Gardena City Council
October 8, 2024

At this time the final map is prepared to go before the City Council for final approval by the Public Works Department. Due to the late timeline, the map may be presented to the Council at its regularly scheduled meetings on either October 8th or October 22nd. If the final map is not submitted by the first October meeting, the approval of the tentative map will expire and b ecome void. Therefore, the applicant/property owners, represented by civil engineer Karl Riemer, are requesting an extension of 2 months, in order to guarantee the final map can get recorded before the expiration date of the tentative map.

PROJECT DESCRIPTION
The map calls for the subdivision of a single parcel to create two equal-sized lots each containing one (1) single family home and one (1) two- car garage, which is consistent with the neighboring properties.

At this time the applicant is requesting an extension of 2 months to the tentative map approval in order to allow for the final approval of the final map by City Council and have it recorded in accordance with the timeframes of the Subdivision Map Act. The applicant’s request does not include any modifications to the map that was approved originally by the Planning Commission.

As part of the request for an extension of time, the applicant has provided a statement as to the reasons for this request, which is attached hereto as Attachment A. In accordance with the Subdivision Title (17) of the Municipal Code a request for extension to a tentative map is subject to review and approval by the Planning Commission.

Staff has reviewed the reason for the extension of time by the applicant and recommends granting a 2 month extension of time.

ENVIRONMENTAL ASSESSMENT
The project is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant Guidelines Section 15061(b)(3) which exempts projects where it can be seen with certainty that the activity in question does not have a significant effect on the environment. The applicant’s request for a 2-month extension to a tentative map will allow the applicant to complete the subdivision map process and will not create any environmental effects.

ATTACHMENTS
Attachment A – Statement of Reasons for Extension of Time

PLANNING AND ENVIRONMENTAL

QUALITY COMMISSION
Regular PEQC Meeting Notice and Agenda
Website: www.cityofgardena.org
Tuesday, October 1, 2024 – 7:00 PM
Council Chamber at City Hall
1700 W. 162nd Street, Gardena, California

6. OTHER ITEMS

6.A THIRD REQUEST FOR EXTENSION
The Planning C ommission considered a request f or a t hird extension of time for Tentative Parcel Map No. 82410, to subdivide a 17, 221 square foot property at 15906 -15908 S. Manhattan Place creating two separate parcels in the Low-Density Multiple-Family Residential (R-2) zone. Requested Extension: 2-Months LOCATION: 15906-15908 S. Manhattan Place
APPLICANT: Nancy Hurt Canady) (Representative: Karl Reimer) Staff Report (15906-15908 Manhattan).pdf
Provided at the Meeting – Applicant Letter to Planning Commission

Commission Action: The Planning Commission approved a third request for an extension of time for Tentative Parcel Map No. 82410 (TM#1- 18), by a vote of 4- 0, granting an additional 2-month extension.

6.B 1818 West Redondo Beach Boulevard, the Tire House Progress Report As requested by the Planning Commission at the July 16, 2024, meeting, staff presented an update report on the Tire House Inc.’s progress with meeting the requirements of Site Plan Review #4-15.

Staff Report.pdf
Attachment A - September 5, 2024 Progress Photos.pdf
Attachment B - September 26, 2024 Progress Photos.pdf
Attachment C - PC Agenda Packet February 20, 2024.pdf
Attachment D - PC Agenda Packet April 16, 2024.pdf
Attachment E - PC Agenda Packet July 16, 2024.pdf

Commission Action: The Planning Commission motioned to postpone the adoption of the resolution for denial, to continue monitoring the business for three additional months, by a vote of 3 -1. The Planning Commission directed staff to bring a report of the applicant’s progress to the January 7, 2025, Planning Commission meeting.

FwwoOOMMewTaw
SentfrommyiPhone
Beginforwardedmessage:

From:StopBCHD<[email protected]>
Date:September23,2024at8:03:06AMPDT
To:[email protected],info<[email protected]>,[email protected], [email protected],[email protected],MHSOAC
<[email protected]>,”Cc:KevinCody“<[email protected]>, [email protected],GarthMeyer<[email protected]>, [email protected],EleanorManzano<[email protected]>, [email protected],[email protected],MinaSemenza <[email protected]>,[email protected],[email protected], [email protected],[email protected],[email protected], [email protected],[email protected], executiveoffice©bos.lacounty.gov,[email protected],[email protected], mayor©lacity.gov
Subject:PublicCommentAllAgencies:LACountySPA8HealthOutcomes Caution!Thismessagewassentfromoutsideyourorganization.

PublicComment
OnAugust15,2024,Gallupissuedapressreleasethatwasananalysisofhealth outcomesbasedona$400,000contractwithBeachCitiesHealthDistrict(BCHD).The Galluppressreleasedidnotprovideenoughofafactbasetovalidateitsresultsand despitesignficanttaxpayerfundingtoGallupbyBCHD,nofurtherdataorworkpaperswere available.

Asaresult,ourvolunteersundertookastudyofSouthBay,SPA8healthoutcomesand needs.Ourprimarydatasourcesarealldocumentedwithintheattachments.

SummaryResults
Differencesinhealthoutcomeswerefoundtobelargelyexplainedbydifferencesin incomelevelsamongsttheSPA8citiesthatLACountyDepartmentofPublicHealth (LACDPH)provideddatafor.Explanatorypowervaried,butingeneral70%to80%ofhealth outcomedifferencescouldbestatisticallyexplainedusinghouseholdincome 1 0R4L 00M
BeckyRomero
From: MinaSemenza
Sent Monday,September23,20248:38AM
To: CityClerkWeb
Subject: Fwd:PublicCommentAllAgencies:LACountySPA8HealthOutcomes levels(usingthetaxpayerfundedGallupdefinitionsofimportanthealthoutcomes includingObesity,DiabetesandSmoking).Thatsuggeststousthatforhealthequity,more directhealthservicesneedtobeinjectedintothelowerincomeCities.Attachment#1 goesintomoredetail.

MentalHealthcareProfessionalShortageAreas(M-HPSAs)tendtobeinthenortheastand southeastsectionsofSPA8.BCHDwasfundedtodeliverallcoveyouthservicestoallof SPA8,butwithaspecificemphasisondiverseareas.Wedidnotfindevidenceofany signficanteffortbyBCHDtodeliverallcovetotheyouthofSPA8M-HPSAs.Attachment #2goesintomoredetail.

DisadvantagedCommunitiesinSPA8aremorewidespreadthanM-HSPAsandalso representanincomecorrelation.DisadvantagedCommunitesalsodonotappeartobe aservicedeliverypriorityforBCHDwithitsallcovefunding.SeeAttachment#3for moredetail.

MedicallyUnderservedAreas/Populationsprovideapowerfulsnapshotofthestateof healthcareinSPA8.Theyarerelativelywidespreadandcouldserveasafocustargetfor Federal,State,CountyandBCHDallcovefundingandservices.SeetheminAttachment#4 formoredetail.

AllmeasuressuggestthatthewesterncoastalareasofSPA8andthePalosVerdes PeninsulaarewellservedcomparedtotherestofSPA8.

Wehopethatthisdocumented,detailedworkisabletoprovidelocalgovernmentswith supportforincreasedresourcesandalsohighlightsthedisparateneedsituationfor servicesandsupportinsideSPA8.

TheNeighborhoodTeam
StopBCHD.com([email protected])isaNeighborhoodQuality—of-LifeCommunity concernedaboutthequality-of-life,health,andeconomicdamagesthatBCHDs110—foot abovethestreet,800,000sqftcommercialdevelopmentwillinflictforthenext50—100 years.Ourneighborhoodshavebeenburdenedsince1960bythefailedSouthBayHospital projectandhavenotreceivedthebenefitofthevoter-approvedacutecarepublichospital since1984.Yetwestillsuffer100%ofthedamagesandwewillsuffer100%ofthedamages ofBCHDsproposal.
<4-MedicallyUnderservedAreasinSPA8.pdf>
<3—SB535DisadvantagedCommunitiesinSPA8.pdf>
<1—AnalysisofSouthBaySPA8HealthOutcomes.pdf>
<2—MentalHealthMHSAsinSPA8.pdf>
CONCERNED TAXPAYER GROUP SEEKS OVERSIGHT OF allcove BEACH CITIES ACTIVITY As a neighborhood taxpayer and advocacy group, we are very concerned about both MHSOAC’s lack of controls and evaluation of BCHD’s allcove program, as well as the potential misuse of our taxpayer funding. The results of the BCHD allcove program demonstrate a significant bias toward whiter, advantaged, higher income, less diverse communities. The BCHD program further exacerbating the disparity of services within SPA8.

OVERSIGHT BY MHSOAC AND BCHD IS LACKING REGARDING allcove BEACH CITIES Based on the allcove proposal evaluation criteria, areas of mental health provider shortages, disadvantaged communities, and targeted underserved groups such a LGBTQ+ and BIPOC were the primary objective of the allcove funding. Unfortunately, those objectives appear to have been ignored by BCHD in its allcove program delivery design, and MHSOAC appears to have failed in its oversight role of BCHD and protection of taxpayer funding.

allcove BEACH CITIES ENROLLMENT IS INEQUITABLE BASED ON INCOME, RACE, DISADVANTAGED

COMMUNITY STATUS, MENTAL HEALTH PROVIDER SHORTAGES AND DEMOGRAPHIC NEED The only plausible conclusion is that BCHD failed to target those factors that led to the creation of the Children and Youth Behavioral Health Initiative (CYBHI), failed to target those factors used to evaluate the BCHD allcove application, failed to target those factors in the funding agreement, and that MHSOAC failed in its oversight role of the programs and funding.

How else could 70.8% of the allcove enrollees have 190% of the income level, 63% the level of non- white residents, no mental health provider shortages, and no disadvantaged communities?

MENTAL HEALTH PROVIDER SHORTAGES DO NOT APPEAR CONSIDERED We have conducted a census tract analysis of Los Angeles County Service Planning Area 8 (SPA8) using HRSA.gov data. SPA8 is the service area for allcove Beach Cities and we determined based on program lack of performance that areas of mental health provider shortages have not been prioritized by BCHD based on current allcove results for SPA8.

Athens, Carson, Gardena, Harbor City, Hawthorne, Inglewood, Lawndale, Lennox, Rancho Dominguez, San Pedro, and Wilmington all contain one or more census tracts with shortages of mental health providers. Increasing services to areas with shortages of providers is a primary objective of the broader CYBHI initiative that provides the funding. Those communities represent only 12.9% of the allcove enrollees/participants per BCHD.

%<18 HH Income % Non-white % allcove Enrollment
SPA8 21.9% 93,058$ 70.8% 94.80% BCHD (HB/RB/MB) 23.5% 152,392$ 35.6% 54.30% The BCHD "4" (HB/RB/MB/Tor) 22.1% 129,316$ 52.7% 70.80% Disadv+Below Avg Target 24.2% 67,272$ 84.4% 10.10%

DEMOGRAPHICS, SOCIOECONOMICS, DISADVANTAGED COMMUNITIES, AND UNDERSERVED GROUPS DO NOT APPEAR CONSIDERED BROADLY WITHIN SPA8
To determine which SPA8 cities have the greatest need for allcove based on demographics, socioeconomics, disadvantaged communities and underserved groups, we gathered data for proxy measures of those community factors. The variables selected were based on their sources, relative similarity to the application evaluation criteria and their ease and consistency of acquisition across all the cities. They are Cal Enviro Screen/SB 535 disadvantaged community status, fraction of the city population under the age of 18 (a Census measure), percentage of non-white residents, and average household income.

DISADVANTAGED COMMUNITIES
Athens, Carson, Gardena, Harbor City, Hawthorne, Inglewood, Lawndale, Lennox, Rancho Dominguez, San Pedro and Wilmington are all disadvantaged communities by Cal Enviro Screen/SB 535 criteria.

Those communities represent only 12.9% of the allcove enrollees/participants per BCHD.

DEMOGRAPHIC NEED BASED ON RELATIVE SHARE OF COMMUNITY YOUTH The US Census metric for fraction of population under age 18 was available and of consistent quality across cities. Using the intersection of Mental Health Provider Shortage Areas and Disadvantaged Communities, we found that Athens, Harbor City, Hawthorne, Inglewood, Lawndale, Rancho Dominguez, and Wilmington all had youth populations above the average share for SPA8. By virtue of their lack of mental health providers, community disadvantage, and high population fraction of use, these seven communities qualify as priority prospects for allcove services and should receive a disproportionate share of services, effects, and expenditures. This group represents on 10.1% of the allcove enrollees/participants per BCHD data.

TRADITIONALLY UNDERSERVED GROUPS
US Census measures of gender preference and identity are not available currently. As a proxy, we used fraction of non-white population. Athens, Carson, Gardena, Hawthorne, Inglewood, Lawndale, Lennox, Long Beach, Rancho Dominguez, and Wilmington all rank above the average non-white % of SPA8 and should be considered priority prospects for BIPOC and other marginalized groups. This group represents on 12.4% of the allcove enrollees/participants per BCHD data.

ECONOMICALLY DISADVANTAGED COMMUNITIES
Household income was used to identify economic disparity among SPA8 communities. There is an enormous disparity in income levels between the wealthier coastal and Palos Verdes Peninsula communities and the rest of SPA8. The following communities all have household income below the SPA8 average: Athens, Avalon, Gardena, Harbor City, Hawthorne, Inglewood, Lawndale, Lennox, Long Beach, Rancho Dominguez, San Pedro and Wilmington. This group represents on 12.4% of the allcove enrollees/participants per BCHD data.

PRIORITY TARGETING IN THE allcove APPLICATION AND AGREEMENT The priority groups were set out in both the allcove application and agreement. Further, the intent of the program as stated in the application included: “Priority will be given to applicants serving communities with higher demonstrated need (e.g., mental health professional shortage areas, socio-economically disadvantaged communities, communities with populations of focus) or those which propose to reduce disparities between racial/ethnic/marginalized groups in the community.”

The only reasonable conclusion to draw based on the allcove Beach Cities results is that BCHD ignored the various factors of disparity and and inequity and provided the service primarily to higher income, better served, local areas without regard to appropriate targeting.

BCHD PERFORMANCE FOCUS IS ON WEALTHIER AND WHITER AREAS OF LA COUNTY SERVICE PLANNING AREA 8
BCHD is currently stating in a June 4, 2024 California Public Records Request (CPRA) response that allcove Beach Cities is servicing the following with allcove:

Further, BCHD highlights in its CPRA response “In addition, please find the attached slide that shows the allcove Beach Cities residents’ enrollment is 54.3% and with Torrance is 70.8% (September 2023.)”

WBLIC(Lo/mew£F2
Caution!Thismessagewassentfromoutsideyourorganization.

Hi,mynameisLuisMedel,IliveinGardenaatCrenshawandmarine.IwantedtoletyouknowaboutLine4fromGTran.

Duringtheafternoonsline4surpassesthecapacityofpeopleonthebus(majoritystudents)afterpassingGardenahigh. ltoldthebusdriver,"wowyouhavealotofstudents“,shesaidyeahit'sforthestudents.laskedherifshewastheonly busfortheafternoonshesaidyes.
ltoldhersorrybecauseIbelievesheneededananotherbussothatweweren'tstackedlikesardines.Ilatertoldher thatIbelievethatitseemedlikeadangertohaveabusfullofstudentsreallyclosetoeachotheronamovingbus.she toldmethatdotochangestoline2andaaddedondemandappforridesinthehopesthatpeoplewouldusethatthe numberofbusestoline4willremainlowtononexistent,butasofnowthatstudentshavegonetoline4atfull capacity.
laskedherifsheisgoingtothecouncilmeetinginordertofixtheproblem.Shetoldmethatyou(thecouncil)aremore likelytolistentothepubliccomparedtothebusdrivers.

KatherineRhee UNDewoKAL oOM/VIMA/lMTI
From: LuisMedel<|[email protected]>
Sent: Tuesday,October1,20243:25PM
To: PublicComment
Subject: "PublicComment"
City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 13.A
Section: DEPARTMENTAL

ITEMS - COMMUNITY

DEVELOPMENT
Meeting Date: October 8, 2024

TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE:

PUBLIC HEARING
: Consolidated Annual Performance and Evaluation
Report (CAPER) for the 2023-2024 Fiscal Year
COUNCIL ACTION REQUIRED:

Staff Recommendation: Open the public hearing, receive testimony from the public, allow three (3) minutes for each speaker, and close the public hearing.

Staff Recommendation for Motion:

Staff respectfully recommends that the Council
authorize staff to submit the FY 2023-2024 CAPER to the U.S. Department of Housing and Urban Development (HUD).

RECOMMENDATION AND STAFF SUMMARY:

The U.S. Department of Housing and Urban Development (HUD) requires that the City Council annually conduct a public hearing to allow for comments regarding the City’s Consolidated Annual Performance and Evaluation Report (CAPER) for each fiscal year. The CAPER is a federally required annual review of the City’s progress toward meeting the objectives specified in the City's five-year Consolidated Plan for use of Community Development Block Grant (CDBG) funds.

A public notice was published in the Gardena Valley News on September 11, 2024 to solicit public comments from interested citizens and invite them to the City Council meeting if they wish to comment on this item. In addition, the draft CAPER was available for public review for the required 15-day period from September 19, 2024 through October 3, 2024 at City Hall and on the City’s website.

FINANCIAL IMPACT/COST:

ATTACHMENTS:

Staff Report - CAPER 2023-2024.pdf
Gardena - 2023-2024 Draft CAPERv.10.8.24.pdf

APPROVED:
___________________________________
Clint Osorio, City Manager
City of Gardena
City Council Meeting
Agenda Item No. 13A
Department: Community Development
Meeting Date: October 8, 2024
CDBG CAPER FY23-24

AGENDA STAFF REPORT

AGENDA TITLE: PUBLILC HEARING , Regarding FY 2023-2024 Consolidated Annual Performance And Evaluation Report (Caper)

RECOMMENDATION:

Staff Recommendation: Open the public hearing, receive testimony from the public, allow three (3) minutes for each speaker, and close the public hearing.

Staff Recommendation for Motion: Staff respectfully recommends that the Council authorize staff to submit the FY 2023- 2024 CAPER to the U.S. Department of Housing and Urban Development (HUD).

BACKGROUND:

The U.S. Department of Housing and Urban Development (HUD) requires that the City Council annually conduct a public hearing to allow for comments regarding the City’s Consolidated Annual Performance and Evaluation Report (CAPER) for each fiscal year . The CAPER is a federally required annual review of the City’s progress toward meeting the objectives specified in the City's five -year Consolidated Plan for use of Community Development Block Grant (CDBG) funds. A public notice was published in the Gardena Valley News on September 11, 2024 to solicit public comments from interested citizens and invite them to the City Council meeting if they wish to comment on this item. In addition, the draft CAPER w as available for public review for the required 15 -day period from September 19, 2024 through October 3, 2024 at City Hall and on the City’s website.

DISCUSSION:

The City’s current 5- year Consolidated Plan covers the period from July 1, 2021 through June 30, 2026 . The Consolidated Plan provides HUD with a comprehensive assessment of the City’s housing and community development needs. The Plan outlines the City’s priorities, objectives, and strategies for the investment of CDBG funds to address these needs over a five-year period. While the Consolidated Plan establishes objectives and strategies, the Annual Action Plan identifies the specific activities that will use CDBG funds to achieve certain outcomes related to the established objectives , and the CAPER evaluates the accomplishments of the Annual Action Plan.

FY 2023-2024 CAPER Summary

For the 2023- 2024 program year, the City received $592,299 of CDBG funds. Combined with prior year unused funds and program income, totaling $650,000, the City’s formula grant allocation totaled $1,249,299. A total of $240,280.56 of these funds were used to meet the Action Plan goals, including funding for fair housing and landlord- tenant mediation services, services for low- and moderate-income persons, public facilities improvements and residential rehabilitation. Although considerable progress was made in both the Residential Rehabilitation Program and Community Center – Demolition Project, the bulk of expenditures and actual accomplishments will be completed and reported in FY2024- 2025. Remaining unused funds will be available to reallocate towards FY 2024-2025 eligible activities.

In addition, u nder the CARES Act, HUD provided special allocations of CDBG - Coronavirus (CV) funds to the City of Gardena. In total, the City received $901,984 of CDBG -CV funds to prevent, prepare for, and respond to the COVID -19 Pandemic. A total of $5 71,605.39 of CDBG-CV funds have been expended by the Emergency Rental Assistance Program, Small Business Assistance Program, and Emergency Food/Sustenance Assistance Program.

However, these CV -funded activities are no longer being implemented therefore, t he City will consider reallocating the balance of $3 30,378.61 in CDBG -CV funds to an eligible activity which will address the emergency service needs of Gardena residents in FY 2024-2025.

