ATTACHMENT H.
Correspondence Letter- Notice of
Default dated May 4, 2021
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ATTACHMENT I.
Correspondence Letter- Notice of
Missing DA Signatures dated September
2, 2021
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ATTACHMENT J.
Correspondence Letter – Notice of
Cannabis Deferment and Payment
Program dated December 7, 2022
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5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Elizabeth Alcantar
Vice Mayor
Jose R. Gonzalez
Councilmember
Jack M. Guerrero
Councilmember
Blanca Lozoya
Councilmember
Daisy Lomeli
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
December 7, 2022
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C
Dear Owner/Operator:
On December 6, 2022, the City Manager presented a Cannabis Deferment and Payment Program to the City Council. Within this program, the City Manager will be utilizing his discretionary authority allowed within the Development Agreements to assist Cannabis Operators with the accumulated non-operating and other fees by deferring and providing additional time for payment without penalty.
The stipulations of this Program will be as follows:
• Unpaid non-operating fees will be deferred (without penalty) until six (6) months after the Operator is issued a Certificate of Occupancy. Thereafter, the accumulated non-operating fees would be required to be repaid within twelve (12) months or other term negotiated with the City Manager.
o Any previous late penalties charged to non-operating fees would be waived provided that a payment agreement is reach and the operator follows all stipulations within the agreement
• Community Benefit and Cost Recovery Fees, as detailed in the Development Agreement, would have to be paid timely on a monthly basis. Any Fees incurred prior to the agreement would be put under a payment agreement and also required to be paid timely on a monthly basis. • Payment agreement terms would be subject to the discretion of the City Manager as negotiated with each operator
• The Operators would have to remain in good standing with the City with respect to Planning and Building and Safety Regulations.
In order to be eligible for this program, Operators must have negotiated with the City and entered into an executed payment agreement no later than January 31, 2023.
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If you are interested in entering into this deferment and payment program, please contact Joshua Calhoun at [email protected].
Sincerely,
Joshua Calhoun, CPA
Finance Director
Administrative Record - Review Hearing for Genius Distribution, LLC Page 188 of 329 Page 1250 of 4584 ATTACHMENT K.
Letter of Agreement (Payment Plan)
dated February 1, 2023
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ATTACHMENT L.
Correspondence Letters- April, May, and
June Delinquency notices.
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Mayor
Daisy Lomeli
Vice Mayor
Jose R. Gonzalez
Councilmember
Elizabeth Alcantar
Councilmember
Martin U. Fuentes
Councilmember
Cynthia Gonzalez, Ed.D
City Manager
Alfonso Noyola, ICMA-CM
CUDAHY
OP!;:N MINDS, OP!;:N DOORS
Incorporated November 10, 1960
5220 Santa Ana Street
Cudahy, CA 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
June 6, 2023
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C -TEN (10) DAY NOTICE OF INTENTION TO TERMINATE LETTER
AGREEMENT ON PAYMENT OF OUTSTANDING FEES & COST DELINQUENT
PAYMENT
Dear Owner/Operator:
On or about March 1, 2023, the City of Cudahy ("City") and Genius Distribution, LLC ("Operator") entered into a Letter Agreement wherein the City agreed to forebear enforcement of its rights under Development Agreement # 18-0l 6C, provided Operator entered into a payment arrangement on past due fees owed to the City.
On May 15, 2023, the Operator was notified that the monthly fees for April 2023, May 2023, and June 2023, were not paid as required by the Letter Agreement. The Operator is now more than thirty (30) days delinquent on its payment plan with the City. The May 15, 2023, letter is attached hereto and states that the current amount outstanding on the Letter Agreement is $34,219.70.
The Letter Agreement provides that upon the breach of any its provisions, the City may, at is sole option and discretion, give the Operator ten (10) days written Notice of Intention to Terminate the Letter Agreement and an Opportunity to Cure. In the event of any uncured default after notice is given, the Letter Agreement shall automatically terminate without further notice, at which time the City may exercise any and all rights and remedies under the Development Agreement, including but not limited to, termination of the Development Agreement and revocation of the cannabis permit.
NOTICE IS HEREBY GIVEN that if the "current amount outstanding" on the Letter Agreement of $34,219.70 is not paid in full within ten (10) calendar days of the date of this Notice, the City will consider the Letter Agreement automatically terminated and no longer of
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ATTACHMENT M.
Final Demand Letter dated June 23, 2023
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ATTACHMENT N.
Correspondence – Notice of Escrow
Account dated August 9, 2023
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ATTACHMENT O.
Correspondence – Notice of Review
Hearing dated October 12, 2023
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5220 Santa Ana Street
Cudahy, CA 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Daisy Lomeli
Vice Mayor
Jose R. Gonzalez
Councilmember
Elizabeth Alcantar
Councilmember
Martin U. Fuentes
Councilmember
Cynthia Gonzalez, Ed.D
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
SENT VIA USPS-CERTIFIED MAIL
October 12, 2023
Attn: Robert Gaither, Managing Member
Genius Distribution, LLC
10866 Wilshire Blvd. Suite 1650
Los Angeles, CA 90024
Genius Distribution, LLC
4916 Cecilia Street, Unit D
Cudahy, CA 90201
RE: 4916 Cecilia St., Unit D, Cudahy CA 90201 – Genius Distribution, LLC Development Agreement No. DA18-016C
Commercial Cannabis Permit No. CCP18-0019
NOTICE OF REVIEW HEARING
Hearing Date: Tuesday, November 14th, 2023.
Time: 9:00 a.m.
Place: 5220 Santa Ana St. Cudahy CA 90201 – Bedwell Hall, Council Chambers.
Dear Genius Distribution, LLC,
This letter is to inform you that the City Manager of the City of Cudahy (“City”) has appointed Steve Napolitano to act as an independent hearing officer for a Review Hearing on your compliance with the terms of your Development Agreement (“Agreement”) with the City.
Under Section 19 of the Agreement, the City may conduct Periodic and Special Reviews of the Owner's "good faith compliance with the terms of the Agreement." The burden of proof is on the Owner to demonstrate compliance. Please submit any arguments and supporting documents evidencing compliance ten (10) days prior to the Review Hearing. In the event of a finding of noncompliance, the City Council may terminate the Agreement or impose such conditions as are reasonably necessary to protect the interests of the City in accordance with the Agreement and state law. The decision of the City Council shall be final, subject only to judicial review pursuant to Code of Civil Procedure Section 1094.5.
This letter shall also serve as notice that the findings of this Review Hearing may inform the Administrative Record - Review Hearing for Genius Distribution, LLC Page 221 of 329 Page 1283 of 4584
City Manager’s decision to revoke or suspend Commercial Cannabis Permit No. CCP18-019 pursuant to Cudahy Municipal Code (“CMC”) Section 5.20.080(6), due to a failure to comply with the requirements of Chapter 5.20 of the CMC, or any condition of approval, or any other agreement or covenant required – inclusive of this Agreement.
The estimated cost for the Review hearing is $12,695. The Owner is responsible for the cost of the Review Hearing. You are requested to deliver a cashier's check payable to the City of Cudahy three (3) days prior to the hearing date. The Review hearing will proceed as scheduled whether or not the deposit is made; however, the City may consider the failure to make the deposit a further default on the Development Agreement. The hearing is set for:
Date: Tuesday, November 14, 2023.
Time: 9:00 a.m.
Place: 5220 Santa Ana St. Cudahy, CA 90201 – Bedwell Hall – Council Chambers Please contact Cecilia Madrigal-Gonzalez, Senior Planner at 323-773-5143 ext. 252 or [email protected] no later than ten (10) days from the date of this letter to confirm your appearance at the Review hearing. If we do not hear back from you by this date, we will assume you waive your right to present evidence at the hearing. Please be advised that the City’s Staff Report with exhibits will be available, upon request, for your review ten (10) days prior to the Hearing.
Respectfully,
Cecilia Madrigal-Gonzalez
Senior Planner
cc: Law Office of Glenn Ward Calsada, Special Counsel
Stephanie A. Arechiga, Esq., City Attorney
Alfonso Noyola, City Manager
Juan Arauz, AICP, Community Development Director
Joshua Calhoun, Finance Director
Jessica Guillen, Assistant Planner
Daffodil Tyminski, (via email)
Philip Kfoury, (via email)
Shaoul J. Levy, Manager, Cudahy Cecilia, LLC (via mail) Yaffa Shamy, Agent for Service of Process (via mail)
Administrative Record - Review Hearing for Genius Distribution, LLC Page 222 of 329 Page 1284 of 4584 ATTACHMENT P.
Correspondence – Notice of updated
payment of fees dated October 24, 2023
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Administrative Record - Review Hearing for Genius Distribution, LLC Page 225 of 329
ATTACHMENT Q.
Invoices from 2019 to September 2023
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P a g e | 1
5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Elizabeth Alcantar
Vice Mayor
Jose R. Gonzalez
Councilmember
Jack M. Guerrero
Councilmember
Blanca Lozoya
Councilmember
Daisy Lomeli
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
October 10, 2022
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C
Dear Owner/Operator:
Below is a summary of past and current amounts due under Development Agreement DA 18-016C for Ordinance No 678, with an Effective date of June 5, 2018.
Fee Type Payment
Amount
Payment Period City
Code
Community Benefit Program $22,476.33
$9,904.83
Outstanding balance through July 31,
2021.
Monthly installments ($761.91) from
August 2021 to August 2022.
CBP
Cost Recovery Fee $14,430.59
$33,603.55
Outstanding balance through July 31,
2021.
City Labor from August 2021 to
August 2022
URBF1
Non-Operating Fee $11,552.52
$4,417.14
Outstanding balance through July 31,
2021.
August 2021 through August 2022.
The monthly non-operating fee is
$339.78 (.42 x 809-square footage of
the premises)
OPFEE
Total Fees $96,384.96 Due October 31, 2022
Administrative Record - Review Hearing for Genius Distribution, LLC Page 288 of 329 Page 1350 of 4584 P a g e | 2
Community Benefit Program
The Community Benefit Program (CBP) payment amount is due the first day of each month and is considered late if payment is received on or after the fifth day of the month. All CBP outstanding balance as of July 31, 2021, and current CBP monthly installments totaling $32,381.16 are due October 31, 2022.
Cost Recovery Fee
The outstanding Cost Recovery Fee as of July 31, 2021, the City labor, and third-party contractors from August 2021 to August 2022 totaling $48,034.14 are due October 31, 2022.
Non-Operating Fees
The outstanding balance as of July 31, 2021, and the current monthly non-operating fees from August 2021 and August 2022 totaling $15,969.66 are due October 31, 2022.
Please pay no later than October 31, 2022, to avoid any penalties. If you have any questions related to these items, please contact Joshua Calhoun at [email protected].
Sincerely,
Joshua Calhoun, CPA
Finance Director
See supporting detail attached of monthly billings and payments from August 2021 through current.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 289 of 329 Page 1351 of 4584 CBP URBF1 OPFEE
Operator Comm Benefit Cost Recovery Non Operating Outstanding Genius Distribution, LLC
September 22, 2021 Letter 22,476.33 14,430.59 11,552.52 48,459.44
BILLINGS
Aug 2021 761.91 335.18 339.78 1,436.87
Sep 2021 761.91 496.78 339.78 1,598.47
Oct 2021 761.91 351.00 339.78 1,452.69
Nov 2021 761.91 2,973.23 339.78 4,074.92
Dec 2021 761.91 130.65 339.78 1,232.34
Jan 2022 761.91 494.28 339.78 1,595.97
Feb 2022 761.91 1,137.30 339.78 2,238.99
Mar 2022 761.91 875.25 339.78 1,976.94
Apr 2022 761.91 1,103.88 339.78 2,205.57
May 2022 761.91 2,115.39 339.78 3,217.08
Jun 2022 761.91 127.60 339.78 1,229.29
Jul 2022 761.91 924.63 339.78 2,026.32
Aug 2022 761.91 932.38 339.78 2,034.07
PAYMENTS
Aug 2021
Sep 2021
Oct 2021
Nov 2021
Dec 2021
Jan 2022
Feb 2022
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Annual City Reimbursement Costs 72,020.00
Cost per operator (10) 7,202.00
Three years(2019‐2022) 3 years
City Labor 21,606.00 21,606.00
Balance as of August 31, 2022 32,381.16 48,034.14 15,969.66 96,384.96 (a) City Reimbursement cost of $7,202 per year (x three years (2019‐2022)= $21,606.00 Administrative Record - Review Hearing for Genius Distribution, LLC Page 290 of 329 Page 1352 of 4584 P a g e | 1
5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Elizabeth Alcantar
Vice Mayor
Jose R. Gonzalez
Councilmember
Jack M. Guerrero
Councilmember
Blanca Lozoya
Councilmember
Daisy Lomeli
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
November 14, 2022
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C
Dear Owner/Operator:
Below is a summary of past and current amounts due under Development Agreement DA 18-016C for Ordinance No 678, with an Effective date of June 5, 2018.
Fee Type Payment
Amount
Payment Period City
Code
Community Benefit Program $22,476.33
$11,428.65
Outstanding balance through July
31, 2021.
Monthly installments ($761.91)
from August 2021 to October 2022.
CBP
Cost Recovery Fee $14,430.59
$38,068.49
Outstanding balance through July
31, 2021.
City Labor from August 2021 to
October 2022
URBF1
Non-Operating Fee $11,552.52
$5,096.70
$356.77
Outstanding balance through July
31, 2021.
August 2021 through October
2022. The monthly non-operating
fee is $339.78 (.42 x 809-square
footage of the premises)
Penalties August 2022-October
2022
OPFEE
Total Fees $103,410.05 Due November 30, 2022
Administrative Record - Review Hearing for Genius Distribution, LLC Page 291 of 329 Page 1353 of 4584 P a g e | 2
Community Benefit Program
The Community Benefit Program (CBP) payment amount is due the first day of each month and is considered late if payment is received on or after the fifth day of the month. All CBP outstanding balance as of July 31, 2021, and current CBP monthly installments totaling $33,904.98 are due November 30, 2022.
Cost Recovery Fee
The outstanding Cost Recovery Fee as of July 31, 2021, the City labor, and third-party contractors from August 2021 to October 2022 totaling $52,499.08 are due November 30, 2022.
Non-Operating Fees
The outstanding balance as of July 31, 2021, and the current monthly non-operating fees from August 2021 and October 2022 totaling $16,649.22 are due November 30, 2022.
Late Payments Penalties
Penalties totaling $356.77 from August 2022 to October 2022 are due November 30, 2022.
Per the Development Agreement, amounts that are more than 30 days late after the due date shall result in a penalty equal to the sum of 25% of the non-operating/operating fees. In addition, a 10% shall be added to the first day of each calendar month following the month of the imposition of the 25% penalty if the fees remain unpaid in whole or in part-up to a maximum of 100% of the fee payable. The City will be enforcing these penalties for amounts due from July 2022 to present, as appliable. No penalties will be imposed on amounts outstanding prior to this date. This will be separately listed on current and future invoice letters provided by the City. Should you wish to avoid penalties, ensure that either amounts payable are paid timely or contact the City to discuss entering into a payment plan on prior amounts outstanding.
Please pay no later than November 30, 2022, to avoid any penalties. If you have any questions related to these items, please contact Joshua Calhoun at [email protected].
Sincerely,
Joshua Calhoun, CPA
Finance Director
See supporting detail attached of monthly billings and payments from August 2021 through current.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 292 of 329 Page 1354 of 4584 CBP URBF1 OPFEE OPFEE
Operator Comm Benefit Cost Recovery Non Operating Penalties Outstanding Genius Distribution, LLC
September 22, 2021 Letter 22,476.33 14,430.59 11,552.52 48,459.44
BILLINGS
Aug 2021 761.91 335.18 339.78 1,436.87 Sep 2021 761.91 496.78 339.78 1,598.47 Oct 2021 761.91 351.00 339.78 1,452.69 Nov 2021 761.91 2,973.23 339.78 4,074.92 Dec 2021 761.91 130.65 339.78 1,232.34 Jan 2022 761.91 494.28 339.78 1,595.97 Feb 2022 761.91 1,137.30 339.78 2,238.99 Mar 2022 761.91 875.25 339.78 1,976.94 Apr 2022 761.91 1,103.88 339.78 2,205.57 May 2022 761.91 2,115.39 339.78 3,217.08 Jun 2022 761.91 127.60 339.78 1,229.29 Jul 2022 761.91 924.63 339.78 2,026.32 Aug 2022 761.91 932.38 339.78 84.95 2,119.02 Sep 2022 761.91 2,550.29 339.78 118.92 3,770.90 Oct 2022 761.91 1,914.65 339.78 152.90 3,169.24
PAYMENTS
Aug 2021
Sep 2021
Oct 2021
Nov 2021
Dec 2021
Jan 2022
Feb 2022
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Sep 2022
Oct 2022 0.00 0.00 0.00 0.00 0.00
Annual City Reimbursement Costs 72,020.00
Cost per operator (10) 7,202.00
Three years(2019‐2022) 3 years
City Labor 21,606.00 21,606.00
Balance as of October 31, 2022 33,904.98 52,499.08 16,649.22 356.77 103,410.05 (a) City Reimbursement cost of $7,202 per year (x three years (2019‐2022)= $21,606.00 Administrative Record - Review Hearing for Genius Distribution, LLC Page 293 of 329 Page 1355 of 4584 P a g e | 1
5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Elizabeth Alcantar
Vice Mayor
Jose R. Gonzalez
Councilmember
Jack M. Guerrero
Councilmember
Blanca Lozoya
Councilmember
Daisy Lomeli
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
December 12, 2022
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C
Dear Owner/Operator:
Below is a summary of past and current amounts due under Development Agreement DA 18-016C for Ordinance No 678, with an Effective date of June 5, 2018.
Fee Type Payment
Amount
Payment Period City
Code
Community Benefit Program $22,476.33
$12,190.56
Outstanding balance through July
31, 2021.
Monthly installments ($761.91)
from August 2021 to November
2022.
CBP
Cost Recovery Fee $14,430.59
$40,659.97
Outstanding balance through July
31, 2021.
City Labor from August 2021 to
November 2022
URBF1
Non-Operating Fee $11,552.52
$5,436.48
$543.65
Outstanding balance through July
31, 2021.
August 2021 through November
2022. The monthly non-operating
fee is $339.78 (.42 x 809-square
footage of the premises)
Penalties Aug 2022-Nov 2022
OPFEE
Total Fees $107,290.10 Due December 29, 2022
Administrative Record - Review Hearing for Genius Distribution, LLC Page 294 of 329 Page 1356 of 4584 P a g e | 2
Community Benefit Program
The Community Benefit Program (CBP) payment amount is due the first day of each month and is considered late if payment is received on or after the fifth day of the month. All CBP outstanding balance as of July 31, 2021, and current CBP monthly installments totaling $34,666.89 are due December 29, 2022.
Cost Recovery Fee
The outstanding Cost Recovery Fee as of July 31, 2021, the City labor, and third-party contractors from August 2021 to November 2022 totaling $55,090.56 are due December 29, 2022.
Non-Operating Fees
The outstanding balance as of July 31, 2021, and the current monthly non-operating fees from August 2021 and October 2022 totaling $16,989 are due December 29, 2022.
Late Payments Penalties
Penalties totaling $543.65 from August 2022 to November 2022 are due December 29, 2022.
Per the Development Agreement, amounts that are more than 30 days late after the due date shall result in a penalty equal to the sum of 25% of the non-operating/operating fees. In addition, a 10% shall be added to the first day of each calendar month following the month of the imposition of the 25% penalty if the fees remain unpaid in whole or in part-up to a maximum of 100% of the fee payable. The City will be enforcing these penalties for amounts due from July 2022 to present, as appliable. No penalties will be imposed on amounts outstanding prior to this date. This will be separately listed on current and future invoice letters provided by the City. Should you wish to avoid penalties, ensure that either amounts payable are paid timely or contact the City to discuss entering into a payment plan on prior amounts outstanding.
Please pay no later than December 29, 2022, to avoid any penalties. If you have any questions related to these items, please contact Joshua Calhoun at [email protected].
Sincerely,
Joshua Calhoun, CPA
Finance Director
See supporting detail attached of monthly billings and payments from August 2021 through current.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 295 of 329 Page 1357 of 4584 CBP URBF1 OPFEE OPFEE
Operator Comm Benefit Cost Recovery Non Operating Penalties Outstanding Genius Distribution, LLC
September 22, 2021 Letter 22,476.33 14,430.59 11,552.52 48,459.44
BILLINGS
Aug 2021 761.91 335.18 339.78 1,436.87 Sep 2021 761.91 496.78 339.78 1,598.47 Oct 2021 761.91 351.00 339.78 1,452.69 Nov 2021 761.91 2,973.23 339.78 4,074.92 Dec 2021 761.91 130.65 339.78 1,232.34 Jan 2022 761.91 494.28 339.78 1,595.97 Feb 2022 761.91 1,137.30 339.78 2,238.99 Mar 2022 761.91 875.25 339.78 1,976.94 Apr 2022 761.91 1,103.88 339.78 2,205.57 May 2022 761.91 2,115.39 339.78 3,217.08 Jun 2022 761.91 127.60 339.78 1,229.29 Jul 2022 761.91 924.63 339.78 2,026.32 Aug 2022 761.91 932.38 339.78 84.95 2,119.02 Sep 2022 761.91 2,550.29 339.78 118.92 3,770.90 Oct 2022 761.91 1,914.65 339.78 152.90 3,169.24 Nov 2022 761.91 2,591.48 339.78 186.88 3,880.05
PAYMENTS
Aug 2021
Sep 2021
Oct 2021
Nov 2021
Dec 2021
Jan 2022
Feb 2022
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Sep 2022
Oct 2022
Nov 2022 0.00 0.00 0.00 0.00 0.00
Annual City Reimbursement Costs 72,020.00
Cost per operator (10) 7,202.00
Three years(2019‐2022) 3 years
City Labor 21,606.00 21,606.00
Balance as of November 30, 2022 34,666.89 55,090.56 16,989.00 543.65 107,290.10 (a) City Reimbursement cost of $7,202 per year (x three years (2019‐2022)= $21,606.00 Administrative Record - Review Hearing for Genius Distribution, LLC Page 296 of 329 Page 1358 of 4584 P a g e | 1
5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Daisy Lomeli
Vice Mayor
Jose R. Gonzalez
Councilmember
Elizabeth Alcantar
Councilmember
Martin U. Fuentes
Councilmember
Cynthia Gonzalez
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
January 11, 2023
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C
Dear Owner/Operator:
Below is a summary of past and current amounts due under Development Agreement DA 18-016C for Ordinance No 678, with an Effective date of June 5, 2018.
Fee Type Payment
Amount
Payment Period City
Code
Community Benefit Program $22,476.33
$12,952.47
Outstanding balance through July
31, 2021.
Monthly installments ($761.91)
from August 2021 to December
2022.
CBP
Cost Recovery Fee $14,430.59
$45,831.00
Outstanding balance through July
31, 2021.
City Labor from August 2021 to
December 2022
URBF1
Non-Operating Fee $11,552.52
$5,776.26
$764.51
Outstanding balance through July
31, 2021.
August 2021 through December
2022. The monthly non-operating
fee is $339.78 (.42 x 809-square
footage of the premises)
Penalties Aug 2022-Dec 2022
OPFEE
Total Fees $113,783.68 Due January 31, 2023
Administrative Record - Review Hearing for Genius Distribution, LLC Page 297 of 329 Page 1359 of 4584 P a g e | 2
Community Benefit Program
The Community Benefit Program (CBP) payment amount is due the first day of each month and is considered late if payment is received on or after the fifth day of the month. All CBP outstanding balance as of July 31, 2021, and current CBP monthly installments from August 2021 to December 2022 totaling $35,428.80 are due January 31, 2023.
Cost Recovery Fee
The outstanding Cost Recovery Fee as of July 31, 2021, the City labor, and third-party contractors from August 2021 to December 2022 totaling $60,261.59 are due January 31, 2023.
Non-Operating Fees
The outstanding balance as of July 31, 2021, and the current monthly non-operating fees from August 2021 and December 2022 totaling $17,328.78 are due January 31, 2023.
Late Payments Penalties
Penalties totaling $764.51 from August 2022 to December 2022 are due January 31, 2023.
Per the Development Agreement, amounts that are more than 30 days late after the due date shall result in a penalty equal to the sum of 25% of the non-operating/operating fees. In addition, a 10% shall be added to the first day of each calendar month following the month of the imposition of the 25% penalty if the fees remain unpaid in whole or in part-up to a maximum of 100% of the fee payable. The City will be enforcing these penalties for amounts due from July 2022 to present, as appliable. No penalties will be imposed on amounts outstanding prior to this date. This will be separately listed on current and future invoice letters provided by the City. Should you wish to avoid penalties, ensure that either amounts payable are paid timely or contact the City to discuss entering into a payment plan on prior amounts outstanding.
