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RESOLUTION NO . 2018-R 014
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CULVER CITY, CALIFORNIA ESTABLISHING THE
MAXIMUM NUMBER OF PERMITS AND THE
PROCEDURES FOR THE APPLICATION AND SELECTION
PROCESS FOR COMMERCIAL CANNABIS STOREFRONT
RETAIL BUSINESSES
WHEREAS , pursuant to the provisions of the 2017 California Medicinal and Adult Use Cannabis Regulation and Safety Act ("MAUCRSA") , the City of Culver City is authorized to adopt ordinances that establish standards, requirements and regulations for the licensing and permitting of commercial medicinal and adult use cannabis activity; and
WHEREAS , on November 27, 2017 the City introduced an ordinance amending Title 11, "Business Regulations ", of the Culver City Municipal Code to add a new Chapter 11.17 "Commercial Cannabis Businesses", also referred to as the Culver City Commercial Cannabis Regulation and Safety Ordinance ("Commercial Cannabis Ordinance"), which was adopted on December 11, 2017 with an effective date of January 10, 2018 ; and
WHEREAS , Section 11.17.105 of the Commercial Cannabis Ordinance provides that the ma ximum number of each type of commercial cannabis business that will be permitted to operate in the City shall be established by Resolution of the City Council; and
WHEREAS , Section 11.17.110 of the Commercial Cannabis Ordinance provides that the procedures to gove rn the application process for issuance of Commercial Cannabis Business Permits shall be adopted by Resolution of the City Council, and that the Resolution shall authorize the City Manager to prepare the necessary forms, and adopt any necessary rules, regulations, and processes concerning the applications and the application process; and -1-
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WHEREAS , Section 11.17.115.A of the Commercial Cannabis Ordinance provides that the procedures that govern the selection process for the issuance of Commercial Cannabis Business Permits for storefront retail commercial cannabis businesses shall be adopted by Resolution of the City Council, and the process will include, among other requirements , a multi-stage screening and a public meeting where the public may comment on the proposed Retailer-Storefront commercial cannabis businesses , among others ; and
WHEREAS , Section 11.17.185 of the Commercial Cannabis Ordinance authorizes the City Manager to establish any additional rules, regulations and standards related to the issuance , denial, or renewal of Commercial Cannabis Business Permits , the ongoing operation and City's oversight of commercial cannabis businesses , or any other subject determined to be necessary to carry out the purposes of the Ordinance; and
WHEREAS , Section 11.17.200 of the Commercial Cannabis Ordinance provides that the hours of operation for a commercial cannabis business will be established by Resolution of the City Council.
NOW , THEREFORE, the City Council of the City of Culver City, California, DOES HEREBY RESOLVE:
SECTION 1. Any terms used is this Resolution shall have the same meaning as defined in the Commercial Cannabis Ordinance .
SECTION 2. The maximum number of storefront retail commercial cannabis businesses operating in the City at any one given time shall be three.
SECTION 3. The application process for the storefront retail Commercial Cannabis Business Permit is attached hereto as Exhibit A. The City Manager is authorized to prepare the necessary forms , and adopt any necessary rules, regulations and processes concerning the applications and the application process . -2-
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SECTION 4. The selection for storefront retail Commercial Cannabis Business Permittees is attached hereto as Exhibit B.
SECTION 5. Storefront retail commercial cannabis businesses shall open for business no earlier than 8 :00 a.m., and shall close each evening no later than 9 :00 p.m.
This Resolution shall take effect as of the date of its adoption . Approved and adopted this 12 day of February, 2018.
APPROVED AS TO FORM:
•
ATTEST :
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2018 - R014
Exhibit A: Culver City Cannabis Business Permit Application Process: Storefront Step 1
1. All responsible persons (owners and managers) of applicant submit Live Scan background checks to the California Department of Justice and FBI.
2. Applicant receives Zoning Verification from City, including verification of compliance with zoning and distancing from sensitive receptors.