LEGAL REVIEW:

N/A

FISCAL IMPACT:

None

Submitted by: _______________________________________ Date: 10/2/2024

Attachment: FY 2023-2024 CAPER

Amanda Acuna, Community Development Manager

Community Development Block Grant
HOME Investment Partnerships Program

2023-202
4 Consolidated Annual

Performance and

Evaluation Report

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CITY OF GARDENA CAPER

P r e p a r e d b y :

T h e C i t y o f G a r d e n a
C o m m u n i t y D e v e l o p m e n t D e p a r t m e n t 1 7 0 0 W e s t 1 62 nd S t r e e t
G a r d e n a, C A 9 0 2 4 7
h t t p s : / / c i t y o f g a r d e n a . o r g / c d d h o m e p a g e /

CITY OF GARDENA CAPER

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CITY OF GARDENA - i - 2020 – 2021 CAPER

TABLE OF CONTENTS
CR-05 - Goals and Outcomes .................................................................................................................... 1 CR-10 - Racial and ethnic composition of families assisted ...................................................................... 5 CR-15 - Resources and Investments 91.520(a) ......................................................................................... 6 CR-20 - Affordable Housing 91.520(b) ...................................................................................................... 7 CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) .................................. 9 CR-30 - Public Housing 91.220(h); 91.320(j) ........................................................................................... 11 CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j) .................................................................................... 12 CR-40 - Monitoring 91.220 and 91.230 ................................................................................................... 15 CR-45 - CDBG 91.520(c) .......................................................................................................................... 16 CR-58 – Section 3 ……………………………………………………………………………………………………………………………. 28

APPENDICES

Appendix A – Public Notice................................ ................................ ................................ .......... A Appendix B – Summary of Citizen Participation Comments ................................ ........................... B Appendix C – IDIS PR26 Financial Reports ............................................................................. C

CITY OF GARDENA CAPER

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CITY OF GARDENA - 1 - CAPER

CR-05 - Goals and Outcomes
Progress the jurisdiction has made in carrying out its Strategic Plan and its Action Plan.

91.520(a)

This 2023-2024 Consolidated Annual Performance and Evaluation Report (CAPER) is the City of Gardena’s report to the U.S. Department of Housing and Urban Development (HUD) describing the use of federal Community Development Block Grant (CDBG) funds. The CAPER reports on the third Program Year of the 2021-2025 Consolidated Plan period, covering July 1, 2021 to June 30, 2026.

The City receives CDBG funds from HUD on a formula basis each year, and in turn, implements projects and activities in furtherance of the Consolidated Plan. The CDBG program generally provides for a wide range of eligible activities for the benefit of low - and moderate-income Gardena residents, as discussed below.

For the 2023-2024 program year, the City received $ 592,299 of CDBG funds . Combined with prior year unused funds and program income, totaling $650,000, the City’s formula grant allocation totaled $1,249,299. These funds were intended to be used to meet the Action Plan goals, including funding for fair housing and landlord-tenant mediation services, services for low- and moderate-income persons, public facilities improvements and housing rehabilitation. Although considerable progress was made in both the Residential Rehabilitation Program and Community Center – Demolition Project, the bulk of expenditures and actual accomplishments will be completed and reported in FY2024 -2025. Remaining unused funds will be available to reallocate towards FY 2024-2025 eligible activities.

Under the CARES Act, HUD provided special allocations of CDBG funds to the City of Gardena. In total, the City received $9 01,984 of CDBG-CV funds to prevent, prepare for, and respond to the COVID -19 Pandemic. A total of $5 71,605.39 of CDBG-CV funds has been expended by the Emergency Rental Assistance Program, Small Business Assistance Program, and Emergency Food/Sustenance Assistance Program. The City will consider reallocating the balance of $330,378.61 in CDBG-CV funds to an eligible activity which will continue to address the emergency service needs of Gardena residents in FY2024-2025.

Table 1 provides a summary of the proposed five-year and one -year accomplishments for the period ending June 30, 202 4, listed by each of the Strategic Plan Goals included in the 2021-2025 Strategic Plan of the Consolidated Plan.

CITY OF GARDENA - 2 - CAPER

Comparison of the proposed versus actual outcomes for each outcome measure submitted with the Consolidated Plan and explain, if applicable, why progress was not made toward meeting goals and objectives. 91.520(g)

Table 1 - Accomplishments – Strategic Plan and Program Year to Date Goal Category 2023-2024
Amount Indicator Unit of
Measure
5-Year Strategic Plan 2023-2024 Program Year 3
Expected Actual Percent
Complete Expected Actual Percent
Complete
Program
Administration)
Planning &
Administration

CDBG:
$98,450

Planning
Administration

Other

5 2

40.00%

1 1

100.00%
Fair Housing
Services

Affordable
Housing
Non-Homeless
Special Needs
CDBG:
$20,000

Fair Housing
Services
People
250 238 95.20% 188 188 100.00%
Services for Low &
Moderate Income
Persons
Homeless
Non-Homeless
Special Needs
CDBG:
$88,840
Public services
to help low-
income
residents.

People 100 205 205.00% 100 90 90.00%

CITY OF GARDENA - 3 - CAPER

Goal Category 2023-2024
Amount Indicator Unit of
Measure
5-Year Strategic Plan 2023-2024 Program Year 3
Expected Actual Percent
Complete Expected Actual Percent
Complete
Residential
Rehabilitation
Affordable
Housing

CDBG:
$385,009
Preserve the
supply of
affordable
housing

Housing Units

125

8 6.40%

10 0 0.00%
Public Facilities
Improvements
Non-Housing
Community
Development

CDBG:
$650,000
Improve Public
Facilities

People

8,900

0 0.00%

8,900

0 0.00%

CITY OF GARDENA CAPER

Assess how the jurisdiction’s use of funds, particularly CDBG, addresses the priorities and specific objectives identified in the Action Plan, giving special attention to the highest priority activities identified.

As shown in Table 1, the City and its housing and community development partners made significant progress toward achieving the 2023-2024 Program Year goals established in the Action Plan. Each of the CDBG funded activities addressed specific high priority objectives identified in the 2021-2025 Consolidated Plan.

The City of Gardena allocated CDBG funds to activities that affirmatively furthered fair housing choice, provided public services, preserved affordable housing and provided for the administration of the CDBG.

Each of the activities that were underway during the 2023-2024 Program Year are listed in Figure 1, including the amount of CDBG allocated to the activity and the amount spent as of June 30, 202 4. Figure 2 provides the numeric accomplishment goal and the amount accomplished as of June 30, 2024.

Figure 1 – Use of CDBG Funds
Strategic Plan Goal / Activity Source Allocation Spent through 6/30/24
Percent
Spent

1. Planning and Administration
Program Administration CDBG $98,450.00 $85,501.63 86.85% Subtotal $98,450.00 $85,501.63 86.85%

2. Fair Housing Services
Fair Housing Services CDBG $20,000.00 $20,000.00 100.00% Subtotal $20,000.00 $20,000.00 100.00%

3. Scvs for Low- & Mod-Inc Persons
Youth & Family Services Bureau CDBG $88,840.00 $40,312.61 45.38% Subtotal $88,840.00 $40,312.61 45.38%

4. Affordable Hsg Preserv & Access
Residential Rehabilitation Program CDBG $385,009.00 $61,869.75 16.07% Subtotal $385,000.00 $61,869.75 16.07%

5. Public Facilities Improvements
Community Ctr – Demo Phase Project CDBG $650,000.00 $32,596.57 5.01% Subtotal $650,000.00 $32,596.57 5.01%
Total for all Goals: $1,242,299.00 $240,280.56 19.34%

CITY OF GARDENA CAPER

Figure 2–Program Year Accomplishments by Strategic Plan Goal Strategic Plan Goal / Activity Unit of Measure Expected Actual Percent Accomplished

1. Planning and Administration
Program Administration Other 1 1 100.00%

2. Fair Housing Services
Fair Housing Services People 188 188 100.00%

3. Svcs for Low- & Mod-Inc Persons
Youth & Family Services Bureau People 100 90 90.0%

4. Affordable Hsg Preserv & Access
Residential Rehabilitation Program Housing Units 10 0 0.00%

5. Public Facilities Improvements
Community Ctr – Demo Phase Project People 8,900 0 0.00%

CR-10 - Racial and ethnic composition of families assisted Describe the families assisted (including the racial and ethnic status of families assisted).

91.520(a)
Table – Table of assistance to racial and ethnic populations by source of funds Race / Ethnicity CDBG
White 98
Black or African American 58
Asian 24
American Indian or American Native 0
Native Hawaiian or Other Pacific Islander 1
Other Multi-Racial 7
Total 188
Hispanic 74
Not Hispanic 114
Narrative
Table 2 provides an aggregate of race and ethnicity data for the combined number of people, families, households or housing units reported as complete during the Program Year based on accomplishment data from all CDBG activities reported in HUD’s Integrated Disbursement and Information System (IDIS).

CITY OF GARDENA CAPER

CR-15 - Resources and Investments 91.520(a)
Identify the resources made available

Table 2 - Resources Made Available
Source of Funds Resources Made Available in
the 2023-2024 Action Plan
Amount Expended During
Program Year
CDBG $1,242,299.00 $240,280.56

Narrative

The federal resources allocated in the 2023-2024 Action Plan for the implementation of projects are identified in Table 3. A grand total of $ 1,242,299.00 of CDBG funds were allocated to projects in the 2023-2024 Action Plan, and $240,280.56 of CDBG funds were expended. The remaining FY2023-2024 CDBG funds will be reallocated to 202 4-2025 projects and activities.

Identify the geographic distribution and location of investments

Table 3 – Identify the geographic distribution and location of investments Target Area
Planned
Percentage of
Allocation
Actual
Percentage of
Allocation
Narrative Description
CDBG Eligible Areas 38% 0% CDBG Eligible Areas
Citywide Area 62% 0% Citywide

Narrative
The City sought to disburse federal entitlement dollars strategically within low-and moderate- income (LMI) census tracts. No specific neighborhoods were targeted for expenditure of funds. Investments in services serving special needs populations and primarily low - and moderate-income persons continue to be made throughout the City. The City will evaluate each eligible project and program based on urgency of needs, availability of other funding sources and financial feasibility. Residential rehabilitation assistance will be available to income-qualified households citywide with an emphasis on distressed neighborhoods.

Leveraging
Explain how federal funds leveraged additional resources (private, state , and local funds), including a description of how matching requirements were satisfied, as well as how any publicly owned land or property located within the jurisdiction that were used to address the needs identified in the Action Plan.

CITY OF GARDENA CAPER

To address housing and community development needs in Gardena, CDBG entitlement grants are used to leverage a variety of funding resources to maximize the effectiveness of available funds. The CDBG public service activities leveraged private, state, and other federal funds to deliver services for low- and moderate-income people.

During the program year, the City did not identify and did not use any publicly owned land or property located within the jurisdiction to address the needs identified in the Consolidated Plan. The City does not currently own land or property that is suitab le for use in addressing the needs identified in the Consolidated Plan.

In addition, the City does not receive direct HOME funds and therefore, is not required to meet a matching requirement.

CR-20 - Affordable Housing 91.520(b)
Evaluation of the jurisdiction's progress in providing affordable housing, including the number and types of families served, the number of extremely low -income, low-income, moderate- income and middle-income persons served.

Table 4 – Number of Households
One-Year Goal Actual
Number of homeless households to be provided
affordable housing units 0 0
Number of non-homeless households to be
provided affordable housing units 10 0
Number of special-needs households to be
provided affordable housing units 0 0
Total 10 0

Table 5 – Number of Households Supported
One-Year Goal Actual
Number of households supported through rental
assistance 0 0
Number of households supported through the
production of new units 0 0
Number of households supported through the
rehab of existing units 10 0
Number of households supported through the
acquisition of existing units 0 0
Total 10 0

CITY OF GARDENA CAPER

Discuss the difference between goals and outcomes and problems encountered in meeting these goals.

As the City’s housing stock ages, a growing percentage of housing units may need rehabilitation to allow them to remain safe and habitable. The situation is of particular concern for low- and moderate-income homeowners who are generally not in a financial position to properly maintain their homes.

As such, the 2023-2024 Action Plan allocated $385,009 of CDBG funds for the preservation of owner-occupied single-family dwellings as part of the Residential Rehabilitation Program.

However, the City did not complete any projects in FY2023-2024 but approved and initiated six (6) projects that will be completed in FY2024-2025.

Discuss how these outcomes will impact future annual action plans.

The City anticipates continuing to invest in affordable housing preservation in addition to investing in projects that will create new affordable housing opportunities for low -income residents.

As community needs change the City may need to undertake additional activities to best achieve the City's ability to meet its affordable housing goals. All future Annual Action Plans will provide additional information on any on-going affordable housing activities and the City will continue to assess and determine affordable housing needs that best utilize available funding sources.

Include the number of extremely low-income, low-income, and moderate-income families or households served by each activity where information on income by family size is required to determine the eligibility of the activity.

Table 6 – Number of Families or Households Served
Number Served CDBG Actual
Extremely Low-Income 66
Low-Income 79
Moderate-Income 25
Total 170

Narrative Information
Although the City did not complete any rehabilitation projects in FY 2023-2024, to address what HUD defines as “worst case housing need” the City will continue to provide funds in FY 2024-2025 for the preservation of the physical and functional integrity of existing housing units occupied by low - and extremely low -income residents who would otherwise continue

CITY OF GARDENA CAPER

to live in substandard housing because they were not in the financial position to properly maintain their home.

Addressing substandard housing conditions through housing preservation activities is a cost- effective way to invest limited resources to retain housing units that are already affordable to low- and moderate-income residents and ensure all economic segments of the community have the opportunity to live in decent housing.

CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c)
Evaluate the jurisdiction’s progress in meeting its specific objectives for reducing and ending homelessness through:

Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
The City of Gardena is not the recipient of federal or state funds targeted to homeless individuals and families. However, the City of Gardena supported homeless and other special needs activities by continuing to allocate CDBG funds to support the Y outh and Family Services Bureau, which focus es their work on addressing homelessness and providing services to special needs populations.

Preventing and ending homelessness is a HUD priority addressed nationally through coordination of regional strategies carried out locally by government agencies and a wide variety of community -based organizations and faith -based groups. To reach out to unsheltered homeless persons and assess their individual needs for the purpose of connecting them with available emergency shelter and transitional housing resources, the City of Gardena provided information and referrals to the Los Angeles County Continuum of Care (CoC) led by the Los Angeles Homeless Services Authority (LAHSA) and the organizations receiving CDBG funds for homelessness prevention activities.

During LAHSA’s most recent homeless count in 2024, the City of Gardena had a total of 69 homeless persons counted. Of the 69 homeless persons counted, 9 were in cars, 6 had makeshift shelters, 12 were in RV’s/campers, 4 were in vans, 0 were in tents, and 38 were not in a dwelling.

The City will continue its efforts in the prevention and reduction of homelessness by supporting the LAHSA and its outreach programs and providing referrals to public assistance programs offered by the County. Additionally, the City will continue to use C DBG funds to fund its Youth and Family Service Program that provides various services to the homeless and those at risk of becoming homeless.

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Addressing the emergency shelter and transitional housing needs of homeless persons The ultimate solution to ending homelessness is transitional to permanent housing closely aligned with supportive services that ensure housing stability can be maintained. However, because the demand for affordable housing far outpaces the region’s supply, the CoC continues to rely on its emergency and transitional housing system in order, to address the immediate needs of Los Angeles County’s homeless population.

Los Angeles County has implemented policy and program changes aimed at ensuring homeless persons in Los Angeles County are rapidly housed and offered an appropriate level of support services to meet their circumstances and keep them stably housed. An incre ase in permanent supportive housing for the most vulnerable populations is attributed to Los Angeles County homeless service providers re-tooling their programs and shifting their focus to moving people quickly into permanent supportive housing throughout the County.

The City will continue its efforts in addressing the emergency shelter and transitional housing needs of the homeless by collaborating with agencies that provide shelter for the homeless. The City will also continue to fund its Youth and Family Services Pr ogram to address the homeless issue.

Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: likely to become homeless after being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); and, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs Inadequate discharge planning and coordination contributes to homelessness in situations where people are released from public institutions or public systems of care without having an appropriate mainstream or supportive housing option available upon disch arge from an institutional setting. Public institutions such as jails, hospitals, treatment facilities, mental health facilities, youth facilities, and foster care homes are central to limiting the creation of newly homeless persons upon discharge.

In California, discharge coordination and planning is largely unregulated unless county or municipal ordinances provide rules preventing public institutions from discharging people into homelessness. One of the goals included in the Los Angeles Ten Year St rategy to End Homelessness is to formalize protocols and improve the coordination of discharge planning among key institutional systems of care and supervision. The goal calls for the CoC to close the “revolving door” to homelessness so that new persons do not find themselves living in the community without the social and economic support necessary to access and maintain

CITY OF GARDENA CAPER

themselves in a safe environment.

The City will continue its efforts in helping low-income individuals and families avoid becoming homeless through its Youth and Family Services Program. The City will also provide referrals to public assistance programs offered by other agencies in the County.

Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the peri od of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again The City will continue its efforts in helping homeless persons make the transition to permanent housing and independent living by collaborating with agencies that provide shelter for the homeless. The City will also provide referrals to public assistance p rograms offered by other agencies to aid in preventing the recently homeless from becoming homeless again.

CR-30 - Public Housing 91.220(h); 91.320(j)
Actions taken to address the needs of public housing
The Gardena Housing Authority does not administer Section 8 and does not own HUD Public Housing; however, the City is within the service area of the Los Angeles Community Development Agency (LACDA), formerly known as the Housing Authority of the County of Los Angeles (HACoLA), for the purposes of Section 8 and Public Housing.

LACDA continues to serve the needs of residents through public housing and Section 8 vouchers. Specifically, the U.S. Census Bureau projects that the elderly in California will have an overall increase of 112 percent from 1990 to 2020. Los Angeles County mirrors this trend. To address the need for the growing senior population, in August of 2013, HUD approved LACDA’s application to designate 13 public housing senior developments as housing for elderly families only (62 years or older).

Actions taken to encourage public housing residents to become more involved in management and participate in homeownership
LACDA actively encourages residents to be involved in the organization through resident councils and active participation in housing authority decisions via surveys and other forms of engagement. LACDA also maintains quarterly newsletters for Section 8 ten ants, public housing residents, and Section 8 property owners.

CITY OF GARDENA CAPER

LACDA encourages residents to explore homeownership opportunities. LACDA currently administers Family Self -Sufficiency (FSS) program for public conventional housing and Housing Choice Voucher program residents. The FSS program provides critical tools and supportive services to foster a resident’s transition from financial and housing assistance to economic and housing self-sufficiency, most importantly homeownership.

To support this effort, LACDA utilizes marketing materials to outreach and further promote the program’s requirements and benefits to all public housing residents. For families that are eligible to participate, a Contract of Participation (COP) is prepared to govern the terms and conditions of their participation and an Individual Training Service Plan (ITSP) is created that outlines the following: supportive services to be provided, activities to be completed by the participant, and agreed upon completion dates for the services and activities. The COP is valid for five years and may be extended to allow the family to meet their ITSP goals.

Actions taken to provide assistance to troubled PHAs
N/A, LACDA is designated as a High Performing Public Housing Agency.

CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j)
Actions taken to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment. 91.220 (j); 91.320 (i) In the Housing Element Update, the City has established barrier removal goals, policies and programs. The following goals will be implemented:
• Remove or reduce governmental constraints on affordable housing development. • Continue efforts to streamline administrative procedures for granting approvals and permits.
• Review residential development standards, regulations, ordinances, review procedures and permitting fees related to the development of housing. Adjust, as appropriate, those that are determined to be a constraint to the development of housing.
• Encourage the use of density bonuses and provide other regulatory concessions to facilitate affordable housing development.
• Provide appropriate definitions and zoning designations in the Zoning Ordinance to allow and facilitate the development of housing for extremely low-income and special needs persons.
• Streamline the development process, particularly for affordable housing projects,

CITY OF GARDENA CAPER

which reduces the costs associated with holding on to land until it can be developed.

As part of the Governmental Constraints analysis for the Housing Element update, revisions to the Gardena were identified as appropriate to better facilitate the provision of a variety of housing types such as: emergency shelters, transitional housing, sup portive housing, and single-room occupancy (SRO) units.

Actions taken to address obstacles to meeting underserved needs. 91.220(k); 91.320(j) Efforts to address obstacles to meeting underserved needs included:
• The City obtained data from the Housing Authority of the County of Los Angeles on the number of Section 8 households assisted by race, ethnicity, age and disability status. The City will compare who is being served to the demographic characteristics of the community. In this way, the City can estimate more precisely underserved populations.
• The City encouraged and supported the efforts of the Housing Authority of the County of Los Angeles to seek additional Section 8 Housing Choice Vouchers. • The City encouraged and supported the efforts of non -profit housing development corporations to seek funding from federal, state and local sources for special needs housing.
• The City adopted a new ordinance that allows for the use of accessory structures as living units under certain conditions.

Actions taken to reduce lead-based paint hazards. 91.220(k); 91.320(j) The Residential Lead Based Paint Hazard Reduction Act of 1992 (Title X) emphasizes prevention of childhood lead poisoning through housing-based approaches. To reduce lead- based paint hazards, the City of Gardena's Residential Rehabilitation Program conducted lead-based paint testing and risk assessments for each property assisted that was built prior to January 1, 1978 and incorporated safe work practices or abatement into the scope of work as required to reduce lead-based paint hazards in accordance with 24 CFR Part 35.

Actions taken to reduce the number of poverty-level families. 91.220(k); 91.320(j) The City will continue to implement its strategy to help impoverished families achieve economic independence and self-sufficiency. The City's anti- poverty strategy utilizes existing County job training and social service programs to increase employment marketabil ity, household income, and housing options. As funds become available, the City will consider allocating CDBG funds to public service agencies that offer supportive services in the fight

CITY OF GARDENA CAPER

against poverty.

The City assists in reducing the number of persons living below poverty level by continuing to fund its Youth and Family Services Program that assist with making referrals to job skill training and educational resources that assist in obtaining employment opportunities.

Actions taken to develop institutional structure. 91.220(k); 91.320(j) The institutional delivery system in Gardena is high -functioning and collaborative — particularly the relationship between local government and the nonprofit sector comprised of a network of capable community -based organizations that are delivering a full range of services to residents.