Please pay no later than January 31, 2023, to avoid any penalties. If you have any questions related to these items, please contact Joshua Calhoun at [email protected].
Sincerely,
Joshua Calhoun, CPA
Finance Director
See supporting detail attached of monthly billings and payments from August 2021 through current.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 298 of 329 Page 1360 of 4584 CBP URBF1 OPFEE OPFEE
Operator Comm Benefit Cost Recovery Non Operating Penalties Outstanding Genius Distribution, LLC
September 22, 2021 Letter 22,476.33 14,430.59 11,552.52 48,459.44
BILLINGS
Aug 2021 761.91 335.18 339.78 1,436.87 Sep 2021 761.91 496.78 339.78 1,598.47 Oct 2021 761.91 351.00 339.78 1,452.69 Nov 2021 761.91 2,973.23 339.78 4,074.92 Dec 2021 761.91 130.65 339.78 1,232.34 Jan 2022 761.91 494.28 339.78 1,595.97 Feb 2022 761.91 1,137.30 339.78 2,238.99 Mar 2022 761.91 875.25 339.78 1,976.94 Apr 2022 761.91 1,103.88 339.78 2,205.57 May 2022 761.91 2,115.39 339.78 3,217.08 Jun 2022 761.91 127.60 339.78 1,229.29 Jul 2022 761.91 924.63 339.78 2,026.32 Aug 2022 761.91 932.38 339.78 84.95 2,119.02 Sep 2022 761.91 2,550.29 339.78 118.92 3,770.90 Oct 2022 761.91 1,914.65 339.78 152.90 3,169.24 Nov 2022 761.91 2,591.48 339.78 186.88 3,880.05 Dec 2022 761.91 5,171.03 339.78 220.86 6,493.58
PAYMENTS
Aug 2021
Sep 2021
Oct 2021
Nov 2021
Dec 2021
Jan 2022
Feb 2022
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Sep 2022
Oct 2022
0.00 0.00 0.00 0.00 0.00
72,020.00
7,202.00
3 years
21,606.00 21,606.00
Nov 2022
Dec 2022
Annual City Reimbursement Costs
Cost per operator (10)
Three years(2019‐2022)
City Labor
Balance as of December 31, 2022 35,428.80 60,261.59 17,328.78 764.51 113,783.68 (a) City Reimbursement cost of $7,202 per year (x three years (2019‐2022)= $21,606.00 Administrative Record - Review Hearing for Genius Distribution, LLC Page 299 of 329 Page 1361 of 4584 P a g e | 1
5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Daisy Lomeli
Vice Mayor
Jose R. Gonzalez
Councilmember
Elizabeth Alcantar
Councilmember
Martin U. Fuentes
Councilmember
Cynthia Gonzalez
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
February 9, 2023
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C
Dear Owner/Operator:
Below is a summary of payments currently due under letter agreement on payment of outstanding fees and costs for Development Agreement DA 18-016C.
Community Benefit Program and Cost Recovery Fees
Beginning March 1, 2023, Operator agrees to maintain Community Benefit Program (CB) and Cost Recovery (CR) payments as they come due under the Development Agreement and shall not become delinquent on any payments by more than thirty (30) days from the payment due date.
Non-Operating Fees
All Non-Operating Fees (NOF) (past due and accruing) are deferred until six (6) months after Operator is first issued a Temporary Certificate of Occupancy for the Site. Six (6 months) after the first issuance of a Temporary Certificate of Occupancy for Site, the Finance Director shall Fee Type Payment
Amount
Payment Period City
Code
Community Benefit Program $3,015.89
1 st deferred monthly
payment CBP
Cost Recovery Fee $5,192.82 1st deferred monthly
payment URBF1
Total Fees $8,208.71 Due April 1, 2023
Administrative Record - Review Hearing for Genius Distribution, LLC Page 300 of 329 Page 1362 of 4584 P a g e | 2
notify Operator in writing of the start date for a twelve (12) month term for payment of the total accrued NOF fees then due and owing. The Finance Director will provide the Operator with notice of the payment term for accrued NOF fees by email or US Mail.
Please pay no later than April 1, 2023, to avoid any penalties. If you have any questions relating to these items, please contact Joshua Calhoun at [email protected].
Sincerely,
Joshua Calhoun, CPA
Finance Director
See supporting detail attached of monthly billings and payments as of January 31, 2023.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 301 of 329 Page 1363 of 4584 CBP URBF1
Operator Comm Benefit Cost Recovery Outstanding
Tracking of
Deferred Non‐
OPFEES
Genius Distribution, LLC
Deferment Plan as of January 31, 2023 36,190.71 62,313.84 98,504.55 17,668.56 Deferred Monthly Payments
April 1, 2023 3,015.89 5,192.82 8,208.71 May 1, 2023 3,015.89 5,192.82 8,208.71 June 1, 2023 3,015.89 5,192.82 8,208.71 July 1, 2023 3,015.89 5,192.82 8,208.71 August 1, 2023 3,015.89 5,192.82 8,208.71 September 1, 2023 3,015.89 5,192.82 8,208.71 October 1, 2023 3,015.89 5,192.82 8,208.71 November 1, 2023 3,015.89 5,192.82 8,208.71 December 1, 2023 3,015.89 5,192.82 8,208.71 January 1, 2024 3,015.89 5,192.82 8,208.71 February 1, 2024 3,015.89 5,192.82 8,208.71 March 1, 2024 3,015.92 5,192.82 8,208.74 Current Fees Due
February 2023
March 203
April 2023
May 2023
June 2023
July 2023
August 2023
September 2023
October 2023
November 2023
December 2023
January 2024
February 2024
March 2024
Payments
Apr‐23
May‐23
Jun‐23
Jul‐23
Aug‐23
Sep‐23
Oct‐23
Nov‐23
Dec‐23
Jan‐24
Feb‐24
Mar‐24
Balance as of January 31, 2023 36,190.71 62,313.84 98,504.55 17,668.56 Administrative Record - Review Hearing for Genius Distribution, LLC Page 302 of 329 Page 1364 of 4584 P a g e | 1
5220 Santa Ana Street
Cudahy, CA, 90201
Phone: (323) 773-5143
Fax: (323) 771-2072
www.cityofcudahy.com
Mayor
Daisy Lomeli
Vice Mayor
Jose R. Gonzalez
Councilmember
Elizabeth Alcantar
Councilmember
Martin U. Fuentes
Councilmember
Cynthia Gonzalez
City Manager
Alfonso Noyola, ICMA-CM
Incorporated November 10, 1960
March 6, 2023
Via U.S. Mail and Email:
Genius Distribution, LLC
Attn: Robert Gaither, Manager
4916 Cecilia Street Unit D
Cudahy, CA 90201
Re: DA 18-016C
Dear Owner/Operator:
Below is a summary of payments currently due under letter agreement on payment of outstanding fees and costs for Development Agreement DA 18-016C.
Community Benefit Program and Cost Recovery Fees
Beginning March 1, 2023, Operator agrees to maintain Community Benefit Program (CB) and Cost Recovery (CR) payments as they come due under the Development Agreement and shall not become delinquent on any payments by more than thirty (30) days from the payment due date.
Fee Type Payment
Amount
Payment Period City
Code
Community Benefit Program
$3,015.89
$761.91
$761.91
1 st deferred monthly
payment
February 2023 monthly fee
March 2023 monthly fee
CBP
Cost Recovery Fee $5,192.82
$2,504.00
1st deferred monthly
payment
February 2023 monthly fee
URBF1
Total Fees $12,236.53 Due April 1, 2023
Administrative Record - Review Hearing for Genius Distribution, LLC Page 303 of 329 Page 1365 of 4584 P a g e | 2
Non-Operating Fees
All Non-Operating Fees (NOF) (past due and accruing) are deferred until six (6) months after Operator is first issued a Temporary Certificate of Occupancy for the Site. Six (6 months) after the first issuance of a Temporary Certificate of Occupancy for Site, the Finance Director shall notify Operator in writing of the start date for a twelve (12) month term for payment of the total accrued NOF fees then due and owing. The Finance Director will provide the Operator with notice of the payment term for accrued NOF fees by email or US Mail.
Please pay no later than April 1, 2023, to avoid any penalties. If you have any questions relating to these items, please contact Joshua Calhoun at [email protected].
Sincerely,
Joshua Calhoun, CPA
Finance Director
See supporting detail attached of monthly billings and payments as of January 31, 2023 through current.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 304 of 329 Page 1366 of 4584 CBP URBF1
Operator Comm Benefit Cost Recovery Outstanding
Tracking of
Deferred Non‐
OPFEES
Genius Distribution, LLC
Deferment Plan as of January 31, 2023 36,190.71 62,313.84 98,504.55 17,668.56 Deferred Monthly Payments
April 1, 2023 3,015.89 5,192.82 8,208.71 May 1, 2023 3,015.89 5,192.82 8,208.71 June 1, 2023 3,015.89 5,192.82 8,208.71 July 1, 2023 3,015.89 5,192.82 8,208.71 August 1, 2023 3,015.89 5,192.82 8,208.71 September 1, 2023 3,015.89 5,192.82 8,208.71 October 1, 2023 3,015.89 5,192.82 8,208.71 November 1, 2023 3,015.89 5,192.82 8,208.71 December 1, 2023 3,015.89 5,192.82 8,208.71 January 1, 2024 3,015.89 5,192.82 8,208.71 February 1, 2024 3,015.89 5,192.82 8,208.71 March 1, 2024 3,015.92 5,192.82 8,208.74 Current Fees Due
February 2023 761.91 2,504.00 3,265.91 339.78 March 203 761.91 761.91 339.78
April 2023
May 2023
June 2023
July 2023
August 2023
September 2023
October 2023
November 2023
December 2023
January 2024
February 2024
March 2024
Payments
Apr‐23
May‐23
Jun‐23
Jul‐23
Aug‐23
Sep‐23
Oct‐23
Nov‐23
Dec‐23
Jan‐24
Feb‐24
Mar‐24
Balance as of March 1, 2023 37,714.53 64,817.84 102,532.37 18,348.12 Administrative Record - Review Hearing for Genius Distribution, LLC Page 305 of 329 Page 1367 of 4584 Administrative Record - Review Hearing for Genius Distribution, LLC Page 306 of 329
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ATTACHMENT R.
Certificate of Status with the Secretary
of State of California dated October 31,
2023
Administrative Record - Review Hearing for Genius Distribution, LLC Page 326 of 329 Page 1388 of 4584 Secretary of State
Certificate of Status
I, SHIRLEY N. WEBER, PH.D., California Secretary of State, hereby certify:
The above referenced entity's powers, rights and privileges are suspended in California.
This certificate relates to the status of the entity on the Secretary of State’s records as of the date of this certificate and does not reflect documents that are pending review or other events that may affect status.
No information is available from this office regarding the financial condition, status of licenses, if any, business activities or practices of the entity.
Suspended - FTB/SOS
Entity Name:
Entity No.:
Registration Date:
Entity Type:
201725410448
09/05/2017
Limited Liability Company - CA
Status:
Formed In: CALIFORNIA
GENIUS DISTRIBUTION, LLC
IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of October 31, 2023.
SHIRLEY N. WEBER, PH.D.
Secretary of State
Certificate No.:
To verify the issuance of this Certificate, use the Certificate No. above with the Secretary of State Certification Verification Search available at bizfileOnline.sos.ca.gov. 155801319
Administrative Record - Review Hearing for Genius Distribution, LLC Page 327 of 329 Page 1389 of 4584 ATTACHMENT S.
Proof of certified mailing of Notice of
Hearing, October 12, 2023
Administrative Record - Review Hearing for Genius Distribution, LLC Page 328 of 329 Page 1390 of 4584 Administrative Record - Review Hearing for Genius Distribution, LLC Page 329 of 329 Page 1391 of 4584 Ordinance No. 747
EXHIBIT “B”
HEARING OFFICER DECISION AND ORDER
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DECISION and ORDER
Administrative Hearing Regarding Compliance by Genius Distribution LLC (Respondent) with Commercial Cannabis Permit (CCP) 18-0019 and Development Agreement (DA) 18-016C Between Respondent and the City of Cudahy (City)
Hearing Date: November 14, 2023
Hearing Officer: Steve Napolitano, Esq.
The hearing took place in the City Council Chambers at Cudahy City Hall, 5220 Santa Ana St., Cudahy, CA 90201. The hearing was recorded and is available through the City Clerk’s Office.
Respondent: Genius Distribution LLC, 4916 Cecilia St., Unit D, Cudahy, CA 90201. Respondent did not appear and was not represented at the hearing.
City was present and represented by:
• Cecilia Madrigal-Gonzalez, Senior Planner.
• Joshua Calhoun, Finance Director
• Juan Arauz, Community Development Director
• Jessica Guillen, Assistant Planner
• Raul Diaz, Building Official
• Glenn Calsada, Special Counsel
• Paloma McEvoy, City Attorney
• Richard Iglesias, City Clerk
DECISION SUMMARY
Based on the evidence and analysis discussed below, this Hearing Officer finds that a preponderance of the evidence shows that Respondent, despite considerable notice and opportunities to cure any issues, has breached the terms and conditions of DA 18-016C and Respondent’s portion of its CCP and recommends that the Planning Commission and/or City Council repeal Ordinance No. 678 and terminate DA 18-016C and revoke Respondent’s interest under CCP 18-0019.
ADMINISTRATIVE HEARING PROCEDURES
All state and local public entities are subject to due process of law. State agencies are subject to statutory requirements, including the Administrative Procedures Act. Local public agencies are, with some minor exceptions, not subject to the APA and generally subject only to the constitutional limitations of due process of law. Govt. Code §11410.30. While a local agency may elect to apply some or all of the provisions of the APA to its hearings, the City has not done so.
The process required by law are those imposed by our constitution(s) as well as any procedures adopted by the County. In Mohilef v. Janovici (1996) 51 Cal.App.4th 267 and E.W.A.P., Inc. v. City of Los Angeles (1997) 56 Cal.App.4th 310, the court explored what due process is necessary in an administrative proceeding. There is general agreement that there must be notice and an opportunity to be heard. Beyond this, “there is no precise manner of hearing which must be afforded; rather the particular interests at issue must be considered in determining what kind of hearing is appropriate. A
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formal hearing, with full rights of confrontation and cross-examination is not necessarily required. (Saleeby v. State Bar (1985) 39 Cal.3d 547, 565, 216 Cal.Rptr. 367, 702 P.2d 525.) ‘Due process’ is an elusive concept. Its exact boundaries are undefinable, and its content varies according to specific factual contexts.” Mohilef at 286. Our Supreme Court has stated, “[D]ue process may require only that the administrative agency comply with the statutory limitations on its authority.” People v. Ramirez (1979) 25 Cal.3d 260, 269
Beyond notice and a hearing, the procedures available in this case to the participants are those provided by Cudahy Municipal Code (CMC) 5.20.080.
The legal standard of review applicable to an administrative hearing is based on a preponderance of the evidence, or “evidence which is of greater weight and more convincing than the evidence which is offered in opposition to it; that is evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary, Fifth Edition.
BACKGROUND
Background information was presented in the City’s Staff Report dated November 14, 2023, with attachments A through R, which were admitted into the record.
On September 11, 2017, the City adopted Ordinance No. 673 (Attachment A) establishing the City of Cudahy's commercial cannabis production activity regulations codified in Chapter 5.20 of the Cudahy Municipal Code (“CMC”). CMC Section 5.20.040 authorizes medicinal commercial cannabis activities within a designated overlay zone, pursuant to a development agreement adopted in accordance with the Development Agreement Law (Govt. Code Section 65864 et seq.) and Chapter 20.28 of the CMC.
On April 30, 2018, the Planning Commission recommended the City Council to approve CCP18-0019 for cannabis delivery at 4916 Cecilia St Unit D., subject to the approval of a development agreement between the City and Respondent for cannabis distribution.
On May 15, 2018, the City Council adopted Resolution No. 18-17 (Attachment B) approving the issuance of CCP18-0019 (Attachment C) with conditions of approval to the Respondent upon the execution of a development agreement with the City. On June 5, 2018, the City Council adopted Ordinance No. 678 (Attachment D) approving DA18- 016C (Attachment E) inclusive of exhibits A-F (Attachment F) between the Respondent and the City authorizing commercial cannabis distribution activities at 4916 Cecelia Street Unit D (“Site”) as illustrated in Figures 1 and 2 in the City’s staff report.
Recital I of the Development Agreement permits the Respondent to utilize approximately 809 square feet of the Site for cannabis distribution activities, inclusive of warehousing and workspace. The Respondent is one of seven tenants at the Site which all have separate development agreements with the City but fall under the same CCP conditions of approval.
On October 2, 2019, the City provided the Respondent with a Notice of Delinquency (Attachment G) prior to placing the Respondent in default status due to payment non-compliance with the Development Agreement, inclusive of the payment of Community Benefit Fees, Cost Recovery Fees, and NonOperating Fees in the amount of eight thousand nine hundred and ninety-one dollars and seventy-six cents ($8,891.76). The Respondent was given no later than October 17, 2019, to cure the amount, however, the delinquency was not timely cured.
On May 4, 2021, the City provided the Respondent with a Notice of Default (Attachment H) due to payment non-compliance with the payment of fees due in the amount of forty-one thousand four
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hundred and sixty-eight dollars and thirty-five cents ($41,468.35). The Respondent was given no later than 30 days to cure the default, however, the default was not timely cured. On September 2, 2021, the City notified the Respondent of their failure to sign the DA (Attachment I). The DA was not signed until January 19, 2023.
On December 7, 2022, the City Manager offered a Cannabis Deferment and Payment Program (Attachment J) to assist cannabis operators with the accumulated non-operating and other fees by deferring and providing additional time for payment without penalty. All cannabis operators interested in participating in this program were given no later than January 31, 2023, to execute a payment agreement. The City received interest from the Respondent and due to their good-faith negotiations the City extended the deadline of the deferment and payment program.
On February 1, 2023, the City’s Finance Department presented the Respondent with a Letter of Agreement agreeing to a payment plan to forbear outstanding payment due on the DA (Attachment K).
The Respondent accepted the proposed terms on the same day which agreed to begin payments on March 1, 2023. The Respondent also acknowledged and agreed “that the past due amounts stated are true and correct and are in fact presently due and owing. The parties agree that the Respondent is in ‘default status’ on its obligations under its Development Agreement with the City.” Between April and June 2023, the City notified the Respondent with three (3) notices of delinquency (Attachment L) and provided an opportunity to cure outstanding payments due. However, the default on the Letter Agreement was not timely cured and therefore was terminated and no longer in full force and effect as of June 16, 2023. Accordingly, the total of all past due amounts at the time the Letter Agreement was terminated and an amount of $132,046.79 was due and owed.
On June 23, 2023, the City sent a Final Demand Letter (Attachment M) demanding the Respondent to respond to the following demands: 1) Proof of the revival (or request for revival) of the LLC’s entity status with the California Secretary of State; 2) Forwarding payment for the total past due amounts and 3) Contact City staff for a meeting to revise the CCP’s Schedule of Performance and for further information to become compliant with the DA and CCP. The Respondent did not respond in a timely manner and has failed to make any attempt to cure any defaults.
On August 9, 2023, the City issued Escrow Account Letters (Attachment N) requiring all cannabis operators to open an escrow account by September 15, 2023, to ensure payment of Cost Recovery Fees. As of the writing of this report, the Respondent has not opened an escrow account nor made any payments into the account.
On October 12, 2023, the City issued to the Respondent a Notice of Review Hearing (Attachment O) with the hearing date, time, and place.
On October 24, 2023, the City issued a letter (Attachment P) updating the Respondent on their payment and fees related to the DA by correcting the amount due to an error in the total amount billed.
The City provided a credit in the amount of fourteen thousand nine hundred fifty dollars and fifty cents ($14,950.50). As of the writing of this report, Respondent owes the City one-hundred thirty thousand and six hundred eleven dollars and seventy-four cents ($130,611.74). Community Benefit Fees, CostRecovery and Non-operating Fees plus penalties continue to accrue and the total amount due may be higher as of the date of the Review Hearing on November 14, 2023.
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PROCEDURAL ISSUES
As noted, Respondent did not participate and was not represented at the hearing. No evidence was submitted by Respondent.
Evidence submitted prior to the hearing by City staff and testimony and statements made at the hearing by City staff are incorporated herein by reference, including the City’s staff report dated November 14, 2023, with attachments A through R, which were admitted into evidence.
Pursuant to CMC 5.20.080(6), the City Manager or his designee may determine if a Cannabis Permittee has failed to comply with any condition, agreement, or covenant with the City. In the event of any material violation, the City Manager or his designee may suspend or revoke a cannabis permit.
Under section 19 of Respondent’s DA, the City may conduct Periodic and Special Reviews of Respondent’s “good faith compliance with the terms of the Agreement,” noting that the burden of proof is on the Owner [Respondent]. In the event of a finding of noncompliance, the City Manager may report the matter to the Planning Commission and City Council with recommended actions. The City Council may terminate the Agreement or impose such conditions as are reasonably necessary to protect the interests of the City.
Pursuant to Section 22 of the Development Agreement the City sent a Review Hearing notice via certified mail, and a courtesy email notice, to all concerned parties on October 12, 2023. The notice advised that the Review Hearing would be held on the hearing date at such location designated in Attachment O. Proof of certified mailing is provided in Attachment S.
The City engaged this Hearing Officer to conduct an impartial, independent review of the evidence in this matter and determine whether Respondent is in compliance with its CCP and DA between itself and the City.
No objections or other procedural issues were raised.
Presenting City Staff members were sworn in prior to giving testimony.
EVIDENCE
Cecilia Madrigal-Gonzalez, Senior Planner, provided an overview of the City’s staff report. Ms.
Madrigal-Gonzalez asked the Hearing Officer to make the recommended findings to repeal and revoke Respondent’s portion of the CCP and their DA in its entirety based on the City’s staff report and the testimony by City staff at the hearing.
Joshua Calhoun, Finance Director, testified as to the accuracy of amounts owed by Respondent and that Respondent had failed to make their required payments.
Glenn Calsada, Special Counsel, confirmed that Respondent’s status as a legal entity was suspended.
Raul Diaz, Building Official, testified that no permits were issued for any site improvements and no certificate of occupancy had been issued to Respondent. Ms. Madrigal-Gonazalez also confirmed that no zoning clearances were issued.
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Richard Iglesias, City Clerk, testified that all documents were true and correct copies and all mailing procedures under the CMC were followed.
ANALYSIS
Pursuant to the CMC 5.20.080(6)(a), “Any material violations of this chapter or any other relevant city law by a cannabis permittee, or cannabis permittee’s agent, is grounds for suspending or revoking the relevant cannabis permit.” To suspend or revoke a cannabis permit the City Manager or the City Manager’s Designee [Hearing Officer] must determine “that the cannabis permittee has failed to comply with any conditions of approval, or any agreement or covenant as required pursuant to this chapter” (CMC 5.20.080(6)(a)).
The City asserts that Respondent has made several material violations of the CCP and/or DA as outlined in the City’s Staff Report and testimony, which will be discussed as follows.
1. Breach of Payment Obligations
Pursuant to the DA Article. 5.b (Community Benefit Fees), Article. 7.c (Operating Fees) and Article. 8 (Cost Recovery Fees), the Respondent must pay the City an annual community benefit fee in the amount of $9,523.86 ($1,904.77 down payment and monthly payments in the amount of $761.91), a cost recovery fee, and an operating [or non-operating] fee each year since 2018. The Respondent is also obliged to make payments for these fees under Condition of Approval No. 45; the obligation for Non-Operating Fees is also repeated in Condition of Approval No. 37 for distribution activities.
The Respondent has not made the required timely payments and as of October 24, 2023, is past due in the amount of $130,611.74 as shown in Table 1 below. Past-due payments continue to accumulate, including late payment penalties. The Respondent must pay all required DA fees in accordance with DA terms. Failure to pay fees constitutes a breach of the DA and may result in suspension or immediate revocation of the DA. Accordingly, the Respondent is in breach of its payment obligation under DA No. 18-016C.
On June 5, 2018, Respondent executed Development Agreement No. 18- 016C, which is a legally binding contract between the Respondent and the City of Cudahy pursuant to DA Art. 5.b [Community Benefit Fees], Art. 7.c [Operating Fees] Art. 8 [Cost Recovery Fees].In December 2022, the City offered a deferment and payment plan option to the Respondent which was accepted and the first payment was due on March 1, 2023. The Respondent did not make a single required payment in March, April and May of 2023. The Respondent did not cure the delinquency and as a result, the payment plan was null and voided on June 16, 2023. Proper notice of default was given with the opportunity to cure, but the Respondent has failed to fulfill its monetary obligations owed to the City. This failure is a material breach of the DA and grounds for termination of the DA.
