13-B
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Travis Sais, Deputy City Manager
SUBJECT: Consideration and possible action to consider a Modification Application for one existing Cannabis Business Permit (“CBP”) for a dispensary use for NC3 Systems, Inc. (dba “Deli by Caliva”) at 9535 Artesia Boulevard.
Date: November 13, 2023
EXECUTIVE SUMMARY
On August 24, 2023, the City Manager received a Cannabis Business Permit (“CBP”) Modification Application (“Application”) from NC3 Systems, Inc. (dba “Deli by Caliva”).
The Application explains the business interests, proprietors and ownership of the permittee.
Deli by Caliva submitted the Application due to three changes in its approved officers:
(1) Michael Batesole, who served as the CFO, has been replaced by Marshall Minor; (2) Judith Schvimmer, who is appointed as the Secretary for the disclosed upstream entities, has been appointed as the Secretary of the permittee; and (3) Troy Datcher, who served as the CEO, has been replaced by Laurie Holcomb. The applicant specifies that these officers do not possess any financial interest in the permittee but are disc losed based on their respective roles within the permittee. Furthermore, these new officers have successfully undergone live scans, and the applicant affirms that there have been no civil or criminal enforcement actions against any individuals listed in the Application. These changes have also been updated in the permittee's State Cannabis License. The City Manager and City Attorney reviewed the Application and determined it appears that the permittee provided sufficient information to satisfy the requirements of the Cannabis Regulations regarding a Modified CBP – as defined in Resolution No. 23-18. The Application was available for individual City Council Members to review.
At the October 23, 2023 City Council Meeting, this Modification Application item was removed from the consent calendar to be considered at the next regular City Council meeting on November 13, 2023. At the October 23, 2023 City Council Meeting, Mayor Santa Ines raised additional questions for the Applicant regarding the ownership of the upstream entities of NC3 Systems, Inc. – TPCO US Holding LLC and Gold Flora Corporation. The City Manager suggested that this item be deferred to the next regular City Council Meeting on November 13, 2023, so that the Applicant can provide more detailed and comprehensive information regarding the ownership entities. The Applicant will provide additional information at the November 13, 2023 City Council Meeting.
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Staff Report – NC3 System, Inc. (dba “Deli by Caliva”) – Modification Application November 13, 2023
RECOMMENDATION TO CITY COUNCIL
1) Approve a Modification Application for one existing Cannabis Business Permit (“CBP”) for a dispensary use for NC3 Systems, Inc. (dba “Deli by Caliva”) at 9535 Artesia Boulevard; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
CBP modification applications are required to pay a review fee of $3,410.00 to recover processing costs. Deli by Caliva paid the review fee on September 5, 2023, and is current on all taxes remitted to the City.
ATTACHMENT
October 23, 2023 Staff Report……………………………………………....………………....3
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14-F
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Travis Sais, Deputy City Manager
SUBJECT: Consideration and possible action to consider a Modification Application for one existing Cannabis Business Permit (“CBP”) for a dispensary use for NC3 Systems, Inc. (dba “Deli by Caliva”) at 9535 Artesia Blvd.
Date: October 23, 2023
EXECUTIVE SUMMARY
On August 24, 2023, the City Manager received a Cannabis Business Permit (“CBP”) Modification Application (“Application”) from NC3 System, Inc. (dba “Deli by Caliva”). The Application explains the business interests, proprietors and ownership of the permittee.
Deli by Caliva submitted the Application due to three changes in its approved officers:
(1) Michael Batesole, who served as the CFO, has been replaced by Marshall Minor; (2) Judith Schvimmer, who is appointed as the Secretary for the disclosed upstream entities, has been appointed as the Secretary of the permittee; and (3) Troy Datcher, who served as the CEO, has been replaced by Laurie Holcomb. The applicant specifies that these officers do not possess any financial interest in the permittee but are disclosed based on their respective roles within the permittee. Furthermore, these new officers have successfully undergone live scans, and the applicant affirms that there have been no civil or criminal enforcement actions against any individuals listed in the Application. These changes have also been updated in the permittee's State Cannabis License and Secretary of State's "Statement of Information" filing for NC3 Systems.
The City Manager and City Attorney reviewed the Application and determined it appears that the permittee provided sufficient information to satisfy the requirements of the Cannabis Regulations regarding a Modified CBP – as defined in Resolution No. 23-18.
The Application was available for individual City Council Members to review.
RECOMMENDATION TO CITY COUNCIL
1) Approve a Modification Application for one existing Cannabis Business Permit (“CBP”) for a dispensary use for NC3 Systems, Inc. (dba “Deli by Caliva”) at 9535 Artesia Blvd.; or
2) Alternatively, discuss and take other action related to this item.
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Staff Report – NC3 System, Inc. (dba “Deli by Caliva”) – Modification Application October 23, 2023
FISCAL IMPACT
CBP modification applications are required to pay a review fee of $3,410.00 to recover processing costs. Deli by Caliva paid the review fee on September 5, 2023, and is current on all taxes remitted to the City.
ATTACHMENTS
City Attorney Memorandum – NC3 Systems, Inc (dba “Deli by Caliva”).………………....3
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Dan Koops
Mayor
Ray Dunton
Mayor Pro Tem
Raymond Y. Hamada
Council Member
Sonny R. Santa Ines
Council Member
Victor Sanchez
Council Member
December 6, 2021
To: Honorable Mayor, Mayor pro tem, and City Council
From: Karl H Berger, City Attorney
Re: CBP Modification Application for NC3 Systems, Inc. dba Caliva
On February 8, 2021, the City Council adopted Resolution No. 21-08. That Resolution, in combination with the Bellflower Municipal Code (“BMC”) and previously adopted resolutions and administrative policies promulgated by the City Manager (collectively, the “Cannabis Regulations”) govern the City Council’s consideration of whether to approve a Modified CBP.1
Resolution No. 21-08 defines “ownership” as either of the following:
“A. A person with an aggregate ownership interest of 25 percent or more in the person seeking a CBP or a permittee seeking a CBP Renewal, unless the interest is solely a security, lien, or encumbrance; [OR]
B. An individual who will be participating in the direction, control, or management of a permittee.”
Caliva submitted a number of documents containing tax-related information that is exempt from public disclosure.2 The documents may, however, be reviewed by authorized City officials to determine compliance with the Cannabis Regulations.
After reviewing Caliva’s application, it appears that it provided sufficient information to satisfy the requirements of the Cannabis Regulations regarding a Modified CBP.
Specifically, Caliva both identified the person (which, in this instance is a corporate person) that owns NC3 Systems, Inc. (which is CMG Partners, Inc.); and also identified the individuals (i.e., the natural persons) “who will be participating in the direction, control, or management of a permittee.” It is these persons who were subjected to background checks.
1 Defined as “an application requesting to modify an existing CBP by changing ownership or business name.” 2 See, e.g., Government Code §§ 6254(i); 6276.40; and 6276.44. -5-