To support and enhance this existing institutional structure, the City of Gardena collaborated with nonprofit agencies to ensure that the needs of low - and moderate -income residents were met as envisioned within the 2021-2025 Consolidated Plan - Strategic Plan.

Actions taken to enhance coordination between public and private housing and social service agencies. 91.220(k); 91.320(j)
To enhance coordination between public and private housing and social service agencies, the City continued consulting with and inviting a wide variety of agencies and organizations involved in the delivery of housing and supportive services to low - and moderate-income residents to participate in Gardena - particularly in low- and moderate-income areas.

Identify actions taken to overcome the effects of any impediments identified in the jurisdictions analysis of impediments to fair housing choice. 91.520(a) The City works with the Fair Housing Foundation to address the impediments identified in the report. One of the most common impediments to Fair Housing choice is discrimination towards race and familial status. The Fair Housing Foundation uses a diverse pool of skilled testers to investigate complaints. When an investigation is complete, each client is advised of the findings and available legal options. Referrals are made to the U.S. Department of Housing and Urban Development (HUD) for complaints regarding lending discrimination, to the Department of Justice (DOJ) for class action cases, to the State Department of Fair Employment and Housing (DFEH), Small Claims Court and to private attorneys for other matters as appropriate. The Fair Housing Foundation follows the desired legal path selected by the Complainant and mediates the situation if requested to do so. Legal training seminars are available to property owners as a means to educate them on Fair Housing regulations and requirements.

The City of Gardena’s goal is to ensure that all available avenues are maximized to make

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sure there are fair housing opportunities for all residents within the City.

CR-40 - Monitoring 91.220 and 91.230
Describe the standards and procedures used to monitor activities carried out in furtherance of the plan and used to ensure long -term compliance with requirements of the programs involved, including minority business outreach and the comprehensive planning requirements
This part describes the City’s compliance with the five monitoring requirements that are contained in 91.230. These requirements include topics such as standards and procedures and ensuring compliance with City housing codes.

1. Standards and Procedures - The City monitors each funded activity to ensure compliance with the CDBG regulations, national objectives, and subrecipient agreement. The City requires any sub -recipients to execute an agreement with specific performance measures prior to the release of funds. In addition, all records must be maintained for a five -year period. Pursuant to the CDBG contract, progress reports are required to be submitted quarterly. Staff conducts periodic site visits to ensure progra m records are in order and services are being provided in compliance with the sub -recipient agreements. The City further ensures compliance with the Strategic Plan and Action Plan by placing guidelines or conditions in its contracts with consultants that ensure implementation of the annual monitoring goals. All CDBG funds are disbursed on a reimbursement basis. Invoices must be submitted for payment and must include a description of activities being reimbursed. Audit reports are further required at the c lose of the year.

2. Monitoring of City’s Performance - The previously described Performance Measurement System will be used to monitor the City’s performance in meeting its goals and objectives as set forth in the Strategic Plan and Action Plan.

3. Ensuring Compliance with Planning and Monitoring Requirements - The City makes every effort to comply with all CDBG and Consolidated Plan regulations. The Citizen Participation Plan ensures input from the community prior to action to approve or amend the Consolidated Plan or Action Plan. Housing rehabilitation, construction and professional services agreements are prepared to guarantee compliance with applicable CDBG program regulations. CDBG subrecipient agreements also contain language consistent with the program regulations. Additionally, the City continues on-site monitoring of CDBG recipients and housing units assisted by State HOME funds and subject to occupancy and/or affordability covenants.

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4. Compliance with Housing Codes and On-Site Inspections - The City has established program guidelines for all its CDBG -funded housing rehabilitation programs. The program guidelines require an initial property inspection to evaluate the current condition of the property and to prepare of written scope of work that addresses all outstanding building code and health and safety identified issues.

5. Monitoring of Subrecipients - As previously described, the City requires that sub - recipients maintain all records for a five -year period. Progress reports are required to be submitted quarterly. Staff conducts periodic site visits to ensure program records are in order and services are being provided in compliance with the sub-recipient agreements.

Citizen Participation Plan 91.105(d); 91.115(d)
Describe the efforts to provide citizens with reasonable notice and an opportunity to comment on performance reports.

In accordance with the City’s adopted Citizen Participation Plan, a public notice was published in the Gardena Valley News on September 19, 2024, notifying the public of the availability of the Consolidated Annual Performance and Evaluation Report for a 15 -day public review and comment period. A copy of the public notice is included in Appendix A.

The draft CAPER was available from September 19, 2024, to October 3, 2024, on the City’s website and at Gardena City Clerk’s Office, Gardena City Manager’s Office, Gardena Human Services Division, Mayme Dear Memorial Library, and Nakaoka Community Center.

A public hearing was conducted before the City Council on Tuesday, October 8, 2024, to solicit comments from residents and interested parties. A summary of any written or oral comments received during the public hearing is included in Appendix B.

CR-45 - CDBG 91.520(c)
Specify the nature of, and reasons for, any changes in the jurisdiction’s program objectives and indications of how the jurisdiction would change its programs as a result of its experiences.

In review of the progress made toward accomplishing the goals established in the 20 21- 2025 Consolidated Plan – Strategic Plan during the program year, there is no need to change the program objectives or the projects and activities using CDBG funds.

CDBG funded activities are contributing significantly to the City’s progress toward meeting the high priority needs identified in the Consolidated Plan. As shown in Table 1 on page 2 of this document, CDBG funds are contributing to the Strategic Plan goals including fair housing

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services, services to low- and moderate income persons, owner occupied rehabilitation, and improvements to public facilities.

While considerable progress was made in both the Residential Rehabilitation Program and Community Center – Demolition Project, the bulk of expenditures and actual accomplishments will be completed and reported in FY2024-2025. Remaining unused funds will be available to reallocate towards FY 2024-2025 eligible activities.

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CR-58 – Section 3
Identify the number of individuals assisted and the types of assistance provided Table 7 – Total Labor Hours

Qualitative Efforts - Number of Activities by Program
Total Labor Hours CDB
G

HOME ESG HOPW
A
HTF
Total Number of Activities 0 0 0 0 0
Total Labor Hours
Total Section 3 Worker Hours
Total Targeted Section 3 Worker Hours

CDBG HOME ESG HOPWA HTF
Outreach efforts to generate job applicants who are Public Housing Targeted Workers
Outreach efforts to generate job applicants who are Other Funding Targeted Workers.

Direct, on-the job training (including apprenticeships).

Indirect training such as arranging for, contracting for, or paying tuition for, off-site training.

Technical assistance to help Section 3 workers compete for jobs (e.g., resume assistance, coaching).

Outreach efforts to identify and secure bids from Section 3 business concerns.

Technical assistance to help Section 3 business concerns understand and bid on contracts.

Division of contracts into smaller jobs to facilitate participation by Section 3 business concerns.

Provided or connected residents with assistance in seeking employment including: drafting resumes,preparing for interviews, finding job opportunities, connecting residents to job placement services.

Held one or more job fairs.

Provided or connected residents with supportive services that can provide direct services or referrals.

Provided or connected residents with supportive services that provide one or more of the following: work readiness health screenings, interview clothing, uniforms, test fees, transportation.

Assisted residents with finding child care.

Assisted residents to apply for, or attend community college or a four year educational institution.

Assisted residents to apply for, or attend vocational/technical training.

Assisted residents to obtain financial literacy training and/or coaching.

Bonding assistance, guaranties, or other efforts to support viable bids from Section 3 business concerns.

Provided or connected residents with training on computer use or online technologies.

Promoting the use of a business registry designed to create opportunities for disadvantaged and small businesses.

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Outreach, engagement, or referrals with the state one-stop system, as designed in Section 121(e)(2) of the Workforce Innovation and Opportunity Act.

Other.

Table 8 – Qualitative Efforts - Number of Activities by Program

Narrative
The City did not have any activities that required Section 3 reporting requirements.

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APPENDIX A
Public Notice

2023-2024

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2023 THROUGH JUNE 30, 2024

TO: Gardena Valley News DATE: September 11, 2024
FROM: City of Gardena
Publication Date: September 19, 2024

NOTICE OF COMMENT PERIOD AND PUBLIC HEARING
FOR THE DRAFT FY 2023-2024

CONSOLIDATED ANNUAL PERFORMANCE EVALUATION REPORTS (CAPER)

CITY OF GARDENA

PUBLIC NOTICE IS HEREBY GIVEN that pursuant to the U.S. Department of Housing and Urban Development (HUD) regulations, the City of Gardena has prepared a draft Consolidated Annual Performance Evaluation Report (CAPER) for the 2023 -2024 Fiscal Year. The draft CAPER will be available for public review and comment from September 19, 2024 through October 3, 2024.

The CAPER provides an assessment of the City's performance in using Community Development Block Grant (CDBG) funds in meeting the City’s housing and community development goals that were included in the 2023-2024 Annual Action Plan.

During the public comment period, the draft document is available for public inspection on the City’s website at www.cityofgardena.org, Gardena City Clerk’s Office, Gardena City Manager’s Office, Gardena Human Services Division, Mayme Dear Memorial Library, and Nakaoka Community Center. Copies may also be provided upon request by contacting Greg Tsujiuchi, Director of Community Development at (310) 217-9526.

PUBLIC NOTICE IS HEREBY FURTHER GIVEN that the City Council of the City of Gardena will conduct a public hearing on Tuesday, October 8, 2024, at 7:30 p.m. in the City Hall Council Chambers, 1700 W. 162nd Street, Gardena, California f or the purpose of 1) receiving public comment on the draft FY2023 -2024 CAPER report, and (2) approving the submission of the reports to the U.S. Department of Housing and Urban Development (HUD).

All interested persons may appear before the City Council at said hearing and will be given an opportunity to comment on the above -referenced item at the public hearing and any subsequent public hearings conducted related to the item . In addition, written comments may be submitted to the City Council prior to the hearing via U.S. Mail to the attention of City Clerk’s Office, City of Gardena, 1700 W 162nd Street, Gardena, CA 90247 or via email to [email protected]. Please reference the hearing title and date of the hearing in any correspondence.

If you wish to challenge the above item in court, the challenge will be limited only to those issues you or someone else raised at the public hearing in written correspondence delivered to the City at or prior to the public hearing as described in this notice. The City cannot be held responsible for U.S. Mail that is not received prior to the hearing.

Americans with Disabilities Act (ADA) : The City of Gardena, in complying with the Americans with Disabilities Act (ADA), requests individuals who require special accommodations to access, attend and/or participate in the City meeting due to disability, to please contact the City Clerk’s Office by email [email protected] at least 24 hours prior to the scheduled special meeting to ensure assistance is provided. Assistive listening devices are available.

Limited English Proficiency (LEP)
An interpreter for Limited English-speaking persons with Limited English Proficiency (LEP) can be made available at public hearing meetings. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements.

Spanish:

Si necesita más información sobre este aviso o la traducción de documentos en español, comuníquese con Greg Tsujiuchi al (310) 217-9526.

Korean:
이 통지 또는 한국어 문서 번역에 대한 자세한 정보가 필요한 경우 (310) 217-9526으로
Greg Tsujiuchi에게 문의하십시오.

Japanese:
この通知または日本語の文書の翻訳に関する詳細情報が必要な場合は、Greg
Tsujiuchi((310)217-9526)にお問い合わせください。

/s/ MINA SEMENZA

CITY CLERK

CITY OF GARDENA CAPER

APPENDIX B
Summary of Citizen Participation Comments

2023-2024

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2023 THROUGH JUNE 30, 2024

Summary of Citizen Participation Comments

In compliance with the City’s approved Citizen Participation Plan and implementing regulation 24CFR 91.105, a public notice was published (see attached proof of publication) to solicit public comments from interested citizens regarding the draft 2023-2024 CAPER. The draft CAPER was made available to the general public for a period of 15 days in order to provide an opportunity for the public to review the document.

The public hearing to solicit input and comment on the CAPER and the City’s performance during PY 202 3-2024 was held at the Gardena City Council Chambers at 1 700 W. 162md Street, Gardena CA. on October 8, 2024.

The following is a summary of Citizen Participation comments:
• TBD

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APPENDIX C
IDIS PR26 FINANCIAL REPORT

2023-2024

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2023 THROUGH JUNE 30, 2024

PR26 - CDBG Financial Summary Report
U.S. Department of Housing and Urban Development
Office of Community Planning and Development
Integrated Disbursement and Information System
DATE:

TIME:

PAGE: 1
11:18
10-02-24
Program Year 2023

GARDENA , CA
Metrics
Grantee
Program Year
PART I: SUMMARY OF CDBG RESOURCES
01 UNEXPENDED CDBG FUNDS AT END OF PREVIOUS PROGRAM YEAR 02 ENTITLEMENT GRANT
03 SURPLUS URBAN RENEWAL
04 SECTION 108 GUARANTEED LOAN FUNDS
05 CURRENT YEAR PROGRAM INCOME
05a CURRENT YEAR SECTION 108 PROGRAM INCOME (FOR SI TYPE) 06 FUNDS RETURNED TO THE LINE-OF-CREDIT
06a FUNDS RETURNED TO THE LOCAL CDBG ACCOUNT
07 ADJUSTMENT TO COMPUTE TOTAL AVAILABLE
08 TOTAL AVAILABLE (SUM, LINES 01-07)
PART II: SUMMARY OF CDBG EXPENDITURES
09 DISBURSEMENTS OTHER THAN SECTION 108 REPAYMENTS AND PLANNING/ADMINISTRATION 10 ADJUSTMENT TO COMPUTE TOTAL AMOUNT SUBJECT TO LOW/MOD BENEFIT 11 AMOUNT SUBJECT TO LOW/MOD BENEFIT (LINE 09 + LINE 10) 12 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION
13 DISBURSED IN IDIS FOR SECTION 108 REPAYMENTS
14 ADJUSTMENT TO COMPUTE TOTAL EXPENDITURES
15 TOTAL EXPENDITURES (SUM, LINES 11-14)
16 UNEXPENDED BALANCE (LINE 08 - LINE 15)
PART III: LOWMOD BENEFIT THIS REPORTING PERIOD
17 EXPENDED FOR LOW/MOD HOUSING IN SPECIAL AREAS
18 EXPENDED FOR LOW/MOD MULTI-UNIT HOUSING
19 DISBURSED FOR OTHER LOW/MOD ACTIVITIES
20 ADJUSTMENT TO COMPUTE TOTAL LOW/MOD CREDIT
21 TOTAL LOW/MOD CREDIT (SUM, LINES 17-20)
22 PERCENT LOW/MOD CREDIT (LINE 21/LINE 11)

LOW/MOD BENEFIT FOR MULTI-YEAR CERTIFICATIONS
23 PROGRAM YEARS(PY) COVERED IN CERTIFICATION
24 CUMULATIVE NET EXPENDITURES SUBJECT TO LOW/MOD BENEFIT CALCULATION 25 CUMULATIVE EXPENDITURES BENEFITING LOW/MOD PERSONS
26 PERCENT BENEFIT TO LOW/MOD PERSONS (LINE 25/LINE 24) PART IV: PUBLIC SERVICE (PS) CAP CALCULATIONS
27 DISBURSED IN IDIS FOR PUBLIC SERVICES
28 PS UNLIQUIDATED OBLIGATIONS AT END OF CURRENT PROGRAM YEAR 29 PS UNLIQUIDATED OBLIGATIONS AT END OF PREVIOUS PROGRAM YEAR 30 ADJUSTMENT TO COMPUTE TOTAL PS OBLIGATIONS
31 TOTAL PS OBLIGATIONS (LINE 27 + LINE 28 - LINE 29 + LINE 30) 32 ENTITLEMENT GRANT
33 PRIOR YEAR PROGRAM INCOME
34 ADJUSTMENT TO COMPUTE TOTAL SUBJECT TO PS CAP
35 TOTAL SUBJECT TO PS CAP (SUM, LINES 32-34)
36 PERCENT FUNDS OBLIGATED FOR PS ACTIVITIES (LINE 31/LINE 35) PART V: PLANNING AND ADMINISTRATION (PA) CAP
37 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION
38 PA UNLIQUIDATED OBLIGATIONS AT END OF CURRENT PROGRAM YEAR 39 PA UNLIQUIDATED OBLIGATIONS AT END OF PREVIOUS PROGRAM YEAR 40 ADJUSTMENT TO COMPUTE TOTAL PA OBLIGATIONS
41 TOTAL PA OBLIGATIONS (LINE 37 + LINE 38 - LINE 39 +LINE 40) 42 ENTITLEMENT GRANT
43 CURRENT YEAR PROGRAM INCOME
44 ADJUSTMENT TO COMPUTE TOTAL SUBJECT TO PA CAP
45 TOTAL SUBJECT TO PA CAP (SUM, LINES 42-44)
46 PERCENT FUNDS OBLIGATED FOR PA ACTIVITIES (LINE 41/LINE 45)

GARDENA , CA
2,023.00

1,541,294.00
592,299.00

0.00 0.00

0.00 0.00

0.00 0.00

0.00 2,133,593.00

134,909.31
(130.38)
134,778.93
105,501.63

0.00 0.00
240,280.56
1,893,312.44

0.00 0.00
134,909.31
(130.38)
134,778.93
100.00%

PY: 2023 PY: 2024 PY: 2025
134,909.31
134,909.31
100.00%

40,442.99

0.00 0.00
(130.38)
40,312.61
592,299.00

0.00 0.00
592,299.00

6.81%

105,501.63

0.00 0.00

0.00 105,501.63
592,299.00

0.00 0.00
592,299.00

17.81%
PR26 - CDBG Financial Summary Report
U.S. Department of Housing and Urban Development
Office of Community Planning and Development
Integrated Disbursement and Information System
DATE:

TIME:

PAGE: 2
11:18
10-02-24
Program Year 2023

GARDENA , CA
LINE 17 DETAIL: ACTIVITIES TO CONSIDER IN DETERMINING THE AMOUNT TO ENTER ON LINE 17 No data returned for this view. This might be because the applied filter excludes all data.

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Year
IDIS
Project
IDIS
Activity
Voucher
Number Activity Name Matrix
Code
National
Objective Drawn Amount
2023
2023
2023
2023

2022
2023
2023

2023

2023
2023
2023
2023
2023

Total
5 5
5 5
4 3
3 4
4 4
4 4
4 253
253
253
253
244
250
250
251
252
252
252
252
252
6894352
6907231
6907233
6927720
6907227
6862037
6894352
6927722
6862037
6883807
6894354
6907233
6927722
Community Center - Demolition Phase Project
Community Center - Demolition Phase Project
Community Center - Demolition Phase Project
Community Center - Demolition Phase Project

YOUTH AND FAMILY SERVICES BUREAU (COUNSELORS/AIDES)
Youth and Family Services
Youth and Family Services
Residential Rehabilitation Program
Residential Rehabilitation Program Administration
Residential Rehabilitation Program Administration
Residential Rehabilitation Program Administration
Residential Rehabilitation Program Administration
Residential Rehabilitation Program Administration
04 04
04 04
04 05Z
05Z
05Z
05Z
14A
14A
14H
14H
14H
14H
14H
14H
LMC
LMC
LMC
LMC
Matrix Code 04
LMC
LMC
LMC
Matrix Code 05Z
LMH
Matrix Code 14A
LMH
LMH
LMH
LMH
LMH
Matrix Code 14H
$11,213.58
$6,662.82
$10,000.00
$4,720.17
$32,596.57
$130.38
$28,944.01
$11,368.60
$40,442.99
$7,416.00
$7,416.00
$952.00
$14,904.50
$13,850.50
$12,520.25
$12,226.50
$54,453.75
$134,909.31
LINE 27 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 27 Plan
Year
IDIS
Project
IDIS
Activity
Voucher
Number
Activity to
prevent,
prepare for,
and respond
to
Coronavirus
Activity Name Grant Number Fund
Type
Matrix
Code
National
Objective
Drawn Amount
2022
2023
2023

Total
4 3
3 244
250
250
6907227
6862037
6894352
No
No
No
No

YOUTH AND FAMILY SERVICES BUREAU (COUNSELORS/AIDES)
Youth and Family Services
Youth and Family Services
Activity to prevent, prepare for, and respond to Coronavirus B22MC060577
B23MC060577
B23MC060577
EN
EN
EN
05Z
05Z
05Z
05Z
LMC
LMC
LMC
Matrix Code 05Z
$130.38
$28,944.01
$11,368.60
$40,442.99
$40,442.99
$40,442.99
LINE 37 DETAIL: ACTIVITIES INCLUDED IN THE COMPUTATION OF LINE 37 Plan
Year
IDIS
Project
IDIS
Activity
Voucher
Number Activity Name Matrix
Code
National
Objective Drawn Amount
2023
2023
2023
2023
2023

2023
2023
2023
2023
2023
2023
1 1
1 1
1 1
1 1
1 1
1 248
248
248
248
248
249
249
249
249
249
249
6862037
6883807
6894354
6907233
6927722
6862037
6883807
6894354
6907232
6927722
6945612
CDBG Program Administration
CDBG Program Administration
CDBG Program Administration
CDBG Program Administration
CDBG Program Administration
Fair Housing Services
Fair Housing Services
Fair Housing Services
Fair Housing Services
Fair Housing Services
Fair Housing Services
21A
21A
21A
21A
21A
21A
21D
21D
21D
21D
21D
21D
Matrix Code 21A
$4,256.50
$10,346.00
$31,836.75
$20,033.38
$19,029.00
$85,501.63
$8,674.90
$1,623.21
$3,312.99
$1,538.68
$2,776.45
$2,073.77
PR26 - CDBG Financial Summary Report
U.S. Department of Housing and Urban Development
Office of Community Planning and Development
Integrated Disbursement and Information System
DATE:

TIME:

PAGE: 3
11:18
10-02-24
Program Year 2023

GARDENA , CA
Plan
Year
IDIS
Project
IDIS
Activity
Voucher
Number Activity Name Matrix
Code
National
Objective Drawn Amount

Total
21D Matrix Code 21D$20,000.00
$105,501.63
PR26 - CDBG-CV Financial Summary Report
U.S. Department of Housing and Urban Development
Office of Community Planning and Development
Integrated Disbursement and Information System
DATE:

TIME:

PAGE: 1
9:55
09-19-24

GARDENA , CA
Metrics
New Grantee (CV)
PART I: SUMMARY OF CDBG-CV RESOURCES
01 CDBG-CV GRANT
02 FUNDS RETURNED TO THE LINE-OF-CREDIT
03 FUNDS RETURNED TO THE LOCAL CDBG ACCOUNT
04 TOTAL CDBG-CV FUNDS AWARDED
PART II: SUMMARY OF CDBG-CV EXPENDITURES
05 DISBURSEMENTS OTHER THAN SECTION 108 REPAYMENTS AND PLANNING/ADMINISTRATION 06 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION
07 DISBURSED IN IDIS FOR SECTION 108 REPAYMENTS
08 TOTAL EXPENDITURES (SUM, LINES 05 - 07)
09 UNEXPENDED BALANCE (LINE 04 - LINE8 )
PART III: LOWMOD BENEFIT FOR THE CDBG-CV GRANT
10 EXPENDED FOR LOW/MOD HOUSING IN SPECIAL AREAS
11 EXPENDED FOR LOW/MOD MULTI-UNIT HOUSING
12 DISBURSED FOR OTHER LOW/MOD ACTIVITIES
13 TOTAL LOW/MOD CREDIT (SUM, LINES 10 - 12)
14 AMOUNT SUBJECT TO LOW/MOD BENEFIT (LINE 05)
15 PERCENT LOW/MOD CREDIT (LINE 13/LINE 14)
PART IV: PUBLIC SERVICE (PS) CALCULATIONS
16 DISBURSED IN IDIS FOR PUBLIC SERVICES
17 CDBG-CV GRANT
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19 DISBURSED IN IDIS FOR PLANNING/ADMINISTRATION
20 CDBG-CV GRANT
21 PERCENT OF FUNDS DISBURSED FOR PA ACTIVITIES (LINE 19/LINE 20)

GARDENA , CA

901,984.00

0.00 0.00
901,984.00

571,605.39

0.00 0.00
571,605.39
330,378.61

0.00 0.00
571,605.39
571,605.39
571,605.39
100.00%

234,218.39
901,984.00

25.97%

0.00 901,984.00

0.00%
PR26 - CDBG-CV Financial Summary Report
U.S. Department of Housing and Urban Development
Office of Community Planning and Development
Integrated Disbursement and Information System
DATE:

TIME:

PAGE: 2
9:55
09-19-24

GARDENA , CA
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National
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8 232
233
234
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6726742
6796783
6863427
6615574
6615574
6796783
Emergency Rental Assistance Program (COVID-19)
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Emergency Rental Assistance Program (COVID-19)
Emergency Rental Assistance Program (COVID-19)
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05S
05S
05S
18A
05Q
05Q
LMH
LMH
LMH
LMH
LMH
LMA
LMC
LMC
$160,152.00
$13,616.00
$5,022.02
$30,265.00
$3,650.00
$337,387.00
$18,334.00
$3,179.37
$571,605.39
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Code
National
Objective Drawn Amount
2020
Total
6 8
232
234
6615574
6643580
6726742
6796783
6863427
6615574
6796783
Emergency Rental Assistance Program (COVID-19)
Emergency Rental Assistance Program (COVID-19)
Emergency Rental Assistance Program (COVID-19)
Emergency Rental Assistance Program (COVID-19)
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05S
05S
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05Q
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LMH
LMH
LMH
LMH
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LMC
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$13,616.00
$5,022.02
$30,265.00
$3,650.00
$18,334.00
$3,179.37
$234,218.39
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City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 13.B
Section: DEPARTMENTAL

ITEMS - COMMUNITY

DEVELOPMENT
Meeting Date: October 8, 2024

TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE:

INTRODUCTION OF ORDINANCE NO. 1875
, Amending Chapter 18.66 and
Section 18.36.020 and Adding Chapter 5.80 to the Gardena Municipal Code Relating to Non- Storefront Retail Medicinal Cannabis Delivery Service Businesses.

Environmental Determination
: The adoption of the ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) under the common sense exemption of CEQA Guidelines section 15061(b)(3).

COUNCIL ACTION REQUIRED:

Staff Recommendation: Open the public hearing, receive testimony from the public, allow three (3) minutes for each speaker, and close the public hearing.

Staff Recommendation for Motion: Introduce Ordinance No. 1875, find that the adoption of the Ordinance is exempt from the provisions of CEQA, and direct staff to file a notice of exemption.

RECOMMENDATION AND STAFF SUMMARY:

On September 18, 2022, Governor Newsom signed Senate Bill No. 1186 (SB 1186) into law, referred to as the Medicinal Cannabis Patients’ Right of Access Act, prohibiting cities from adopting or enforcing any regulation on or after January 1, 2024, that directly or indirectly prohibits the retail sale by delivery of medicinal cannabis in the City. In order to comply with the requirements of SB 1186, the City must consider amendments to Chapters 18.66 and Title 5 of the Gardena Municipal Code (GMC).

Ordinance No. 1875 has been drafted to make the
necessary amendments.

On August 20, 2024, the Planning Commission approved Resolution No. PC 16-24, by a vote of 3-1, recommending the City Council adopt Ordinance No. 1875 and amend GMC Chapter

18.66 and Section 18.36.020 under Title 18 (Zoning) and determination on the adoption of the ordinance to be exempt from the provisions of the California Environmental Quality Act (CEQA).

The Planning Commission did not make a recommendation as to the changes to Title 5 as those provisions are not within the purview of the Commission.

The City Council is being
asked to consider the adoption of Ordinance No. 1875, in its entirety.

FINANCIAL IMPACT/COST:

None.

ATTACHMENTS:

Staff Report.pdf
Attachment A - Planning Commission Resolution No. PC 16-24.pdf Attachment B - Ordinance No. 1875
Attachment C - State Regulations Excerpts.pdf

APPROVED:
___________________________________
Clint Osorio, City Manager
City of Gardena
City Council Meeting
Agenda Item No. 13B
Department: Community Development
Meeting Date: October 8, 2024
Ordinance No. 1875

AGENDA STAFF REPORT

AGENDA TITLE: INTRODUCTION OF ORDINANCE NO. 1875 , Amending Chapter 18.66 and Section 18.36.020 and Adding Chapter 5.80 to the Gardena Municipal Code Relating to Non -Storefront Retail Medicinal Cannabis Delivery Service Businesses.

Environmental Determination: The adoption of the ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) under the common sense exemption of CEQA Guidelines section 15061(b)(3).

RECOMMENDATION:

Staff respectfully recommends the City Council open the public hearing, receive testimony from the public, allow three (3) minutes for each speaker, and close the public hearing.

Staff Recommendation for Motion: Introduce Ordinance No. 1875, find that the adoption of the Ordinance is exempt from the provisions of CEQA, and direct staff to file a notice of exemption.

BACKGROUND:

On September 18, 2022, Governor Newsom signed Senate Bill No. 1186 (SB 1186) into law, referred to as the Medicinal Cannabis Patients’ Right of Access Act, prohibiting cities from adopting or enforcing any regulation on or after January 1, 2024, that directly or indirectly prohibits the retail sale by delivery of medicinal cannabis in the City. However, the Act allows cities to adopt or enforce reasonable regulations on the location and operation of medicinal cannabis delivery service businesses, also known as “non-storefront retailers,” within the City.

Gardena Municipal Code (GMC) Chapter 18.66 currently prohibits all cannabis activity in the City, except for personal cultivation within residential properties. This prohibition includes the delivery of cannabis to or from destinations within the C ity, including for medical purposes. As a result, the current Gardena Zoning Code does not comply with SB 1186. To comply with state law, the City must amend GMC Chapter 18.66 to lift the ban on the establishment of a physical location which would allow the retail delivery of medicinal cannabis to patients or caregivers within the City. Additionally, if the City’s intends to regulate the establishment of non- storefront retailers within the City, the Zoning Code must be amended to designate appropriate zoning areas for these businesses.

Ordinance No. 1875 has been drafted to comply with the requirements of SB 1186. The ordinance establishes that non-storefront retailers would be allowed within the Industrial (M -1)

and General Industrial (M -2) zones with a 600 -foot distance requirement from listed sensitive receptors. Additionally, the ordinance proposes to add a new chapter to GMC Title 5 (Business License and Regulations) to establish a regulatory permitting scheme and impose reasonable regulations.

On August 20, 2024, the Planning Commission approved Resolution No. PC 16- 24 (Attachment A), by a vote of 3 -1, recommending the City Council adopt Ordinance No. 1875 amending the GMC Chapter 18.66 and Section 18.36.020 of the Zoning Code, and determination on the adoption of the ordinance to be exempt from the provisions of the California Environmental Quality Act (CEQA) under the common sense exemption of CEQA Guidelines section 15061(b)(3). The Planning Commission did not make a recommendation as to the changes to Title 5 as those provisions are not within the purview of the Commission.

DISCUSSION:

In 1996, California voters approved Proposition 215, which legalized the use of medical cannabis in California. In 2015, a series of state laws known as the Medical Cannabis Regulation and Safety Act established a state regulatory and licensing scheme for medical cannabis businesses. In November 2016, voters approved Proposition 64, referred to as the Adult Use of Marijuana Act, which legalized the nonmedical use of cannabis. Under Proposition 64, adults 21 years of age or older can legally grow, possess and use cannabis for nonmedical purposes, with certain restrictions. Proposition 64 also established a state regulatory and licensing scheme for commercial adult-use cannabis businesses.

Senate Bill 94 was signed into law in 2017 which created a single regulatory scheme known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act to regulate both medical and non-medical cannabis. Under this law, the City retained local control and continued to prohibit all commercial cannabis activity within the City. Chapter 18.66 was previously amended to comply with state law to allow personal cultivation.

Senate Bill No. 1186 (SB 1186) - Medicinal Cannabis Patients’ Right of Access Act

SB 1186 prohibits cities from adopting or enforcing any regulation that prohibits the establishment of a business that allows the delivery of medicinal cannabis within the City to medicinal cannabis patients or their primary caregivers. These businesses will not be open to the public.

This legislation specifically states that a city cannot regulate the following with respect to medicinal cannabis delivery service businesses:
• Limit the number of businesses authorized to deliver medicinal cannabis in the city. • Limit the operating hours of medicinal cannabis businesses. • Limit the number or frequency of medicinal cannabis sales by delivery. • Limit the types or quantities of medicinal cannabis.
• Require the establishment of physical premises within the city.

However, the law does not prevent the City from adopting or enforcing reasonable regulations on non-storefront retailers of medicinal cannabis related to:
• Zoning requirements.
• Security or public health and safety requirements.
• Licensing requirements.
• Imposing or collecting applicable state or local taxes on retail sales of medicinal cannabis occurring within the city.
• Regulations consistent with requirements or restrictions imposed on cannabis businesses by state law or regulations issued by the California Department of Cannabis Control.

Additionally, cities may continue to enforce prohibitions on all other aspects of medicinal cannabis including cultivation, manufacturing, testing and sales. The legislation also does not impact cities’ local control over non-medicinal cannabis businesses.

In order to comply with the requirements of SB 1186, the City must consider amendments to Chapters 18.66 and Title 5 of the Gardena Municipal Code. The City’s licensing requirements will be in addition to S tate law requirements . Excerpts from the State regulations relating to cannabis businesses are included as Attachment C.

LEGAL REVIEW:

Staff from the City Attorney’s Office, the Community Development Department and the Police Department worked together to draft Ordinance No. 1875 to develop regulations that comply with SB 1186. Ordinance No. 1875, which is attached hereto as Attachment B , establishes reasonable restrictions and operational standards that address potential security and public health and safety concerns as it relates to allowing non- storefront retail medicinal cannabis delivery services businesses within the City.

Ordinance No. 1875 will introduce new definitions for terms related to the retail sale and delivery of medicinal cannabis, specify the zoning districts where these activities will be allowed, and establish permitting and operational standards to be managed by the Police Department.

Amendments to Chapter 18.66 – Cannabis Prohibition and Personal Cultivation

Ordinance No. 1875 clarifies that the City's ban on commercial cannabis activities does not apply to the delivery of medicinal cannabis by a non- storefront retailer to a medicinal cannabis patient for medical use within the City. However, the City’s current prohibition on all other aspects of medical and commercial cannabis activities, such as cultivation, manufacturing, testing, retail sales, and retail delivery of non -medical cannabis products, will be unaffected by the proposed changes.

This Ordinance will also introduce definitions related to the retail sale and delivery of medicinal cannabis to clarify the distinctions between the medical cannabis uses permitted under SB 1186. The following are some of the definitions that will be added to Chapter 18.66:

• Medical Use - or “medicinal use” shall mean the use of medicinal cannabis by a medicinal cannabis patient;

• Medicinal cannabis – business means a retailer authorized to engage in the retail sale by delivery of medicinal cannabis to medicinal cannabis patients; • Medicinal cannabis delivery service – means a state- licensed, non- storefront retailer that sells and delivers only medicinal cannabis and medicinal cannabis products to medicinal cannabis patients; and
• Non-storefront retailer – means a retailer that sells cannabis goods to customers only through delivery and whose business is closed to the public.

Amendments to Chapter 18.36 – Industrial Zone (M-1)

As mandated by SB 1186, the City must permit the establishment of non- storefront retailers for medicinal cannabis delivery services. Upon review, staff found these businesses to be similar to uses located in Industrial Zoning districts. The City’s Zoning Map currently includes two Industrial Zoning designations: M -1 and M -2. However, both designations serve the same purpose, as the M-2 zone adheres to the same regulations as the M-1 zone.

Ordinance No. 1875 will permit medicinal cannabis delivery service businesses in the M -1 and M-2 zones, provided they are located at least 600 feet from the following sensitive receptors:

• Public or private schools;
• Daycare centers as defined by Health and Safety Code section 1596.76; • Churches;
• Public parks;
• Libraries;
• Youth centers, which for purposes of this section shall mean a public or private facility that is primarily used to host recreation or social activities for minors, including:
o Private youth membership organizations or clubs;
o Social service teenage club facilities;
o Any facility used for youth activities at least 60 percent of the time in a calendar year;
o A park, playground or recreational area located on a public or private school grounds or in a city, county or state park specifically designed to be used by children or which has play equipment installed, including public grounds designed for athletic activities including courts or fields; or o A similar facility to one of the above.
• Any other medicinal cannabis delivery service business.

Businesses that meet the zoning requirements must obtain a permit from the Police Department before commencing operations, in accordance with the newly established Chapter

5.80. Adding Chapter 5.80 to the Gardena Municipal Code Relating to Non- Storefront Retail Medicinal Cannabis Delivery Service Businesses

As stated above, Ordinance No. 1875 will add a new chapter 5 .08 to Title 5 (Business Licenses and Regulations) . The Ordinance would require a person to obtain a medicinal cannabis business permit in addition to having a S tate license to operate as a non- storefront retailer. In addition to this business permit, each employee of the medicinal cannabis delivery service business must also obtain a permit.

Each employee must be at least 21 years of age.

The Ordinance outlines all application requirements and the necessary submissions for each business and employee to secure the appropriate permits from the City. The Chief of Police will be the authority responsible for approving these permits and may deny any application based on certain convictions the applicant has received for specified offenses within the 10 years prior to their permit application with the City.

The Ordinance would outline the following regulations for medicinal cannabis delivery service business and its employees within the City:

• All applicable requirements of state law, including statutes and California Code of Regulations.

• No markings or indications of medicinal cannabis shall be visible from the public right - of-way and/or exterior of the structure(s) associated with the medicinal cannabis delivery service business.

• Odor control devices and techniques shall be incorporated and maintained to ensure that odors from the medicinal cannabis are not detectable off-site.

• The original of the business permit issued by the city pursuant to this chapter, along with the medicinal cannabis delivery business's state cannabis license and city -issued business license, shall be readily available upon request by the Chief and not visible to the public.

• Delivery drivers shall keep the original of the employee permit and identification card, along with a copy of the business permit, with them at all times while making deliveries.

• All records required to be kept by state law shall be made available to the Chief and must be produced no later than one business day after receipt of the City’s request, unless otherwise stipulated by the City.

• The business shall designate a security representative/liaison who can meet with the Chief regarding any security related measures and/or operational issues.

• Signage shall be limited to the name of the business only and shall be in compliance with Chapter 18.58 of the City’s sign code and shall contain no advertising of other companies, brands, goods, or services.

• No medicinal cannabis products shall be visible from outside the non- storefront medicinal cannabis delivery services fixed location or delivery vehicles.

• No visual display, signage, or condition on the exterior of the non- storefront medical cannabis delivery service fixed locations or delivery vehicles shall indicate the types of products being stored inside the fixed location or transported in the delivery vehicles.

• All deliveries of medicinal cannabis must be to a customer’s physical address and no delivery may be made to an address located on publicly owned land or any address on land or in a building leased by a public agency.

Lastly, the Ordinance would allow for the Chief, Police Officers, Code Enforcement Officers, and Los Angeles County Fire Department to conduct inspections of any permitted establishment in the City to ensure that they are abiding by all City and State regulations.

GENERAL PLAN CONSISTENCY
Approving these changes to the Gardena Municipal Code is required for the public necessity, convenience, general welfare and good land use and zoning practices. The Industrial land use designation of the Gardena General Plan Land Use Plan allows for a variety of clean and environmentally friendly industries. The Industrial land use designation is implemented by the M-1 and M -2 zones. These zones allow for commercial, manufacturing and industrial uses conducted within enclosed buildings. The establishment of non- storefront cannabis delivery businesses is consistent with the General Plan and zoning.

ENVIRONMENTAL REVIEW
Adoption of this ordinance is exempt under the common sense exemption of CEQA Guidelines section 15061(b)(3) where it can be seen that the project will not have any possibility of creating significant effects on the environment. The ordinance does not authorize any development and is merely sets forth policy and procedures.

FISCAL IMPACT:

None

CONCLUSION

The adoption of Ordinance No. 1875 will bring the City’s code into compliance with the state laws but will not change the ban on all other commercial cannabis related activities including storefront cannabis businesses from operating in the City . Staff respectfully recommends the City Council open the public hearing, receive testimony from the public, allow three (3) minutes for each speaker, and close the public hearing.

Submitted by: _______________________________________ Date: 10/2/2024

Attachment:

A – Planning Commission Resolution No. PC 16-24
B – Ordinance No. 1875
C – State regulation excerpts
Amanda Acuna, Community Development Manager
RESOLUTION NO. PC 16-24

A RESOLUTION OF THE PLANNING AND ENVIRONMENTAL QUALITY

COMMISSION OF THE CITY OF GARDENA, CALIFORNIA
RECOMMENDING THAT THE CITY COUNCIL ADOPT ORIDNANCE NO.
1875 AMENDING CHAPTER 18.66 AND SECTION 18.36.020 TO THE

GARDENA MUNICIPAL CODE RELATING TO NON- STOREFRONT

RETAIL MEDICINAL CANNABIS DELIVERY SERVICE BUSINESSES

THE PLANNING COMMISSION OF THE CITY OF GARDENA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. RECITALS.

A. C
hapter 18.66 of the Gardena Municipal Code imposes reasonable regulations consistent with state law to protect the city's neighborhoods, residents, and businesses from negative public safety and aesthetic impacts associated with the transporting, delivery, and distribution of medicinal cannabis and medicinal cannabis products to patients within the City.

B. O
n September 18, 2022, Governor Newsom signed Senate Bill No. 1186 into law, which is referred to as the Medicinal Cannabis Patients’ Right of Access Act, codified as Chapter 26 (commencing with Section 26320) to Division 10 of the Business and Professions Code, ("MCPRAA").

C. The M
CPRAA further prohibits cities from adopting or enforcing any regulations on or after January 1, 2024, that have the effect of prohibiting the retail sale by delivery within the local jurisdiction of medicinal cannabis to medicinal cannabis patients or their primary caregivers in a timely and readily accessible manner and in types and quantities that are sufficient to meet demand from medicinal cannabis patients within the jurisdiction.

D. Sections 5 and 7 of Article XI of the California Constitution, and the provisions of the Medical Cannabis Regulation and Safety Act ("MCRSA") as amended by the Medical and Adult -Use Cannabis Regulation and Safety Act ("MAUCRSA"), authorize cities to adopt ordinances that establish standards, requirements, and regulations for local licenses and permits for commercial cannabis and cannabis related activity. Any standards, requirements, and regulations regarding health and safety, security, and worker protections established by the State of California, or any of its departments or divisions, shall be the minimum standards applicable to medicinal cannabis related activity in a city.

E. I
t is the City’s desire to amend the Gardena Municipal Code to reflect the requirements of SB 1186 and appropriately regulate the establishment of physical premises from which retail sale by delivery of medicinal cannabis within the City is conducted by a licensed non-storefront retailer.

PC Resolution No. 16-24
RESO NO. PC 16-24
ZTA #5-24, Ordinance No. 1875
August 20, 2024

2 F. On August 20, 2024, the Planning Commission held a duly noticed public hearing on this matter at which time it considered all evidence presented, both written and oral.