The City staff report theorizes several potential defenses that Respondent may assert and discusses how each defense would fail. The Hearing Officer agrees but finds no need for further analysis as Respondent has made no such argument itself, as Respondent failed to provide any evidence contrary to that presented by the City. Respondent knew and accepted the terms of the agreement, including all payment provisions, willingly and voluntarily and has not disputed their imposition. It is understood that Respondent requested the City forgive Non-Operating Fees for an 18 month period but did not provide a legally valid reason that would allow such a forgiveness, nor was such a forgiveness ever approved by the City.
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Based on the evidence provided by the City above, and the failure of Respondent to provide any evidence to the contrary, a preponderance of the evidence shows that Respondent has breached the terms of DA No. 18-016C by failing to make all required payments to the City as required.
Similarly, The Respondent has failed to comply with Conditions of Approval No. 1(a) and (b) of the CCP, which required the Respondent to pay all City-issued invoices within 30 days of receipt thereof.
The City approved Development Agreement No. 18-016C subject to Conditions of Approval, which are incorporated as part of Development Agreement No. 18-016C. Condition of Approval 1(b) provides that the Respondent is required to pay all City-issued invoices within 30 days of receipt thereof. The City has sent the Respondent regular monthly invoices since 2019 (Attachment Q). The current outstanding fees owed by the Respondent have been owed to the City for longer than 30 days. Despite demand and after proper notice of default and the opportunity to cure the Respondent has failed to cure its monetary obligations owed to the City.
Additionally, the City asserts that pursuant to Condition of Approval Nos. 37 and 45, the Respondent’s failure to pay all fees constitutes a cross-breach of Development Agreement No. 18-016C and is grounds for revocation of the CCP.
The Respondent’s non-payment of Non-Operating Fees due under the Development Agreement and all fees due under the Development Agreement, respectively in violation of Condition Nos. 37 and 45 and constitute grounds for revocation of the Respondent's interest in the CCP for the Site.
Again, based on the unrefuted evidence presented by the City above, a preponderance of the evidence shows that Respondent breached multiple conditions of their DA and CCP. Despite multiple attempts and notices by the City to gain compliance, the evidence shows that Respondent failed to comply with their payment obligations, which constitutes the necessary grounds for termination of the DA and revocation of the CCP under the CMC.
2. Noncompliance with State Law
Under DA Art. 4.a. [Facility Operations], Respondent must be a lawful entity capable of operating in accordance with a state-issued cannabis license at all times.
Attachment R shows the Certificate of Status with the Secretary of State of California dated October 31, 2023, which states, “The above-referenced entity’s [Respondent] powers, rights and privileges are suspended in California.” Despite notice of default and opportunity to cure, Respondent’s entity status remains “FTB/SOS” suspended by the California Secretary of State and, as such, the entity is unable to operate in the State of California.
According to the California Franchise Tax Board website, a suspended entity cannot do business in California until they cure the reason for their suspension, which is supported by Rev. & Tax Code Sec. 23301 and case law cited by the City: Casiopea Bovet, LLC v. Chiang (2017) 12 Cal.App.5th 656, 662; City of San Diego v. San Diegans for Open Government (2016) 3 Cal.App.5th 568, 577.
Based on the evidence provided by the City, and the failure of Respondent to provide any evidence to the contrary, a preponderance of the evidence shows that Respondent is not a current legal entity capable of operating in California in violation of DA Art. 4.a.
3. Breach of Conditions of Approval No. 51 (Time Limits) Under CCP 18-0019
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CCP Condition No. 51.A. states the approval decision for this CCP becomes effective upon the expiration of the 15-day appeal period following the approval decision, or when any appeals of the decision are finally resolved. The CCP effective date for Respondent’s DA was June 20, 2018. No appeal was ever filed and thus CCP Condition No. 51.A.i sets a 90-day time limit from the effective date of the CCP for the Permittee/Respondent to obtain a Zoning Clearance. CCP Condition No. 51A.ii sets a 90-day time limit from the effective date of the CCP for the Permittee/Respondent to complete construction of Phase I. CCP Condition No. 51A.iii sets a 180-day time limit from the effective date of the CCP for the Permittee/Respondent to complete all Tenant Improvements and construction and to obtain a Certificate of Occupancy from the City Building Department. The City Manager may grant an extension of time if the Permittee/Respondent has made a diligent effort to implement the Project.
Here, Respondent has not provided the City with any evidence it has obtained a Zoning Clearance, completed construction of Phase I, completed all Tenants Improvements, or obtained a Certificate of Occupancy for the Site within the time limits set forth in Condition of Approval No. 51. Without an extension, the deadlines expired in 2019. The City has no record of any request by the Respondent for an extension of time by the City Manager and there is no evidence the Respondent has made substantial progress such as submitting for a zoning clearance or submitting for a building permit plan check.
Respondent was given notice of default and an opportunity to cure by the City’s Final Demand letter dated October 12, 2023 with no response from Respondent.
Based on the evidence provided by the City, and the failure of Respondent to provide any evidence to the contrary, a preponderance of the evidence shows that Respondent has failed to meet its conditions of approval for CCP18-0019 by failing to implement the Project within the time limits set forth in Conditions of Approval No. 51.
DECISION AND ORDER
Based on the evidence and analysis discussed above, this Hearing Officer finds that a preponderance of the evidence shows that Respondent, despite considerable notice and opportunities to cure any issues, has breached the terms and conditions of DA 18-016C and Respondent’s portion of its CCP and recommends that the Planning Commission and/or City Council repeal Ordinance No. 678 and terminate DA 18-016C and revoke respondent’s interest under CCP 18-0019.
This decision does not affect the payments and penalties outlined in the City’s Staff Report, which are still accumulating, owed and due to City from Respondent.
Submitted January 18, 2024 by Steve Napolitano, Esq., Administrative Hearing Officer.
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Ordinance No. 747
EXHIBIT “C”
PLANNING COMMISSION RESOLUTION
ORDINANCE NO. 673
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY AMENDING TITLE 5 (BUSINESS LICENSES AND
REGULATIONS) AND TITLE 20 (ZONING) OF THE
CUDAHY MUNICIPAL CODE TO PROHIBIT CANNABIS
RETAILERS/DISPENSARIES CITYWIDE AND TO
ESTABLISH REGULATIONS AND A DISCRETIONARY
REVIEW PROCESS FOR THE ALLOWANCE OF
MEDICINAL-ONLY COMMERCIAL CANNABIS ACTIVITIES
(CULTIVATION, DISTRIBUTION, MANUFACTURING,
DELIVERIES, MICROBUSINESS, AND LABORATORY
TESTING) IN A SPECIFIED OVERLAY ZONE THROUGH A
DEVELOPMENT AGREEMENT
WHEREAS, in 1996, the California Legislature approved Proposition 215, also known as the Compassionate Use Act (the "CUA"), which was codified under Health and Safety Code Section 11262.5 et sec. and was intended to enable persons in need of medical marijuana for specified medical purposes, such as cancer, anorexia, AIDS, chronic pain, glaucoma and arthritis, to obtain and use marijuana under limited circumstances and where recommended by a physician. The CUA provides that "nothing in this section shall be construed or supersede legislation prohibiting persons from engaging in conduct that endangers others, or to condone the diversion of marijuana for non-medical purposes.";
WHEREAS, in 2004, the California Legislature enacted the Medical Marijuana Program Act (Health & Saf. Code, § 11362.7 et seq.)(the "MMP"), which clarified the scope of the CUA, created a state-approved voluntary medical marijuana identification card program, and authorized cities to adopt and enforce rules and regulations consistent with the MMP. Assembly Bill 2650 (2010) and Assembly Bill 1300 (2011) amended the MMP to expressly recognize the authority of counties and cities to "[a]dopt local ordinances that regulate the location, operation, or establishment of a medical marijuana cooperative or collective" and to civilly and criminally enforce such ordinances;
WHEREAS, the Federal Controlled Substances Act (21 U.S. C., § 801 et seq.) makes it unlawful under federal law for any person to cultivate, manufacture, distribute or dispense, or possess with intent to manufacture, distribute, or dispense marijuana.
Despite such federal prohibition, on August 29, 2013, the United States Department of Justice issued a memorandum (the "Cole Memo") stating that, notwithstanding the federal classification of marijuana as a schedule 1 controlled substance, jurisdictions that have legalized marijuana in some form are less likely to be subject to federal enforcement under the Controlled Substances Act if they have implemented strong and effective regulatory and enforcement systems to follow eight guiding principles: (1) preventing the distribution of marijuana to minors; (2) preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; (3) preventing the
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diversion of marijuana from states where it is legal under state law in some form to other states; (4) preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; (5) preventing violence and the use of firearms in the cultivation and distribution of marijuana; (6) preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; (7) preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and (8) preventing marijuana possession or use on federal property;
WHEREAS, in September 2015, the California State Legislature enacted, and Governor Brown signed into law three bills - Assembly Bill 243, Assembly Bill 266, and Senate Bill 643 - which together comprise the Medical Marijuana Regulation and Safety Act (the "MMRSA"). The MMRSA created a comprehensive dual state licensing system for the cultivation, manufacture, retail, sale, transport, distribution, delivery, and testing of medical cannabis;
WHEREAS, on August 22, 2016, the City Council of the City of Cudahy (the "City Council" of the "City") adopted Interim Urgency Ordinance No. 656U to establish a temporary moratorium on medical "commercial cannabis activities," as defined under the MMRSA, for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 661, on September 26, 2016;
WHEREAS, the MMRSA was renamed the Medical Cannabis Regulation and Safety Act (the "MCRSA") under Senate Bill 837 in June 2016, which also made substantive changes to the applicable state laws, which affect the various state agencies involved in regulating cannabis businesses as well as potential licensees; WHEREAS, on November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act ("AUMA") was approved California voters as Proposition 64 and became effective on November 9, 2016, pursuant to the California Constitution (Cal. Const., art.
II, § 10(a).). Proposition 64 legalized the nonmedical use of cannabis by persons 21 years of age and over, and the personal cultivation of up to six (6) cannabis plants. On November 14, 2016, the City Council adopted Urgency Ordinance No. 663 to prohibit outdoor personal marijuana cultivation and establish regulations and a permitting process for indoor personal marijuana cultivation;
WHEREAS, AUMA also created a state regulatory and licensing system j governing the commercial cultivation, testing, and distribution of nonmedical cannabis, and the manufacturing of nonmedical cannabis products. On January 9, 2017, Interim Urgency Ordinance No. 666 was adopted by the City Council to establish a temporary moratorium on nonmedical "commercial cannabis activities" for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 667, on February 27, 2017; Page2
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WHEREAS, on June 27, 2017, Governor Brown signed the Legislature-approved Senate Bill 94. SB 94 combined elements of the MCRSA and AUMA to establish a streamlined singular regulatory and licensing structure for both medical and nonmedical cannabis activities given that there were discrepancies between the MCRSA and AUMA. The new consolidated provisions under SB 94 is now known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA") to be governed by the California Bureau of Cannabis Control. MAUCRSA refers to medical cannabis as "medicinal cannabis" and nonmedical/recreational cannabis as "adult-use cannabis"; WHEREAS, on June 27, 2017, the as part of an Economic Development Ad Hoc Committee presentation on revenue-generating opportunities, commercial cannabis regulations and strategies were offered to and discussed by the City Council; WHEREAS, the City seeks to establish an overlay zone in the City in which certain medicinal-only commercial cannabis activities can be conducted in accordance with MAUCRSA and the City's police power under Section 7 of Article XI of the California Constitution;
WHEREAS, it is the purpose and intent of the City to regulate medicinal cannabis in a manner that is consistent with the Cole Memo and promotes the health, safety, and general welfare of the residents and businesses within the City, while limiting any negative impacts;
WHEREAS, the City intends to be on the forefront of groundbreaking research, science, innovation, and development of treatment for symptoms and cures in the field of medicinal cannabis, as scientific research, studies, and data have established that medicinal cannabis can help patients with a vast array of medical conditions; WHEREAS, the City desires to reduce the illegal market for cannabis while minimizing the chances of social harm and creating jobs and revenue for the City; and WHEREAS, nothing in this Ordinance shall be construed to allow persons to engage in conduct that violates the law, endangers others, causes a public nuisance, allows the illegal use or diversion of cannabis, or allows any activity relating to cannabis that is otherwise illegal under California state law, as amended.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein.
SECTION 2. Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 20.120 (Commercial Cannabis Overlay Zone), which shall read as follows:
Chapter 20.120 - Commercial Cannabis Overlay Zone.
20.120.010 Definitions
For purposes of this Chapter 20.120, the following definitions shall apply:
"Commercial cannabis activities" mean the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products. ) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or j Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter, cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
"Cannabis product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients. "Day care center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
"Overlay Zone" means the commercial cannabis overlay zone, whose area and boundaries are attached to City Council Ordinance No. 673 as Exhibit "A" "MAUCRSA" means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, as may hereinafter be amended.
"Youth center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.
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20.120.020 Prohibitions.
Adult-use commercial cannabis activities and medicinal commercial cannabis activities, as both are described in state law, including, but not limited to MAUCRSA, are hereby prohibited unless otherwise allowed in this Chapter.
20.120.030 Overlay zone.
Medicinal commercial cannabis activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the Overlay Zone pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter
20.28 (Development Agreements). No such activities shall be permitted without a development agreement within or outside of the boundaries of the Overlay Zone.
The City may approve or deny such a development agreement in its sole and absolute discretion.
20.120.040 Particular restrictions for Atlantic Avenue.
Section 20.120.030 notwithstanding, no cannabis-related business shall be located within the Overlay Zone and on Atlantic Avenue with a storefront facing Atlantic Boulevard unless such business employs and effectuates a business model with a primary entertainment purpose.
20.120.050 Indoor Horticulture.
Indoor horticulture, excluding cannabis horticulture shall be permitted by-right within the Overlay Zone.
20.120.060 Prohibition on new schools, day cares, and youth centers in overlay zone.
The establishment of public or private schools providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center is prohibited within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone, is hereby prohibited, unless otherwise mandated under state or federal law. An existing public or private school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center located within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone shall be considered legal nonconforming, in accordance with Chapter 20.24 (Legal Nonconforming) of Title 20 (Zoning) of the Cudahy Municipal Code.
20.120.070 Temporary permits for local events - rights reserved.
The City reserves the right to issue temporary permits for onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair, district agricultural association event, or other similar event authorized under state law, which is located within the Overlay Zone, pursuant to the provisions of Subdivision (e) of Business and Professions Code Section 26200.
SECTION 3. Subsection (3)(p) of Section 20.64.090 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.64 (Residential Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(p) Schools, public and private, excluding schools providing instruction in kindergarten or any grades 1 through 12 located within 600 feet of a residential zone located within the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 4. Subsection (24) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(24) Day care centers, excluding those occupying any portion of the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 5. Subsection (49) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(49) Schools, colleges, and universities, accredited, including appurtenant facilities that offer instruction required to be taught by the Education Code of the state of California and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 6. Subsection (50) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(50) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 7. Subsection (46) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(46) Schools, colleges, and universities, accredited, including appurtenant facilities which offer instruction required to be taught by the Education Code of the state and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise
mandated under state or federal law.
SECTION 8. Subsection (47) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(47) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 9. Title 5 (Business License and Regulations) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 5.20 (Cannabis Permitting and Regulation), which shall read as follows:
Chapter 5.20 - Cannabis Permitting and Regulation.
5.20.010 Section Intent and Purposes.
The intent and purpose of this Chapter is to regulate Commercial Cannabis Activity (as defined below) in accordance with State Law (as defined below) to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law, including, but not limited to, MAUCRSA. The goals of this regulation for Commercial Cannabis Activity include:
(a) To comply with the goals and guidance set forth in the Cole Memo. (b) To minimize the size of the illegal market for Cannabis in the City and the surrounding regions.
(c) To create jobs, revenue, and economic growth for the City and its residents. (d) To enable law enforcement and regulators to have sufficient rights to inspect and audit Cannabis Permittees and take expeditious action against Cannabis Permittees who violate the requirements of this Chapter. (e) To minimize social harms which may arise from Cannabis including youth consumption or intoxicated driving.
(f) To regulate the manner of advertising and location of Cannabis Permittees such that public nuisance is minimized.
5.20.020 Definitions.
For purposes of this Chapter, the following definitions shall apply, unless the context clearly indicates otherwise:
(a) "Applicant" means an Owner seeking a Cannabis Permit pursuant to this Chapter.
(b) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every
compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. Cannabis also means the separated resin, whether crude or purified, obtained from cannabis. Cannabis also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter 5.18, Cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
(c) "Cannabis Permit" means a permit issued by the City to conduct a Commercial Cannabis Activity, including, but not limited to a Cultivation Permit, Distribution Permit, Manufacturing Permit, Microbusiness Permit, Retail Delivery Permit, or Testing.
(d) "Cannabis Permittee" means a Person who holds a Cannabis Permit. (e) "Cannabis Product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.
(f) "City" shall mean the City of Cudahy.
(g) "City Coden means the City of Cudahy Municipal Code. (h) "City Manager" means the City Manager of the City of Cudahy. (i) "Cole Memo" means the August 29, 2013 United States Department of Justice memorandum offering guidance on federal enforcement priorities regarding Cannabis.
U) "Commercial Cannabis Activity(ies)" means the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of Cannabis and/or Cannabis Products. (k) "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of Cannabis.
(I) "Cultivation Permit" means a Cannabis Permit for the Indoor Cultivation of Cannabis in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to the particular Cultivation Permittee.
(m) "Cultivation Permittee" means an applicant who has applied for and has been issued a Cultivation Permit by the City pursuant to the terms and conditions of this Chapter.
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(n) "Day Care Center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
(o) "Development Agreement" means an agreement adopted pursuant to the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter 20.28 (Development Agreements), which provides agreed upon community benefits to the City.
(p) "Distribution" means the procurement, sale, and transport of cannabis and cannabis products between persons authorized to engage in permitted commercial cannabis activities pursuant to this Chapter. (q) "Distribution Permit" means, with respect to a Distribution Permittee, a Cannabis Permit for Distribution in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to such Distribution Permittee.
(r) "Distribution Permittee" means a Person that has been issued a Distribution Permit by the City pursuant to the terms and conditions of this Chapter. (s) "Fully Enclosed and Secure Structure" means a space within a building or other structure which has a complete roof enclosure supported by connecting walls extending from the ground to the roof, which is reasonably secure against unauthorized entry, provides complete visual screening or is behind fencing or other features providing complete visual screening, and which is accessible only through one or more lockable doors and is inaccessible to minors. (t) "Good Cause" for purposes of refusing or denying a Cannabis Permit, for revoking a Cannabis Permit, or for refusing or denying a Cannabis Permit renewal or reinstatement means: (i) the Applicant has not obtained approval by the City Council of a Development Agreement setting forth the general terms for the operation of commercial cannabis activity or breaches a term or terms of a Development Agreement approved by the City Council pursuant to this Chapter; (ii) The Applicant or Cannabis Permittee has violated the terms, conditions, or provisions of this Chapter, of state law, of any regulations or rules promulgated pursuant to state law or this Chapter, any applicable local rules, regulations, or conditions placed upon its state license or Cannabis Permit; (iii) the licensed Premises have been operated in a manner that adversely affects the public health, safety, or welfare or the safety of the immediate neighborhood in which the Commercial Cannabis Activity is being conducted; (iv) the Applicant or Cannabis Permittee has knowingly made false statements, misrepresentations, or material omissions on an application form, renewal form, or other document submitted to the City; (v) the Applicant or Cannabis Permittee's criminal history does not indicate that the Applicant or Cannabis Permittee is of Good Moral Character or the Applicant or Cannabis Permittee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee. However, if the City has issued a Cannabis Permit to the Applicant or Cannabis Permittee, the City shall not consider any
criminal history of the Applicant or Cannabis Permittee that was disclosed to or discovered by the City prior to issuance of the Cannabis Permit and is confirmed by the Applicant or Cannabis Permittee. For any criminal history that was not disclosed to or discovered by the City prior to issuance of a Cannabis Permit, or that arose after the issuance of the Cannabis Permit, the City shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the Applicant or Cannabis Permittee, and shall evaluate the suitability of the Applicant or Cannabis Permittee based upon such review. In determining which offenses are substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee, the City shall consider factors set forth in Business and Professions Code Section 26057; (vi) the Applicant or Cannabis Permittee is employing or allowing to volunteer any person whose criminal history indicates that such person is not of Good Moral Character; (vii) the Applicant or Cannabis Permittee fails to allow inspection by City officials of the security recordings, activity logs, business records, or other accessible records pertaining to the activities conducted on the applicable Premises; or (viii) the Applicant or Cannabis Permittee allows for Physician Services to be conducted on the applicable Premises. (u) "Good Moral Character" means having a personal history that demonstrates the propensity to serve the public in a manner that reflects openness, honest, fairness, and respect for the law and rights and well-being of others. In determining Good Moral Character, the following standards shall apply: (i) a judgment of guilt in a criminal prosecution or a judgment in a civil action shall not be used, in and of itself, as proof of an individual's lack of Good Moral Character.
Such judgment, however, may be used as evidence in the determination and when so used, the individual shall be notified and shall be permitted to rebut the evidence by showing that, at the current time, he or she has the ability to, and is likely to serve the public, in a fair, honest, and open matter, that he or she is rehabilitated, and/or that the substance of the former offense is not substantially related to the applicable Commercial Cannabis Activity; and (ii) a prior conviction where the sentence, including any term of probation incarceration, or supervised release is completed for the possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance, is not considered substantially related, and shall not be the sole ground for denial of a Cannabis Permit, except that any of the convictions set forth in Business and Professions Code Section 26057(b)(4), as may be amended, shall be deemed substantially related to applicable Commercial Cannabis Activity. (v) "Health and Safety Code" means the California Health and Safety Code, as amended from time to time.
(w) "Indoor" means within a Fully Enclosed and Secure Structure. (x) "Manufacture" or "Manufacturing" means to compound, blend, extract, infuse, or otherwise make or prepare a Cannabis Product from such blends, extractions, or infusions.
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(y) uManufacturing Permit" means a Cannabis Permit to Manufacture in accordance with the terms and conditions of this Chapter and the conditions of approval for the applicable Cannabis Permit issued to the particular Manufacturing Permittee.
(z) "Manufacturing Permittee" means a Person that has been issued a Manufacturing Permit by the City pursuant to the terms and conditions of this Chapter.
(aa) "Medicinal Permittee" means a Person who is issued a Cannabis Permit to engage in Commercial Cannabis Activity with respect to medicinal Cannabis in accordance with applicable City law and State Law, including MAUCRSA. (bb) "Microbusiness" means a commercial medicinal cannabis business facility of cultivation of medicinal cannabis on areas less than 10,000 square feet and also acts as a licensed distributor, manufacturer, and Delivery-only retailer, pursuant to State Law, including MAUCRSA. Microbusinesses shall not be open to the public for point-of-sale retail Cannabis sales.
(cc) "Microbusiness Permit" means a Cannabis Permit to establish and conduct a Microbusiness in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Microbusiness Permittee. (dd) "Microbusiness Permittee" means a Person who has been issued a Microbusiness Permit by the City pursuant to the terms and conditions of this Chapter.
(ee) "Outdoors" means any location within the City that is not within a Fully Enclosed and Secure Structure.
(ff) "Owner" means any of the following: (i) a Person with an aggregate ownership interest of 20% or more in the Person applying for a Cannabis Permit, unless the interest is solely a security, lien, or encumbrance; (ii) the chief executive officer of a nonprofit or other entity; a member of the boards of directors of a nonprofit; (iv) an individual who will be participating in the direction, control, or management of the person applying for a Cannabis Permit. (gg) "Permit Zone" means, with respect to a Person holding a Cannabis Permit, the overlay zone described in Cudahy Municipal Code Chapter 20.120 where such Cannabis Permit type is permitted to operate pursuant to a Development Agreement with the City.
(hh) "Person" includes any individual, entity, firm, co-partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
(ii) "Physician Services" means the consultation by a State-licensed physician of a patient with the possible recommendation by such physician of medicinal Cannabis for such patient.
OD "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 Cannabis Permittee applicant or Cannabis Permittee where the Commercial Cannabis Activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one Cannabis Permittee. (kk) "Retail Delivery" means the commercial transfer or delivery of Cannabis or Cannabis Products to a customer, patient, primary caregiver or Cannabis Permittee.
