RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AGREEMENT BETWEEN
THE CITY AND THE PUN GROUP , LLC TO PROVIDE
CANNABIS EXCISE TAX AND INVENTORY AUDIT AND
CONSULTING SERVICES
WHEREAS, On November 6, 2018, City of Chula Vista voters approved Measure Q by
64.32%, which imposes a Cannabis Business tax of $25 per square foot of canopy on Cannabis Cultivators, and 7% of gross receipts of all other Cannabis Businesses including Storefront Retailers, Non-Storefront Retailers, Manufacturers, Distributors, and Testing Laboratories, to fund general City services, including but not limited to enforcement efforts against Cannabis Businesses that are operating illegally; and
WHEREAS, Chula Vista Municipal Code (“CVMC”) C hapter 5.19 and the City’s Cannabis Ordinance contain the local licensing and regulatory provisions governing Commercial Cannabis Businesses in the City of Chula Vista; and
WHEREAS, Currently, eleven licensed Cannabis Businesses are operating withi n the City’s boundaries, and a twelfth Cannabis Businesses will open during fiscal year 2024;
WHEREAS, CVMC Section 5.21.150 allows the City to perform compliance audits and examine all businesses locations, books, and records of cannabis businesses to ce rtify tax remittance and general operations are in accordance with the City of Chula Vista rules and regulations; and
WHEREAS, to enhance Cannabis Excise Tax revenue collection efforts, program oversight, and compliance with CVMC Chapter 5.21, the Finance Department requires the use of a consultant to provide cannabis excise tax and inventory audit and consulting services; and
WHEREAS, request for proposal (RFP 23-09) was published in October 2022 by the City of La Mesa in conjunction with the City of Chula Vista and Imperial County, to request cannabis audit services to perfo rm cash handling audits, on -site inventory audits, development of audit policies and procedures, and track and trace systems evaluation; and
WHEREAS, five (5) proposals were received, staff from all three agencies evaluated the proposals and selected The Pun Group, LLC; and
WHEREAS, the staff recommends entering into an agreement with The Pun Group , LLC for the above-described cannabis excise tax and inventory audit services, for an initial term through June 30, 2024, with four (4) one-year options to renew through fiscal year 2028; and
WHEREAS, the proposed a greement with The Pun Group , LLC shall become effective upon adoption of this Resolution by the City Council.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it approves the agreement between the City and The Pun Group , LLC to provide cannabis excise tax and inventory audit and consulting services , in the form presented, with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes and directs the Mayor to execute the same.
Presented by Approved as to form by
Sarah Schoen Jill D.S. Maland
Director of Finance/Treasurer Lounsbery Ferguson Altona & Peak Acting City Attorney