NOW, THEREFORE, THE PLANNING AND ENVIRONMENTAL QUALITY

COMMISSION OF THE CITY OF GARDENA DOES HEREBY RESOLVE AS FOLLOWS:

The P
lanning Commission hereby recommends that the City Council adopt the Ordinance No. 1875 attached hereto as Exhibit A, amending the Gardena Municipal Code Chapter 18.66 and Section 18.36.020 relating to allowing non- storefront retail medicinal cannabis delivery services businesses in the M-1 and M-2 zoning districts.

SECTION 2. FINDINGS
The Planning Commission hereby makes the following findings.

A. The recitals set forth in Section 1 are true and correct; B. The amendments under Ordinance No. 1875 to the Gardena Municipal Code are required for the public necessity, convenience, general welfare and good land use and zoning practices. The Industrial land use designation of the Gardena General Plan Land Use Plan allows for a variety of clean and environmentally friendly industries. The Industrial land use designation is implemented by the M -1 and M -2 zones. These zones allow for commercial, manufacturing and industrial uses conducted within enclosed buildings. The establishment of non-storefront cannabis delivery businesses is consistent with the General Plan and zoning;
C. Adoption of O rdinance No. 1875 is exempt under the common sense exemption of CEQA Guidelines section 15061(b)(3) where it can be seen that the project will not have any possibility of creating significant effects on the environment. The ordinance does not authorize any development and is merely sets forth policy and procedures.

SECTION 3. RECORD.

Each and every one of the findings and determinations in this Resolution is based on the competent and substantial evidence, both oral and written, contained in the entire record.

All summaries of information in the findings which precede this section are based on the entire record. The absence of any particular fact from any such summary is not an indication that a particular finding is not based in part on that fact.

SECTION 4. CUSTODIAN OF RECORD.

The Custodian of Record for the proceedings relating to the Project is Greg Tsujiuchi, Community Development Director, City of Gardena, 1700 West 162 nd Street, Gardena, Kanhan, Wright-Scherr and Sherman
Langley
Henderson
1 ORDINANCE NO. 1875

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
GARDENA, CALIFORNIA, AM ENDING CHAPTER 18.66
AND SECTION 18.36.020 AND ADDING CHAPTER 5.80 TO

THE GARDENA MUNICIPAL CO DE RELATING TO NON-

STOREFRONT RETAIL MEDICINAL CANNABIS DELIVERY

SERVICE BUSINESSES

WHEREAS, on November 6, 1996, Californi a voters approved Proposition 215, the “Compassionate Use Act of 1996”, an initiative measure that declared that its purpose was, among other things, to ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes and exempts from state criminal liability certain patients and their primary caregivers who possess or cultivate marijuana for the personal medical purposes of the patient; and

WHEREAS, on October 9, 2015, Assembly Bill 243, Assembly Bill 266, and Senate Bill 643 were signed into law, which collecti vely were known as the Medical Cannabis Regulation and Safety Act (hereinafter “MCRSA”) and established a state regulatory and licensing scheme for commercial and medical cannabis businesses; and

WHEREAS, on November 8, 2016, California voters approved Prop 64, the “Control, Regulate and Tax Adult Use of Marijuana Act” (“AUMA”), an initiative measure which made it lawful under st ate and local law for persons 21 years of age or older to possess and cultivate limit ed quantities of cannabis for personal non-medical or recreational use. The AUMA also established a state regulatory and licensing scheme for commercial adult-use cannabis businesses; and

WHEREAS, on June 27, 2017, Senate Bill 94 wa s signed into law and repealed the MCRSA, included ce rtain portions of the MCRSA in the licensing provisions of the AUMA, and created a single regul atory scheme known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MA UCRSA”) to regulate both medical and non- medical cannabis and retained certain provis ions from MCRSA and AUMA that granted local jurisdictions control over whether co mmercial cannabis activity could occur in a particular jurisdiction; and

WHEREAS, Gardena Municipal Code Chapter 18.66 currently prohibits all cannabis activity in the City except for per sonal cultivation, including all delivery of cannabis to or from destinations within the city, including for medical purposes; and

WHEREAS, on September 18, 2022, Governor Newsom signed Senate Bill No. 1186 into law, which is referred to as the Medicinal Cannabis Patients’ Right of Access Act, codified as Chapter 26 (commencing with Section 26320) to Division 10 of the Business and Professions Code, ("MCPRAA"); and

2 WHEREAS, the MCPRAA further prohibits ci ties from adopting or enforcing any regulations on or after January 1, 2024, that have the effect of prohibiting the retail sale by delivery within the local jurisdiction of medicinal cannabis to medicinal cannabis patients or their primary caregivers in a timely and readily accessible manner and in types and quantities that are sufficient to meet demand from medicinal cannabis patients within the jurisdiction; and

WHEREAS, Sections 5 and 7 of Arti cle XI of the Californi a Constitution, and the provisions of the Medical Cannabis Regu lation and Safety Act ("MCRSA") as amended by the Medical and Adult-Use Cannabis R egulation and Safety Act ("MAUCRSA"), authorize cities to adopt ordinances that establish standards, requirements, and regulations for local licenses and permits for commercial cannabis and cannabis related activity. Any standards, requirements, and regulations regardi ng health and safety, security, and worker protections established by the State of Califor nia, or any of its departments or divisions, shall be the mi nimum standards applicable to medicinal cannabis related activity in a city; and

WHEREAS, the City desires to amend the Gardena Municipal Code to reflect the requirements of SB 1186 and appropriately r egulate the establishment of physical premises from which retail sale by deliver y of medicinal cannabis within the City is conducted by a licensed non-storefront retailer; and

WHEREAS, Chapter 18.66 of the Gardena M unicipal Code impo ses reasonable regulations consistent with st ate law to protect the city's neighborhoods, residents, and businesses from negative public safety and aesthetic impacts associated with the transporting, delivery, and distribution of medicinal cannabis and medicinal cannabis products to patients within the City; and

WHEREAS, on August 20, 2024, the Planning Commission of the City of Gardena, held a duly noticed public hearing at which time it considered all evidence presented, both written and oral regarding the proposed amendments to Title 18 of the Gardena Municipal Code as set forth in this Ordinance, after which time it adopted Resolution No. PC 16-24 recommending that the City Co uncil adopt this Ordinance and make a finding that the Ordinance falls under the common sense exempt ion of CEQA set forth in Guidelines section 15061(b)(3); and

WHEREAS, on ___, 2024, the City Council of the City of Gardena held a duly noticed public hearing and cons idered the staff report, re commendations by staff, and public testimony regarding this Ordinance, at which time it considered all evidence presented, both written and oral; and

WHEREAS, the proposed Zoning Code amendments are consistent with the City’s General Plan; and

WHEREAS, all legal requirements prior to t he adoption of this Ordinance have occurred.
3 NOW THEREFORE, THE CITY

COUNCIL OF THE CITY OF GARDENA DOES
ORDAIN AS FOLLOWS:

SECTION 1. The City Council finds that the recitals set forth above are true and correct.

SECTION 2. Sections 18.66.010, 18.66.020, and 18.66.030 of Chapter 18.66 (Cannab is
Prohibition and Personal Cultiv ation Regulations/Permitting) of the Gardena Municipal Code are hereby amended to read as follows; the rest of the provisions of Chapter 18.66 remain the same.

18.66.010 Purpose.

A. A. The purpose of this chapter is to ex pressly prohibit the establishment of commercial cannabis uses in the city relating to medical cannabis and adult use non- medicinal cannabis, except to the extent that allo wing the retail delivery of medical cannabis and cannabis products to medical cannabis patients wit hin the city by a non- storefront retailer is required by law.

A.B. The purpose of this chapter is also as well as to impose reasonable regulations on both personal cultivation in private residences and accessory structures and on non- storefront retailers and impose a permitting schemes on such uses.

CB. The city council finds that except as provided for herein and as required by law, the prohibition on storefront commercial cannabis activity is necessary for the preservation of and protection of the public health, sa fety, and welfare of the city. The prohibition of such uses is within the authority conferred upon the city council by state law and is an exercise of its po lice powers to enact and enforce regulations for the public health, safety, and welfare.

18.66.020 Definitions.

A. “Adult Use” or “non-medical us e” means the recreational or personal use of cannabis by a natural person 21 years of age or older, as used in MAUCRSA.

B. “Authorized grower” shall meanmeans a person twenty-one years and older who is authorized by, and in compliance with, stat e law and the provisions of this chapter relating to the cultivation of cannabis for personal use.

BC. “Cannabis” means all parts of the pl ant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis , whether growing or not; t he seeds thereof; the resin, whether crude or purified, ex tracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or pr eparation of the plant, it s seeds, or resin. “Cannabis” also means the separated resin, whether crude or purif ied, obtained from cannabis, and any product containing cannabis. “Cannabis” includes cannabis that is used for medical, nonmedical, or other purposes. “Cannabis” does not include the mature 4 stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, der ivative, mixture, or preparation of the mature stalks (except the resin extracted theref rom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of ge rmination. “Cannabis” also does not include industrial hemp, as defined in California Health and Safety Code Section 11018.5.

CD. “Commercial cannabis activity” means the cultivation, possession, manufacture, distribution, processing, stori ng, laboratory testing, labelin g, packaging, transportation, delivery or sale of cannabis and cannabis products for nonmedical, medical or any other purpose, and includes the activities of an y business licensed by the state or other government entity under Division 10 of the California Business and Professions Code or any other provision of state law that regulates the licensing of cannabis businesses.

DE. “Cultivation” means any acti vity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

EF. “Delivery” means the commercial transfe r of cannabis or cannabis products to a customer. Delivery also includes the use by a retailer of any te chnology platform owned and controlled by the retailer.

FG. “Fully enclosed and secure structure” means a space within a building that complies with the California Building Code (“CBC”) as adopted by the city of Gardena, or if exempt from the permit requirements of the CBC, a structure that has a complete roof, a foundation, slab or equivalent base to which the floor is se cured by bolts or similar attachments, is secure against unauthorized entry, and is accessible only through one or more lockable doors. Walls and roofs must be c onstructed of solid materials that cannot be easily broken through such as two-inch by four-inch nominal or thicker studs overlaid with three-eighths-inch or thicker plywood or the equivalent. Plastic sheeting, regardless of the mil or inches, or sim ilar products do not satisfy this requirement. If skylights are used, security bars shall be added to the skylights. The structure must provide complete visual screening.

GH. “Indoors” means within a fully enclosed and secure structure.

HI. “MAUCRSA” means the Medicinal an d Adult-Use Cannabis Regulation and Safety Act, as codified in Division 10 of the California Business and Professions Code (Section 26000 et seq.) as the same may be amended from time to time.

J. “MCPRAA” means the Medicinal Cannabis Patients' Right to Access Act, as codified in Chapter 26 (comm encing with Section 26320) to Division 10 of the Business and Professions Code.

K. “Medicinal Cannabis” means both medicinal cannabis and medicinal cannabis products, as those terms are defined in Section 26001(ai)(1) of the Business and Professions Code.
5 L. “Medical Use” or “medicinal use” shall mean the use of medicinal cannabis by a medicinal cannabis patient.

ML. “Medicinal cannabis business” means a retailer authorized to engage in the retail sale by delivery of medicinal cannabis to medicinal cannabis patients pursuant to an M- license, as defined in the MCPRAA.

N. “Medicinal cannabis delivery service” m eans a state-licensed, non-storefront retailer that sells and delivers only medici nal cannabis and medicinal cannabis products to medicinal cannabis patients.

OM. “Medicinal cannabis patient” means a qualified patient or a primary caregiver for a qualified patient, as the same are defined in Section 11362.7 of the Health and Safety Code.

P. “Non-storefront retailer” means a retailer that sells cannabis goods to customers only through delivery and whose business is closed to the public.

IQO. “Outdoors” means any lo cation that is not within a fully enclosed and secure structure.

JPR. “Person” means any person, firm, corpor ation, partnership, jo int venture, limited liability company, collective, cooperative, nonprofit, trust, estate, association, club, receiver, syndicate, society, or other organiza tion. The term “person” shall include any owner, manager, proprietor, employee, volunteer, or salesperson.

KQS. “Private residence” means a house, apartment unit, condominium, mobile home, or other similar dwelling that is lawfully used as a residence.

18.66.030 Prohibition.

A. Commercial cannabis activities, whether or not for profit, are expressly prohibited in all zones in the city of Gardena, including all specific plan areas and overlay zones. No person shall establish, operate, conduct, allow or engage in a commercial cannabis activity anywhere within the city. This prohibition includes any type of business enterprise where cannabis is complimentar ily provided as part of any other non-cannabis-related business activity.

B. A property owner shall not rent, lease, or otherwise permit any person or business that engages in commercial cannabis activity to occupy real property in the city. A property owner shall not allow any person or business to establish, operate, maintain, conduct, or engage in commercial cannabis activity on any real property owned or controlled by that property owner that is located in the city.

C. To the extent not already covered by s ubsection A of this section, all deliveries of non-medicinal cannabis are expressly prohibited within the Ccity of Gardena. No person 6 shall conduct any deliveries that either originate or terminat e within the city, but the city shall not prohibit the use of city streets where the delivery does not originate or end within the jurisdictional limits of the city.

D. This section is meant to prohibit all commercial retail activities for which a state license is required , except for a medicinal cannabis de livery service pursuant to the MAUCRSA . Accordingly, the city shall not issue any permit, license or other entitlement for any activity for which a state license is required under the AUMA, including any local license to a non-profit entity pursuant to California Business and Professions Code Section 26070.5, except for a permit for a medicinal cannabis delivery service as provided for in Chapter 5.80 of this Code.

E. Except as pr ovided in Section 18.66.040, all cultivation of cannabis is expressly prohibited in all zones in the Ccity of Gardena.

F. Notwithstanding any other provision of this chapter, the prohibitions set forth herein do not apply to the delivery by a non-storefront retailer of medicinal cannabis to a medicinal cannabis patient for medical use within the city.

SECTION 3. Section 18.36.020 of the Gardena Municipal Code relating to uses allowed in the M-1 zone, is hereby amended by adding a new subsection P. to read as follows:

P. Medicinal cannabis delivery service as defined in Chapter 18.66, subject to the following requirements:

1. The owner of the medicinal ca nnabis delivery service has obtained a medicinal cannabis delivery service permit prio r to the commencement of operations in accordance with Chapter 5.80 of this Code, as well as a business license as required by Chapter 5.04 of this Code.

2. The medicinal cannabis delivery servic e businesses shall be located at least 600 feet from the following sensitive receptors. All measurements shall be taken from the closest property line of the medicinal cannabi s delivery service business to the closest property line of the sensitive receptor.

a. Public or private schools;

b. Daycare centers as defined by Health and Safety Code section 1596.76;

c. Churches;

d. Public parks;

e. Libraries;

7 f. Youth centers, which for purposes of this section shall mean a public or private facility that is primarily used to host recreation or social activities for minors, including:

1. Private youth membership organizations or clubs;

2. Social service teenage club facilities;

3. Any facility used for youth activities at least 60 percent of the time in a calendar year;

4. A park, playground or recreatio nal area located on a public or private school grounds or in a city, county or state park specifically designed to be used by children or which has play equipment installed, including public grounds designed for athletic activities including courts or fields; or

5. A similar facility to one of the above.

g. Any other medicinal cannabis delivery service business.

SECTION 4. Chapter 5.80 (Medical Cann abis Delivery Service Businesses) is hereby added to Title 5 (Business Licenses and Regulations) of the Gardena Municipal Code to read as follows:

Chapter 5.80

MEDICINAL CANNABIS DELIVERY SERVICE BUSINESSES

5.80.010 Purpose and intent.

The purpose and intent of this chapter is to implement th e provisions of Chapter 26 (commencing with Section 26320) of Divis ion 10 of the California Business and Professions Code, referred to as the Medici nal Cannabis Patients' Right to Access Act.

This chapter also imposes a regulatory permitting scheme and reasonable regulations to protect the city's neighbor hoods, residents, and busine sses from negative impacts associated with the delivery of medicinal cannabis.

5.80.020 Definitions.

All definitions in Chapter 18.66 of this code also apply to this chapter.

Any term defined in Title 4, Division 19 of the California Code of Regulations, that is not otherwise defined herein, shall have the meaning ascribed to it in that Division. “Business Owner” means the same as that set forth in Titl e 14 of the California Code of Regulations, section 15003.

“Business Permit” means a permit for a medicinal cannabis delivery service business.

8 “CCR” shall mean Title 4, Division 19 of the California Code of Regulations. “Chief” means the Chief of Police of t he Gardena Police Department or the Chief’s designee.
“Disqualifying conduct” means, except for item 1, within the 10 years preceding the date of the application, or in the case of revocation or suspension proceedings, within 10 years preceding the date of the revocation or suspension notice, a person has had:

1. Within the three years preceding the date of the application, or in the case of revocation or suspension proceedings, within three years preceding the date of the revocation or suspension notice, the applicant has had a suspension or revocation of a commercial cannabis license, or any convictions or administrative citations that are final for operating an unlicensed commercial cannabis activity;

2. A violent felony conviction, as s pecified in Penal Code section 667.5(c);

3. A serious felony conviction, as specified in Penal Code section 1192.7(c;

4. A felony conviction involvin g fraud, deceit, or embezzlement;

5. A felony conviction for hiring, employ ing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor;

6. A felony conviction for drug trafficking with enhancements pursuant to Health and Safety Code section 11370.4 or 11379.8;

7. A conviction for any controlled substance felony;

8. A conviction for the intentional and knowing sale of cannabis to a person under 21 years of age;

9. A conviction for the intentional and k nowing sale of medicinal cannabis to a person without a physician’s recommendation;

10. A conviction for the sale of cannabis without a license.

For purposes of this chapter, a conviction means a plea or verdict of guilty or a conviction or diversion following a plea of nolo contendere.
“Employee Permit” means a permit for an individual employed by a medicinal cannab is
delivery service business.

5.80.030 Permit/business license required.
9 A. No person shall engage in or conduct any medicinal cannabis delivery service business within the city without first obtaini ng a business permit under this chapter and having a state license to operate as a non-storefront retailer. A separate business permit shall be required for each physical address location within the city. An applicant may not apply for a business license until the applicant has received the state license.

B. No person shall be employed by a medi cinal cannabis delivery service business within the city without first obtaining an employee permit under this chapter. No permit shall be issued to an individual under 21 years of age.

5.08.040 Application.

A. An application for a business permit or employee permit shall be on a form provided by the Gardena Police Department, shall be signed and dated, and shall be accompanied by a permit fee in an amount set by resolution of the City Council.

B. All applications shall in clude the following statements:

1. A certification under penalty of perjury that the information contained in the application is true and correct;

2. An authorization for the city, its officers, agents and employees to seek information and conduct an investigation into the truth of the statements set forth in the application and to ensure continual compliance with all applicable provisions of law;

3. An agreement to the fullest extent pe rmitted by law to indemnify, defend (at the applicant's sole cost and expense), and hold the city, and its officers, elected and appointed officials, employees, vol unteers, and agents harmless, from any and all claims, losses, damages, injuries, including death, liabilities or losses which arise out of, or which are in any way rela ted to, the city's issuance of the permit, the city's decision to approve the permit, the process used by the city in making its permitting decision, or the alleged violation of any laws by the applicant, its officers, employees, or agents.

C. An application for either a business pe rmit or employee permit shall contain the following information:

1. The legal first and la st name of the applicant;

2. The date of birth of the applicant;

3. The address of the applicant;

4. The email address of the applicant;

5. Whether the applicant has engag ed in any disqualifying conduct; 10 6. Such further information as the Chief determines necessary to determine compliance with this chapter and applicable provisions of law;

7. A complete set of the applicant’s fingerprints taken by the Gardena police department. The applicant shall be responsible for payment of any fingerprinting fee;

8. All applicants shall have their pict ure taken by the Gardena police department;

D. Business Permit Application. An applicat ion for a business permit shall contain the following additional information:

1. An application for a business permit shall be filed for each business owner.

2. Both the business owner and the proper ty owner, if different, shall sign the business permit application form.

3. The legal business name of the medicinal cannabis delivery service business;

4. The physical address of the business;

5. The mailing address of the business if different from the physical address;

6. The telephone numbe r of the business;

7. The website address of the business, if any;

8. Identification of the owner that wil l serve as the primary contact person, including the person’s title; and

9. A site plan showing a complete and detailed diagram of the proposed business location as required by CCR section 15006(b) through (f).

E. Employee Permit Application – An applicat ion for an employee permit shall contain the following additional information:

1. The legal business name of the medicinal cannabis delivery service business where the applicant will be employed; and

2. The physical address of the business.

F. Renewal. A permit issued pur suant to this chapter shall expire 12 months after the date of its issuance and must be a renewed on a yearly basis. A renewal application shall 11 contain the same information as the original application, but new fingerprints need not be provided and a new site plan need not be submitted if there has been no change.

5.80.050 Duty to Update.

A. A permittee shall be required to update t he information contained in the application within 10 business days of such change.

B. Reporting legal matters. The business owner shall notify the Chief in writing of the following legal matters pending against the owner, in its individual capacity or otherwise, within 48 hours of the date of conviction, judgment, order, or final decision:

1. Criminal conviction. The written notification to the city shall include the date of the conviction, the court docket number, the name of the court in which the conviction was entered, and the specific offense(s) resulting in a conviction(s).

2. Civil penalty or judgment. The written notification shall include the date of verdict, entry of judgment, or order, the court docket number, the name of the court in which the matter was adjudicated, and a description of the civil penalty or judgment rendered.