(II) "Retail Delivery Establishment" means a location where Cannabis or Cannabis Products are, either individually or in any combination, Delivered pursuant to State Law, including MAUCRSA. Retail Delivery Establishments shall not be open to the public for point-of-sale retail sales. (mm) "Retail Delivery Permit" means a Cannabis Permit to Deliver Cannabis and Cannabis Products to customers, patients, and primary caregivers in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Retail Delivery Permittee.
(nn) "Retail Delivery Permittee" means a Person that has been issued a Retail Delivery Permit by the City pursuant to the terms and conditions of this Chapter. (oo) "State" means the State of California.
(pp) "State Law" means all laws of the State of California, including, but not limited to, all rules and regulations adopted by State agencies and State regulatory entities, including subsequent amendments to such laws, rules, and regulations.
(qq) "State Medicinal license" means a State license for medicinal Commercial Cannabis Activities issued pursuant to State Law. (rr) "Testing" means the activities conducted by a Testing Laboratory. (ss) "Testing Laboratory" means an accredited laboratory, facility, or entity in the City that offers or performs tests of medicinal cannabis or medicinal cannabis products in accordance with State Law and City law:
(tt) "Testing Permit" means a Cannabis Permit for Testing the quality and makeup of Cannabis and Cannabis Products pursuant to the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Testing Permittee. (uu) "Testing Permittee" means a Person who has been issued a Testing Permit by the City pursuant to the terms and conditions of this Chapter. (vv) "Volatile Solvent" means a Class I Flammable liquid as defined by the National Fire Protection Association, including butane and propane. (ww) "Youth Center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to,
private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.
5.20.030 Commercial Cannabis Activity Prohibited.
All Commercial Cannabis Activity within the City is prohibited except as permitted by this Chapter.
5.20.040 Certain Commercial Cannabis Activity Permitted. Medicinal Commercial Cannabis Activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the area set forth in the overlay zone/Permit Area illustrated in Exhibit "A" to City Council Ordinance No. 673 pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code,§ 65864 et seq.) and Cudahy Municipal Code Chapter
20.28 (Development Agreements). No such activities shall be permitted without a Development Agreement within or outside of the boundaries of such overlay zone.
The City may approve or deny such a Development Agreement in its sole and absolute discretion. The City Manager is authorized to develop and promulgate policies and procedures consistent with the intent and spirit of this Chapter concerning the applications, application process, including, but not limited to, the information required of Applicants, and application review procedures, which shall inform the administration and protocols to be used and followed by the City in the application and hearing processes.
5.20.050 Business standards.
Commercial Cannabis Activity within the City shall be in conformance with the standards set forth in this Section, in addition to those additional standards that may be imposed through negotiated Development Agreement. The City Manager is hereby authorized to formulate and impose additional Business Requirements applicable to Cannabis Permittees in furtherance of the public health, safety, and/or welfare.
(a) Commercial Cannabis Activity shall only be allowed upon application and issuance of a Cannabis Permit and a Development Agreement by the City in accordance with the criteria and process set forth in this Chapter and City Code. (b) Zoning and Land Use.
(1) Operation Near Schools, Day Cares, and Youth Centers. Following the enactment of this Chapter, no new Premises shall be established, developed, or operated within 600 feet of a Day Care Center, Youth Center, or public or private school providing instruction in kindergarten or any grades 1 through 12 that is in existence at the time the Cannabis Permit is issued. All distances shall be measured in a straight line, without regard to intervening structures, from the nearest point of the building or structure in which the Premises are, or will be, located to the nearest property line of those uses describe in this Subsection. The restrictions set forth in this Subsection shall not apply to Premises which operate within 600 feet of any Day Care Center, Youth Center, or public or private school
providing instruction in kindergarten or any grades 1 through 12, if such Premises existed prior to the establishment of the applicable Day Care Center, Youth Center, or school that is located within 600 feet of such Premises.
(2) Co-Location. All Commercial Cannabis Activity shall fully comply with all l mandates set forth in State Law. To the extent not prohibited under State Law, a Cannabis Permittee may be located within the same unit of the same Premises or building, facility or real property parcel as another Cannabis Permittee.
(3) Development Agreement.
a) Prior to commencing operations, all Cannabis Permittees shall enter into a Development Agreement with the City.
b) All Premises shall be operated in accordance with the terms of the applicable Development Agreement for the specified parcel of real property (or sub-portion thereof) upon which the Premises is located. c) Except as specified, Commercial Cannabis Activities shall not exceed the square footage authorized pursuant to the applicable Development Agreement.
d) All Premises shall be located in the Permit Zone pursuant to the applicable Development Agreement.
(c) Commercial Cannabis Activity is allowed only within Fully Enclosed and Secure Structures that are inaccessible to minors.
(d) Signage for any business must be applied for through the City's Planning Division, which shall require review and approval prior to installation. Business identification signage shall be limited to that needed for identification only, and shall not contain any logos or information that identifies, advertises, or lists the services or the products offered. No Cannabis Permittee shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the Premises of the Cannabis Permittee or elsewhere including, but not limited to, the public right-of-way. (e) From any public right-of-way, there shall be no visible evidence of the consumption of any Cannabis Products. Commercial Cannabis Activity shall not adversely affect the health or safety of the nearby residents by creating dust, glare, heat, noise, smoke, traffic, vibration, odor or other impacts, and shall not be hazardous due to use or storage of materials, processes, products, or wastes. (f) Hours of operation limits, if any, shall be specified in terms mutually agreed upon in a Development Agreement.
(g) All Cannabis and Cannabis Products shall be kept in a secured manner during all business and nonbusiness hours.
(h) All Commercial Cannabis Activities shall operate within Premises that are compliant with all applicable State Laws and local laws.
(i) Cannabis Permittees must pay all applicable taxes pursuant to all federal, State, and local laws, including, but not limited to, fees relating to infrastructure improvements within the Permit Zone.
U) Cannabis Permittees shall provide sufficient odor absorbing ventilation and exhaust systems so that odors outside the applicable Premises are not a nuisance on any adjacent property of public right-of-way. Any violation of this Section shall be remedied within thirty (30) days of the Cannabis Permittee receiving notice of such violation.
(k) Cannabis Permittees shall utilize product and inventory tracking software and accounting software that is consistent with reasonable business practices within the industry and the seed-to-sale tracking software being developed by the State. (I) Except permitted in this Chapter, on-site smoking, ingestion, or consumption of Cannabis or Cannabis Products shall be prohibited on Premises. Except to the extent otherwise permitted pursuant to this Chapter, the entrance of the Premises shall be clearly and legibly posted with a notice indicating that smoking, ingesting, or consuming Cannabis, Cannabis Products or alcohol on such Premises is prohibited.
(m) Signage for all Premises shall be in compliance with the City's sign code and application for all signs must be submitted to the City's Planning Division and comply with its sign permitting protocol.
(n) Alcoholic beverages and tobacco shall not be sold, stored, distributed, or consumed on the Premises. Cannabis Permittees shall not hold or maintain a license from the State Department of Alcohol Beverage Control to sell alcoholic beverages, or operate a business that sells alcoholic beverages or tobacco with respect to the Premises. In addition, alcohol shall not be provided, stored, kept, located, sold, dispensed, or used on the Premises.
(o) Physician Services shall not be provided at any Premises. (p) The Premises shall fully comply with all applicable rules, regulations, and laws including, but not limited to, zoning and building City Codes, the City's business license ordinances, the Revenue and Taxation Code, the Americans with Disabilities Act, and MAUCRSA.
(q) Each Cannabis Permittee shall provide the City Manager, or the City Manager's designee, with the name, phone number, facsimile number, and email address of an on-site representative of such Cannabis Permittee to whom the City and the public can provide notice if there are any operational problems associated with such Cannabis Permittee's Premises. Each Cannabis Permittee shall make reasonable and good faith efforts to encourage residents and the public to call this representative to resolve any operational problems before any calls or complaints are made to the City or law enforcement. (r) All Cannabis Permittees must comply with the following security requirements:
(1) General Security Requirements.
a) Security cameras shall be installed and maintained in good working condition and used in a format approved by the City Manager. The cameras shall be in use 24 hours per day, 7 days per week. The areas to be covered by the security cameras include areas as determined by the City Manager, including, but not limited to, the area in which the primary Commercial Cannabis Activity occurs, e.g. the Cultivation area for a for a cultivator.
b) The Premises shall be alarmed with a reliable commercial alarm system that is operated and monitored by a security company or alarm business in a manner satisfactory to the City Manager.
c) Entrance to any storage areas shall be locked at all times and under the control of staff of the Cannabis Permittee.
d) The business entrance(s) and all window areas shall be illuminated during evening hours. The Applicant shall comply with the City's lighting standards regarding fixture type, wattage, illumination levels, shielding, etc., and secure the necessary approvals and permits, as necessary. e) All windows on the Premises shall be appropriately secured with all Cannabis and Cannabis Products securely stored.
f) Each Cannabis Permittee shall implement track and trace protocols, as noted above in this Section, in order to prevent diversion of Cannabis or Cannabis Products.
g) All waste and disposal containers shall be locked at all times and stored ins a secure area and, at all times, under the control of the Cannabis Permittee.
(2) Security Alarm Systems - Minimum Requirements.
a) Each Premises shall have a security alarm system installed by a licensed alarm company on all perimeter entry points and perimeter windows.
b) Each Premises must ensure that its location is continuously monitored. Premises may engage the services of outside vendors to fulfill this requirement, such as a private security firm.
c) Each Premises shall maintain up to date and current records and existing contracts on the Premises that describe the location and operation of each security alarm system, a schematic of security zones, the name of the licensed alarm company, and the name of any vendor monitoring the Premises.
(3) Lock Standards. At a minimum, all points of ingress and egress shall be secured with commercial-grade, non-residential door locks. (4) Video Surveillance Requirements.
a) Prior to exercising the privileges of a Cannabis Permit issued under this Chapter, an Applicant must install fully operational video surveillance and camera recording system. The recording system must record in digital format and meet the requirements outlined herein.
b) All video surveillance records and recording must be stored in a secure area that is only accessible to the management staff of the Cannabis Permittee.
c) Video surveillance records and recordings must be made available upon request to the City Manager or designee for a purpose authorized by this Chapter or for any other State or local law enforcement purpose. d) Video surveillance shall be held in confidence by all employees and representatives of the City Manager, except that the City Manager may provide such records and recordings to any State or local law enforcement agency for any purpose authorized under this Chapter for any State or local law enforcement purpose.
e) A sign shall be posted in a conspicuous place near each point of public access, which shall not be less than 12 inches wide and 12 inches long, composed of letters not less than one inch in height, stating that "All Activities Monitored by Video Camera" or "These Premises Are Being Digitally Recorded" or otherwise advising of all persons entering the Premises that a video surveillance and camera recording system is in operation and recording all activity as provided in this Section. f) The Premises shall utilize video surveillance equipment and a camera system that shall be remotely accessible by the City and Los Angeles County Sheriff's Department.
(5) Video Surveillance Equipment.
a) Video surveillance equipment shall, at a minimum, consist of digital or network video recorders, cameras capable of meeting the recording requirements described in this Section, video monitors, digital archiving devices, and a color printable capable of delivering still photos. b) All video surveillance systems must be equipped with a failure notification system that provides prompt notification to a Cannabis Permittee of any prolonged surveillance equipment interruption and/or the complete failure of the surveillance.
c) Cannabis Permittees are responsible for ensuring that all surveillance equipment is properly functioning and maintained so that the playback quality is suitable for viewing and the surveillance equipment is capturing the identity of all individuals and activities in the monitored Premises.
d) All video surveillance equipment shall have sufficient battery backup to support a minimum of four hours of recording in the event of a power outage.
(6) Placement of Cameras and Required Camera Coverage.
a) Camera placement shall be capable of identifying activity occurring within 20 feet of all points of ingress and egress and shall allow for the clear and certain identification of any individual and activities on the Premises.
b) All entrances and exits to the Premises shall be recorded from both indoor and outdoor vantage points.
c) The system shall be capable of recording all pre-determined surveillance areas in any lighting conditions. If the Premises has a medicinal cannabis cultivation area, a rotating schedule of lighted conditions and zero-illumination can occur as long as ingress and egress points to those areas remain constantly illuminated for recording purposes.
d) Areas where medicinal cannabis is grown, tested, cured, manufactured, or stored shall have a camera placed in the room facing the primary entry door at a height that will provide a clear unobstructed view of activity without sight blockage from lighting hoods, fixtures, or other equipment.
e) Cameras shall also be placed at each location where weighing, packaging, preparation, tagging activities occur, or other distribution preparation activities occur.
f) At least one camera must be dedicated to record the access points to the secured surveillance recording area.
(7) Location and Maintenance of Surveillance Equipment. a) Surveillance recording equipment must be housed in a designated, locked, and secured room or other enclosure with access limited to authorized employees, the City Manager or designee, Los Angeles County Sheriff's Department, as authorized by this Chapter, other State or local law enforcement purpose, and service personnel or contractors. b) Premises must keep a current list of all authorized employees and service personnel who have access to the surveillance system and/or surveillance system room on the Premises. Premises must keep a surveillance equipment activity log on the Premises to record all service activity, including the identity of all individuals performing services on system service, the service date and time, and the reason for such service to the surveillance system.
c) Off-site monitoring and video recording storage of the Premises by an independent third party may be authorized so long as standards exercised at the remote location meets or exceeds all of the standards applicable to onsite monitoring.
d) Each Premises located in a common or shred building must have a separate surveillance room/area that is dedicated to that specific Premises. The facility that does not house the central surveillance room is required to have a review station, printer, and map of camera placement on the Premises. All minimum requirements for equipment and security standards as set forth in this Section apply to such review station. (8) Video Recording Retention Requirements.
a) All camera views of all recorded areas must be continuously recorded 24 hours a day.
b) All surveillance recordings must be kept for a minimum of 30 days and be in a format that can be easily accessed for viewing. Video recordings must be archived in a format that ensures authentication of the recording as legitimately-capture video and guarantees that no alteration of the recorded image has taken place.
c) The surveillance system or equipment must have the capabilities to produce a color still photograph form any camera image, live, or recorded, of the Premises.
d) The date and time must be embedded on all surveillance recordings without significantly obscuring the picture. e) Time is to be measured in accordance with the official United States time established by the National Institute of Standards and Technology and the U.S. Naval Observatory at www.time.gov. f) After the 30-day surveillance retention schedule has lapsed, surveillance video recordings must be erased or destroyed prior to being discarded or disposed of for any other purpose. Surveillance video recordings shall not be destroyed if the Cannabis Permittee knows or should have known of a pending criminal, civil, or administrative investigation or any other proceeding sfor which the recording may contain relevant information.
(9) Other Records. All records applicable to the surveillance system and cannabis tracking system shall be maintained on the Premises. At a minimum, Premises shall maintain a map of the camera locations, directions of coverage, camera numbers, surveillance equipment maintenance activity log, user authorization list and operating instructions for the surveillance equipment.
(s) Audit. Each Cannabis Permittee shall maintain accurate books and records in an electronic format, which detail all revenues and expenses of the business, including, but not limited to, all assets and liabilities. On no less than an annual basis, or at any time upon reasonable request of the City, each Cannabis Permittee shall file a sworn statement detailing business activity during the previous 12-month period (or shorter period based upon the timing of the request). The statement shall include gross sales for each month and all
applicable taxes and fees paid or due to be paid. On an annual basis, each owner and operator shall submit to the City a financial audit of the business's operations conducted by an independent certified public accountant. Each Cannabis Permittee shall be subject to a regulatory compliance review and financial audit as determined by the City Manager or designee. (t) Inspections. The City Manager, or designee, or Los Angeles County Sheriff's Department shall have the right to enter all Premises from time to time unannounced during a Cannabis Permittee's hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this Chapter, to inspect and copy records required to be maintained under this Chapter, or to inspect, view, and copy recordings made by security cameras, all without requirement for a search warrant, subpoena, or court order, and subject to appropriate fees, as specified in the Development Agreement, or adopted by the City.
5.20.060 Application and fee requirements.
(a) All applicants wishing to obtain a Cannabis Permit from the City shall file an application with the City upon a form approved by the City Manager and shall pay a permit application fee as established by the City. The fee may vary depending on the type of Cannabis Permit. The City Manager or designee may require and conduct background checks, as necessary, to process and evaluate Cannabis Permit applications.
(b) Prior to operating in the City, each Cannabis Permittee shall timely and fully pay all fees associated with the establishment of Commercial Cannabis Activity.
The fees shall be as set forth in the schedule and fees and charges established by the City Council, including, but not limited to, the following:
(1) Application fee for accepting a registration application, due and payable in full at the time an application is submitted;
(2) Processing fee for the cost to the City of processing an application and reviewing, investigating, and scoring each application in accordance with any evaluation system to determine eligibility for issuance of a Cannabis Permit, due and payable in full at the time a registration application is submitted;
(3) Permit issuance fee for the cost to the City of preparing a Development Agreement, Planning Commission and City Council review of the Development Agreement and the Cannabis Permit, and preparation and issuance of the Cannabis Permit, as authorized by the Cannabis Permit; (4) Amended registration fee for the cost to the City of reviewing amendments or changes to the registration form previously filed on behalf of an Applicant, due and payable in full at the time amendments or changes to any Cannabis Permit form is submitted to the City;
(5) Permit renewal fee for the cost ot the City of processing an application to renew a Cannabis Permit, due and payable in full at the time application is made to renew a Cannabis Permit; and
(6) Any fees set forth in the applicable Development Agreement.
5.20.070 Permit conditions.
(a) A Cannabis Permit application may be denied and not awarded by the City if:
(1) The Applicant or the Applicant's agent(s) has made one or more false or misleading statements or omissions in the application or during the application process.
(2) The proposed Premises or Commercial Cannabis Activity at the Premises is not allowed by State Law or City law.
(3) The Applicant is not a legal representative of the proposed Cannabis Permittee.
(4) The Applicant or any of its officers, directors, owners, managers, or employees is under 21 years of age.
(5) The Applicant's facility or its location is in violation of any building, zoning, health, safety, or other provision of this Chapter or of any State or local law that substantially affects the public health, welfare, safety, or morals, or the facility or its location is not permitted in the proposed area, or the issuing or continuation of a Cannabis Permit would be contrary ro the public health, welfare, safety, or morals.
(6) The Applicant or any of its officers, directors, owners, managers, or employees has been sanctioned by the City, State, or any county for unauthorized cannabis activities or has had a registration revoked under this Chapter in the previous 3 years.
(7) The Applicant or the Applicant's agent(s) have engaged in unlawful, fraudulent, unfair, or deceptive business acts or practices. (8) The Applicant has not been or is not in good standing with the City related to other or previous business activities operated in the City. (9) The Applicant has not satisfied all requirement of this Chapter. (10) For Good Cause, as defined in this Chapter.
(b) A Cannabis Permit shall be awarded by the City to Applicants in accordance with the process established by the City Manager.
(c) Before a Cannabis Permit can be issued to an applicant, a Cannabis Permit fee must be paid to offset all related costs to the City, and the proposed Premises must pass all applicable inspections.
(d) Each Cannabis Permit is subject to the conditions of approval in the applicable Development Agreement for the parcel of real property upon which the Premises is located.
(e) Each Cannabis Permit is subject to any additional conditions that may be applied by the City at the time of issuance or renewal as necessary to properly regulate the applicable Commercial Cannabis Activities and to protect the public. (f) Each Cannabis Permittee shall execute a Development Agreement with the City to, among other things, fully reimburse the City for all fiscal impacts, costs, expenses, fees, and attorneys' fees incurred by the City related to the Cannabis Permit and the related Commercial Cannabis Activity of such Cannabis Permittee.
(g) Each Cannabis Permittee shall:
(1) Carry liability insurance in the amounts and types set by the City Manager or the City Manager's designee, and name the City as an additional insured on all such insurance policies.
(2) Execute an Indemnification Agreement prepared by the City that fully indemnifies the City for all liabilities associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activities, and any action taken by the Cannabis Permittee pursuant to this Chapter. Such indemnification may be set forth in the applicable Development Agreement.
(3) Defend the City, at the Cannabis Permittee's sole expense, in any action against the City or its agents, officers, officials, or employees associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activities, or any action taken by the Cannabis Permittee pursuant to this Chapter. The City may, at its sole discretion, participate in the defense of any such action, but such participation shall not relieve the Cannabis Permittee of its indemnification and reimbursement obligations. (4) Reimburse the City for all costs, expenses, fees, and attorney's fees incurred by the City related to any action against the City or its agents, officers, or employees associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activity, or any action taken by the Cannabis Permittee pursuant to this Chapter.
(h) A Cannabis Permittee shall keep the City and law enforcement updated with the names, addresses, and relevant criminal histories of the Applicant's Agents.
Relevant criminal histories shall include any drug-related or felony convictions, the nature of such offenses, and the sentences received for such convictions. (i) Transfer.
(1) Any Cannabis Permittee may not sell, transfer, pledge, assign, grant an option, or otherwise dispose of his or her ownership interest in the Commercial Cannabis Business authorized pursuant to the Cannabis Permit.
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(2) In order for a Cannabis Permittee to transfer its Cannabis Permit to any Person, such Cannabis Permittee must submit a transfer application to the City Manager or City Manager's designee. The City Manager or designee may create a transfer application and reasonable transfer application process, including mandatory fee, that Cannabis Permittees and the City must follow and pay for Cannabis Permit transfer requests. Each transfer request of a Cannabis Permit and the related transfer application is subject to the prior approval of the City Manager or designee. (3) Applicants for Cannabis Permits must show proof of lawful possession of the applicable location. Evidence of lawful possession consists of properly executed deeds of trust, leases, and other written instruments, as may be accepted by the City.
(4) The location shall only be the geographical area that is specifically and accurately described in executed documents verifying lawful possession.
No Cannabis Permittee is authorized to relocate to other areas or units within a building structure without first filing a change of location application and obtaining approval form the City regardless of any possessory interest or right to possession to such additional space. No Cannabis Permittee shall add additional contiguous units or areas, thereby altering initially-approved Premises without filing an application to modify the location on forms prepared by the City Manager, including any applicable processing fee.
(5) No Cannabis Permittee is authorized to sublet any portion of any Premises for any purpose unless all necessary forms and applications to modify the existing location to accomplish any subletting have been approved by the City.
(6) The City Manager shall develop and promulgate a process for the renewal of Cannabis Permits and the establish related fees, in accordance with applicable laws.
U) To the fullest extent permitted by law, the City does not assume any liability, and expressly does not waive sovereign immunity, with respect to any Commercial Cannabis Activities, or for the other activities of any Cannabis Permittee or for any other activities taking place at Premises. (k) Changing, Altering, or Modifying Location.
(1) After issuance of a Cannabis Permit, the Cannabis Permittee shall not make any physical change, alteration, or modification to the Premises that materially or substantially alters the location, production estimates, and/or usage of the location form the plans originally approved under the applicable Development Agreement, without the prior written approval of the City Council or designee. The Cannabis Permittee whose Premises are to be materially or substantially changed is responsible for filing an application with the City in order to obtain requisite approval.
(2) Material or substantial changes, alterations, or modifications requiring approval include, but are not limited to, the following: (i) an increase or decrease in the total physical size or capacity of the location; (ii) the sealing off, creation of or relocation of a common entryway, doorway, passage, or other such means of public ingress and/or egress, when such common entryway, doorway, or passage alters or changes limited access areas; or (iii) the installation or replacement of electric fixtures or equipment, the lowering of a ceiling, or electrical modifications made for the purpose of increasing power usage ..
(3) The City Council or designee may grant approval for the types of changes, alterations, or modifications described herein upon the filing of an application by the Cannabis Permittee and payment of any applicable fee, subject to any requisite amendments to the applicable Development Agreement. The Cannabis Permittee must submit all information requested by the City Council or designee including, but not limited to, documents that verify the following: (i) the Cannabis Permittee will continue to have the exclusive possession of the Premises, as changed, by ownership, lease, rental agreement, or other means, and sole control over all activities; and (ii) the proposed change conforms to any and all City restrictions related to the time, manner, and place of regulation of the applicable Commercial Cannabis Activity.
(I) To the fullest extent permitted by law, the City does not assume any liability, and expressly does not waive sovereign immunity, with respect to any Commercial Cannabis Activities, or for the other activities of any Cannabis Permittee or for any other activities taking place at Premises.
5.20.080 Enforcement and Appeals.
(a) Any Commercial Cannabis Activity within the City in violation of this Chapter is hereby declared to be unlawful and a public nuisance. (b) Any Person who willfully or knowingly (i) engages in a violation of this Chapter or (ii) owns, possesses, controls, or has charge of any parcel of real property in the City upon which a violation of this Chapter is maintained and who has actual knowledge of such violation ( or would have actual knowledge of such violation after a reasonable inquiry), shall be subject to the penalties and remedies provided by this Chapter.
(c) Any violation of this Chapter shall constitute a separate offense for each and every day the violation occurs or persists.