3. Applicant submits Cannabis Business Application: Part, which will require a Business Plan, including detailed financial information, a Security Plan, and a Safety Plan, among other requirements, and Step 1 Fees to City.
4. Staff reviews and approves Application: Part 1.
5. Culver City Police Department receives, reviews, and approves background checks from California Department of Justice and FBI.
6. Applicants with successful background checks and completed and reviewed applications will be notified that they have been approved to proceed to Step 1(a). Applications that are incomplete or where responsible persons have failed background checks will be rejected.
7. Applicants pay the Step 1(a) fee.
Step 1(a)
1. Applications will be reviewed by a three person panel comprised of City staff members appointed by the City Manager. The three person panel will rank applications using a forced ranking system, with the average ranking determined for each applicant.
2. The panel will select a minimum of 3 and a maximum of 6 applicants with the highest average ranking to proceed to Step 1(b).
3. The other applications may be put on hold pending the outcome of the permitting process.
4. The City notifies the successful applicant that it is progressing. Applicant pays the Step 1(b) fee.
Step 1(b)
1. A five person review committee comprised of City staff members appointed by the City Manager conducts panel interviews with each remaining applicant. At least two of the three largest individual equity holders of the applicant as well as the highest level manager responsible for day -to-day operations at the Culver City location must be present at the panel interview.
2. Staff appointed by the City M anager will contact officials in jurisdictions where the applica nt has previously or currently operates or manages another business.
3. If feasible, staff appointed by the City M anager will conduct a site visit of another business currently operated or managed by the applicant.
4. The review commi ttee assi gns points to each applicant in various categories using established criteria.
For each applicant, the high and low scores are dropped. The scores given by the remaining three review committee members are averaged.
1 Exhibit A: Culver City Cannabis Business Permit Application Process: Storefront
5. The three applicants with the highest average scores are notified with a "Step 1(c) Approval Letter" to proceed to Step 1(c). In the event of a tie, a lottery is used to select which of the tied applicants progresses. The remaining applications are placed on hold pending the outcome of the permitting process.
Step 1(c)
l. Applicant applies for a Conditional Use Permit.
2. Applicant applies for Los Angeles County permits, including a Public Health Permit from the Los Angeles County Department of Public Health {LACDPH). Depending on modifications requested by the LACDPH, the applicant may need to submit modified plans to the City.
3. Applicant notices a public meeting with postings at its proposed site and mailed notices to all occupants and property owners within 2,500 feet of the proposed site, delivered at least 10 d ays p rior to the meeting.
4. The app licant holds a publ ic m eeting where the ap plicant presents its plans to the p ub lic. This meeting may also serve as the first required public meeting under the CUP process. At least two of the three largest individual equity holders o f the ap plicant as well as the highest level mana ger responsible for day -to -day operations at the Culver City location must be present at the p ublic meeting. The meeting is sp ecific to the individual applicant.
5. Applicant completes the CUP approval process, including Planning Com m ission appro val. Applicants with a successfully approved CUP and a Step 1(c) Approval Letter are allowed to proceed to Step 1(d).
Step 1(d)
l. At a pu b lic City Council meeting, the applicant will present its proposa l. City Co u ncil will either appro ve or deny a storefront -retail cann abis b usiness permit b ased on all information com piled throughout the ap plication process. City Counc il hearings for mu ltiple applicants may occur at the same meeting.
2. The City Coun cil will vote to app rove a p ermit, contingent on the successful com p letion o f the remaind er o f the approval process. The City will issue the applicant a "Step 2 Ap proval Letter".
Step 2
l. Applicant applies for Cul ver City Business Tax Certificate.
2. App licant applie s for all regularly required City permits (bu ilding pe rmits, sign permits, etc.)
3. LACDPH has notified the City that applicant is approved to mo ve forward w ith bu ild-out.
4. City issues "Step 3 Approval Letter" to app licant.
l. Applicant pays any regularly required building perm it fees.
2. Ap pl icant initiates and completes buildout, including any regularly requ ired City inspections, and any Co u nty inspections.