3. Administrative order. The written not ification shall include the date of the order, the name of the agency issuing the order, and a description of the administrative penalty or decision rendered against the business owner or property owner.

4. Revocation or suspension of a stat e or local license, permit, or other authorization. The written not ification shall include the name of the local agency involved, a written explanati on of the proceeding or enf orcement action, and the specific violation(s) that led to the revocation or suspension.

5.80.060 Decision on the app lication; permit approva l, denial, suspension and revocation.

A. The Chief is authorized to approve, deny, suspend, or revoke the permits required under this chapter.

B. Upon receipt of a completed application, the Chief shall cause an investigation to be conducted by the appropriate departments within the city, including state and local background checks.

C. The Chief shall act upon an application within 30 working days following receipt.

Notwithstanding the above, fail ure to act upon a completed app lication within the time frame set forth above shall not be deemed approval of the application. Any permit issued 12 pursuant to this subsection shall be deemed c onditional pending the city’s receipt of the California Department of Justice report on the applicant’s fingerprints.

D. Permit Issuance. When an application, including a renewal, is approved, in addition being issued a permit, an identification badge shall be issued to every business owner and employee. The identification b adge shall include the permit number and the expiration date.

E. Grounds for Denial. An application for a permit or renewal shall be denied if any of the following grounds are found to exist:

1. The applicant has engaged in disqualifying conduct;

2. There has been a material misr epresentation on the application;

3. There has been a material misr epresentation on the site plan;

4. Application deficiencies. The appl ication is incomplete, supportive documentation was not provided, and/or the applicant failed to correct deficiencies in the application or provide additional application information within the response timeframe requested; or

5. For a business permit, facts or circum stances exist which indicate that the business does or would very likely consti tute a threat to public health, safety, and/or welfare.

F. Grounds for revocation or suspension. A permit issued pursuant to this chapter may be suspended or revoked by the Chief if any of the following grounds are found to exist:

1. Any reason exists which would have resulted in a denial of the application in the first instance;

2. For a business permit, there have been modifications to the operations of the business as shown on the original site plan;

3. For a business permit, there has been a change in the business owners and such new owners have not obtained a permit;

4. The Chief has determined, based on substantial evidence, that the permittee is in violation of t he requirements of this chapte r, of this Code, or state law; or

5. Suspension or expiration without time ly renewal of a license issued by the State of California, or by any of its departments or di visions, shall immediately suspend the ability of a medicinal cannabi s delivery service business to operate 13 within the city until the Stat e of California, or any of its departments or divisions, reinstates or reissues the state license. Revocation or termination of the license of a medicinal cannabis delivery service busine ss by the State of California, or any of its departments or divisions, shall immediately revoke or terminate the ability of a medicinal cannabis delivery service busin ess to operate within the city without notice. If the city becomes aware t hat a state license has expired or been suspended, revoked, or terminated, it will initiate proceedings under this section to suspend or revoke a business permit.

6. If, in the discretion of the Chie f, an alleged violation is minor and capable of correction, then prior to suspension or revocation a written notice shall be given to the permittee of the alleged violation(s) involved to allow a period of time to correct the alleged violation(s), wh ich period shall not exceed five business days, at the end of which period an inspection shall be conducted to determine whether the alleged violation(s) has been corrected. For purposes of this section, written notice may be in the form of a notice of violation or an administrative citation.

G. Any denial, suspension or revocation s hall be accompanied by a written statement setting forth the reason for the decision. A notice of sus pension or revocation may be accompanied by an administrative or criminal citation. Any notice may be appealed in accordance with section 5.80.070.

5.80.070 Appeals.

A. An appeal from a decision of the Chief shall be conduc ted as prescribed in this section.

B. Within 10 calendar days after the date a decision of the Chief is mailed by first- class mail, postage prepaid, to deny, suspend, or revoke a permit, or to add conditions to a permit, an aggrieved party may appeal such action by filing a written appeal with the city clerk setting forth the reasons why the decision was not proper. The notice of appeal shall specify:

1. The name and addres s of the appellant;

2. The date that the permit applic ation was filed with the city;

3. The date of the mailing of the decision to deny, suspend, revoke, or condition the permit which is being appealed; and

4. The factual basis for the appeal.

C. An appeal shall be accompanied by a fee set by resolution of the City Council. An appeal without the timely payment of the fee shall be considered to be untimely.

14 D. Upon receipt of a complete and timely filed notice of appeal, the City Clerk shall schedule a hearing before a hearing officer. T he hearing officer shall be either the city manager or an administrative hearing officer hired under contract by the city manager.

E. The appellant shall be provided with wr itten notice of the time and place of the appeal hearing, as well as a copy of all relev ant materials, at least seven calendar days prior to the hearing.

F. The scope of the appeal hearing shall be limited to those issues raised by the appellant in the written appeal.

G. At the time of the heari ng, the hearing officer shall review the records and files relating to the notice of decision.

1. The hearing officer shall permit any interested person, including the chief of police and the appellant, to present any re levant evidence bearing on the issues involved in the matter.

2. In conducting the hearing, technica l rules relating to evidence and witnesses shall not apply. An y relevant evidence may be admitted if it is material and if it is evidence customarily relied upon by responsible persons in the conduct of their affairs regardless of the existence of any co mmon law or statutory rule which might make admission of such ev idence improper over objection in civil actions. Hearsay evidence may be admissible if it is the sort upon which reasonable persons are accustomed to rely in the conduct of serious affairs. The rules of privilege shall be applicable to the extent they are now or are hereafter permitted in civil actions. Irrelevant, co llateral, and repetitious testimony shall be excluded.

3. In determining whether a person shoul d be disqualified for meeting the definition of disqualifying conduct, the hearing officer may consider: the nature and severity of the act(s) or crime(s); whether there we re any additional subsequent act(s) or crime(s); the number of act(s) or crime(s); and how re cent the act(s) or crime(s) were.

H. T he appellant shall have t he burden of proving that he or she meets the requirements for issuing the permit in the first instance. The Chief shall have the burden of proving that grounds exist for revoking or failing to renew a permit.

I. Based upon the evidence presented at the hearing, the hearing officer shall determine whether the decision by the Chief should be affirmed, modified or reversed.

J. The hearing officer’s decision and the r easons therefore shall be communicated in writing to the appellant within 10 working days after the close of the hearing. The decision shall also state that it is final and conclusive, that judicial review may be sought therefrom pursuant to Code of Civil Procedure Section 1094.5, and that any action filed in the 15 superior court shall be filed within ninety days following the city manager’s notice pursuant to Code of Civil Procedure Section 1094.6.

5.08.080 Notices.

All notices required to be given pursuant to this chapter shall be served on the responsible party (i.e., permittee, applicant or appellant) either by personal delivery or by deposit in the United States mail in a sealed envelope postage pr epaid addressed to such responsible party as the name and address appear in the most recent application on file with the city. Service by mail shall be deemed to have been completed on the date deposited in the mail.

5.80.090 Fees.

The City Council may impose by resolution a nonrefundable fee to reimburse the city for its reasonable and necessary costs for providing the services under this chapter. This fee shall be in addition to the business license fees required by Title 5 of this Code.

5.80.100 Operational standards.

A medicinal cannabis delivery service business and its employees shall comply with the following requirements:

A. All applicable requirements of state law, including statutes and California Code of Regulations.

B. No markings or indications of medici nal cannabis shall be visi ble from the public right-of-way and/or exterior of the structur e(s) associated with t he medicinal cannabis delivery service business.

C. Odor control devices and techniques shall be incorporated and maintained to ensure that odors from the medicinal cannabis are not detectable off-site.

D. The original of the business permit i ssued by the city pursuant to this chapter, along with the medicinal can nabis delivery business's st ate cannabis license and city- issued business license, shall be readily av ailable upon request by the Chief and not visible to the public.

E. Delivery drivers shall keep the original of the employee permit and identification card, along with a copy of the business pe rmit, with them at all times while making deliveries.

F. All records required to be kept by stat e law shall be made available to the Chief and must be produced no later than one business day after receipt of the City’s request, unless otherwise stipulated by the City.

16 G. The business shall designate a security representative/liaison who can meet with the Chief regarding any security related measures and/or operational issues.

H. Signage shall be limited to the name of the busin ess only and shall be in compliance with Chapter 18.58 of the City’s sign code and shall contain no advertising of other companies, brands, goods, or services.

I. No medicinal cannabis products shall be visible from outsi de the non-storefront medicinal cannabis delivery services fixed location or delivery vehicles.

J. No visual display, signage, or condition on the exterior of the non-storefront medical cannabis delivery service fixed locations or delivery vehicles shall indicate the types of products being stored inside the fix ed location or transported in the delivery vehicles.

K. All deliveries of medicinal cannabis must be to a customer’s physical address and no delivery may be made to an address located on publicly owned land or any address on land or in a building leased by a public agency.

5.80.110 Violations, inspections, and enforcement.

A. Violations declar ed a public nuisance. Each and ever y violation of the provisions of this chapter is deemed unlawful and a public nuisance.

B. Each violation a separate offense. Each and every violation of this chapter shall constitute a separate violation, and the city may pursue any and all remedies and actions available under state and local law for any violations committed by a medicinal cannabis delivery service business, a business owner, a property owner, or any other persons related to or associated with any commercial cannabis activity, including suspension or revocation of any permit pursuant to this chapter. Additionally, as a nuisance per se, any violation of this chapter shall be subject to disgorgement and payment to the city of any monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or in equity.

C. Remedies are cumulative and not exclusive. The remedies provided in this chapter or this code are not to be c onstrued as exclusive remedies. The city is authorized to pursue any proceedings or remedies provided by law.

D. Business owner are responsible for vi olations. The business owner shall be responsible for all local and state law violations that occur in or about a physical address location, a medicinal cannabis delivery service vehicle, or related to delivery personnel, whether or not the violations occur within the presence of the business owner.

E. Inspections and enforcement.

17 1. The Chief, code enforcement officers, police officers, and the Los Angeles County Fire Department, are charged with enf orcing the provisio ns of this code and shall be authorized to enter a medicinal cannabis delivery service business or a medicinal cannabis delivery service vehi cle operating in the city at any time during the business's hours of operation with or without notice, subject to constitutional limitations, to do inspec t the medicinal cannabis delivery service business and medicinal cannabis delivery service vehicle as well as any recordings and records required to be maintained pursuant to this chapter or under applicable provisions of state law.

2. It is unlawful for any person having responsibility over the operation of a medicinal cannabis delivery service business to impede, obstruct, interfere with, or otherwise not allow the city to conduct an inspection, review or copy records, recordings, or other documents required to be maintained by such business under this chapter or under state or local law. It is also unlawful for a person to conceal, destroy, deface, damage, or falsify any re cords, recordings, or other documents required to be maintained by a medicinal cannabis delivery service business under this chapter or under state or local law.

SECTION 5. Findings. In approving the changes to the Gardena Municipal Code set forth above, the City Council finds that adoption of this Ordinance is required for the public necessity, convenience, general welfare and good land use and zoning practices. The Industrial land use designation allows for a variety of clean and environmentally friendly industries. The industrial zone allows comme rcial, manufacturing and industrial uses conducted within enclosed buildings. The es tablishment of non- storefront cannabis delivery businesses is consistent with the General Plan and zoning.

SECTION 6. CEQA. Adoption of this Ordinanc e is exempt under the common sense exemption of CEQA Guidelines section 15061(b)(3) where it can be seen that the project will not have any possibility of creating significant effe cts on the environment. The ordinance does not authorize any development and is merely sets forth policy and procedures.

SECTION 7. Severability. If any se ction, subsection, subdivision, paragraph, sentence, clause or phrase of this ordi nance, or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragr aph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional.

SECTION 8. Effective Date. This Ordinance shall ta ke effect on the thir ty-first day after passage.

SECTION 9. Certification. The City Clerk shall certify the passage of this ordinance and shall cause the same to be entered in the book of original ordinances of said City; shall 18 make a minute passage and adoption thereof in the records of the meeting at which time the same is passed and adopted; and shall, within fifteen (15) days after the passage and adoption thereof, cause the same to be published as required by law, in a publication of general circulation.

PASSED, APPROVED AND ADOPTED this ____ day of ____________, 2024.

TASHA CERDA, Mayor
ATTEST:

MINA SEMENZA, City Clerk

APPROVED AS TO FORM:

CARMEN VASQUEZ, City Attorney

1 ORDINANCE NO. 1875

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
GARDENA, CALIFORNIA, AM ENDING CHAPTER 18.66
AND SECTION 18.36.020 AND ADDING CHAPTER 5.80 TO

THE GARDENA MUNICIPAL CO DE RELATING TO NON-

STOREFRONT RETAIL MEDICINAL CANNABIS DELIVERY

SERVICE BUSINESSES

WHEREAS, on November 6, 1996, Californi a voters approved Proposition 215, the “Compassionate Use Act of 1996”, an initiative measure that declared that its purpose was, among other things, to ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes and exempts from state criminal liability certain patients and their primary caregivers who possess or cultivate marijuana for the personal medical purposes of the patient; and

WHEREAS, on October 9, 2015, Assembly Bill 243, Assembly Bill 266, and Senate Bill 643 were signed into law, which collecti vely were known as the Medical Cannabis Regulation and Safety Act (hereinafter “MCRSA”) and established a state regulatory and licensing scheme for commercial and medical cannabis businesses; and

WHEREAS, on November 8, 2016, California voters approved Prop 64, the “Control, Regulate and Tax Adult Use of Marijuana Act” (“AUMA”), an initiative measure which made it lawful under st ate and local law for persons 21 years of age or older to possess and cultivate limit ed quantities of cannabis for personal non-medical or recreational use. The AUMA also established a state regulatory and licensing scheme for commercial adult-use cannabis businesses; and

WHEREAS, on June 27, 2017, Senate Bill 94 wa s signed into law and repealed the MCRSA, included ce rtain portions of the MCRSA in the licensing provisions of the AUMA, and created a single regul atory scheme known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MA UCRSA”) to regulate both medical and non- medical cannabis and retained certain provis ions from MCRSA and AUMA that granted local jurisdictions control over whether co mmercial cannabis activity could occur in a particular jurisdiction; and

WHEREAS, Gardena Municipal Code Chapter 18.66 currently prohibits all cannabis activity in the City except for per sonal cultivation, including all delivery of cannabis to or from destinations within the city, including for medical purposes; and

WHEREAS, on September 18, 2022, Governor Newsom signed Senate Bill No. 1186 into law, which is referred to as the Medicinal Cannabis Patients’ Right of Access Act, codified as Chapter 26 (commencing with Section 26320) to Division 10 of the Business and Professions Code, ("MCPRAA"); and

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 2 WHEREAS, the MCPRAA further prohibits cities from adopting or enforcing any regulations on or after January 1, 2024, that have the effect of prohibiting the retail sale by delivery within the local jur isdiction of m edicinal cannabis to medicinal cannabis patients or their primary caregivers in a timely and readily accessible manner and in types and quantities that are sufficient to meet demand from medicinal cannabis patients within the jurisdiction; and
WHEREAS, Sections 5 and 7 of Article XI of the California Constitution, and the provisions of the Medical Cannabis Regulation and Safety Act ("MCRSA") as amended by the Medical and Adult- Use Cannabis R egulation and S afety Act ("MAUCRSA"), authorize cities to adopt ordinances that establish standards, requirements, and regulations for local licenses and permits for commercial cannabis and cannabis related activity. Any standards, requirements, and regulations regar ding health and safet y, security, and worker protections established by the State of Califor nia, or any of its departments or divisions, shall be the mi nimum s tandards applicable to medicinal cannabis related activity in a city; and
WHEREAS, the City desires to amend the Gardena Municipal Code to reflect the requirements of SB 1186 and appropriately r egulate the establishment of physical premises from which retail sale by deliver y of medic inal cannabis within the City is conducted by a licensed non-storefront retailer; and
WHEREAS, Chapter 18.66 of the Gardena M unicipal Code impo ses reasonable regulations consistent with st ate law to protect the city's neighborhoods, residents, and businesses from negative public safety and aesthetic impacts assoc iated with the transporting, deliv ery, and distribution of medicinal cannabis and medicinal cannabis products to patients within the City; and
WHEREAS, on August 20, 2024, the Planning Commission of the City of Gardena, held a duly noticed public hearing at which time it considered all evidence presented, both written and oral regarding the proposed amendments to Title 18 of the Gardena Municipal Code as set forth in this Ordinance, after which time it adopted Resolution No. PC 16-24 recommending that the City Co uncil adopt this Ordinance and make a finding that the Ordinance falls under the common sense exempt ion of CEQA set forth in Guidelines section 15061(b)(3); and
WHEREAS, on October 8, 2024, the City Council of the City of Gardena held a duly noticed public hearing and considered the staff report, recommendations by staff, and public testimony regarding this Ordinance, at which time it considered all evidence presented, both written and oral; and
WHEREAS, the proposed Zoning Code amendments are consistent with the City’s General Plan; and
WHEREAS, all legal requirements prior to t he adoption of this Ordinance have occurred.

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 3 NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF GARDENA DOES ORDAIN AS FOLLOWS:

SECTION 1. The City Council finds that the recitals set forth above are true and correct.

SECTION 2. Sections 18.66.010, 18.66.020, and 18.66.030 of Chapter 18.66 (Cannabis Prohibition and Personal Cultiv ation Regulations/Permitting) of the Gardena Municipal Code are hereby amended to read as follows; the rest of the provisions of Chapter 18.66 remain the same.

18.66.010 Purpose.

A. A. The purpose of this chapter is to ex pressly prohibit the establishment of commercial cannabis uses in the city re lating to medical cannabis and adult use non- medicinal cannabis, except to the extent that allo wing the retail delivery of medical cannabis and cannabis products to medical cannabis patients wit hin the city by a non- storefront retailer is required by law.

A.B. The purpose of this chapter is also as well as to impose reasonable regulations on both personal cultivation in private residences and accessory structures and on non- storefront retailers and impose a permitting schemes on such uses.

CB. The city council finds that except as provided for herein and as required by law, the prohibition on storefront commercial cannabis activity is necessary for the preservation of and protection of the public health, sa fety, and welfare of the city. The prohibition of such uses is within the authority conferred upon the city council by state law and is an exercise of its po lice powers to enact and enforce regulations for the public health, safety, and welfare.

18.66.020 Definitions.

A. “Adult Use” or “non-medical use” means the recreational or personal use of cannabis by a natural person 21 years of age or older, as used in MAUCRSA.

B. “Authorized grower” shall meanmeans a person twenty-one years and older who is authorized by, and in compliance with, stat e law and the provisions of this chapter relating to the cultivation of cannabis for personal use.

BC. “Cannabis” means all parts of the pl ant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis , whether growing or not; t he seeds thereof; the resin, whether crude or purified, ex tracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or pr eparation of the plant, it s seeds, or resin. “Cannabis” also means the separated resin, whether crude or purif ied, obtained from cannabis, and any product containing cannabis. “Cannabis” includes cannabis that is used for medical, nonmedical, or other purposes. “Cannabis” does not include the mature Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 4 stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, der ivative, mixture, or preparation of the mature stalks (except the resin extracted theref rom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of ge rmination. “Cannabis” also does not include industrial hemp, as defined in California Health and Safety Code Section 11018.5.

CD. “Commercial cannabis activity” means the cultivation, possession, manufacture, distribution, processing, stori ng, laboratory testing, labelin g, packaging, transportation, delivery or sale of cannabis and cannabis products for nonmedical, medical or any other purpose, and includes the activities of an y business licensed by the state or other government entity under Division 10 of the California Business and Professions Code or any other provision of state law that regulates the licensing of cannabis businesses.

DE. “Cultivation” means any acti vity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

EF. “Delivery” means the commercial transfe r of cannabis or cannabis products to a customer. Delivery also includes the use by a retailer of any te chnology platform owned and controlled by the retailer.

FG. “Fully enclosed and secure structure” means a space within a building that complies with the California Building Code (“CBC”) as adopted by the city of Gardena, or if exempt from the permit requirements of the CBC, a structure that has a complete roof, a foundation, slab or equivalent base to which the floor is se cured by bolts or similar attachments, is secure against unauthorized entry, and is accessible only through one or more lockable doors. Walls and roofs must be c onstructed of solid materials that cannot be easily broken through such as two-inch by four-inch nominal or thicker studs overlaid with three-eighths-inch or thicker plywood or the equivalent. Plastic sheeting, regardless of the mil or inches, or sim ilar products do not satisfy this requirement. If skylights are used, security bars shall be added to the skylights. The structure must provide complete visual screening.

GH. “Indoors” means within a fully enclosed and secure structure.

HI. “MAUCRSA” means the Medicinal an d Adult-Use Cannabis Regulation and Safety Act, as codified in Division 10 of the California Business and Professions Code (Section 26000 et seq.) as the same may be amended from time to time.

J. “MCPRAA” means the Medicinal Cannabis Patients' Right to Access Act, as codified in Chapter 26 (comm encing with Section 26320) to Division 10 of the Business and Professions Code.

K. “Medicinal Cannabis” means both medicinal cannabis and medicinal cannabis products, as those terms are defined in Section 26001(ai)(1) of the Business and Professions Code.

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 5 L. “Medical Use” or “medicinal use” shall mean the use of medicinal cannabis by a medicinal cannabis patient.

ML. “Medicinal cannabis business” means a retailer authorized to engage in the retail sale by delivery of medicinal cannabis to medicinal cannabis patients pursuant to an M- license, as defined in the MCPRAA.

N. “Medicinal cannabis delivery service” m eans a state-licensed, non-storefront retailer that sells and delivers only medici nal cannabis and medicinal cannabis products to medicinal cannabis patients.

