by the balance of the Board.

This Board meets once a month in Victorville (the fourth Monday; meetings start at 10:00 a.m.). $100 a meeting, plus mileage.

Rules and Policies Committee
The Rules and Policies Committee was formed to review the City’s Personnel Policies and Procedures and Classification Plan for compliance with the Barstow Municipal Code and federal and state law and for competitiveness within the public service market. Additionally, the Committee will address public health and safety issues and to coordinate with various City departments to address these issues.

The Rules and Policies Committee meets the last Tuesday of each month at 9:00 a.m.

San Bernardino County Transportation Authority (SBCTA) – formally known as SANBAG / MEASURE I Committee
SBCTA is responsible for cooperative regional transportation planning and furthering an efficient multi-modal system for San Bernardino County. Each city in San Bernardino County has a representative on this regional Board.

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Packet Pg. 1959 Attachment: City Council Committee Descriptions 12 19 22 Update draft (5200 : City Council/Barstow Fire Protection District Reorganization) Updated Council Reorganization __/__/2022
3 The City’s representative must attend the Board meeting, which is the first Wednesday of each month at 10:00 a.m. The representative has the option of attending administrative committee meetings within SBCTRA. The representative is expected to attend the Mountain/Desert Policy Committee meetings, which meets regularly on the 3rd Friday of every month in Victorville, CA at 9:30 a.m. The representative receives $200.00 per meeting for the Board and $100.00 per meeting for the Mountain/Desert Policy Committee; $400 per month cap.

Solid Waste Advisory Task Force (SWAT) and Solid Waste Joint Powers Authority JPA
a) Solid Waste Advisory Task Force (SWAT) – Originally created to provide oversight of the county landfill system as the landfills were being closed with five regional landfills created within the county to serve the area. Much of the work is already done and now the committee meets to voice opinion on current practices involving solid waste management of the landfill and waste streams.

SWAT meets infrequently, and is not a paid position.
b) Solid Waste Joint Powers Authority (JPA) – Formed to support the creation of the Materials Recovery Facility for Victorville and Apple Valley in 1992. As members of the JPA, the communities work together on common solid waste concerns and provide local legislative support when necessary.

The Solid Waste JPA meets quarterly and each representative receives $75.00 plus mileage.

Southern California Association of Governments (SCAG)
SCAG develops long-range regional transportation plans including sustainable communities strategy and growth forecast components, regional transportation improvement programs, regional housing needs allocations and a portion of the South Coast Air Quality management plans. SCAG represents six counties (Imperial, Los Angeles, Orange, Riverside, San Bernardino and Ventura) and 191 cities.

The organization meets once a month (Thursday afternoons at 12:30 p.m.) in Los Angeles. The City pays the expenses to attend these meetings.

Southern California Edison Government Advisory Panel (GAP) The primary purpose of the GAP is to foster an open dialogue between SCE and local government entities for discussions on safe, reliable and clean electric service.

The panel will meet three to four times a year at various locations.

The organization will meet three to four times a year at various locations.

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Packet Pg. 1960 Attachment: City Council Committee Descriptions 12 19 22 Update draft (5200 : City Council/Barstow Fire Protection District Reorganization) Updated Council Reorganization __/__/2022
4 Street Committee
The Street Committee was formed to review policy issues related to the public works functions of the City and to review proposed capital improvement projects for public works functions and to recommend prioritization of each.

The Street Committee meets on the first Wednesday of each month at 5:00 p.m.

Victor Valley Transit Authority (VVTA) Board of Directors The Board of Directors is the governing body for the VVTA. The Board is responsible for setting policies and providing direction on issues that affect transit operations.

The Board meets monthly on the third Monday of each month at 9:30 a.m. The representative receives $125.00 per meeting.

Wastewater Enterprise Fund Ad Hoc Committee
The Wastewater Enterprise Fund Ad Hoc Committee reviews proposed plans and capital improvement projects for the Wastewater Treatment Plan, sewer lines, and other wastewater functions.

The Committee meets semi-annually on the second Monday of January and July at 3:30 p.m., or as needed.

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Packet Pg. 1961 Attachment: City Council Committee Descriptions 12 19 22 Update draft (5200 : City Council/Barstow Fire Protection District Reorganization)

Barstow City CouncilDecember 19, 2022

Barstow City Council
December 19, 2022