2 Exhibit A: Culver City Cannabis Business Permit Application Process : Storefront
3. LACDPH completes final site inspection.
4. Applicant submits Step 3 Fees.
5. Staff performs cannabis site inspection to ensure compliance with the cannabis business operating requirements in the Culver City Municipal Code. Successful completion of an inspection checklist will allow applicant to proceed to Step 4.
Step4
1. Applicant submits Annual Cannabis Business Permit fee.
2. City issues Cannabis Business Permit.
3. City issues Business Tax Certificate.
4. Applicant notifies LACDPH and receives its Public Health Permit, and any other required County permits.
5. Applicant may not operate in the City until its State Cannabis license is approved and received.
6. Applicant may open for business .
Applications on Hold
If an application is denied or a permittee withdraws, and an opening in an application step becomes available, the next highest scoring applicant from the most recent step may be offered the opportunity to proceed, at the discretion of the City Manager . If that applicant is no longer available or interested in proceeding, the next highest scoring applicant from the most recent step may be given the opportunity to advance, at the discretion of the City Manager. Once the City Council determines the number of Permits to be issued, up to the maximum, the City Manager will issue a notice that the permittee selection process has been completed and no further applications for cannabis storefront permits will be considered.
3 Exhibit B: Culver City Storefront Retail Cannabis Business Permit Application Selection Process Step l(a) Scoring Methodology
During Step 1(a) of the storefront retail cannabis business permit application process, applications will be reviewed and force ranked by each member of a three person panel comprised of City staff members, selected by the City Manager. In the forced ranking methodology, 1 will be the best application. The rankings of each applicant will be summed. The applicants with the lowest total score will progress.
Each member of the three person panel will focus his/her review a different part of the application.
However, reviewers will consider their specific section within the context of the application as a whole.
Reviewer
Reviewer One (such as Finance Director or his/her designee.) Reviewer Two (such as Police Chief or his/her designee.) Reviewer Three (such as CDD Director or his/her designee) Section Ranked
Business Plan
Security Plan
Design & Location
Reviewers may convene a team of City staff in order to evaluate applications before ranking.
Business Plan
The Business Plan will be evaluated based on the following criteria:
l. Assets and liabilities: size of assets compared to liabilities
2. Capitalization: size of capitalization
3. Three year pro-forma: assumptions made , supporting evidence and reasoning
4. Employee training plan: extent of training required, evidence of ability to execute 5 . Design of audit plan and electro nic record keeping: City's ability to access
6. Desig n of track & trace system: planning, detail and evidence of ability to execute
7. Experience of responsible persons: amount and relevance of previous experience Security Plan
The Security Plan will be evaluated based on the following criteria:
l. Employee security training: extent & frequency of training, evidence of ability to execute
2. Transactional security: number of relevant security measures
3. V isitor security: number of relevant security measures
4. Storag e security (24/7) including product and currency: number of relevant security measures
5. Delivery security (including pro duct and currency): number of relevant security measures
6. Ing ress and egr ess access: level of contro l
7. N umber, training, and qualifications of security personnel: number of security personnel, extent and frequency of training, and amount and relevance of qualifications Design & Location
The Desig n & Location will be evaluated based on the following criteria:
l. Floor & site plan
2. Proximity to sensitive receptors (including schools)
3. Parking availability
4. Exterior design and materials
5. Interior design and materials
6. Revitalization of site and neighborhood.
7. Signage plan
1 Exhibit B: Culver City Storefront Retail Cannabis Business Permit Application Selection Process Sample Forced Ranking Sheet
In this example, there are five applicants (A, B, C, D, E). The reviewer reads Application A first, at which point it is ranked 1. The reviewer next reads Application B, which it finds stronger than Application A.
Application B is ranked 1 and Application A is now ranked 2. The reviewer now reads Application C.
Applications A and Bare both stronger than Application C, so the reviewer ranks it 3. The method continues as described until all five applications are read, and applicants are ranked as follows, from best to worse: D, E, B, A, C.
