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TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Travis Sais, Assistant to the City Manager
Elizabeth Corpuz, Director of Planning and Building Services
DATE: June 13, 2022
SUBJECT: Consideration and possible action to consider a six-month extension for three Cannabis Business Permits (“CBP”) for dispensary, cultivation and distribution uses by Joint Forces, LLC (dba “Greenwolf”), to continue to operate at 10040 and 10042 Artesia Place. Permittee representative: Jonathan Barrett.
EXECUTIVE SUMMARY
At the December 9, 2021 Special City Council Meeting, the City Council considered Cannabis Business Permit (“CBP”) renewals for existing CBP permittees. Following the review and discussion of Joint Forces, LLC’s (dba “Greenwolf”) renewal application, the City Council granted Greenwolf a renewal of three CBPs for dispensary, cultivation, and distribution uses for a six-month period, instead of the full twelve-month period. A six-month renewal was granted due to the pending completion of the cultivation space expansion and upgraded HVAC units that were to be installed as an odor mitigation measure. The construction permit for the cultivation space expansion and HVAC units was finalized on May 10, 2022.
Staff is recommending the City Council consider granting for the annual renewal for three CBPs for dispensary, cultivation and distribution uses for Joint Forces, LLC to continue to operate at 10040 and 10042 Artesia Place. The annual permit would expire December 31, 2022. Should the City Council decide not to grant the CBPs, they will expire on June 30, 2022.
RECOMMENDATION TO CITY COUNCIL
It is recommended that the City Council consider the following:
1) If appropriate, grant Joint Forces, LLC’s (dba “Greenwolf”) three CBPs for dispensary, cultivation and distribution uses until December 31, 2022; or
2) Alternatively, discuss and take other action related to this item.
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Staff Report – Joint Forces, LLC (dba “Greenwolf”) Cannabis Business Permits June 13, 2022
FISCAL IMPACT
A cannabis business permit application review fee is $6,357 per application. Once an application is approved, a cannabis business permittee is required to pay for each permit the applicable business license tax, annual permit administration fee of $28,024, quarterly cannabis business taxes and provide an annual contribution of $5,000 toward a drug education fund identified by the City Council.
Per the City Council’s direction regarding Greenwolf’s six-month extension and fees at the December 9, 2021 Special City Council meeting, Greenwolf paid half of the renewal fees required to activate its three CBPs in January 2022 for a six-month renewal period. If the City Council grants for the annual renewal for Greenwolf’s three CBPs, they would expire at the same time as all other annual permits, December 31, 2022. If the City Council grants the renewal, Greenwolf will be required to pay the balance of all CBP renewal/activation fees:
Annual Cannabis Business Permit Fee (3 permits for 6 months or 50%) $42,036 Drug Education/Rehabilitation Program Contribution (3 permits for 6 months or 50%)
$7,500
Total Amount Due $49,536
At this time, Greenwolf is current on all taxes remitted to the City. Projected sales (previously provided by the permittee) and related cannabis tax revenues for 2022 - 2024 are below for reference:
Projected
2022 Sales
Projected
2022
Cannabis
Tax
Current
Cannabis
Tax
Rates
Projected
2023 Sales
Projected
2024 Sales
Retail $6,500,000 $552,500 8.5% $7,000,000 $7,500,000
Distribution 100,000 1,000 1.0% 100,000 100,000
Cultivation-6,300 s.f. not provided 126,000 $20/s.f.
not
provided not provided
Total $6,600,000 $679,500 $7,100,000 $7,600,000
The quarterly cannabis business taxes for cultivation will also increase to $51,195 starting the tax period of April to June 2022 since additional grow rooms were added and finalized in May 2022.
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (Pub lic Resources Code § 21000, et seq.; “CEQA”) and CEQA Guidelines (14 Cal. Code of Regs. § 15000, et seq.) -2-
Staff Report – Joint Forces, LLC (dba “Greenwolf”) Cannabis Business Permits June 13, 2022
the City determined that the applications for the CBPs consist of applications to operate businesses in existing commercial and industrial buildings that meet the definition for classes of projects exempt from additional environmental review under CEQA Guidelines § 15301 (Existing Facilities) and § 15302 (Replacement or Reconstruction).
DISCUSSION
At the December 9, 2021 Special City Council Meeting, the City Council considered Cannabis Business Permit (“CBP”) renewals for existing CBP permittees. CBP renewal applications and application review payments for the 2022 calendar year were submitted from October 21, 2021 through October 25, 2021 by existing CBP permittees. Renewal applicants were required to provide an application form, dates the operations commenced, any code or law enforcement issues from the previous one year; financial projections for the next three years, proof of business entity, updated photos of the location and proof of their State and Bellflower cannabis related licenses/permits.
Following the review and discussion of Joint Forces, LLC’s (dba “Greenwolf”) renewal application, the City Council granted Greenwolf a renewal of three CBPs for dispensary, cultivation, and distribution uses for a six-month period, instead of the full twelve-month period. A six-month renewal was granted due to the pending completion of the cultivation space expansion and upgraded HVAC units that were to be installed as an odor miti gation measure. The cultivation expansion consisted of adding three grow rooms, bringing the total square footage of cultivation space from 6,300 square feet to 10,239 square feet. The cultivation expansion also included revising the mechanical HVAC systems and electrical lighting systems for the three new cultivation rooms. The cultivation expansion has been completed and the permit was finalized on May 10, 2022. Photos of the expansion are attached as Attachment “A”.
As an odor mitigation measure, the permittee installed three new “mini split” HVAC systems near the front the cultivation building, which fronts Artesia Place at 10042 Artesia Place. The permittee also installed a CLO2 Odor and Pathogen Control unit as an additional odor mitigation measure. Originally, the permittee stated at the December 9, 2021 Special City Council Meeting it was going to replace all HVAC units throughout the building. However, the permittee informed staff that it discovered the CLO2 Odor and Pathogen Control unit is a more cost-effective odor solution that is supposed to better neutralize cannabis odors.
Attachment “B” was provided by the applicant and contains a technical description of CLO2 Odor and Pathogen Control.
Staff is recommending the City Council consider granting the full annual CBPs for dispensary, cultivation and distribution uses for Joint Forces, LLC (dba Greenwolf), to continue to operate at 10040 and 10042 Artesia Place. Should the City Council decide not to extend Greenwolf’s CBPs, the CBPs will expire on June 30, 2022.
ATTACHMENTS
A……………………………………………………….Greenwolf Cultivation Expansion Photos B…………………………………..……………….CLO2 Odor and Pathogen Control Hand-Out -3-
Attachment A
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