(d) Any Person in violation of any provision of this Chapter or who causes another Person to be in violation of this Chapter shall have committed a misdemeanor. In addition which shall be punishable by a fine of up to one thousand dollars ($1,000) for each violation and for each day the applicable violation continues to persist.
(e) Any person in violation of any provision of this Chapter shall be punishable by an administrative fine of up to a $1,000 per offense.
(f) Any material violation of this Chapter or any other relevant City law or State Law by a Cannabis Permittee, or a Cannabis Permittee's agent, is grounds for suspending or revoking the relevant Cannabis Permit. In addition, the City Manager or the City Manager's designee may suspend or revoke a Cannabis Permit, disqualify an Applicant from the application process, or elect not to renew a Cannabis Permit if any of the following occur:
(1) The City Manager or the City Manager's designee determines that the Cannabis Permittee has failed to comply with this Chapter, any condition of approval, or any agreement or covenant as required pursuant to this Chapter.
(2) The Cannabis Permittee's Commercial Cannabis Activities cease for more than ninety (90) calendar days.
(3) Ownership of the Cannabis Permittee is changed without approval from the City.
(4) The licensed Commercial Cannabis Activity moves from the licensed Premises to a different, unauthorized location.
(5) The Cannabis Permittee fails to provide remote access to the security cameras to the City Manager, the City Manager's designee, or Los Angeles County Sheriff's Department, or fails to allow inspection of the security recordings, the activity logs, or of the Premises by authorized City officials.
(g) Any decision regarding the suspension or revocation of a Cannabis Permit, disqualification of an Applicant from the application process, or election not to renew a Cannabis Permit may be appealed to an independent neutral third-party administrative hearing officer appointed by the City Manager or the City Manager's designee (the "Hearing Officer"). Said appeal shall be made by a notice of appeal from the Person appealing within thirty (30) days from the date of the City's decision. The appeal shall be accompanied by a written verified declaration setting forth the basis for the claim that the City's decision was improper. The Hearing Officer's decision shall be final and binding upon the City and the appellant Cannabis Permittee or Applicant. Alternatively, the City Manager may provide for the appeal to be made to the City Council, in lieu of a hearing officer. In such case, the City Council's decision shall be final and binding upon the City and the appellant.
(h) These penalties and remedies are cumulative, and in addition to any other penalties and remedies available to the City.
5.20.090 State Medicinal License Requirement.
(a) Cannabis Permittees must obtain a State Medicinal License in accordance with State Law, including, but not limited, to the temporary and permanent State Medicinal Licenses provided for in MAUCRSA.
(b) Each Cannabis Permittee must expeditiously provide proof of receipt of the applicable State Medicinal License by such Cannabis Permittee to the City Manager or designee.
5.20.100 Medicinal Cannabis Cultivation.
(a) Purpose. The purpose and intent of this Section is to permit and regulate the medicinal Cannabis Cultivation in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law. (b) Scope; Medicinal Cannabis. This Section permits and regulates the medicinal Cannabis Cultivation pursuant to State Law, including MAUCRSA.
Subject to the terms of this Chapter, Cultivation Permits may be issued by the City for medicinal Cannabis Cultivation pursuant to and in accordance with State Law, including MAUCRSA.
(c) Outdoor Cultivation is prohibited within the City.
(d) Indoor Cultivation is permitted only on properties within the applicable Permit Zone with a valid Cultivation Permit and other requisite permits and entitlements. (e) Indoor Cultivation may include growing Cannabis plants, harvesting Cannabis plants, and drying Cannabis flowers but shall not include the Manufacturing or of Cannabis Products, unless otherwise authorized pursuant to this Chapter. (f) Entrance to the Cultivation area, and all storage areas, of the applicable Premises shall be locked at all times and under the control of the staff of such Premises.
5.20.110 Medicinal Cannabis Products Manufacturing.
(a) Purpose. The purpose and intent of this Section is to permit and regulate the medicinal Cannabis Products Manufacturing to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law. (b) Scope; Medicinal Cannabis. This Section permits and regulates medicinal Cannabis Products Manufacturing pursuant to State Law, including MAUCRSA.
Subject to the terms of this Chapter, Manufacturing Permits may be issued by the City for medicinal Cannabis Products Manufacturing, pursuant to and in accordance with State Law, including MAUCRSA.
(c) Medicinal Cannabis Products Manufacturing is a permitted use only on properties within the applicable Permit Zone with a valid Cultivation Permit and other requisite permits and entitlements.
(d) A Manufacturing Permittee must employ at least one (1) member of its personnel dedicated full time to quality control.
(e) The Manufacturing Permittee must establish standard operating procedures and batch records that comply with current good manufacturing practices and applicable State Law, including MAUCRSA.
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(f) All Cannabis Products produced by a Manufacturing Permittee must be labeled in compliance with applicable State Law, including MAUCRSA. (g) All Cannabis Products produced by a Manufacturing Permittee must be packaged in child resistant containers prior to leaving the Premises fOf such Manufacturing Permittee in accordance with applicable State Law, including MAUCRSA.
(h) Manufacturing Permittees may conduct Manufacturing using any type of solvents, including Volatile Solvents, or Manufacturing processes if such Manufacturing complies with the requirements of this Chapter and State or local law, including but not limited to Health and Safety Code Section 11362.775 (or any successive State Law) all applicable fire and building codes in the City and any other laws of the City designed to ensure the safety of such operation. (i) Manufacturing Permittees using Volatile Solvents for Manufacturing Cannabis Products must operate in a manner to reduce the risk of explosion or danger to public health, including through the use of a close-loop · or solvent dispersion system consistent with the requirements of Health and Safety Code Section 11362.775 (or any successive State Law).
U) If hazardous materials, flammable gas, flammable liquefied gas, flammable and combustible liquids, or other flammable material, as those terms are defined in California Fire Code Section 202, are to be used in the processing of medicinal Cannabis, then the provisions of California Fire Code Section 407 shall be applicable where hazardous materials are subject to permits under California Fire Code Section 50 (Hazardous Materials) are located on the Premises or where required by the applicable building or fire official.
(k) Storage, use, and handling of compressed gases in compressed gas containers, cylinders, tanks, and systems shall comply with California Fire Code Chapter 53. Partially full compressed gas containers, cylinders, or tanks containing residual gases shall be considered as full for the purposes of the controls required. Compressed gases classified as hazardous materials shall also comply with California Fire Code Chapter 50 for general requirements and California Fire Code Chapter 53 addressing specific hazards, including California Fire Code Chapter 58 (Flammable Gases), California Fire Code Chapter 60 (Highly Toxic and Toxic Materials), California Fire Code Chapter 63 (Oxidizers, Oxidizing Gases and Oxidizing Cryogenic Fluids, and California Fire Code Chapter 64 (Pyrophoric Materials). Prevention, control, and mitigation of dangerous conditions related to storage, use, dispensing, mixing, and handling of flammable and combustible liquids shall be in accordance with California Fire Code Chapters 50 and 57.
(I) Labeling Requirements - Edibles.
(1) Before a Manufacturing Permittee prepares any edible Cannabis or edible Cannabis Product for retail sale, it shall be labeled and placed in tamperevident packaging which at least meets the requirements of State Law, including, but not limited to, MAUCRSA.
(2) All items to be sold or distributed shall be individually wrapped at the original point of preparation by the Cannabis Permittee. (3) Labeling must include a warning if nuts or other known allergens are used, and must include the total weight (in ounces or grams) of Cannabis in the package, not to exceed ten (10) milligrams of tetrahydrocannabinol (THC) per serving.
(4) A warning that the item is a medication and not a food must be clearly legible on the front of the package and/or must comply with state packing requirements.
(5) The package must have a label warning that the product is to be kept away from children.
(6) The label must also state that the product contains Cannabis and must specify the date of Manufacture and the Manufacture Permittee's information, including, but not limited to, address, and phone number. (7) Distributions must be in a properly labeled opaque package when distributed.
(8) The City Manager, or designee, may impose additional packaging and labeling requirements on Cannabis or Cannabis Products.
5.20.120 Medicinal Cannabis and Cannabis Products Retail Delivery (Retail Delivery Only, Dispensaries Prohibited).
(a) Purpose. The purpose and intent of this Section is to regulate the Retail Delivery of medicinal Cannabis and Cannabis Products in order to promote the health, safety, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to the State Law. (b) Scope; Medicinal Cannabis Only. This Section permits and regulates the Retail Delivery of medicinal Cannabis and Cannabis Products pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Retail Delivery Permits may be issued by the City for the Retail Delivery of medicinal Cannabis and Cannabis Products pursuant to and in accordance with State Law, including MAUCRSA. The point-of-sale sale of Cannabis or Cannabis Products is strictly prohibited.
(c) Retail Delivery of Cannabis and Cannabis Products is a permitted use only on properties within the applicable Permit Zone with a valid Retail Delivery Permit and other requisite permits and entitlements.
(d) The Retail Delivery of medicinal Cannabis and Cannabis Products may only include the Retail Delivery of Cannabis and Cannabis Products by a Retail Delivery Permittee to a customer, patient or primary caregiver, in accordance with State Law, including MAUCRSA.
(e) Retail Delivery Permittees shall implement sufficient security measures to both deter and prevent unauthorized entrance into areas containing Cannabis
and Cannabis Products and theft of Cannabis and Cannabis Products from the Retail Delivery Establishment or employees participating in Retail Delivery. (f) All Cannabis and Cannabis Products shall be stored in a secured and locked room, safe, or vault, and in a manner as to prevent diversion, theft, or loss. (g) Individuals shall not be allowed to remain on the Premises comprising of the Retail Delivery Establishment unless they are engaging in activity expressly related to the operations of the Retail Delivery Establishment or are a customer. (h) A Retail Delivery Permittee shall notify the City Manager or the City Manager's designee within 24 hours of discovering any of the following:
(1) Significant discrepancies identified during inventory. The level of significance shall be determined by the City Manager or the City Manager's designee.
(2) Diversion, theft, loss, or any criminal activity involving the Retail Delivery Establishment or any agent or employee of the Retail Delivery Establishment.
(3) The loss or unauthorized alteration of records related to Cannabis, Cannabis Products, registered qualifying patients, primary caregivers, or Retail Delivery Establishment agents or employees.
(4) Any other material breach of security.
(i) The Retail Delivery of medicinal Cannabis and Cannabis Products shall comply with all State and local Law, including all laws requiring presentment of government-issued identification card, physician's recommendation, or medicinal Cannabis identification card at the time of initial purchase.
U) With respect to medicinal Cannabis, physicians' recommendations for medicinal cannabis use shall be verified by a Retail Delivery Permittee prior to the Retail Delivery any medicinal Cannabis to a qualified patient or primary caregiver and at least every six months thereafter.
(k) A Retail Delivery Establishment may not employ or enter into any agreements with any physicians who recommend medicinal Cannabis; Physician Services are prohibited from any and all Retail Delivery Establishments. (I) A Retail Delivery Permittee shall inspect all Cannabis and Cannabis Products received for quality assurance prior to the Retail Delivery to any Person. (m) The Retail Delivery of Cannabis and Cannabis Products shall occur only after such Cannabis and Cannabis Products have been inspected and quality tested in accordance with applicable State Law, including MAUCRSA. (n) Each Retail Delivery Establishment shall do regular monthly inventories and record the total quantity of Cannabis and Cannabis on the Premises. These records shall be maintained for three years from the date created and shall be open to inspection by the City Manager, the City Manager's Designee, and law enforcement.
(o) A Retail Delivery Permittee shall register with the City each location where Cannabis or Cannabis Products are stored for purposes of Retail Delivery by such Retail Delivery Permittee within the City.
(p) A Retail Delivery Establishment shall maintain customer and patient and other business records in a secure location (including electronically or cloud-based) j. that is compliant with, as applicable, HIPAA and other federal and state privacy laws.
(q) During the Retail Delivery of Cannabis or Cannabis Products, each vehicle driver shall carry a copy of the Retail Delivery Permit, a copy of the Retail Delivery request, a form of government-issued identification, and all other information required by State and local Law. The driver shall present these documents upon the request of law enforcement, the City Manager, or the City Manager's designee.
(r) Prior to Retail Delivery of Cannabis and Cannabis Products, such Cannabis and Cannabis Products shall be labeled and placed in a tamper-evident package.
Labels and packages of Cannabis and Cannabis Products shall, at minimum, meet the requirements specified under State Law, including MAUCRSA. (s) All Retail Delivery vehicles shall:
(1) Be equipped with, and utilize, a vehicle alarm system. (2) Have and utilize a direct communication system with the related Retail Delivery Establishment.
(3) Keep all Cannabis and Cannabis Products in a secure and locked container.
(4) Have an internal partition between the driver and all passengers from the Cannabis and Cannabis Products storage containers that prevents access by the driver and passengers to all cannabis products from inside the vehicle.
(5) Not carry more Cannabis and Cannabis Products than allowed by State and local Law and required to fulfill all immediate Retail Delivery requests (6) Not display any logo, signage, or other information that identifies, advertises, or lists the services or the products offered.
5.20.130 Medicinal Cannabis and Cannabis Products Distribution. (a) Purpose. The purpose and intent of this Section is to permit and regulate the Distribution of Cannabis and Cannabis Products between Cannabis Permittees in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law.
(b) Scope; Medicinal Cannabis Only. This Section permits and regulates the Commercial Cannabis Activity of Distribution of medicinal Cannabis and Cannabis Products pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Distribution Permits may be issued by the City for the
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Distribution of medicinal Cannabis and Cannabis Products pursuant to and in accordance with State Law, including MAUCRSA. Distribution of Cannabis and Cannabis Products requires a Development Agreement with the City and must be located within the applicable Permit Zone. -,
(c) Distribution activities includes the receiving and releasing of Cannabis and Cannabis Products for inspection, Testing, and quality assurance, as required under applicable State Law and such other activities as are permitted pursuant to State Law.
(d) A Distribution Permittee shall only Distribute Cannabis and Cannabis Products between Cannabis Permittees or to facilities or portions of facilities wholly controlled by such Distribution Permittee to the extent permitted by State Law.
(e) A Distribution Permittee shall inspect all Cannabis and Cannabis Products received by it for quality assurance prior to Distributing to any Cannabis Permittee, as required under applicable State Law.
(f) In addition to the application requirements in Section 0, a Distribution Permittee shall register with the City each location within the City where Cannabis and Cannabis Products are stored for purposes of Distribution activities within the City.
(g) A Distribution Permittee shall Distribute Cannabis and Cannabis Products to Cannabis Permittees only after such Cannabis and Cannabis Products have been inspected and quality tested in accordance with applicable State Law, including MAUCRSA.
(h) A Distribution Permittee may also hold any other Permit type to the extent permitted by State Law. To the extent permitted by State law, a Distribution Permittee that also holds another Permit type may self-distribute its Cannabis Products.
5.20.140 Medicinal Cannabis and Cannabis Products Microbusiness. (a) Purpose. The purpose and intent of this Section is to permit and regulate the medicinal Cannabis and Cannabis Products Microbusiness in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law, including MAUCRSA.
(b) Scope; Medicinal Cannabis Only. This Section permits and regulates Microbusinesses, pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Microbusiness Permits may be issued by the City pursuant to and in accordance with State Law, including MAUCRSA. (c) All Microrobusinesses shall require a Development Agreement with the City and must be located within the applicable Permit Zone.
(d) All components of a Microbusiness (i.e., Cultivation, Manufacturing, etc.) must be in compliance with the provisions of this Chapter and State Law, including MAUCRSA.
(e) The City may authorize the smoking, vaporizing, and ingestion of Cannabis or Cannabis Products on the Premises of a Microbusiness if all of the following are met:
(1) Access to the area where Cannabis consumption is allowed is restricted to persons 21 years of age and older.
(2) Cannabis consumption is not visible from any public place or nonagerestricted area. (3) Sale or consumption of alcohol or tobacco is not allowed on the Premises.
5.20.140 Medicinal Cannabis and Cannabis Products Testing. (a) Purpose. The purpose and intent of this Section is to permit and regulate the Testing of medicinal Cannabis and Cannabis Products in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City intends to be on the forefront of medicinal Cannabis research and Testing. The City is authorized to regulate this activity pursuant to State Law.
(b) Scope; Medicinal Cannabis Only. This Section permits and regulates Cannabis and Cannabis Products Testing, pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Testing Permits may be issued by the City for the Testing of medicinal Cannabis and Cannabis Products pursuant to and in accordance with State Law, including MAUCRSA. (c) Testing of Cannabis and Cannabis Products requires a Development Agreement with the City and must be located within the applicable Permit Zone. (d) Each Testing Permittee must employ at least one (1) full time quality control personnel employee.
(e) Testing Permittees must operate, and all Cannabis and Cannabis Products must be properly tested by Testing Permittees, in accordance with applicable State Law.
(f) All Testing devices used by a Testing Permittee must be "UL listed," and/or otherwise approved for the intended use by the City's Building Official, the Fire Department or other person designated by the City Manager or designee. (g) Each Testing Permittee must notify the State Department of Public Health and the City Manager, or the City Manager's designee, within one business day after the receipt of notice of any kind that its accreditation has been denied, suspended, or revoked.
SECTION 10. Recognizing that there is a potential conflict between federal and State law, it is the City Council's intention that this Ordinance shall be deemed to comply with applicable State Law and shall defer to such applicable State Law through preemption.
SECTION 11. The City Council determines that it is in the best interest of the residents of the City to allow Commercial Cannabis Activities in compliance with applicable State Law, including MAUCRSA, to be established and operated as permitted uses within certain areas of the City subject to the regulations and restrictions provided in this
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Ordinance. It is the City Council's intention that nothing in this Ordinance shall be construed to:
1. Allow a Person to engage in conduct that endangers others or causes a public nuisance.
2. Allow any activity relating to Cannabis that is otherwise not permitted under State law.
SECTION 12. The City Council finds that the actions contemplated by this Ordinance are exempt from the California Environmental Quality Act pursuant to Section 15061 (b )(3) and 15305 of the Guidelines, in that the Ordinance alone does not have the potential for causing a significant effect on the environment. Further permits and approvals will be required before any activity that will affect the environment will be permitted. In addition, Business and Professions Code Section 26055 exempts local ordinances from CEQA that authorizes commercial cannabis activity through discretionary review and approval.
SECTION 13. If any section or provision of this Ordinance is for any reason held to be invalid, unconstitutional, illegal, or unenforceable by any court of competent jurisdiction, or contravened by reason of any preemptive legislation, then such section or provision shall be severed and shall be inoperative, and the remainder of this Ordinance shall remain in full force and effect.
SECTION 14. By regulating Commercial Cannabis Activity, the City is only undertaking to preserve the general welfare through implementing the MAUCRSA. The City Council is not assuming, nor is it imposing on its officers and employees, an obligation for which a breach thereof would expose the City to liability in money damages to any Person who claims that such breach proximately caused injury. To the fullest extent permitted by law, the City shall assume no liability whatsoever, and expressly does not waive sovereign immunity, with respect to any provision of this Ordinance or for the activities of any Cannabis Permittee. To the fullest extent permitted by law, any actions taken by a public officer or employee under the provisions of this Ordinance shall not become a personal liability of any public officer or employee of the City. Nothing in this Ordinance shall be deemed or considered in any respects to constitute authorization to violate any law.
SECTION 15. Inconsistent Provisions. Any provision of the Cudahy Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to the extent necessary to implement the provisions of this Ordinance.
SECTION 16. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subs,ection, subdivision, paragraph, sentence, clause or phrase thereof,
irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase would be subsequently declared invalid or unconstitutional.
SECTION 17. Publication and Effective Date. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in a newspaper of general circulation within fifteen (15) days after its adoption. This Ordinance shall become effective thirty (30) days after adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Cudahy at the / ." ,_, regular meeting of this 11th day of September, 2017. ,.,_,,,_ /4. ~VY
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CITY OF CUDAHY
)
)
)
SS:
Chris Garcia
Mayor
I, Richard Iglesias, Deputy City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 673 was introduced for a first reading on the 14th day of August 2017 and approved for a second reading and adopted by said Council at its regular meeting held on the 11th day of September, 2017 by the following vote, to-wit:
AYES: Markovich, Hernandez, Garcia
)
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NOES: Guerrero
ABSTAIN: None
ABSENT: Sanchez
.. --;' ~ j ~~----'~ -
Richard lgles~a~ / 7 · · · ·-:---___ __
Deputy City B r:I<
EXHIBIT "A": OVERLAY ZONE
IIABI! NA~ l'!ATIJRl!B
,-.... I._.J Cuclohy Boundary
-Railroad, EXISTING ZONING - Boundaries of Overlay Zone .,r Portion of High Density Residential Zone which shall be available for Medicinal Commercial Cannabis Activity upon rezoning by the City Council by General Plan Amendment, Zoning Map Amendment, or other means.
CUDAHY GENERAL PLAN
RESOLUTION NO.18-17
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CUDAHY, CALIFORNIA, APPROVING THE
ISSUANCE OF COMMERCIAL CANNABIS PERMIT NO. CCPlS0019 (LOCATION: 4916 CECILIA STREET, APPLICANTS:
CUPER DEVELOPMENT, THE 420 CLUB, GENIUS DISTRIUTION,
GO CUDAHY, DANIEL AND GOLIATH, DAVINA, HERBAL
DRAGON).
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted Section 65864 et seq. of the California Government Code (the Development Agreement Statute"); and
WHEREAS, the Development Agreement Statute authorizes the City to enter into a property development agreement with any person having legal or equitable interest in real property for the development of such property in order to establish certain development rights; and WHEREAS, in accordance with California law, the City of Cudahy has adopted Municipal Code Chapter 20.28 (Development Agreements) establishing the procedures and requirements for the consideration of development agreement with the City; and WHEREAS, on September 11, 201 7, the City Council for the City of Cudahy passed Ordinance No. 673 establishing regulations and a discretionary review process for the allowance of medicinal-only commercial cannabis activities ( cultivation, distribution, manufacturing, deliveries, micro-business and laboratory testing) in a specified Overlay Zone through a development agreement; and
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. The City has found that the proposed Project is Categorically Exempt from California Environmental Quality Act (CEQA) requirements under provisions of CEQA Guidelines Section 15301 -Existing Facilities.
This exemption applies to projects characterized as alterations to existing facilities meeting the conditions described in Section 15301;
WHEREAS, the City of Cudahy Planning Commission ("Planning Commission") conducted a properly noticed public hearing to consider approval of a Commercial Cannabis Permit and a Development Agreement, at which testimony and evidence, both written and oral, were presented to and considered by the Planning Commission; and WHEREAS, the City Council shall approve a development agreement by ordinance; and WHEREAS, subsequent to receipt of the recommendation of the Planning Commission, the City Council conducted a properly noticed public hearing to consider the approval of a Commercial Cannabis Permit No. CCP18-0019 and Development Agreement(s) Nos. DA18-019C, DA18-012C, DA18-016C, DA18-018C, DA18-020C, DA18-021C and DA18-022C, at which testimony and Attachment CPage 1450 of 4584
Resolution No. 18-17
evidence, both written and oral, were presented to and considered by the City Council.
NOW THEREFORFE, THE CITY COUNCIL OF THE CITY OF CUDAHY
DOES HEREBY RESOLVE, DECLARE AND DETERMINE AS FOLLOWS:
SECTION 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.
SECTION 2. APPROVAL OF COMMERCIAL CANNABIS PERMIT
That the City Council hereby approves Commercial Cannabis Permit No. CCP18-0019, subject to the terms and conditions stated therein, to allow a Commercial Cannabis Facility for the Site located at: 4916 Cecilia Street. A copy of the permit is attached hereto and incorporated herein by this reference as Exhibit "A." The Commercial Cannabis Permit shall be issued upon execution by the City of a Development Agreement for the Site.
SECTON3. SEVERABILITY
That the City Council declares that, should any provision, section, paragraph, sentence or word of this Resolution be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Resolution as hereby adopted shall remain in full force and effect.
PASSED, APPROVED, AND ADOPTED by the City Counc~f the City regular meeting on this 15th day of May, 2018. / /
ATTEST:
Richard
Deputy City
Iglesias
Clerk
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u.