OM. “Medicinal cannabis patient” means a qualified patient or a primary caregiver for a qualified patient, as the same are defined in Section 11362.7 of the Health and Safety Code.

P. “Non-storefront retailer” means a retailer that sells cannabis goods to customers only through delivery and whose business is closed to the public.

IQO. “Outdoors” means any lo cation that is not within a fully enclosed and secure structure.

JPR. “Person” means any person, firm, corpor ation, partnership, jo int venture, limited liability company, collective, cooperative, nonprofit, trust, estate, association, club, receiver, syndicate, society, or other organiza tion. The term “person” shall include any owner, manager, proprietor, employee, volunteer, or salesperson.

KQS. “Private residence” means a house, apartment unit, condominium, mobile home, or other similar dwelling that is lawfully used as a residence.

18.66.030 Prohibition.

A. Commercial cannabis activities, whether or not for profit, are expressly prohibited in all zones in the city of Gardena, including all specific plan areas and overlay zones. No person shall establish, operate, conduct, allow or engage in a commercial cannabis activity anywhere within the city. This prohibition includes any type of business enterprise where cannabis is complimentar ily provided as part of any other non-cannabis-related business activity.

B. A property owner shall not rent, lease, or otherwise permit any person or business that engages in commercial cannabis activity to occupy real property in the city. A property owner shall not allow any person or business to establish, operate, maintain, conduct, or engage in commercial cannabis activity on any real property owned or controlled by that property owner that is located in the city.

C. To the extent not already covered by s ubsection A of this section, all deliveries of non-medicinal cannabis are expressly prohibited within the Ccity of Gardena. No person Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 6 shall conduct any deliveries that either originate or terminat e within the city, but the city shall not prohibit the use of city streets where the delivery does not originate or end within the jurisdictional limits of the city.

D. This section is meant to prohibit all commercial retail activities for which a state license is required , except for a medicinal cannabis de livery service pursuant to the MAUCRSA . Accordingly, the city shall not issue any permit, license or other entitlement for any activity for which a state license is required under the AUMA, including any local license to a non-profit entity pursuant to California Business and Professions Code Section 26070.5, except for a permit for a medicinal cannabis delivery service as provided for in Chapter 5.80 of this Code.

E. Except as pr ovided in Section 18.66.040, all cultivation of cannabis is expressly prohibited in all zones in the Ccity of Gardena.

F. Notwithstanding any other provision of this chapter, the prohibitions set forth herein do not apply to the delivery by a non-storefront retailer of medicinal cannabis to a medicinal cannabis patient for medical use within the city.

SECTION 3. Section 18.36.020 of the Gardena Municipal Code relating to uses allowed in the M-1 zone, is hereby amended by adding a new subsection P. to read as follows:

P. Medicinal cannabis delivery service as defined in Chapter 18.66, subject to the following requirements:

1. The owner of the medicinal ca nnabis delivery service has obtained a medicinal cannabis delivery service permit prio r to the commencement of operations in accordance with Chapter 5.80 of this Code, as well as a business license as required by Chapter 5.04 of this Code.

2. The medicinal cannabis delivery servic e businesses shall be located at least 600 feet from the following sensitive receptors. All measurements shall be taken from the closest property line of the medicinal cannabi s delivery service business to the closest property line of the sensitive receptor.

a. Public or private schools;

b. Daycare centers as defined by Health and Safety Code section 1596.76;

c. Churches;

d. Public parks;

e. Libraries;

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 7 f. Youth centers, which for purposes of this section shall mean a public or private facility that is primarily used to host recreation or social activities for minors, including:

1. Private youth membership organizations or clubs;

2. Social service teenage club facilities;

3. Any facility used for youth activities at least 60 percent of the time in a calendar year;

4. A park, playground or recreatio nal area located on a public or private school grounds or in a city, county or state park specifically designed to be used by children or which has play equipment installed, including public grounds designed for athletic activities including courts or fields; or

5. A similar facility to one of the above.

g. Any other medicinal cannabis delivery service business.

SECTION 4. Chapter 5.80 (Medical Cann abis Delivery Service Businesses) is hereby added to Title 5 (Business Licenses and Regulations) of the Gardena Municipal Code to read as follows:

Chapter 5.80

MEDICINAL CANNABIS DELIVERY SERVICE BUSINESSES

5.80.010 Purpose and intent.

The purpose and intent of this chapter is to implement th e provisions of Chapter 26 (commencing with Section 26320) of Divis ion 10 of the California Business and Professions Code, referred to as the Medici nal Cannabis Patients' Right to Access Act.

This chapter also imposes a regulatory permitting scheme and reasonable regulations to protect the city's neighbor hoods, residents, and busine sses from negative impacts associated with the delivery of medicinal cannabis.

5.80.020 Definitions.

All definitions in Chapter 18.66 of this code also apply to this chapter.

Any term defined in Title 4, Division 19 of the California Code of Regulations, that is not otherwise defined herein, shall have the meaning ascribed to it in that Division. “Business Owner” means the same as that set forth in Titl e 14 of the California Code of Regulations, section 15003.

“Business Permit” means a permit for a medicinal cannabis delivery service business.

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 8 “CCR” shall mean Title 4, Division 19 of the California Code of Regulations.

“Chief” means the Chief of Police of t he Gardena Police Department or the Chief’s designee.

“Disqualifying conduct” means, except for item 1, within the 10 years preceding the date of the application, or in the case of revocation or suspension proceedings, within 10 years preceding the date of the revocation or suspension notice, a person has had:

1. Within the three years preceding the date of the application, or in the case of revocation or suspension proceedings, within three years preceding the date of the revocation or suspension notice, the applicant has had a suspension or revocation of a commercial cannabis license, or any convictions or administrative citations that are final for operating an unlicensed commercial cannabis activity;

2. A violent felony conviction, as s pecified in Penal Code section 667.5(c);

3. A serious felony conviction, as specified in Penal Code section 1192.7(c;

4. A felony conviction involvin g fraud, deceit, or embezzlement;

5. A felony conviction for hiring, employ ing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor;

6. A felony conviction for drug trafficking with enhancements pursuant to Health and Safety Code section 11370.4 or 11379.8;

7. A conviction for any controlled substance felony;

8. A conviction for the intentional a nd knowing sale of cannabis to a person under 21 years of age;

9. A conviction for the intentional and k nowing sale of medicinal cannabis to a person without a physician’s recommendation;

10. A conviction for the sale of cannabis without a license.

For purposes of this chapter, a conviction means a plea or verdict of guilty or a conviction or diversion following a plea of nolo contendere.

“Employee Permit” means a permit for an individual employ ed by a medicinal cannabis delivery service business.

5.80.030 Permit/business license required.

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 9 A. No person shall engage in or conduct any medicinal cannabis delivery service business within the city without first obtaini ng a business permit under this chapter and having a state license to operate as a non-storefront retailer. A separate business permit shall be required for each physical address location within the city. An applicant may not apply for a business license until the applicant has received the state license.

B. No person shall be employed by a medi cinal cannabis delivery service business within the city without first obtaining an employee permit under this chapter. No permit shall be issued to an individual under 21 years of age.

5.08.040 Application.

A. An application for a business permit or employee permit shall be on a form provided by the Gardena Police Department, shall be signed and dated, and shall be accompanied by a permit fee in an amount set by resolution of the City Council.

B. All applications shall in clude the following statements:

1. A certification under penalty of perjury that the information contained in the application is true and correct;

2. An authorization for the city, its officers, agents and employees to seek information and conduct an investigation into the truth of the statements set forth in the application and to ensure continual compliance with all applicable provisions of law;

3. An agreement to the fullest extent pe rmitted by law to indemnify, defend (at the applicant's sole cost and expense), and hold the city, and its officers, elected and appointed officials, employees, vol unteers, and agents harmless, from any and all claims, losses, damages, injuries, including death, liabilities or losses which arise out of, or which are in any way rela ted to, the city's issuance of the permit, the city's decision to approve the permit, the process used by the city in making its permitting decision, or the alleged violation of any laws by the applicant, its officers, employees, or agents.

C. An application for either a business pe rmit or employee permit shall contain the following information:

1. The legal first and la st name of the applicant;

2. The date of birth of the applicant;

3. The address of the applicant;

4. The email address of the applicant;

5. Whether the applicant has engag ed in any disqualifying conduct; Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 10 6. Such further information as the Chief determines necessary to determine compliance with this chapter and applicable provisions of law;

7. A complete set of the applicant’s fingerprints taken by the Gardena police department. The applicant shall be responsible for payment of any fingerprinting fee;

8. All applicants shall have their pict ure taken by the Gardena police department;

D. Business Permit Application. An applicat ion for a business permit shall contain the following additional information:

1. An application for a business permit shall be filed for each business owner.

2. Both the business owner and the proper ty owner, if different, shall sign the business permit application form.

3. The legal business name of the medicinal cannabis delivery service business;

4. The physical address of the business;

5. The mailing address of the business if different from the physical address;

6. The telephone numbe r of the business;

7. The website address of the business, if any;

8. Identification of the owner that wil l serve as the primary contact person, including the person’s title; and

9. A site plan showing a complete and detailed diagram of the proposed business location as required by CCR section 15006(b) through (f).

E. Employee Permit Application – An applicat ion for an employee permit shall contain the following additional information:

1. The legal business name of the medicinal cannabis delivery service business where the applicant will be employed; and

2. The physical address of the business.

F. Renewal. A permit issued pur suant to this chapter shall expire 12 months after the date of its issuance and must be a renewed on a yearly basis. A renewal application shall Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 11 contain the same information as the original application, but new fingerprints need not be provided and a new site plan need not be submitted if there has been no change.

5.80.050 Duty to Update.

A. A permittee shall be required to update t he information contained in the application within 10 business days of such change.

B. Reporting legal matters. The business owner shall notify the Chief in writing of the following legal matters pending against the owner, in its individual capacity or otherwise, within 48 hours of the date of conviction, judgment, order, or final decision:

1. Criminal conviction. The written notification to the city shall include the date of the conviction, the court docket number, the name of the court in which the conviction was entered, and the specific offense(s) resulting in a conviction(s).

2. Civil penalty or judgment. The written notification shall include the date of verdict, entry of judgment, or order, the court docket number, the name of the court in which the matter was adjudicated, and a description of the civil penalty or judgment rendered.

3. Administrative order. The written not ification shall include the date of the order, the name of the agency issuing the order, and a description of the administrative penalty or decision rendered against the business owner or property owner.

4. Revocation or suspension of a stat e or local license, permit, or other authorization. The written not ification shall include the name of the local agency involved, a written explanati on of the proceeding or enf orcement action, and the specific violation(s) that led to the revocation or suspension.

5.80.060 Decision on the app lication; permit approva l, denial, suspension and revocation.

A. The Chief is authorized to approve, deny, suspend, or revoke the permits required under this chapter.

B. Upon receipt of a completed application, the Chief shall cause an investigation to be conducted by the appropriate departments within the city, including state and local background checks.

C. The Chief shall act upon an application within 30 working days following receipt.

Notwithstanding the above, fail ure to act upon a completed app lication within the time frame set forth above shall not be deemed approval of the application. Any permit issued Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 12 pursuant to this subsection shall be deemed c onditional pending the city’s receipt of the California Department of Justice report on the applicant’s fingerprints.

D. Permit Issuance. When an application, including a renewal, is approved, in addition being issued a permit, an identification badge shall be issued to every business owner and employee. The identification b adge shall include the permit number and the expiration date.

E. Grounds for Denial. An application for a permit or renewal shall be denied if any of the following grounds are found to exist:

1. The applicant has engaged in disqualifying conduct;

2. There has been a material misr epresentation on the application;

3. There has been a material misr epresentation on the site plan;

4. Application deficiencies. The appl ication is incomplete, supportive documentation was not provided, and/or the applicant failed to correct deficiencies in the application or provide additional application information within the response timeframe requested; or

5. For a business permit, facts or circum stances exist which indicate that the business does or would very likely consti tute a threat to public health, safety, and/or welfare.

F. Grounds for revocation or suspension. A permit issued pursuant to this chapter may be suspended or revoked by the Chief if any of the following grounds are found to exist:

1. Any reason exists which would have resulted in a denial of the application in the first instance;

2. For a business permit, there have been modifications to the operations of the business as shown on the original site plan;

3. For a business permit, there has been a change in the business owners and such new owners have not obtained a permit;

4. The Chief has determined, based on substantial evidence, that the permittee is in violation of t he requirements of this chapte r, of this Code, or state law; or

5. Suspension or expiration without time ly renewal of a license issued by the State of California, or by any of its departments or di visions, shall immediately suspend the ability of a medicinal cannabi s delivery service business to operate Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 13 within the city until the Stat e of California, or any of its departments or divisions, reinstates or reissues the state license. Revocation or termination of the license of a medicinal cannabis delivery service busine ss by the State of California, or any of its departments or divisions, shall immediately revoke or terminate the ability of a medicinal cannabis delivery service busin ess to operate within the city without notice. If the city becomes aware t hat a state license has expired or been suspended, revoked, or terminated, it will initiate proceedings under this section to suspend or revoke a business permit.

6. If, in the discretion of the Chie f, an alleged violation is minor and capable of correction, then prior to suspension or revocation a written notice shall be given to the permittee of the alleged violation(s) involved to allow a period of time to correct the alleged violation(s), wh ich period shall not exceed five business days, at the end of which period an inspection shall be conducted to determine whether the alleged violation(s) has been corrected. For purposes of this section, written notice may be in the form of a notice of violation or an administrative citation.

G. Any denial, suspension or revocation s hall be accompanied by a written statement setting forth the reason for the decision. A notice of sus pension or revocation may be accompanied by an administrative or criminal citation. Any notice may be appealed in accordance with section 5.80.070.

5.80.070 Appeals.

A. An appeal from a decision of the Chief shall be conduc ted as prescribed in this section.

B. Within 10 calendar days after the date a decision of the Chief is mailed by first- class mail, postage prepaid, to deny, suspend, or revoke a permit, or to add conditions to a permit, an aggrieved party may appeal such action by filing a written appeal with the city clerk setting forth the reasons why the decision was not proper. The notice of appeal shall specify:

1. The name and addres s of the appellant;

2. The date that the permit applic ation was filed with the city;

3. The date of the mailing of the decision to deny, suspend, revoke, or condition the permit which is being appealed; and

4. The factual basis for the appeal.

C. An appeal shall be accompanied by a fee set by resolution of the City Council. An appeal without the timely payment of the fee shall be considered to be untimely.

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 14 D. Upon receipt of a complete and timely filed notice of appeal, the City Clerk shall schedule a hearing before a hearing officer. T he hearing officer shall be either the city manager or an administrative hearing officer hired under contract by the city manager.

E. The appellant shall be provided with wr itten notice of the time and place of the appeal hearing, as well as a copy of all relev ant materials, at least seven calendar days prior to the hearing.

F. The scope of the appeal hearing shall be limited to those issues raised by the appellant in the written appeal.

G. At the time of the heari ng, the hearing officer shall review the records and files relating to the notice of decision.

1. The hearing officer shall permit any interested person, including the chief of police and the appellant, to present any re levant evidence bearing on the issues involved in the matter.

2. In conducting the hearing, technica l rules relating to evidence and witnesses shall not apply. An y relevant evidence may be admitted if it is material and if it is evidence customarily relied upon by responsible persons in the conduct of their affairs regardless of the existence of any co mmon law or statutory rule which might make admission of such ev idence improper over objection in civil actions. Hearsay evidence may be admissible if it is the sort upon which reasonable persons are accustomed to rely in the conduct of serious affairs. The rules of privilege shall be applicable to the extent they are now or are hereafter permitted in civil actions. Irrelevant, co llateral, and repetitious testimony shall be excluded.

3. In determining whether a person shoul d be disqualified for meeting the definition of disqualifying conduct, the hearing officer may consider: the nature and severity of the act(s) or crime(s); whether there we re any additional subsequent act(s) or crime(s); the number of act(s) or crime(s); and how re cent the act(s) or crime(s) were.

H. T he appellant shall have t he burden of proving that he or she meets the requirements for issuing the permit in the first instance. The Chief shall have the burden of proving that grounds exist for revoking or failing to renew a permit.

I. Based upon the evidence presented at the hearing, the hearing officer shall determine whether the decision by the Chief should be affirmed, modified or reversed.

J. The hearing officer’s decision and the r easons therefore shall be communicated in writing to the appellant within 10 working days after the close of the hearing. The decision shall also state that it is final and conclusive, that judicial review may be sought therefrom pursuant to Code of Civil Procedure Section 1094.5, and that any action filed in the Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 15 superior court shall be filed within ninety days following the city manager’s notice pursuant to Code of Civil Procedure Section 1094.6.

5.08.080 Notices.

All notices required to be given pursuant to this chapter shall be served on the responsible party (i.e., permittee, applicant or appellant) either by personal delivery or by deposit in the United States mail in a sealed envelope postage pr epaid addressed to such responsible party as the name and address appear in the most recent application on file with the city. Service by mail shall be deemed to have been completed on the date deposited in the mail.

5.80.090 Fees.

The City Council may impose by resolution a nonrefundable fee to reimburse the city for its reasonable and necessary costs for providing the services under this chapter. This fee shall be in addition to the business license fees required by Title 5 of this Code.

5.80.100 Operational standards.

A medicinal cannabis delivery service business and its employees shall comply with the following requirements:

A. All applicable requirements of state law, including statutes and California Code of Regulations.

B. No markings or indications of medici nal cannabis shall be visi ble from the public right-of-way and/or exterior of the structur e(s) associated with t he medicinal cannabis delivery service business.

C. Odor control devices and techniques shall be incorporated and maintained to ensure that odors from the medicinal cannabis are not detectable off-site.

D. The original of the business permit i ssued by the city pursuant to this chapter, along with the medicinal can nabis delivery business's st ate cannabis license and city- issued business license, shall be readily av ailable upon request by the Chief and not visible to the public.

E. Delivery drivers shall keep the original of the employee permit and identification card, along with a copy of the business pe rmit, with them at all times while making deliveries.

F. All records required to be kept by stat e law shall be made available to the Chief and must be produced no later than one business day after receipt of the City’s request, unless otherwise stipulated by the City.

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 16 G. The business shall designate a security representative/liaison who can meet with the Chief regarding any security related measures and/or operational issues.

H. Signage shall be limited to the name of the busin ess only and shall be in compliance with Chapter 18.58 of the City’s sign code and shall contain no advertising of other companies, brands, goods, or services.

I. No medicinal cannabis products shall be visible from outsi de the non-storefront medicinal cannabis delivery services fixed location or delivery vehicles.

J. No visual display, signage, or condition on the exterior of the non-storefront medical cannabis delivery service fixed locations or delivery vehicles shall indicate the types of products being stored inside the fix ed location or transported in the delivery vehicles.

K. All deliveries of medicinal cannabis must be to a customer’s physical address and no delivery may be made to an address located on publicly owned land or any address on land or in a building leased by a public agency.

5.80.110 Violations, inspections, and enforcement.

A. Violations declar ed a public nuisance. Each and ever y violation of the provisions of this chapter is deemed unlawful and a public nuisance.

B. Each violation a separate offense. Each and every violation of this chapter shall constitute a separate violation, and the city may pursue any and all remedies and actions available under state and local law for any violations committed by a medicinal cannabis delivery service business, a business owner, a property owner, or any other persons related to or associated with any commercial cannabis activity, including suspension or revocation of any permit pursuant to this chapter. Additionally, as a nuisance per se, any violation of this chapter shall be subject to disgorgement and payment to the city of any monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or in equity.

C. Remedies are cumulative and not exclusive. The remedies provided in this chapter or this code are not to be c onstrued as exclusive remedies. The city is authorized to pursue any proceedings or remedies provided by law.

D. Business owner are responsible for vi olations. The business owner shall be responsible for all local and state law violations that occur in or about a physical address location, a medicinal cannabis delivery service vehicle, or related to delivery personnel, whether or not the violations occur within the presence of the business owner.

E. Inspections and enforcement.

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 17 1. The Chief, code enforcement officers, police officers, and the Los Angeles County Fire Department, are charged with enf orcing the provisio ns of this code and shall be authorized to enter a medicinal cannabis delivery service business or a medicinal cannabis delivery service vehi cle operating in the city at any time during the business's hours of operation with or without notice, subject to constitutional limitations, to do inspec t the medicinal cannabis delivery service business and medicinal cannabis delivery service vehicle as well as any recordings and records required to be maintained pursuant to this chapter or under applicable provisions of state law.

2. It is unlawful for any person having responsibility over the operation of a medicinal cannabis delivery service business to impede, obstruct, interfere with, or otherwise not allow the city to conduct an inspection, review or copy records, recordings, or other documents required to be maintained by such business under this chapter or under state or local law. It is also unlawful for a person to conceal, destroy, deface, damage, or falsify any re cords, recordings, or other documents required to be maintained by a medicinal cannabis delivery service business under this chapter or under state or local law.

SECTION 5. Findings. In approving the changes to the Gardena Municipal Code set forth above, the City Council finds that adoption of this Ordinance is required for the public necessity, convenience, general welfare and good land use and zoning practices. The Industrial land use designation allows for a variety of clean and environmentally friendly industries. The industrial zone allows comme rcial, manufacturing and industrial uses conducted within enclosed buildings. The es tablishment of non- storefront cannabis delivery businesses is consistent with the General Plan and zoning.