Ranking Round Round 2 Round 3 Round 4 Rou nd 5
1 A B B D D
2 A A B E
3 C A B
4 C A
5 C
2 Exhibit B: Culver City Storefront Retail Cannabis Business Permit Application Selection Process Step 1(b) Scoring Methodology
During Step l(b) of the storefront retail cannabis business permit application process, a five (5) person review committee (comprised of City staff) selected by the City Manager will review each application, watch a public presentation conducted by each applicant, conduct an in-person interview with representatives from each applicant, review a report of interviews with local officials in jurisdictions where the applicant has previously operated a business, and, where feasible, a report from a site visit existing business operated by the applicant.
At least two of the three largest individual equity holders of the applicant as well as the highest level manager responsible for day-to-day operations at the proposed Culver City location must be present and actively participate at the panel interview. Extra points will be given to applicants where equity holders, owners and managers, rather than representatives (legal counsel, consultants, etc.), are engaged in the ma jority of the interview.
Each committee member will sum his or her score in each category to generate a total score for each applicant. For each applicant, the high and low scores are dropped. The scores given by the remaining three review committee members are avera ged. The applicants with the highest scores progress.
Scoring System
Applicants will be given a score in each category from 0-10.
Score Key
10: Applicant sets the bar for the industry for this criterion. 6-9: Applicant is above the minimum standard of acceptability for this criterion. 5: Applicant meets the minimum standard of acceptability for this criterion. 1-4: Applicant is below the minimum standard of acceptability for this criterion.
O: Applicant does not meet this criterion.
The multiplication factor is applied to each raw score by multiplying the two numbe rs.
Maximum Number of Points: 284
3 Exhibit B: Culver City Storefront Retail Cannabis Business Permit Application Selection Process Operational Experience
Maximum Number of Points: 130 (46%)
Raw Score Multiplica Total
(0-10) tion Points
Factor
1. Amount of experience operating a cannabis business. 2
2. Amount of experience operating a retail storefront. 2 3 . Knowledge of cannabis retail storefront business practices. 2
4. Applicant's history of compliance with local government 2 regulations, including record of interactions with other local government entities.
5. Evidence of historical tax compliance. 2
6. Knowledge of state and local regulations. 2
7. Extra Points (2 extra point/or each of the following): (0 or 2) a) Minority Owned Business Enterprise. 1
b) Woman Owned Business Enterprise. 1
c) Veteran Owned Business Enterprise. 1
d) Substantial, active participation in the interview by equity 1 holders/ owners/ managers.
e) Excellence of operation observed during site visit of 1 another business operated by applicant.
SUBTOTAL
4 Exhibit B: Culver City Storefront Retail Cannabis Business Permit Application Selection Process Design Elements
Maximum Number of Points: 110 (39%)
Raw Score Multiplication Total
(0-10) Factor Points
1. Exterior design. 2
2. Exterior materials. 2
3. Interior design. 2
4. Interior materials. 2
5. Signage . 2
6 . Extra Points (1 extra point for each of the following): (0-1) a) Pedestrian improvements . 2
b) Landscaping improvements . 2
c) Primary entrance faces street. 1
d) Incorporation of glass windows. 1
e) No significant blank walls. 1
f) Removal of pole signs. 1
g) Security screening not visible from exterior. 1
h) Excellence of design observed during site visit of 1 another business operated by applicant.
SUBTOTAL
5 Exhibit B: Culver City Storefront Retail Cannabis Business Permit Application Selection Process Community Engagement
Maximum Number of Points: 44 (15%)
1. Extent of pre-permit outreach/engagement with
neighborhood and community.
2. Plan for ongoing community outreach/engagement with
neighborhood and community.
4. Extra points (1 extra point for each of the following):
a) Security measures beyond minimum standards.
b) Planned partnership(s) with neighboring businesses.
c) Provision of parking above and beyond minimum
standards.
d) Record of community engagement, including reports
from officials in jurisdictions where applicant has operated another storefront retail business.
6 Raw Score Multiplication
(0-10) Factor
2 2
(0-1)
1 1
1 1
SUBTOTAL
TOTAL
Total
Points