Chris Garcia
Mayor
udahy at its
l
Resolution No. 18-17
STATE OF CALIFORNIA )
CERTIFICATION
COUNTY OF LOS ANGELES ) SS:
CITY OF CUDAHY )
I, Richard Iglesias, Deputy City Clerk of the City of Cudahy, do hereby certify that the above and foregoing Resolution No.18-17, signed by the Mayor and attested by the Deputy City Clerk at a meeting of said City Council of the City of Cudahy held on this 15th day of May 2018, and that said Resolution was adopted by the following votes to wit:
A YES: Markovich, Hernandez, and Garcia
NOES: None
ABSTAIN: None
ABSENT: Guerrero and Sanchez
Richard Iglesias
Deputy City Cl k
Resolution No. 18-17
EXHIBIT "A"
COMMERCIAL CANNABIS PERMIT
SEEATTACHMENT
[The Permit will be based upon the Staff Report with
Conditions of Approval and Issued in a Letter to Follow]
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ORDINANCE NO. 678
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY, CALIFORNIA, APPROVING THE DEVELOPMENT
AGREEMENT BY AND BETWEEN THE CITY OF CUDAHY AND
GENIUS DISTRIBUTION, [AN INDIVIDUAL, LIMITED LIABILITY
COMPANY, CORPORATION]
WHEREAS, to strengthen the public planning process, encourage private part1c1pation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted Section 65864 et seq. of the California Government Code (the Development Agreement Statute"); and
WHEREAS, the Development Agreement Statute authorizes the City to enter into a property development agreement with any person having legal or equitable interest in real property for the development of such property in order to establish certain development rights; and WHEREAS, in accordance with California law, the City of Cudahy has adopted Municipal Code Chapter 20.28 (Development Agreements) establishing the procedures and requirements for the consideration of development agreement with the City; and WHEREAS, on September 11, 2017, the City Council for the City of Cudahy passed Ordinance No. 673 establishing regulations and a discretionary review process for the allowance of medicinal-only commercial cannabis activities ( cultivation, distribution, manufacturing, deliveries, micro-business and laboratory testing) in a specified Overlay Zone through a development agreement; and
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. The City has found that the proposed Project is Categorically Exempt from California Environmental Quality Act (CEQA) requirements under provisions of CEQA Guidelines Section 15301 - Existing Facilities.
This exemption applies to projects characterized as alterations to existing facilities meeting the conditions described in Section 15301;
WHEREAS, the City of Cudahy Planning Commission ("Planning Commission") conducted a properly noticed public hearing to consider the Development Agreement (as defined below), at which testimony and evidence, both written and oral, were presented to and considered by the Planning Commission; and
WHEREAS, the City Council shall approve a development agreement by ordinance; and WHEREAS, subsequent to receipt of the recommendation of the Planning Commission, the City Council conducted a properly noticed public hearing to consider the Development Agreement, at which testimony and evidence, both written and oral, were presented to and considered by the City Council.
Attachment DPage 1454 of 4584
Oroinarn:e :Nu. 678
NOW THEREFORFE, THE CITY COUNCIL OF THE CITY OF CUDAHY
DOES ORDAIN AS FOLLOWS:
SECTION 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.
SECTION 2. APPROVAL OF DEVELOPMENT AGREEMENT
That the City Council hereby approves the Development Agreement By and Between the City of Cudahy and Genius Distribution, [an individual, limited liability company, corporation] ("Development Agreement"), a copy of which is attached hereto and incorporated herein by this reference as Exhibit "A," subject to the terms and conditions stated therein.
SECTION 3. SEVERABILITY
That the City Council declares that, should any provision, section, paragraph, sentence or word of this Ordinance be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Ordinance as hereby adopted shall remain in full force and effect.
SECTION 4. EFFECTIVE DATE OF ORDINANCE
That this Ordinance shall take effect thirty (30) days after its second reading by the City Council.
SECTION 5. EFFECTIVE DATE OF DEVELOPMENT AGREEMENT
The Development Agreement shall not be executed by the City until on or after the effective date of the Ordinance.
SECTION 6. RECORDATION OF DEVELOPMENT AGREEEMENT
That the City Clerk is hereby directed to record the fully executed Development Agreement with the County Recorder for the County of Los Angeles no later than ten (10) days after its execution.
SECTION 7. CERTIFICATION
That the City Clerk shall certify to the passage of this Ordinance and shall cause the same to be published according to law.
2 l
1 j
Ordinance No. 678
~Page 3 of 5
PASSED, APPROVED AND ADOPTED by the City Council of the City of Cudahy at its regular meeting of this 5th day of June, 2018.
ATTEST:
~ ~ -- Richard
Deputy City
Iglesias
Cler
~
3 Chris Garcia
Mayor
Ordinance 1'-To. 678
l?age 4 -o:f 5
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CITY OF CUDAHY
)
)
)
CERTIFICATION
SS:
I, Richard Iglesias, Deputy City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 678 was introduced for a first reading on the 15th day of May, 2018 and approved for a second reading and adopted by said Council at its regular meeting held on the 5th day of June, 2018 by the following vote, to-wit:
A YES: Markovich, Hernandez, and Garcia
NOES: None
ABSTAIN: Sanchez
ABSENT: None
4 Richard Iglesias
Deputy City Cle
-
l
Ordinance NG. 678
EXHIBIT "A"
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF CUDAHY
AND GENIUS DISTRIBUTION,
[AN INDIVIDUAL, LIMITED LIABILITY COMPANY, CORPORATION]
SEE ATTACHMENT
5
Attachment E
ADMINISTRATIVE RECORD FOR
REVIEW HEARING
Genius Distribution, LLC
November 14, 2023
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HEARING REVIEW STAFF REPORT
Date: November 14, 2023
To: Hearing Officer, Steve Napolitano
From: Juan Arauz, AICP, Community Development Director
Prepared By: Cecilia Madrigal-Gonzalez, Senior Planner
Concurrence: Joshua Calhoun, Finance Director, Glenn Ward Calsada, Special Counsel, Raul Diaz, Building Official and Paloma McEvoy, Assistant City Attorney.
Subject: Compliance Review Hearing relating to Commercial Cannabis (“CCP”) 18-0019 and Development Agreement (“DA”) 18-016C between Genius Distribution, LLC (“Operator”) and the City of Cudahy (“City”).
RECOMMENDATION
Staff recommends that the Hearing Officer take the following action(s):
1. Hear the evidence presented by the City; and
2. Make a determination that the Operator is not in compliance with the terms and conditions of its DA with the City and find that the Operator is in default of contractual obligations set forth in the DA and conditions of approval of CCP18-0019; and
3. Make a determination that the Operator is not in compliance with the conditions of approval set forth in CCP 18-0019; and
4. Make a recommendation to the City Manager for the Planning Commission and City Council to adopt an ordinance repealing Ordinance No. 678 terminating Development Agreement No. 18-016C and revoking the Operator’s interest under CCP18-0019.
BACKGROUND/TIMELINE
On September 11, 2017, the City adopted Ordinance No. 673 (Attachment A) establishing the City of Cudahy's commercial cannabis production activity regulations codified in Chapter 5.20 of the Cudahy Municipal Code (“CMC”). CMC Section 5.20.040 authorizes medicinal commercial cannabis activities within a designated overlay zone, pursuant to a development agreement adopted in accordance with the Development Agreement Law (Govt. Code Section 65864 et seq.) and Chapter 20.28 of the CMC.
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On April 30, 2018, the Planning Commission recommended the City Council to approve CCP18- 0019 for cannabis delivery at 4916 Cecilia St Unit D., subject to the approval of a development agreement between the City of Cudahy (“City”) and Genius Distribution, LLC (“Operator”) for cannabis distribution.
On May 15, 2018, the City Council adopted Resolution No. 18-17 (Attachment B) approving the issuance of CCP18-0019 (Attachment C) with conditions of approval to the Operator upon the execution of a development agreement with the City.
On June 5, 2018, the City Council adopted Ordinance No. 678 (Attachment D) approving DA18- 016C (Attachment E) inclusive of exhibits A-F (Attachment F) between the Operator and the City authorizing commercial cannabis distribution activities at 4916 Cecelia Street Unit D (“Site”) as illustrated in Figures 1 and 2 below. Recital I of the Development Agreement permits the Operator to utilize approximately 809 square feet of the Site for cannabis distribution activities, inclusive of warehousing and workspace. The Operator is one of seven tenants at the Site which all have separate development agreements with the City but fall under the same CCP conditions of approval.
FIGURE 1 – AERIAL OF SITE
Site
4916 Cecelia St.
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FIGURE 2 – FLOOR PLAN
On October 2, 2019, the City provided the Operator with a Notice of Delinquency (Attachment G) prior to placing the Operator in default status due to payment non-compliance with the Development Agreement, inclusive of the payment of Community Benefit Fees, Cost Recovery Fees, and Non-Operating Fees in the amount of eight thousand nine hundred and ninety-one dollars and seventy-six cents ($8,891.76). The Operator was given no later than October 17, 2019, to cure the amount, however, the delinquency was not timely cured.
On May 4, 2021, the City provided the Operator with a Notice of Default (Attachment H) due to payment non-compliance with the payment of fees due in the amount of forty-one thousand four hundred and sixty-eight dollars and thirty-five cents ($41,468.35). The Operator was given no later than 30 days to cure the default, however, the default was not timely cured.
On September 2, 2021, the City notified the Operator of their failure to sign the DA (Attachment I). The DA was not signed until January 19, 2023.
On December 7, 2022, the City Manager offered a Cannabis Deferment and Payment Program (Attachment J) to assist cannabis operators with the accumulated non-operating and other fees by deferring and providing additional time for payment without penalty. All cannabis operators interested in participating in this program were given no later than January 31, 2023, to execute a payment agreement. The City received interest from the Operator and due to their good-faith negotiations the City extended the deadline of the deferment and payment program. Under the program:
(a) Unpaid Non-operating Fees would be deferred (without penalty) until six (6) months after the Operator was issued a Certificate of Occupancy; and then repay accumulated NonOperating Fees within twelve (12) months; and (b) Operators would continue to be responsible for the timely payment of Community Benefit Fees and Cost Recovery Fees as they accumulated; and Unit D
4916 Cecelia St.
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(c) Past due Community Benefit Fees and Cost Recovery Fees would be subject to a payment plan and require timely payments.
On February 1, 2023, the City’s Finance Department presented the Operator with a Letter of Agreement agreeing to a payment plan to forbear outstanding payment due on the DA (Attachment K). The Operator accepted the proposed terms on the same day which agreed to begin payments on March 1, 2023. The Operator also acknowledged and agreed “that the past due amounts stated are true and correct and are in fact presently due and owing. The parties agree that the Operator is in ‘default status’ on its obligations under its Development Agreement with the City.”
Between April and June 2023, the City notified the Operator with three (3) notices of delinquency (Attachment L) and provided an opportunity to cure outstanding payments due. However, the default on the Letter Agreement was not timely cured and therefore was terminated and no longer in full force and effect as of June 16, 2023. Accordingly, the total of all past due amounts at the time the Letter Agreement was terminated and an amount of $132,046.79 was due and owed.
On June 23, 2023, the City sent a Final Demand Letter (Attachment M) demanding the Operator to respond to the following demands: 1) Proof of the revival (or request for revival) of the LLC’s entity status with the California Secretary of State; 2) Forwarding payment for the total past due amounts and 3) Contact City staff for a meeting to revise the CCP’s Schedule of Performance and for further information to become compliant with the DA and CCP. The Operator did not respond in a timely manner and has failed to make any attempt to cure any defaults.
On August 9, 2023, the City issued Escrow Account Letters (Attachment N) requiring all cannabis operators to open an escrow account by September 15, 2023, to ensure payment of Cost Recovery Fees. As of the writing of this report, the Operator has not opened an escrow account nor made any payments into the account.
On October 12, 2023, the City issued to the Operator a Notice of Review Hearing (Attachment O) with the hearing date, time, and place.
On October 24, 2023, the City issued a letter (Attachment P) updating the Operator on their payment and fees related to the DA by correcting the amount due to an error in the total amount billed. The City provided a credit in the amount of fourteen thousand nine hundred fifty dollars and fifty cents ($14,950.50). As of the writing of this report, Operator owes the City one-hundred thirty thousand and six hundred eleven dollars and seventy-four cents ($130,611.74).
Community Benefit Fees, Cost-Recovery and Non-operating Fees plus penalties continue to accrue and the total amount due may be higher as of the date of the Review Hearing on November 14, 2023.
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DISCUSSION/ANALYSIS
Under Section 19 of the Development Agreement, if the “City finds and determines based on substantial evidence that, Owner or Landlord executing [the] Agreement, or successor in interest thereto, has not complied in good faith with the terms or conditions of the Agreement, City may terminate or modify [the] Agreement (except that no modification shall increase Owner’s liability nor reduce Owner’s rights).”
Pursuant to the CMC Section 5.20.080(6)(a), “[a]ny material violations of this chapter or any other relevant city law by a cannabis permittee, or cannabis permittee’s agent, is ground for suspending or revoking the relevant cannabis permit.” To suspend or revoke a cannabis permit the City Manager must determine “that the cannabis permittee has failed to comply with any conditions of approval, or any agreement or covenant.”
City staff recommends that the Hearing Officer review the material violations and evidence and make the following findings in support of finding the Operator to be in default of the DA18-016C and in violation of the conditions of approval for CCP18-0019.
Violation #1. Breach of Payment Obligations. Pursuant to the DA Article. 5.b (Community Benefit Fees), Article. 7.c (Operating Fees) and Article. 8 (Cost Recovery Fees), the Operator must pay the City an annual community benefit fee in the amount of $9,523.86 ($1,904.77 down payment and monthly payments in the amount of $761.91), a cost recovery fee, and an operating [or nonoperating] fee each year since 2018. The Operator is also obliged to make payments for these fees in Condition of Approval No. 45; the obligation for Non-Operating Fees is also repeated in Condition of Approval No. 37 for distribution activities. The Operator has not made the required timely payments and as of October 24, 2023, is past due in the amount of $130,611.74 as shown in Table 1 below. Past-due payments continue to accumulate, including late payment penalties.
The Operator must pay all required DA fees in accordance with DA terms. Failure to pay fees constitutes a breach of the DA and may result in suspension or immediate revocation of the DA.
Accordingly, the Operator is in breach of its payment obligation under DA No. 18-016C.
TABLE 1 – SUMMARY OF PAST AND CURRENT AMOUNTS DUE AS OF OCTOBER 24, 2023.
Fee Type Payment Amount Due
Community Benefit Program $43,047.90
Cost Recovery Fee $62,827.86
Non-operating Fee $20,726.58
Penalties (Late Payment) $4,009.40
TOTAL: $130,611.74
Finding 1. The Operator breached the terms of Development Agreement No. 18-016C by failing to make all required payments to the City that are required pursuant to the terms of Development Agreement No. 18-016C.
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Evidence: On June 5, 2018, Genius Distribution, LLC executed Development Agreement No. 18- 016C, which is a legally binding contract between the Operator and the City of Cudahy pursuant to DA Art. 5.b [Community Benefit Fees], Art. 7.c [Operating Fees] Art. 8 [Cost Recovery Fees].In December 2022, the City offered a deferment and payment plan option to the Operator which was accepted and the first payment was due on March 1, 2023. The Operator did not make a single required payment in March, April and May of 2023. The Operator did not cure the delinquency and as a result, the payment plan was null and voided on June 16, 2023. Proper notice of default was given with the opportunity to cure, but the Operator has failed to fulfill its monetary obligations owed to the City. This failure is a material breach of the DA and grounds for termination of the DA.
First, in the event that the Operator asserts that City Officials previously made representations that nonretail cannabis operators would not have to pay Non-Operating Fees – no such authority is granted under the CMC nor the Development Agreement.
Forgiveness of fees due to a government agency, if not for a public purpose, constitutes an unlawful gift of public funds in violation of Article XVI, Section 6 of the California Constitution.
The Operator has requested the City forgive Non-Operating Fees spanning the course of an 18- month period and has failed to provide any evidence that the forgiveness of this debt would somehow fulfill a public purpose.
Second, if the Operator asserts that it was unable to move forward with its project due to closures at City Hall caused by the COVID-19 pandemic, this argument would similarly fail. During the height of the pandemic, City Hall’s physical premises were closed to the public, however, the City continued to conduct business, and process requests, including applications for building permits which could be dropped off at the front of City Hall.
Third, if the Operator asserts that the Contested Fees are subject to the Mitigation Fee Act, such assertion is not supported by the law. The Contested Fees are a part of the Development Agreement entered into between the City and the Operator and was enacted via ordinance pursuant to Development Agreement Law (Gov. Code §§ 65864-65869.5). Fees imposed by development agreements are expressly exempt from the Mitigation Fee Act. Gov. Code § 66000(b) (“ ’Fee’ means a monetary exaction other than a tax or special assessment…but does not include…fees collected under development agreements adopted pursuant to Article 2.5 (commencing with Section 65864) of Chapter 4…”). Therefore, the Contested Fees are not subject to the Mitigation Fee Act.
Further, even if the Mitigation Fee Act was applicable to the Contested Fees, to properly contest the Contested Fees, the Operator would have been required to tender the required payment, in full and serve written notice to the City that informs the City that payment has been tendered under protest accompanied by a statement of facts.
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Gov. Code § 66020(a). However, such protests must be filed at the time of the approval of the development or within ninety (90) days of the imposition of fees. The City and Operator entered into the Development Agreement on June 5, 2018. The 90-day statute of limitations to protest such fees ended on September 3, 2023, and has Operator tendered payment in full as required by Government Code Section 66020(a). Therefore, any opportunity to protest under the Mitigation Fee Act has long since passed.
Fourth, if the issue is raised by the Operator, the holdings in Nollan v. California Coastal Commission and Dolan v. City of Tigard do not apply to the Contested Fees. Nollan, (1987) 483 U.S. 825; Dolan, (1994) 512 U.S. 374. The U.S. Supreme Court holding in Nollan requires exactions to (1) bear a nexus to the burdens imposed by development; and (2) substantially advance a legitimate state interest. The 5-4 U.S. Supreme Court decision in Dolan refines the second prong of the Nollan test and requires development conditions to have a “rough proportionality” to a proposed development’s impact. Dolan at p. 391.
However, the holdings in these cases are inapplicable to Contested Fees. Here, the Court notably limited the holding to adjudicative decisions, and not legislative decisions. Id., at p. 385; see also Lingle v. Chevron U.S.A., (2005) 544 U.S. 528, 547 (reaffirming that the rough proportionality requirement applies to adjudicative decisions and not legislative decisions), Leroy Land Development v. Tahoe Regional Planning Agency (1991) 939 F.2d 696, 698 (holding that separately negotiated agreements are not subject to an unconstitutional “takings” analysis because the agreements were entered into voluntarily, in good faith and supported by consideration). In consideration for those Contested Fees, Operator received a ten (10) year term with an option to renew for another ten (10) year term to operate a medicinal commercial cannabis facility.
Finding 2: The Operator has failed to comply with Conditions of Approval No. 1(a) and (b) of the CCP, which required the Operator to pay all City-issued invoices within 30 days of receipt thereof.
Evidence: The City approved Development Agreement No. 18-016C subject to Conditions of Approval, which are incorporated as part of Development Agreement No. 18-016C. Condition of Approval 1(b) provides that the Operator is required to pay all City-issued invoices within 30 days of receipt thereof. The City has sent the Operator regular monthly invoices since 2019 (Attachment Q). The current outstanding fees owed by the Operator have been owed to the City for longer than 30 days. Despite demand and after proper notice of default and the opportunity to cure the Operator has failed to cure its monetary obligations owed to the City.
Finding 3: Pursuant to Condition of Approval Nos. 37 and 45, the Operator, LLC’s failure to pay Non-Operating Fees due under the Development Agreement and all fees due under the Development Agreement, respectively, constitutes a cross-breach of Development Agreement No. 18-016C and is grounds for revocation of the Operator’s interest in the CCP for the Site.
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Evidence. Pursuant to the foregoing evidence, the Operator’s non-payment of fees due under the DA and grounds for revocation of the Operator's interest in the CCP for the Site.
Violation #2. Non-Compliance with State Law. The DA sets forth standard operating procedures as mentioned in DA Art. 4.a. [Facility Operations]. At all times, the operator must be a lawful entity.
Finding 4: The Operator is unable to lawfully operate the LLC due to the Suspended status with the Secretary of State and is therefore in breach of DA Art. 4.a.
Evidence: The City has learned that the Operator’s legal status as a California limited liability company, Genius Distribution LLC, is suspended. Attachment R shows the Certificate of Status with the Secretary of State of California dated October 31, 2023. The Certificate of Status for Genius Distribution, LLC states: “The above-referenced entity’s powers, rights, and privileges are suspended in California.” See, Rev. & Tax Code Sec. 23301. Despite notice of default and opportunity to cure, the Operator’s entity status remains “FTB/SOS” suspended by the California Secretary of State and, as such, the entity is unable to operate in the State of California.
A suspended business entity becomes essentially prohibited from legally operating within the State of California unless and until such suspended status is withdrawn. The consequences of this suspended status include, without limitation, the business entity being unable to sell, transfer, or exchange real property in California, as well as risking any contracts entered by the business entity during the time of suspension being voidable at the option of the other party.
See, e.g., Casiopea Bovet, LLC v. Chiang (2017) 12 Cal.App.5th 656, 662; City of San Diego v. San Diegans for Open Government (2016) 3 Cal.App.5th 568, 577. Additionally, the suspended business entity may lose its ability to prosecute or defend legal actions (i.e., file or defend lawsuits). See City of San Diego, supra, 3 Cal.App.5th at p. 577.
Violation #3. Breach of Conditions of Approval No. 51 (Time Limits) under CCP 18-0019. CCP Condition No. 51.A. states the approval decision for this CCP becomes effective upon the expiration of the 15-day appeal period following the approval decision, or when any appeals of the decision are finally resolved. The CCP effective date for the Development Agreement was June 20, 2018. No appeal was ever filed and thus CCP Condition No. 51.A.i sets a 90-day time limit from the effective date of the CCP for the Permittee to obtain a Zoning Clearance. CCP Condition No. 51A.ii sets a 90-day time limit from the effective date of the CCP for the Permittee to complete construction of Phase I, or until September 18, 2018. CCP Condition No. 51A.iii sets a 180-day time limit from the effective date of the CCP for the Permittee to complete all Tenant Improvements and construction and to obtain a Certificate of Occupancy from the City Building Department, or until December 17, 2018. The City Manager may grant an extension of time if the Permittee has made a diligent effort to implement the Project.
Finding 5: The Operator has not obtained a Zoning Clearance pursuant to Chapter 20.84 of the Administrative Record - Review Hearing for Genius Distribution, LLC Page 9 of 329 Page 1471 of 4584 “Serving The People” "Sirviendo A La Comunidad"
CMC, nor has the Operator applied for a building permit to complete tenant improvements or otherwise obtained a certificate of occupancy. Therefore, the Operator breached its conditions of approval for CCP18-0019 by failing to implement the Project within the time limits set forth in Conditions of Approval No. 51.
Evidence: The Operator has not provided the City with any evidence it has obtained a Zoning Clearance, completed construction of Phase I, completed all Tenants Improvements, or obtained a Certificate of Occupancy for the Site within the time limits set forth in Condition of Approval No. 51. Without an extension, the deadlines expired in 2019. The City has no record of any request by the Operator to the City Manager for an extension of time and there is nor is there evidence that the Operator has made diligent efforts to comply, such as submitting for a zoning clearance or submitting for a building permit plan check. Despite notice of default and opportunity to cure, The Operator remains in breach of its conditions of approval by failing to implement the Project within the time limits set forth in the Conditions for Approval No. 51.
NOTICE
Pursuant to Section 22 of the Development Agreement the City sent a Review Hearing notice via certified mail, and a courtesy email notice, to all concerned parties on October 12, 2023. The notice advised that the Review Hearing would be held on the hearing date at such location designated in Attachment O. Proof of certified mailing is provided in Attachment S.
ENVIRONMENTAL ANALYSIS
The action(s) have been assessed in accordance with the California Environmental Quality Act (CEQA) (Pub. Res. Code § 21000 et seq.) and the environmental regulations of the City. The Project is expected to be categorically exempt from the requirements to prepare additional environmental documentation per CEQA Guidelines Section 15321. Class 21 (Enforcement Actions by Regulatory Agencies) is applicable to “Actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issues, adopted, or prescribed by the regulatory agency or enforcement or a law, general rule, standard, or objective, administered or adopted by the regulatory agency.” Therefore, the action(s) are categorically exempt from the provisions of CEQA.
CONCLUSION
It is the City’s purpose and intent to regulate cannabis activities within the City in a responsible manner to protect the health, safety, and welfare of the residents of Cudahy and to enforce rules and regulations consistent with California Cannabis laws. Cannabis Operators with development agreements are obligated to comply with all provisions of the CMC, obligations of the DA and conditions of approval under the CCP. As discussed above and based on the evidence attached to this report, the Operator has failed to comply with their obligations despite being provided with ample notice and opportunities to achieve compliance. Therefore, staff recommends the Hearing Officer after independent review, consideration, analysis of staff’s report and the information presented, oral and written testimony by all parties and their witnesses, and the record as a whole – make a determination the Operator, Genius Distribution, LLC, has breached Administrative Record - Review Hearing for Genius Distribution, LLC Page 10 of 329 Page 1472 of 4584 “Serving The People” "Sirviendo A La Comunidad"
the terms and conditions DA No. 18-016C and recommend that the Planning Commission and City Council repeal Ordinance No. 678 and terminate DA18-016C and revoke their interest under CCP18-0019.
ATTACHMENT(S)
A. Ordinance No. 673
B. City Council Resolution No. 18-17
C. CCP18-0019 Conditions of Approval
D. Ordinance No. 678
E. Development Agreement No. 18-016C
F. Exhibit A-F of Development Agreement No. 18-016C
G. Correspondence Letter – Notice of Delinquency dated October 2, 2019 H. Correspondence Letter – Notice of Default dated May 4, 2021 I. Correspondence Letter - Notice of Missing DA Signatures dated September 2, 2021 J. Correspondence Letter – Notice of Cannabis Deferment and Payment Program dated December 7, 2022
K. Letter Agreement (Payment Plan) dated February 1, 2023 L. Correspondence Letter – April, May, and June Delinquency notices.
M. Final Demand Letter dated June 23, 2023
N. Correspondence – Notice of Escrow Account dated August 9, 2023 O. Notice of Review Hearing dated October 12, 2023
P. Correspondence – Notice of updated payment of fees dated October 24, 2023 Q. Invoices from 2019 to September 15, 2023
R. Certificate of Status dated October 31, 2023
S. Proof of certified mailing of Final Demand Letter
Administrative Record - Review Hearing for Genius Distribution, LLC Page 11 of 329 Page 1473 of 4584 ATTACHMENT A.
Ordinance No. 673
Administrative Record - Review Hearing for Genius Distribution, LLC Page 12 of 329 Page 1474 of 4584 ORDINANCE NO. 673
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY AMENDING TITLE 5 (BUSINESS LICENSES AND
REGULATIONS) AND TITLE 20 (ZONING) OF THE
CUDAHY MUNICIPAL CODE TO PROHIBIT CANNABIS
RETAILERS/DISPENSARIES CITYWIDE AND TO
ESTABLISH REGULATIONS AND A DISCRETIONARY
REVIEW PROCESS FOR THE ALLOWANCE OF
MEDICINAL-ONLY COMMERCIAL CANNABIS ACTIVITIES
(CULTIVATION, DISTRIBUTION, MANUFACTURING,
DELIVERIES, MICROBUSINESS, AND LABORATORY
TESTING) IN A SPECIFIED OVERLAY ZONE THROUGH A
DEVELOPMENT AGREEMENT
WHEREAS, in 1996, the California Legislature approved Proposition 215, also known as the Compassionate Use Act (the "CUA"), which was codified under Health and Safety Code Section 11262.5 et sec. and was intended to enable persons in need of medical marijuana for specified medical purposes, such as cancer, anorexia, AIDS, chronic pain, glaucoma and arthritis, to obtain and use marijuana under limited circumstances and where recommended by a physician. The CUA provides that "nothing in this section shall be construed or supersede legislation prohibiting persons from engaging in conduct that endangers others, or to condone the diversion of marijuana for non-medical purposes.";
WHEREAS, in 2004, the California Legislature enacted the Medical Marijuana Program Act (Health & Saf. Code, § 11362.7 et seq.)(the "MMP"), which clarified the scope of the CUA, created a state-approved voluntary medical marijuana identification card program, and authorized cities to adopt and enforce rules and regulations consistent with the MMP. Assembly Bill 2650 (2010) and Assembly Bill 1300 (2011) amended the MMP to expressly recognize the authority of counties and cities to "[a]dopt local ordinances that regulate the location, operation, or establishment of a medical marijuana cooperative or collective" and to civilly and criminally enforce such ordinances;
WHEREAS, the Federal Controlled Substances Act (21 U.S. C., § 801 et seq.) makes it unlawful under federal law for any person to cultivate, manufacture, distribute or dispense, or possess with intent to manufacture, distribute, or dispense marijuana.
Despite such federal prohibition, on August 29, 2013, the United States Department of Justice issued a memorandum (the "Cole Memo") stating that, notwithstanding the federal classification of marijuana as a schedule 1 controlled substance, jurisdictions that have legalized marijuana in some form are less likely to be subject to federal enforcement under the Controlled Substances Act if they have implemented strong and effective regulatory and enforcement systems to follow eight guiding principles: (1) preventing the distribution of marijuana to minors; (2) preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; (3) preventing the
Administrative Record - Review Hearing for Genius Distribution, LLC Page 13 of 329 Page 1475 of 4584 diversion of marijuana from states where it is legal under state law in some form to other states; (4) preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; (5) preventing violence and the use of firearms in the cultivation and distribution of marijuana; (6) preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; (7) preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and (8) preventing marijuana possession or use on federal property;
WHEREAS, in September 2015, the California State Legislature enacted, and Governor Brown signed into law three bills - Assembly Bill 243, Assembly Bill 266, and Senate Bill 643 - which together comprise the Medical Marijuana Regulation and Safety Act (the "MMRSA"). The MMRSA created a comprehensive dual state licensing system for the cultivation, manufacture, retail, sale, transport, distribution, delivery, and testing of medical cannabis;
WHEREAS, on August 22, 2016, the City Council of the City of Cudahy (the "City Council" of the "City") adopted Interim Urgency Ordinance No. 656U to establish a temporary moratorium on medical "commercial cannabis activities," as defined under the MMRSA, for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 661, on September 26, 2016;
WHEREAS, the MMRSA was renamed the Medical Cannabis Regulation and Safety Act (the "MCRSA") under Senate Bill 837 in June 2016, which also made substantive changes to the applicable state laws, which affect the various state agencies involved in regulating cannabis businesses as well as potential licensees; WHEREAS, on November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act ("AUMA") was approved California voters as Proposition 64 and became effective on November 9, 2016, pursuant to the California Constitution (Cal. Const., art.
II, § 10(a).). Proposition 64 legalized the nonmedical use of cannabis by persons 21 years of age and over, and the personal cultivation of up to six (6) cannabis plants. On November 14, 2016, the City Council adopted Urgency Ordinance No. 663 to prohibit outdoor personal marijuana cultivation and establish regulations and a permitting process for indoor personal marijuana cultivation;
WHEREAS, AUMA also created a state regulatory and licensing system j governing the commercial cultivation, testing, and distribution of nonmedical cannabis, and the manufacturing of nonmedical cannabis products. On January 9, 2017, Interim Urgency Ordinance No. 666 was adopted by the City Council to establish a temporary moratorium on nonmedical "commercial cannabis activities" for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 667, on February 27, 2017; Page2
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WHEREAS, on June 27, 2017, Governor Brown signed the Legislature-approved Senate Bill 94. SB 94 combined elements of the MCRSA and AUMA to establish a streamlined singular regulatory and licensing structure for both medical and nonmedical cannabis activities given that there were discrepancies between the MCRSA and AUMA. The new consolidated provisions under SB 94 is now known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA") to be governed by the California Bureau of Cannabis Control. MAUCRSA refers to medical cannabis as "medicinal cannabis" and nonmedical/recreational cannabis as "adult-use cannabis"; WHEREAS, on June 27, 2017, the as part of an Economic Development Ad Hoc Committee presentation on revenue-generating opportunities, commercial cannabis regulations and strategies were offered to and discussed by the City Council; WHEREAS, the City seeks to establish an overlay zone in the City in which certain medicinal-only commercial cannabis activities can be conducted in accordance with MAUCRSA and the City's police power under Section 7 of Article XI of the California Constitution;
WHEREAS, it is the purpose and intent of the City to regulate medicinal cannabis in a manner that is consistent with the Cole Memo and promotes the health, safety, and general welfare of the residents and businesses within the City, while limiting any negative impacts;
WHEREAS, the City intends to be on the forefront of groundbreaking research, science, innovation, and development of treatment for symptoms and cures in the field of medicinal cannabis, as scientific research, studies, and data have established that medicinal cannabis can help patients with a vast array of medical conditions; WHEREAS, the City desires to reduce the illegal market for cannabis while minimizing the chances of social harm and creating jobs and revenue for the City; and WHEREAS, nothing in this Ordinance shall be construed to allow persons to engage in conduct that violates the law, endangers others, causes a public nuisance, allows the illegal use or diversion of cannabis, or allows any activity relating to cannabis that is otherwise illegal under California state law, as amended.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUDAHY DOES ORDAIN AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein.
SECTION 2. Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 20.120 (Commercial Cannabis Overlay Zone), which shall read as follows:
Chapter 20.120 - Commercial Cannabis Overlay Zone.
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20.120.010 Definitions
For purposes of this Chapter 20.120, the following definitions shall apply:
"Commercial cannabis activities" mean the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products. ) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or j Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter, cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
"Cannabis product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients. "Day care center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
"Overlay Zone" means the commercial cannabis overlay zone, whose area and boundaries are attached to City Council Ordinance No. 673 as Exhibit "A" "MAUCRSA" means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, as may hereinafter be amended.
"Youth center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.
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20.120.020 Prohibitions.
Adult-use commercial cannabis activities and medicinal commercial cannabis activities, as both are described in state law, including, but not limited to MAUCRSA, are hereby prohibited unless otherwise allowed in this Chapter.
20.120.030 Overlay zone.
Medicinal commercial cannabis activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the Overlay Zone pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter
20.28 (Development Agreements). No such activities shall be permitted without a development agreement within or outside of the boundaries of the Overlay Zone.
The City may approve or deny such a development agreement in its sole and absolute discretion.
20.120.040 Particular restrictions for Atlantic Avenue.
Section 20.120.030 notwithstanding, no cannabis-related business shall be located within the Overlay Zone and on Atlantic Avenue with a storefront facing Atlantic Boulevard unless such business employs and effectuates a business model with a primary entertainment purpose.
20.120.050 Indoor Horticulture.
Indoor horticulture, excluding cannabis horticulture shall be permitted by-right within the Overlay Zone.
20.120.060 Prohibition on new schools, day cares, and youth centers in overlay zone.
The establishment of public or private schools providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center is prohibited within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone, is hereby prohibited, unless otherwise mandated under state or federal law. An existing public or private school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center located within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone shall be considered legal nonconforming, in accordance with Chapter 20.24 (Legal Nonconforming) of Title 20 (Zoning) of the Cudahy Municipal Code.
20.120.070 Temporary permits for local events - rights reserved.
The City reserves the right to issue temporary permits for onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair, district agricultural association event, or other similar event authorized under state law, which is located within the Overlay Zone, pursuant to the provisions of Subdivision (e) of Business and Professions Code Section 26200.
SECTION 3. Subsection (3)(p) of Section 20.64.090 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.64 (Residential Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
Administrative Record - Review Hearing for Genius Distribution, LLC Page 17 of 329 Page 1479 of 4584 (p) Schools, public and private, excluding schools providing instruction in kindergarten or any grades 1 through 12 located within 600 feet of a residential zone located within the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 4. Subsection (24) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(24) Day care centers, excluding those occupying any portion of the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 5. Subsection (49) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(49) Schools, colleges, and universities, accredited, including appurtenant facilities that offer instruction required to be taught by the Education Code of the state of California and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 6. Subsection (50) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(50) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 7. Subsection (46) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(46) Schools, colleges, and universities, accredited, including appurtenant facilities which offer instruction required to be taught by the Education Code of the state and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise
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SECTION 8. Subsection (47) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(47) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.
SECTION 9. Title 5 (Business License and Regulations) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 5.20 (Cannabis Permitting and Regulation), which shall read as follows:
Chapter 5.20 - Cannabis Permitting and Regulation.
5.20.010 Section Intent and Purposes.
The intent and purpose of this Chapter is to regulate Commercial Cannabis Activity (as defined below) in accordance with State Law (as defined below) to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law, including, but not limited to, MAUCRSA. The goals of this regulation for Commercial Cannabis Activity include:
(a) To comply with the goals and guidance set forth in the Cole Memo. (b) To minimize the size of the illegal market for Cannabis in the City and the surrounding regions.
(c) To create jobs, revenue, and economic growth for the City and its residents. (d) To enable law enforcement and regulators to have sufficient rights to inspect and audit Cannabis Permittees and take expeditious action against Cannabis Permittees who violate the requirements of this Chapter. (e) To minimize social harms which may arise from Cannabis including youth consumption or intoxicated driving.
(f) To regulate the manner of advertising and location of Cannabis Permittees such that public nuisance is minimized.
5.20.020 Definitions.
For purposes of this Chapter, the following definitions shall apply, unless the context clearly indicates otherwise:
(a) "Applicant" means an Owner seeking a Cannabis Permit pursuant to this Chapter.
(b) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every
Administrative Record - Review Hearing for Genius Distribution, LLC Page 19 of 329 Page 1481 of 4584 compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. Cannabis also means the separated resin, whether crude or purified, obtained from cannabis. Cannabis also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter 5.18, Cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
(c) "Cannabis Permit" means a permit issued by the City to conduct a Commercial Cannabis Activity, including, but not limited to a Cultivation Permit, Distribution Permit, Manufacturing Permit, Microbusiness Permit, Retail Delivery Permit, or Testing.
(d) "Cannabis Permittee" means a Person who holds a Cannabis Permit. (e) "Cannabis Product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.
(f) "City" shall mean the City of Cudahy.
(g) "City Coden means the City of Cudahy Municipal Code. (h) "City Manager" means the City Manager of the City of Cudahy. (i) "Cole Memo" means the August 29, 2013 United States Department of Justice memorandum offering guidance on federal enforcement priorities regarding Cannabis.
U) "Commercial Cannabis Activity(ies)" means the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of Cannabis and/or Cannabis Products. (k) "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of Cannabis.
(I) "Cultivation Permit" means a Cannabis Permit for the Indoor Cultivation of Cannabis in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to the particular Cultivation Permittee.
(m) "Cultivation Permittee" means an applicant who has applied for and has been issued a Cultivation Permit by the City pursuant to the terms and conditions of this Chapter.
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Administrative Record - Review Hearing for Genius Distribution, LLC Page 20 of 329 Page 1482 of 4584 (n) "Day Care Center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
(o) "Development Agreement" means an agreement adopted pursuant to the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter 20.28 (Development Agreements), which provides agreed upon community benefits to the City.
(p) "Distribution" means the procurement, sale, and transport of cannabis and cannabis products between persons authorized to engage in permitted commercial cannabis activities pursuant to this Chapter. (q) "Distribution Permit" means, with respect to a Distribution Permittee, a Cannabis Permit for Distribution in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to such Distribution Permittee.
(r) "Distribution Permittee" means a Person that has been issued a Distribution Permit by the City pursuant to the terms and conditions of this Chapter. (s) "Fully Enclosed and Secure Structure" means a space within a building or other structure which has a complete roof enclosure supported by connecting walls extending from the ground to the roof, which is reasonably secure against unauthorized entry, provides complete visual screening or is behind fencing or other features providing complete visual screening, and which is accessible only through one or more lockable doors and is inaccessible to minors. (t) "Good Cause" for purposes of refusing or denying a Cannabis Permit, for revoking a Cannabis Permit, or for refusing or denying a Cannabis Permit renewal or reinstatement means: (i) the Applicant has not obtained approval by the City Council of a Development Agreement setting forth the general terms for the operation of commercial cannabis activity or breaches a term or terms of a Development Agreement approved by the City Council pursuant to this Chapter; (ii) The Applicant or Cannabis Permittee has violated the terms, conditions, or provisions of this Chapter, of state law, of any regulations or rules promulgated pursuant to state law or this Chapter, any applicable local rules, regulations, or conditions placed upon its state license or Cannabis Permit; (iii) the licensed Premises have been operated in a manner that adversely affects the public health, safety, or welfare or the safety of the immediate neighborhood in which the Commercial Cannabis Activity is being conducted; (iv) the Applicant or Cannabis Permittee has knowingly made false statements, misrepresentations, or material omissions on an application form, renewal form, or other document submitted to the City; (v) the Applicant or Cannabis Permittee's criminal history does not indicate that the Applicant or Cannabis Permittee is of Good Moral Character or the Applicant or Cannabis Permittee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee. However, if the City has issued a Cannabis Permit to the Applicant or Cannabis Permittee, the City shall not consider any
Administrative Record - Review Hearing for Genius Distribution, LLC Page 21 of 329 Page 1483 of 4584 criminal history of the Applicant or Cannabis Permittee that was disclosed to or discovered by the City prior to issuance of the Cannabis Permit and is confirmed by the Applicant or Cannabis Permittee. For any criminal history that was not disclosed to or discovered by the City prior to issuance of a Cannabis Permit, or that arose after the issuance of the Cannabis Permit, the City shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the Applicant or Cannabis Permittee, and shall evaluate the suitability of the Applicant or Cannabis Permittee based upon such review. In determining which offenses are substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee, the City shall consider factors set forth in Business and Professions Code Section 26057; (vi) the Applicant or Cannabis Permittee is employing or allowing to volunteer any person whose criminal history indicates that such person is not of Good Moral Character; (vii) the Applicant or Cannabis Permittee fails to allow inspection by City officials of the security recordings, activity logs, business records, or other accessible records pertaining to the activities conducted on the applicable Premises; or (viii) the Applicant or Cannabis Permittee allows for Physician Services to be conducted on the applicable Premises. (u) "Good Moral Character" means having a personal history that demonstrates the propensity to serve the public in a manner that reflects openness, honest, fairness, and respect for the law and rights and well-being of others. In determining Good Moral Character, the following standards shall apply: (i) a judgment of guilt in a criminal prosecution or a judgment in a civil action shall not be used, in and of itself, as proof of an individual's lack of Good Moral Character.
Such judgment, however, may be used as evidence in the determination and when so used, the individual shall be notified and shall be permitted to rebut the evidence by showing that, at the current time, he or she has the ability to, and is likely to serve the public, in a fair, honest, and open matter, that he or she is rehabilitated, and/or that the substance of the former offense is not substantially related to the applicable Commercial Cannabis Activity; and (ii) a prior conviction where the sentence, including any term of probation incarceration, or supervised release is completed for the possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance, is not considered substantially related, and shall not be the sole ground for denial of a Cannabis Permit, except that any of the convictions set forth in Business and Professions Code Section 26057(b)(4), as may be amended, shall be deemed substantially related to applicable Commercial Cannabis Activity. (v) "Health and Safety Code" means the California Health and Safety Code, as amended from time to time.
(w) "Indoor" means within a Fully Enclosed and Secure Structure. (x) "Manufacture" or "Manufacturing" means to compound, blend, extract, infuse, or otherwise make or prepare a Cannabis Product from such blends, extractions, or infusions.
)
Administrative Record - Review Hearing for Genius Distribution, LLC Page 22 of 329 Page 1484 of 4584 (y) uManufacturing Permit" means a Cannabis Permit to Manufacture in accordance with the terms and conditions of this Chapter and the conditions of approval for the applicable Cannabis Permit issued to the particular Manufacturing Permittee.
(z) "Manufacturing Permittee" means a Person that has been issued a Manufacturing Permit by the City pursuant to the terms and conditions of this Chapter.
(aa) "Medicinal Permittee" means a Person who is issued a Cannabis Permit to engage in Commercial Cannabis Activity with respect to medicinal Cannabis in accordance with applicable City law and State Law, including MAUCRSA. (bb) "Microbusiness" means a commercial medicinal cannabis business facility of cultivation of medicinal cannabis on areas less than 10,000 square feet and also acts as a licensed distributor, manufacturer, and Delivery-only retailer, pursuant to State Law, including MAUCRSA. Microbusinesses shall not be open to the public for point-of-sale retail Cannabis sales.
(cc) "Microbusiness Permit" means a Cannabis Permit to establish and conduct a Microbusiness in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Microbusiness Permittee. (dd) "Microbusiness Permittee" means a Person who has been issued a Microbusiness Permit by the City pursuant to the terms and conditions of this Chapter.
(ee) "Outdoors" means any location within the City that is not within a Fully Enclosed and Secure Structure.
(ff) "Owner" means any of the following: (i) a Person with an aggregate ownership interest of 20% or more in the Person applying for a Cannabis Permit, unless the interest is solely a security, lien, or encumbrance; (ii) the chief executive officer of a nonprofit or other entity; a member of the boards of directors of a nonprofit; (iv) an individual who will be participating in the direction, control, or management of the person applying for a Cannabis Permit. (gg) "Permit Zone" means, with respect to a Person holding a Cannabis Permit, the overlay zone described in Cudahy Municipal Code Chapter 20.120 where such Cannabis Permit type is permitted to operate pursuant to a Development Agreement with the City.
(hh) "Person" includes any individual, entity, firm, co-partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
(ii) "Physician Services" means the consultation by a State-licensed physician of a patient with the possible recommendation by such physician of medicinal Cannabis for such patient.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 23 of 329 Page 1485 of 4584 OD "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 Cannabis Permittee applicant or Cannabis Permittee where the Commercial Cannabis Activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one Cannabis Permittee. (kk) "Retail Delivery" means the commercial transfer or delivery of Cannabis or Cannabis Products to a customer, patient, primary caregiver or Cannabis Permittee.
(II) "Retail Delivery Establishment" means a location where Cannabis or Cannabis Products are, either individually or in any combination, Delivered pursuant to State Law, including MAUCRSA. Retail Delivery Establishments shall not be open to the public for point-of-sale retail sales. (mm) "Retail Delivery Permit" means a Cannabis Permit to Deliver Cannabis and Cannabis Products to customers, patients, and primary caregivers in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Retail Delivery Permittee.
(nn) "Retail Delivery Permittee" means a Person that has been issued a Retail Delivery Permit by the City pursuant to the terms and conditions of this Chapter. (oo) "State" means the State of California.
(pp) "State Law" means all laws of the State of California, including, but not limited to, all rules and regulations adopted by State agencies and State regulatory entities, including subsequent amendments to such laws, rules, and regulations.
(qq) "State Medicinal license" means a State license for medicinal Commercial Cannabis Activities issued pursuant to State Law. (rr) "Testing" means the activities conducted by a Testing Laboratory. (ss) "Testing Laboratory" means an accredited laboratory, facility, or entity in the City that offers or performs tests of medicinal cannabis or medicinal cannabis products in accordance with State Law and City law:
(tt) "Testing Permit" means a Cannabis Permit for Testing the quality and makeup of Cannabis and Cannabis Products pursuant to the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Testing Permittee. (uu) "Testing Permittee" means a Person who has been issued a Testing Permit by the City pursuant to the terms and conditions of this Chapter. (vv) "Volatile Solvent" means a Class I Flammable liquid as defined by the National Fire Protection Association, including butane and propane. (ww) "Youth Center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to,
Administrative Record - Review Hearing for Genius Distribution, LLC Page 24 of 329 Page 1486 of 4584 private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.
5.20.030 Commercial Cannabis Activity Prohibited.
All Commercial Cannabis Activity within the City is prohibited except as permitted by this Chapter.
5.20.040 Certain Commercial Cannabis Activity Permitted. Medicinal Commercial Cannabis Activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the area set forth in the overlay zone/Permit Area illustrated in Exhibit "A" to City Council Ordinance No. 673 pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code,§ 65864 et seq.) and Cudahy Municipal Code Chapter
20.28 (Development Agreements). No such activities shall be permitted without a Development Agreement within or outside of the boundaries of such overlay zone.
The City may approve or deny such a Development Agreement in its sole and absolute discretion. The City Manager is authorized to develop and promulgate policies and procedures consistent with the intent and spirit of this Chapter concerning the applications, application process, including, but not limited to, the information required of Applicants, and application review procedures, which shall inform the administration and protocols to be used and followed by the City in the application and hearing processes.
5.20.050 Business standards.
Commercial Cannabis Activity within the City shall be in conformance with the standards set forth in this Section, in addition to those additional standards that may be imposed through negotiated Development Agreement. The City Manager is hereby authorized to formulate and impose additional Business Requirements applicable to Cannabis Permittees in furtherance of the public health, safety, and/or welfare.
(a) Commercial Cannabis Activity shall only be allowed upon application and issuance of a Cannabis Permit and a Development Agreement by the City in accordance with the criteria and process set forth in this Chapter and City Code. (b) Zoning and Land Use.
(1) Operation Near Schools, Day Cares, and Youth Centers. Following the enactment of this Chapter, no new Premises shall be established, developed, or operated within 600 feet of a Day Care Center, Youth Center, or public or private school providing instruction in kindergarten or any grades 1 through 12 that is in existence at the time the Cannabis Permit is issued. All distances shall be measured in a straight line, without regard to intervening structures, from the nearest point of the building or structure in which the Premises are, or will be, located to the nearest property line of those uses describe in this Subsection. The restrictions set forth in this Subsection shall not apply to Premises which operate within 600 feet of any Day Care Center, Youth Center, or public or private school
Administrative Record - Review Hearing for Genius Distribution, LLC Page 25 of 329 Page 1487 of 4584 providing instruction in kindergarten or any grades 1 through 12, if such Premises existed prior to the establishment of the applicable Day Care Center, Youth Center, or school that is located within 600 feet of such Premises.
(2) Co-Location. All Commercial Cannabis Activity shall fully comply with all l mandates set forth in State Law. To the extent not prohibited under State Law, a Cannabis Permittee may be located within the same unit of the same Premises or building, facility or real property parcel as another Cannabis Permittee.
(3) Development Agreement.
a) Prior to commencing operations, all Cannabis Permittees shall enter into a Development Agreement with the City.
b) All Premises shall be operated in accordance with the terms of the applicable Development Agreement for the specified parcel of real property (or sub-portion thereof) upon which the Premises is located. c) Except as specified, Commercial Cannabis Activities shall not exceed the square footage authorized pursuant to the applicable Development Agreement.
d) All Premises shall be located in the Permit Zone pursuant to the applicable Development Agreement.
(c) Commercial Cannabis Activity is allowed only within Fully Enclosed and Secure Structures that are inaccessible to minors.
(d) Signage for any business must be applied for through the City's Planning Division, which shall require review and approval prior to installation. Business identification signage shall be limited to that needed for identification only, and shall not contain any logos or information that identifies, advertises, or lists the services or the products offered. No Cannabis Permittee shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the Premises of the Cannabis Permittee or elsewhere including, but not limited to, the public right-of-way. (e) From any public right-of-way, there shall be no visible evidence of the consumption of any Cannabis Products. Commercial Cannabis Activity shall not adversely affect the health or safety of the nearby residents by creating dust, glare, heat, noise, smoke, traffic, vibration, odor or other impacts, and shall not be hazardous due to use or storage of materials, processes, products, or wastes. (f) Hours of operation limits, if any, shall be specified in terms mutually agreed upon in a Development Agreement.
(g) All Cannabis and Cannabis Products shall be kept in a secured manner during all business and nonbusiness hours.
(h) All Commercial Cannabis Activities shall operate within Premises that are compliant with all applicable State Laws and local laws.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 26 of 329 Page 1488 of 4584 (i) Cannabis Permittees must pay all applicable taxes pursuant to all federal, State, and local laws, including, but not limited to, fees relating to infrastructure improvements within the Permit Zone.
U) Cannabis Permittees shall provide sufficient odor absorbing ventilation and exhaust systems so that odors outside the applicable Premises are not a nuisance on any adjacent property of public right-of-way. Any violation of this Section shall be remedied within thirty (30) days of the Cannabis Permittee receiving notice of such violation.
(k) Cannabis Permittees shall utilize product and inventory tracking software and accounting software that is consistent with reasonable business practices within the industry and the seed-to-sale tracking software being developed by the State. (I) Except permitted in this Chapter, on-site smoking, ingestion, or consumption of Cannabis or Cannabis Products shall be prohibited on Premises. Except to the extent otherwise permitted pursuant to this Chapter, the entrance of the Premises shall be clearly and legibly posted with a notice indicating that smoking, ingesting, or consuming Cannabis, Cannabis Products or alcohol on such Premises is prohibited.
(m) Signage for all Premises shall be in compliance with the City's sign code and application for all signs must be submitted to the City's Planning Division and comply with its sign permitting protocol.
(n) Alcoholic beverages and tobacco shall not be sold, stored, distributed, or consumed on the Premises. Cannabis Permittees shall not hold or maintain a license from the State Department of Alcohol Beverage Control to sell alcoholic beverages, or operate a business that sells alcoholic beverages or tobacco with respect to the Premises. In addition, alcohol shall not be provided, stored, kept, located, sold, dispensed, or used on the Premises.
(o) Physician Services shall not be provided at any Premises. (p) The Premises shall fully comply with all applicable rules, regulations, and laws including, but not limited to, zoning and building City Codes, the City's business license ordinances, the Revenue and Taxation Code, the Americans with Disabilities Act, and MAUCRSA.
(q) Each Cannabis Permittee shall provide the City Manager, or the City Manager's designee, with the name, phone number, facsimile number, and email address of an on-site representative of such Cannabis Permittee to whom the City and the public can provide notice if there are any operational problems associated with such Cannabis Permittee's Premises. Each Cannabis Permittee shall make reasonable and good faith efforts to encourage residents and the public to call this representative to resolve any operational problems before any calls or complaints are made to the City or law enforcement. (r) All Cannabis Permittees must comply with the following security requirements:
(1) General Security Requirements.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 27 of 329 Page 1489 of 4584 a) Security cameras shall be installed and maintained in good working condition and used in a format approved by the City Manager. The cameras shall be in use 24 hours per day, 7 days per week. The areas to be covered by the security cameras include areas as determined by the City Manager, including, but not limited to, the area in which the primary Commercial Cannabis Activity occurs, e.g. the Cultivation area for a for a cultivator.
b) The Premises shall be alarmed with a reliable commercial alarm system that is operated and monitored by a security company or alarm business in a manner satisfactory to the City Manager.
c) Entrance to any storage areas shall be locked at all times and under the control of staff of the Cannabis Permittee.
d) The business entrance(s) and all window areas shall be illuminated during evening hours. The Applicant shall comply with the City's lighting standards regarding fixture type, wattage, illumination levels, shielding, etc., and secure the necessary approvals and permits, as necessary. e) All windows on the Premises shall be appropriately secured with all Cannabis and Cannabis Products securely stored.
f) Each Cannabis Permittee shall implement track and trace protocols, as noted above in this Section, in order to prevent diversion of Cannabis or Cannabis Products.
g) All waste and disposal containers shall be locked at all times and stored ins a secure area and, at all times, under the control of the Cannabis Permittee.
(2) Security Alarm Systems - Minimum Requirements.
a) Each Premises shall have a security alarm system installed by a licensed alarm company on all perimeter entry points and perimeter windows.
b) Each Premises must ensure that its location is continuously monitored. Premises may engage the services of outside vendors to fulfill this requirement, such as a private security firm.
c) Each Premises shall maintain up to date and current records and existing contracts on the Premises that describe the location and operation of each security alarm system, a schematic of security zones, the name of the licensed alarm company, and the name of any vendor monitoring the Premises.
(3) Lock Standards. At a minimum, all points of ingress and egress shall be secured with commercial-grade, non-residential door locks. (4) Video Surveillance Requirements.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 28 of 329 Page 1490 of 4584 a) Prior to exercising the privileges of a Cannabis Permit issued under this Chapter, an Applicant must install fully operational video surveillance and camera recording system. The recording system must record in digital format and meet the requirements outlined herein.
b) All video surveillance records and recording must be stored in a secure area that is only accessible to the management staff of the Cannabis Permittee.
c) Video surveillance records and recordings must be made available upon request to the City Manager or designee for a purpose authorized by this Chapter or for any other State or local law enforcement purpose. d) Video surveillance shall be held in confidence by all employees and representatives of the City Manager, except that the City Manager may provide such records and recordings to any State or local law enforcement agency for any purpose authorized under this Chapter for any State or local law enforcement purpose.
e) A sign shall be posted in a conspicuous place near each point of public access, which shall not be less than 12 inches wide and 12 inches long, composed of letters not less than one inch in height, stating that "All Activities Monitored by Video Camera" or "These Premises Are Being Digitally Recorded" or otherwise advising of all persons entering the Premises that a video surveillance and camera recording system is in operation and recording all activity as provided in this Section. f) The Premises shall utilize video surveillance equipment and a camera system that shall be remotely accessible by the City and Los Angeles County Sheriff's Department.
(5) Video Surveillance Equipment.
a) Video surveillance equipment shall, at a minimum, consist of digital or network video recorders, cameras capable of meeting the recording requirements described in this Section, video monitors, digital archiving devices, and a color printable capable of delivering still photos. b) All video surveillance systems must be equipped with a failure notification system that provides prompt notification to a Cannabis Permittee of any prolonged surveillance equipment interruption and/or the complete failure of the surveillance.
c) Cannabis Permittees are responsible for ensuring that all surveillance equipment is properly functioning and maintained so that the playback quality is suitable for viewing and the surveillance equipment is capturing the identity of all individuals and activities in the monitored Premises.
d) All video surveillance equipment shall have sufficient battery backup to support a minimum of four hours of recording in the event of a power outage.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 29 of 329 Page 1491 of 4584 (6) Placement of Cameras and Required Camera Coverage.
a) Camera placement shall be capable of identifying activity occurring within 20 feet of all points of ingress and egress and shall allow for the clear and certain identification of any individual and activities on the Premises.
b) All entrances and exits to the Premises shall be recorded from both indoor and outdoor vantage points.
c) The system shall be capable of recording all pre-determined surveillance areas in any lighting conditions. If the Premises has a medicinal cannabis cultivation area, a rotating schedule of lighted conditions and zero-illumination can occur as long as ingress and egress points to those areas remain constantly illuminated for recording purposes.
d) Areas where medicinal cannabis is grown, tested, cured, manufactured, or stored shall have a camera placed in the room facing the primary entry door at a height that will provide a clear unobstructed view of activity without sight blockage from lighting hoods, fixtures, or other equipment.
e) Cameras shall also be placed at each location where weighing, packaging, preparation, tagging activities occur, or other distribution preparation activities occur.
f) At least one camera must be dedicated to record the access points to the secured surveillance recording area.
(7) Location and Maintenance of Surveillance Equipment. a) Surveillance recording equipment must be housed in a designated, locked, and secured room or other enclosure with access limited to authorized employees, the City Manager or designee, Los Angeles County Sheriff's Department, as authorized by this Chapter, other State or local law enforcement purpose, and service personnel or contractors. b) Premises must keep a current list of all authorized employees and service personnel who have access to the surveillance system and/or surveillance system room on the Premises. Premises must keep a surveillance equipment activity log on the Premises to record all service activity, including the identity of all individuals performing services on system service, the service date and time, and the reason for such service to the surveillance system.
c) Off-site monitoring and video recording storage of the Premises by an independent third party may be authorized so long as standards exercised at the remote location meets or exceeds all of the standards applicable to onsite monitoring.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 30 of 329 Page 1492 of 4584 d) Each Premises located in a common or shred building must have a separate surveillance room/area that is dedicated to that specific Premises. The facility that does not house the central surveillance room is required to have a review station, printer, and map of camera placement on the Premises. All minimum requirements for equipment and security standards as set forth in this Section apply to such review station. (8) Video Recording Retention Requirements.
a) All camera views of all recorded areas must be continuously recorded 24 hours a day.
b) All surveillance recordings must be kept for a minimum of 30 days and be in a format that can be easily accessed for viewing. Video recordings must be archived in a format that ensures authentication of the recording as legitimately-capture video and guarantees that no alteration of the recorded image has taken place.
c) The surveillance system or equipment must have the capabilities to produce a color still photograph form any camera image, live, or recorded, of the Premises.
d) The date and time must be embedded on all surveillance recordings without significantly obscuring the picture. e) Time is to be measured in accordance with the official United States time established by the National Institute of Standards and Technology and the U.S. Naval Observatory at www.time.gov. f) After the 30-day surveillance retention schedule has lapsed, surveillance video recordings must be erased or destroyed prior to being discarded or disposed of for any other purpose. Surveillance video recordings shall not be destroyed if the Cannabis Permittee knows or should have known of a pending criminal, civil, or administrative investigation or any other proceeding sfor which the recording may contain relevant information.
(9) Other Records. All records applicable to the surveillance system and cannabis tracking system shall be maintained on the Premises. At a minimum, Premises shall maintain a map of the camera locations, directions of coverage, camera numbers, surveillance equipment maintenance activity log, user authorization list and operating instructions for the surveillance equipment.
(s) Audit. Each Cannabis Permittee shall maintain accurate books and records in an electronic format, which detail all revenues and expenses of the business, including, but not limited to, all assets and liabilities. On no less than an annual basis, or at any time upon reasonable request of the City, each Cannabis Permittee shall file a sworn statement detailing business activity during the previous 12-month period (or shorter period based upon the timing of the request). The statement shall include gross sales for each month and all
Administrative Record - Review Hearing for Genius Distribution, LLC Page 31 of 329 Page 1493 of 4584 applicable taxes and fees paid or due to be paid. On an annual basis, each owner and operator shall submit to the City a financial audit of the business's operations conducted by an independent certified public accountant. Each Cannabis Permittee shall be subject to a regulatory compliance review and financial audit as determined by the City Manager or designee. (t) Inspections. The City Manager, or designee, or Los Angeles County Sheriff's Department shall have the right to enter all Premises from time to time unannounced during a Cannabis Permittee's hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this Chapter, to inspect and copy records required to be maintained under this Chapter, or to inspect, view, and copy recordings made by security cameras, all without requirement for a search warrant, subpoena, or court order, and subject to appropriate fees, as specified in the Development Agreement, or adopted by the City.
5.20.060 Application and fee requirements.
(a) All applicants wishing to obtain a Cannabis Permit from the City shall file an application with the City upon a form approved by the City Manager and shall pay a permit application fee as established by the City. The fee may vary depending on the type of Cannabis Permit. The City Manager or designee may require and conduct background checks, as necessary, to process and evaluate Cannabis Permit applications.
(b) Prior to operating in the City, each Cannabis Permittee shall timely and fully pay all fees associated with the establishment of Commercial Cannabis Activity.
The fees shall be as set forth in the schedule and fees and charges established by the City Council, including, but not limited to, the following:
(1) Application fee for accepting a registration application, due and payable in full at the time an application is submitted;
(2) Processing fee for the cost to the City of processing an application and reviewing, investigating, and scoring each application in accordance with any evaluation system to determine eligibility for issuance of a Cannabis Permit, due and payable in full at the time a registration application is submitted;
(3) Permit issuance fee for the cost to the City of preparing a Development Agreement, Planning Commission and City Council review of the Development Agreement and the Cannabis Permit, and preparation and issuance of the Cannabis Permit, as authorized by the Cannabis Permit; (4) Amended registration fee for the cost to the City of reviewing amendments or changes to the registration form previously filed on behalf of an Applicant, due and payable in full at the time amendments or changes to any Cannabis Permit form is submitted to the City;
Administrative Record - Review Hearing for Genius Distribution, LLC Page 32 of 329 Page 1494 of 4584 (5) Permit renewal fee for the cost ot the City of processing an application to renew a Cannabis Permit, due and payable in full at the time application is made to renew a Cannabis Permit; and
(6) Any fees set forth in the applicable Development Agreement.
5.20.070 Permit conditions.
(a) A Cannabis Permit application may be denied and not awarded by the City if:
(1) The Applicant or the Applicant's agent(s) has made one or more false or misleading statements or omissions in the application or during the application process.
(2) The proposed Premises or Commercial Cannabis Activity at the Premises is not allowed by State Law or City law.
(3) The Applicant is not a legal representative of the proposed Cannabis Permittee.
(4) The Applicant or any of its officers, directors, owners, managers, or employees is under 21 years of age.
(5) The Applicant's facility or its location is in violation of any building, zoning, health, safety, or other provision of this Chapter or of any State or local law that substantially affects the public health, welfare, safety, or morals, or the facility or its location is not permitted in the proposed area, or the issuing or continuation of a Cannabis Permit would be contrary ro the public health, welfare, safety, or morals.
(6) The Applicant or any of its officers, directors, owners, managers, or employees has been sanctioned by the City, State, or any county for unauthorized cannabis activities or has had a registration revoked under this Chapter in the previous 3 years.
(7) The Applicant or the Applicant's agent(s) have engaged in unlawful, fraudulent, unfair, or deceptive business acts or practices. (8) The Applicant has not been or is not in good standing with the City related to other or previous business activities operated in the City. (9) The Applicant has not satisfied all requirement of this Chapter. (10) For Good Cause, as defined in this Chapter.
(b) A Cannabis Permit shall be awarded by the City to Applicants in accordance with the process established by the City Manager.
(c) Before a Cannabis Permit can be issued to an applicant, a Cannabis Permit fee must be paid to offset all related costs to the City, and the proposed Premises must pass all applicable inspections.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 33 of 329 Page 1495 of 4584 (d) Each Cannabis Permit is subject to the conditions of approval in the applicable Development Agreement for the parcel of real property upon which the Premises is located.
(e) Each Cannabis Permit is subject to any additional conditions that may be applied by the City at the time of issuance or renewal as necessary to properly regulate the applicable Commercial Cannabis Activities and to protect the public. (f) Each Cannabis Permittee shall execute a Development Agreement with the City to, among other things, fully reimburse the City for all fiscal impacts, costs, expenses, fees, and attorneys' fees incurred by the City related to the Cannabis Permit and the related Commercial Cannabis Activity of such Cannabis Permittee.
(g) Each Cannabis Permittee shall:
(1) Carry liability insurance in the amounts and types set by the City Manager or the City Manager's designee, and name the City as an additional insured on all such insurance policies.
(2) Execute an Indemnification Agreement prepared by the City that fully indemnifies the City for all liabilities associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activities, and any action taken by the Cannabis Permittee pursuant to this Chapter. Such indemnification may be set forth in the applicable Development Agreement.
(3) Defend the City, at the Cannabis Permittee's sole expense, in any action against the City or its agents, officers, officials, or employees associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activities, or any action taken by the Cannabis Permittee pursuant to this Chapter. The City may, at its sole discretion, participate in the defense of any such action, but such participation shall not relieve the Cannabis Permittee of its indemnification and reimbursement obligations. (4) Reimburse the City for all costs, expenses, fees, and attorney's fees incurred by the City related to any action against the City or its agents, officers, or employees associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activity, or any action taken by the Cannabis Permittee pursuant to this Chapter.
(h) A Cannabis Permittee shall keep the City and law enforcement updated with the names, addresses, and relevant criminal histories of the Applicant's Agents.
Relevant criminal histories shall include any drug-related or felony convictions, the nature of such offenses, and the sentences received for such convictions. (i) Transfer.
(1) Any Cannabis Permittee may not sell, transfer, pledge, assign, grant an option, or otherwise dispose of his or her ownership interest in the Commercial Cannabis Business authorized pursuant to the Cannabis Permit.
l
Administrative Record - Review Hearing for Genius Distribution, LLC Page 34 of 329 Page 1496 of 4584 (2) In order for a Cannabis Permittee to transfer its Cannabis Permit to any Person, such Cannabis Permittee must submit a transfer application to the City Manager or City Manager's designee. The City Manager or designee may create a transfer application and reasonable transfer application process, including mandatory fee, that Cannabis Permittees and the City must follow and pay for Cannabis Permit transfer requests. Each transfer request of a Cannabis Permit and the related transfer application is subject to the prior approval of the City Manager or designee. (3) Applicants for Cannabis Permits must show proof of lawful possession of the applicable location. Evidence of lawful possession consists of properly executed deeds of trust, leases, and other written instruments, as may be accepted by the City.
(4) The location shall only be the geographical area that is specifically and accurately described in executed documents verifying lawful possession.
No Cannabis Permittee is authorized to relocate to other areas or units within a building structure without first filing a change of location application and obtaining approval form the City regardless of any possessory interest or right to possession to such additional space. No Cannabis Permittee shall add additional contiguous units or areas, thereby altering initially-approved Premises without filing an application to modify the location on forms prepared by the City Manager, including any applicable processing fee.
(5) No Cannabis Permittee is authorized to sublet any portion of any Premises for any purpose unless all necessary forms and applications to modify the existing location to accomplish any subletting have been approved by the City.
(6) The City Manager shall develop and promulgate a process for the renewal of Cannabis Permits and the establish related fees, in accordance with applicable laws.
U) To the fullest extent permitted by law, the City does not assume any liability, and expressly does not waive sovereign immunity, with respect to any Commercial Cannabis Activities, or for the other activities of any Cannabis Permittee or for any other activities taking place at Premises. (k) Changing, Altering, or Modifying Location.
(1) After issuance of a Cannabis Permit, the Cannabis Permittee shall not make any physical change, alteration, or modification to the Premises that materially or substantially alters the location, production estimates, and/or usage of the location form the plans originally approved under the applicable Development Agreement, without the prior written approval of the City Council or designee. The Cannabis Permittee whose Premises are to be materially or substantially changed is responsible for filing an application with the City in order to obtain requisite approval.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 35 of 329 Page 1497 of 4584 (2) Material or substantial changes, alterations, or modifications requiring approval include, but are not limited to, the following: (i) an increase or decrease in the total physical size or capacity of the location; (ii) the sealing off, creation of or relocation of a common entryway, doorway, passage, or other such means of public ingress and/or egress, when such common entryway, doorway, or passage alters or changes limited access areas; or (iii) the installation or replacement of electric fixtures or equipment, the lowering of a ceiling, or electrical modifications made for the purpose of increasing power usage ..
(3) The City Council or designee may grant approval for the types of changes, alterations, or modifications described herein upon the filing of an application by the Cannabis Permittee and payment of any applicable fee, subject to any requisite amendments to the applicable Development Agreement. The Cannabis Permittee must submit all information requested by the City Council or designee including, but not limited to, documents that verify the following: (i) the Cannabis Permittee will continue to have the exclusive possession of the Premises, as changed, by ownership, lease, rental agreement, or other means, and sole control over all activities; and (ii) the proposed change conforms to any and all City restrictions related to the time, manner, and place of regulation of the applicable Commercial Cannabis Activity.
(I) To the fullest extent permitted by law, the City does not assume any liability, and expressly does not waive sovereign immunity, with respect to any Commercial Cannabis Activities, or for the other activities of any Cannabis Permittee or for any other activities taking place at Premises.
5.20.080 Enforcement and Appeals.
(a) Any Commercial Cannabis Activity within the City in violation of this Chapter is hereby declared to be unlawful and a public nuisance. (b) Any Person who willfully or knowingly (i) engages in a violation of this Chapter or (ii) owns, possesses, controls, or has charge of any parcel of real property in the City upon which a violation of this Chapter is maintained and who has actual knowledge of such violation ( or would have actual knowledge of such violation after a reasonable inquiry), shall be subject to the penalties and remedies provided by this Chapter.
(c) Any violation of this Chapter shall constitute a separate offense for each and every day the violation occurs or persists.
(d) Any Person in violation of any provision of this Chapter or who causes another Person to be in violation of this Chapter shall have committed a misdemeanor. In addition which shall be punishable by a fine of up to one thousand dollars ($1,000) for each violation and for each day the applicable violation continues to persist.
Administrative Record - Review Hearing for Genius Distribution, LLC Page 36 of 329 Page 1498 of 4584 (e) Any person in violation of any provision of this Chapter shall be punishable by an administrative fine of up to a $1,000 per offense.
(f) Any material violation of this Chapter or any other relevant City law or State Law by a Cannabis Permittee, or a Cannabis Permittee's agent, is grounds for suspending or revoking the relevant Cannabis Permit. In addition, the City Manager or the City Manager's designee may suspend or revoke a Cannabis Permit, disqualify an Applicant from the application process, or elect not to renew a Cannabis Permit if any of the following occur:
(1) The City Manager or the City Manager's designee determines that the Cannabis Permittee has failed to comply with this Chapter, any condition of approval, or any agreement or covenant as required pursuant to this Chapter.
(2) The Cannabis Permittee's Commercial Cannabis Activities cease for more than ninety (90) calendar days.
(3) Ownership of the Cannabis Permittee is changed without approval from the City.
(4) The licensed Commercial Cannabis Activity moves from the licensed Premises to a different, unauthorized location.
(5) The Cannabis Permittee fails to provide remote access to the security cameras to the City Manager, the City Manager's designee, or Los Angeles County Sheriff's Department, or fails to allow inspection of the security recordings, the activity logs, or of the Premises by authorized City officials.
(g) Any decision regarding the suspension or revocation of a Cannabis Permit, disqualification of an Applicant from the application process, or election not to renew a Cannabis Permit may be appealed to an independent neutral third-party administrative hearing officer appointed by the City Manager or the City Manager's designee (the "Hearing Officer"). Said appeal shall be made by a notice of appeal from the Person appealing within thirty (30) days from the date of the City's decision. The appeal shall be accompanied by a written verified declaration setting forth the basis for the claim that the City's decision was improper. The Hearing Officer's decision shall be final and binding upon the City and the appellant Cannabis Permittee or Applicant. Alternatively, the City Manager may provide for the appeal to be made to the City Council, in lieu of a hearing officer. In such case, the City Council's decision shall be final and binding upon the City and the appellant.
(h) These penalties and remedies are cumulative, and in addition to any other penalties and remedies available to the City.
5.20.090 State Medicinal License Requirement.
(a) Cannabis Permittees must obtain a State Medicinal License in accordance with State Law, including, but not limited, to the temporary and permanent State Medicinal Licenses provided for in MAUCRSA.