SECTION 6. CEQA. Adoption of this Ordinanc e is exempt under the common sense exemption of CEQA Guidelines section 15061(b)(3) where it can be seen that the project will not have any possibility of creating significant effe cts on the environment. The ordinance does not authorize any development and is merely sets forth policy and procedures.

SECTION 7. Severability. If any se ction, subsection, subdivision, paragraph, sentence, clause or phrase of this ordi nance, or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragr aph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional.

SECTION 8. Effective Date. This Ordinance shall ta ke effect on the thir ty-first day after passage.

SECTION 9. Certification. The City Clerk shall certify the passage of this ordinance and shall cause the same to be entered in the book of original ordinances of said City; shall Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51 18 make a minute passage and adoption thereof in the records of the meeting at which time the same is passed and adopted; and shall, within fifteen (15) days after the passage and adoption thereof, cause the same to be published as required by law, in a publication of general circulation.

PASSED, APPROVED AND ADOPTED this ____ day of ____________, 2024.

TASHA CERDA, Mayor
ATTEST:

MINA SEMENZA, City Clerk

APPROVED AS TO FORM:

CARMEN VASQUEZ, City Attorney

Docusign Envelope ID: 2A358776-2ECC-4043-93D6-CFF126081C51

1 Title 4 Division 19. Department of Cannabis Control

• Chapter 1. All Licensees
• Chapter 2. Distributors
• Chapter 3. Retailers
• Chapter 4. Microbusiness
• Chapter 5. Cannabis Events
• Chapter 6. Testing Laboratories
• Chapter 7. Cultivators
• Chapter 8. Manufacturers
• Chapter 9. Other Responsibilities
• Chapter 10. Cannabis and Cannabis Products
• Chapter 11. Labeling and Packaging Requirements
• Chapter 12. Enforcement
• Chapter 13. Other Provisions

Chapter 1. All Licensees
Article 1. Division Definitions and General Requirements

§ 15000. Definitions.

(a) “Act” means the Medicinal and Adult -Use Cannabis Regulation and Safety Act, codified in Business and Professions Code section 26000, et seq.

(b) “Adulterated” or “adulteration” has the meaning stated in section 26039.6(a) of the Act.

(c) “Allergen” means a major food allergen as defined in 21 U.S.C § 321(qq).

(d) “Appellation of Origin” means a designation to indicate that the cannabis meets the requirements developed by the program established pursuant to section 26063 of the Act.

(e) “Applicant” means an owner that is applying for a Department-issued license.

(f) “Batch” means a specific quantity of homogeneous cannabis or cannabis product that is one of the following types:

(1) “Harvest batch” means a specifically identified quantity of dried flower or trim, leaves, and other cannabis plant matter that is harvested at the same time, and, if applicable, cultivated using the same pesticides and other agricultural chemicals.

(2) “Manufactured cannabis batch” or “production batch” means either:

Attachment C
2 (A) An amount of cannabis concentrate or extract produced in one production cycle using the same extraction methods and standard operating procedures; or
(B) An amount of a type of cannabis product produced in one production cycle using the same formulation and standard operating procedures.

(g) “Cannabis accessories” has the meaning stated in Health and Safety Code section 11018.2.

(h) “Cannabis concentrate” means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product's potency. For purposes of this division, “cannabis concentrate” includes, but is not limited to, the kief , tinctures, capsules, suppositories, extracts, butter, vape cartridges, inhaled products (e.g., dab, shatter, and wax), and tablets as defined in subsection (nnn).

(i) “Cannabis goods” means cannabis and cannabis products in final form and packaged and labeled as they will be sold at retail. For the purposes of section 15311, “cannabis goods” includes all cannabis and cannabis products in any form.

(j) “Cannabis product” means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.

(k) “Cannabis product quality,” “quality cannabis product,” or “quality” means that the cannabis product consistently meets the established specifications for identity, cannabinoid concentration, homogeneity, composition, and testing standards pursuant to sections 15718 through 15724, and has been manufactured, packaged, labeled, and held under conditions to prevent adulteration and misbranding.

(l) “Cannabis waste” means any material intended for disposal that contains cannabis but is not otherwise considered a hazardous waste. Cannabis waste consisting solely of plant material shall be considered an organic waste as defined in Public Resources Code section 42649.8(d).

(m) “Canopy” means the designated area(s) at a licensed premises that will contain mature plants at any point in time.

(n) “CBD” means the compound cannabidiol, CAS number 13956- 29-1. “Total CBD” is defined in section 15700(qqq).

(o) “Commercial cannabis activity” includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis or cannabis products as provided for in this division, or acting as a cannabis event organizer for temporary cannabis events. 3 (p) “Commercial -grade, non- residential door lock” means a lock manufactured for commercial use.

(q) “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

(r) “Cultivation site” means a location where commercial cannabis is planted, grown, harvested, dried, cured, graded, or trimmed, or a location where any combination of those activities occurs.

(s) “Delivery employee” means an individual employed by a licensed retailer or licensed microbusiness authorized to engage in retail sales who delivers cannabis goods from the licensed retailer or licensed microbusiness premises to a customer at a physical address.

(t) “Designated responsible party” means the individual identified by the commercial cannabis business who has legal authority to bind the commercial cannabis business and who is the primary contact for the application and license-related issues.

(u) “Distribution” means the procurement, sale, and transport of cannabis and cannabis products between licensees.

(v) “Dried flower” means all dead cannabis that has been harvested, dried, cured, or otherwise processed, excluding leaves and stems.

(w) “Edible cannabis product” means a cannabis product intended to be used orally, in whole or in part, for human consumption. For purposes of this division, “edible cannabis product” includes cannabis products that dissolve or disintegrate in the mouth, but does not include any product otherwise defined as “cannabis concentrate.”

(x) “Extraction” means a process by which cannabinoids are separated from cannabis plant material through chemical or physical means.

(y) “Final form” refers to cannabis and cannabis products that are in the form in which the cannabis or cannabis product will be consumed or used.

(z) “Flowering” means that a cannabis plant has formed a mass of pistils measuring greater than one-half inch wide at its widest point.

(aa) “Free cannabis goods” means any amount of cannabis goods provided to any person without cost or payment or exchange of any other thing of value.

(bb) “Immature plant” or “immature” means, for purposes of cultivation: a cannabis plant that has a first true leaf measuring greater than one- half inch long from base to tip if started from seed or a mass of roots measuring greater than one- half inch wide at its widest point if vegetatively propagated and outside of a tissue container, but that is not flowering; or a container with one or more cannabis protoplasts, cells, shoots, or plantlets 4 in culture. For retail purposes, “immature plant” or “immature” means a cannabis plant that is nonflowering and shorter and narrower than 18 inches.

(cc) “Indoor cultivation” means the cultivation of cannabis within a permanent structure using exclusively artificial light or within any type of structure using artificial light at a rate above twenty-five watts per square foot.

(dd) “Informational panel” means any part of the cannabis product label that is not the primary panel and that contains required labeling information.

(ee) “Infusion” means a process by which cannabis, cannabinoids, or cannabis concentrates are directly incorporated into a product formulation to produce a cannabis product.

(ff) “Infused pre-roll” means a pre-roll into which cannabis concentrate (other than kief) or other ingredients have been incorporated.

(gg) “Ingredient” means any substance that is used in the manufacture of a cannabis product and that is intended to be present in the finished cannabis product.

(hh) “Kief” means the resinous trichomes of cannabis that have been separated from the cannabis plant.

(ii) “Labeling” means any label or other written, printed, or graphic matter upon cannabis or a cannabis product, upon its container or wrapper, or that accompanies any cannabis or cannabis product.

(jj) “Licensee” means any person holding a license issued under the Act.

(kk) “Light deprivation” means the use of any technique to eliminate natural light in order to induce flowering.

(ll) “Limited-access area” means an area in which cannabis or cannabis products are stored or held and is only accessible to a licensee and authorized persons.

(mm) “Lot” means a batch, or specifically identified portion of a batch.

(nn) “Lot number” or “batch number” means a distinctive group of numbers, letters, or symbols or any combination of these that is unique to a group of cannabis or cannabis products.

(oo) “Manufacture” means to compound, blend, extract, infuse, or otherwise make or prepare a cannabis product.

(1) The term “manufacture” includes the following processes:
(A) Extraction.
5 (B) Infusion.
(C) Packaging or repackaging of cannabis products.
(D) Labeling or relabeling the packages of cannabis products. (E) “Post -extraction processing” or “post -processing,” which means a process by which one or more active cannabinoids in cannabis concentrate are further concentrated either by chemical or physical means.
(F) Remediation of failed harvest batches or cannabis product batches.

(2) The term “manufacture” does not include the following:
(A) The repacking of cannabis products from a bulk shipping container by a distributor or retailer where the product's original packaging and labeling is not otherwise altered.
(B) The preparation of pre-rolls by a licensed distributor in accordance with the requirements of section 15303.
(C) The collection of the resinous trichomes that are dislodged or sifted from the cannabis plant incidental to cultivation activities by a licensed cultivator. (D) The processing of nonmanufactured cannabis products, as defined in subsection (eee).
(E) The labeling or relabeling of a package containing cannabis goods with the amount of cannabinoids and terpenoids based on regulatory compliance testing results by a distributor in accordance with sections 15303 and 17407.

(pp) “Manufacturing” or “manufacturing operation” means all aspects of the extraction process, infusion process, post -processing, remediation, and packaging and labeling processes, including processing, preparing, holding, and storing of cannabis products.

Manufacturing also includes any processing, preparing, holding, or storing of components and ingredients.

(qq) “Mature plant” or “mature” means a cannabis plant that is flowering.

(rr) “Medicinal cannabis patient” includes both a qualified patient as defined in Health and Safety Code section 11362.7 and a person in possession of a valid identification card issued under Health and Safety Code section 11362.71.

(ss) “Mixed-light cultivation” means the cultivation of mature cannabis in a greenhouse, hoop-house, glasshouse, conservatory, hothouse, or other similar structure using a combination of:

(1) Natural light and either of the models listed below:
(A) “Mixed-light Tier 1,” without the use of artificial light or the use of artificial light at a rate above zero, but no more than six watts per square foot; or (B) “Mixed-light Tier 2,” the use of artificial light at a rate above six and below or equal to twenty-five watts per square foot.

(tt) “Nonmanufactured cannabis products” means final form items that contain only cannabis, leaf, pre-roll filter tips, or paper.
6 (uu) “Nonvolatile solvent” means any solvent used in the extraction process that is not a volatile solvent. “Nonvolatile solvent” includes carbon dioxide, ethanol, and nonhydrocarbon-based or other solvents such as water, vegetable glycerin, vegetable oil, animal fat, and glycerin.

(vv) “Nursery” means all activities associated with producing clones, immature plants, seeds, and other agricultural products used specifically for the propagation and cultivation of cannabis.

(ww) “Orally consumed concentrate” means a cannabis concentrate that is intended to be consumed by mouth and is not otherwise an edible cannabis product. “Orally consumed concentrate” includes tinctures, capsules, and tablets as defined in subsection (nnn).

(xx) “Outdoor cultivation” means the cultivation of mature cannabis without the use of artificial lighting in the canopy area at any point in time.

(yy) “Package” or “packaging” means any container or wrapper that may be used for enclosing or containing any cannabis or cannabis product. “Package” does not include a shipping container or outer wrapping used solely for the transport of cannabis or cannabis products in bulk quantity to a licensed premises.

(zz) “Person” includes any individual, firm, 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.

(aaa) “Pest” means an undesired insect, rodent, nematode, fungus, bird, vertebrate, invertebrate, weed, virus, bacteria, or other microorganism (except microorganisms on or in living humans or other living animals) that is, or is liable to become, injurious, dangerous, or detrimental to health, the environment, or the agricultural environment of the state.

(bbb) “Pre-roll” means any combination of the following rolled in paper: flower, shake, leaf, or kief that is obtained from accumulation in containers or sifted from loose, dry cannabis flower or leaf with a mesh screen or sieve.

(ccc) “Premises” means the designated structure(s) and land specified in the application that is owned, leased, or otherwise held under the control of the applicant or licensee where the commercial cannabis activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one licensee.

(ddd) “Primary panel” means the part of a cannabis goods label that is most likely to be displayed, presented, shown, or examined under customary conditions of display for retail sale.

7 (eee) “Processing” means all activities associated with the drying, curing, sifting, grading, trimming, rolling, storing, packaging, and labeling of cannabis or nonmanufactured cannabis products.

(fff) “Product Identity” or “identity of the product” means the generic, common, or usual name of a product by which it is most commonly known.

(ggg) “Promotional materials” means any form, letter, circular, pamphlet, publication, or other written material directed to a customer or prospective customer to induce retail sales. Promotional material does not include permitted signs, displays, decorat ions, cannabis accessories, or cannabis or cannabis products furnished by a licensed cultivator, licensed manufacturer, licensed distributor, licensed microbusiness, or licensed cannabis event organizer to a retail licensee for advertising purposes.

Promotional materials shall have no intrinsic or secondary value.

(hhh) “Publicly owned land” means any building or real property that is owned, leased, or occupied by a city, county, state, federal, or other government entity.

(iii) “Quarantine” means the storage or identification of cannabis or cannabis product to prevent use, movement or transfer of the cannabis or cannabis product.

(jjj) “Residential area” is an area that is within 600 feet of any single-family or multifamily residence, other than commercial hotels, motels, and similar establishments for temporary lodging.

(kkk) “Retail area” means a building, room, or other area that is open to the public, upon the licensed retailer or licensed microbusiness premises authorized to engage in retail sales in which cannabis goods are sold or displayed.

(lll) “Serving” means the designated amount of cannabis product established by the manufacturer to constitute a single unit.

(mmm) “Sublet” means to lease or rent all or part of a leased or rented property.

(nnn) “Tablet” means a solid preparation containing a single serving of THC or other cannabinoid that is intended to be swallowed whole, not formulated to be chewable, dispersible, effervescent, orally disintegrating, used as a suspension, or consumed in a manner other than swallowed whole, and does not contain any added natural or artificial flavor or sweetener.

(ooo) “Tamper-evident” means that the cannabis goods packaging is sealed in a manner that prevents the packaging from being opened without obvious destruction of the seal.

8 (ppp) “Terpenes” means terpenes, terpenoids, flavonoids, polyphenols, and other naturally occurring phytochemicals and secondary metabolites contributing to the aroma or flavor of cannabis.

(qqq) “THC” or “delta-9 THC” means the compound tetrahydrocannabinol, CAS number 1972-08-3. “Total THC” is defined in section 15700(rrr).

(rrr) “Tincture” means a solution of cannabis extract, derived either directly from the cannabis plant or from a manufactured cannabis extract, dissolved in alcohol, glycerin, or vegetable oils. For purposes of this definition, “vegetable” includes botanic ally classified fruits and vegetables and their seeds.

(sss) “Topical cannabis product” means a cannabis product intended to be applied to the skin rather than ingested or inhaled.

(ttt) “Track and trace system” means the program for reporting the movement of cannabis and cannabis products through the distribution chain established by the Department in accordance with section 26067 of the Act.

(uuu) “Transport” means the physical movement of cannabis or cannabis products from one licensed premises to another licensed premises.

(vvv) “Unique identifier” or “UID” means an alphanumeric code or designation used for reference to a specific plant and any cannabis or cannabis product derived or manufactured from that plant.

(www) “Universal symbol” means the symbol developed by the Department pursuant to section 26130(c)(7) of the Act to indicate that a product contains cannabinoids.

(xxx) “Vehicle alarm system” is a device or series of devices installed to discourage theft of the vehicle or its contents and is intended to summon general attention or to summon law enforcement as a result of an indication of an attempted breach of the vehicle.

(yyy) “Volatile solvent” means any solvent that is or produces a flammable gas or vapor that, when present in the air in sufficient quantities, will create explosive or ignitable mixtures. Examples of volatile solvents include, but are not limited to, buta ne, hexane, and propane.

(zzz) “Watts per square foot” means the sum of the maximum wattage of all lights identified in the designated canopy area(s) in the premises diagram divided by the sum of the dimensions in square feet of the same designated canopy area(s).

(aaaa) “Wholesale cost” has the meaning stated in title 18, California Code of Regulations, section 3700.

9 § 15000.1. General Requirements.

(a) Every person who conducts commercial cannabis activity shall obtain and maintain a valid license from the Department for each separate premises at which commercial cannabis activity is conducted.

(b) Commercial cannabis activity shall only be conducted between licensees . Licensed retailers and licensed microbusinesses authorized to engage in retail sales may conduct commercial cannabis activity with customers or nonprofits in accordance with this division.

(c) The licensee shall only conduct commercial cannabis activities authorized by the license and on the premises licensed for the activity.

(d) All transfers of cannabis and cannabis product shall be conducted by a licensed distributor.

(e) Licenses shall not be transferrable or assignable to another person or premises, except as provided in section 26050.2 of the Business and Professions Code. In the event of the sale or other transfer of the commercial cannabis business, changes in ownership shall be made in accordance with section 15023.

(f) Applicants and licensees shall use their legal business name on all documents related to commercial cannabis activity.

§ 15000.3. Premises Requirements.

(a) A licensed premises shall not be in a location that requires persons to pass through a business that sells alcohol or tobacco or a private residence to access the licensed premises.

(b) A licensed premises shall not be in a location that requires persons to pass through the licensed premises to access a business that sells alcohol or tobacco or a private residence.

(c) A licensed premises shall not include the living areas of a private residence, such as bathrooms, bedrooms, kitchens, and living rooms, unless living areas are required to be included in the licensed premises. If the local jurisdiction requires living areas of a private residence to be included in the licensed premises, licensees shall designate living areas on their premises diagram as required by section 15006(k) but shall not conduct any commercial cannabis activity within the designated living areas. Nothing in this section shall prohibit a licensee from utilizing the living areas of a private residence for non- commercial cannabis activity, such as staff breaks. Areas of a private residence that are not considered to be living areas may include garages, offices, sheds, barns, and other areas regularly used for commercial cannabis activity

10 (d) Licensees shall ensure that the Department has immediate access to their licensed premises. If the Department is denied access to a licensee's premises for any reason, the licensee shall be held responsible and subject to discipline. If the Department is denied access to one licensee's premises because of another licensee's refusal to grant access when the only access to one licensed premises is through another licensed premises, all licensees shall be held responsible and subject to discipline.

(e) Nothing in this section shall be interpreted to prohibit two or more licensed premises from occupying separate portions of the same parcel of land or sharing common use areas, such as a bathroom, breakroom, hallway, or building entrance.

(f) All structures included as part of the licensed premises shall be permanent structures.

Structures that are considered permanent structures include, but are not limited to, buildings, barns, sheds, shipping containers, and modular buildings. Structures that are not considered to be permanent structures include, but are not limited to, structures that rest on wheels or any structure that can be readily moved.

(g) Personal cultivation of cannabis as permitted by Health and Safety Code section 11362.1 shall not occur on the licensed premises unless the local jurisdiction requires that all areas of the land parcel be included in the premises. If the local jurisdic tion requires all areas of the land parcel be included, then the licensee may conduct personal cultivation in a separate and distinct area on the premises, which shall be identified on the premises diagram pursuant to section 15006. “Separate and distinct,” for purposes of this section, shall mean that the personally cultivated cannabis is cultivated, processed, and stored in a manner that clearly identifies it as personally cultivated cannabis and prevents it from coming into contact with commercially cultivated cannabis.

(h) Notwithstanding any other provision of law, a licensed premises that is not in compliance with subsections (c) and (f) at the time this subsection becomes effective shall come into compliance within six months of the effective date of this subsection b y submitting a premises modification in accordance with section 15027. Premises that must be modified to comply with this subsection shall not be subject to the premises modification fee specified in section 15014.

§ 15000.5. Licensee's Responsibility for Acts of Employees and Agents.

In construing and enforcing the provisions of the Act and the regulations in this division, the act, omission, or failure of an agent, officer, representative, or other person acting for or employed by a licensee, within the scope of their employment or office, shall in every case be deemed the act, omission, or failure of the licensee.

§ 15000.6. Age Restriction.

Employees or persons retained by a licensee to work within or on a licensed premises or to handle cannabis or cannabis products shall be at least 21 years of age.

11 § 15000.7. Storage of Inventory.

(a) All cannabis and cannabis products must be stored within the licensed premises.

(b) A licensee shall not store cannabis goods outdoors.

(c) Bathrooms and changing facilities shall be separated from all storage areas by solid walls that extend from the floor to the ceiling. Employee break areas, if any, shall be separate and distinct from areas where cannabis and cannabis products are stored.

(d) Licensees may use additional shipping containers as temporary storage space on their licensed premises when their storage needs exceed the capacity of their storage space. Licensees using storage containers pursuant to this subsection shall notify the Department of the premises modification in accordance with subsection (h) of section 15027.

Chapter 1. All Licensees
Article 2. Applications

§ 15002. Annual License Application Requirements.

(a) Applications may be completed and submitted online at www.cannabis.ca.gov.

(b) Applicants who submit their applications online shall first register for a user account if required by the licensing system. To register for a user account, the applicant shall do all of the following as requested by the licensing system:

(1) Create a username, password, and security question and answer; (2) Provide an email address; and
(3) Provide the owner's first and last name, primary phone number, Social Security number or individual taxpayer identification number, date of birth, and mailing address.

(c) An application must be completed by an owner as defined by section 15003. An application for an annual cannabis license includes the following:

(1) The legal first and last name of the applicant and the legal business name of the commercial cannabis business.
(2) Every business trade name, fictitious business name, and doing business as (“DBA”) under which the commercial cannabis business will operate. (3) The commercial cannabis license for which the applicant is applying, and whether the applicant is requesting that the license be designated as medicinal, adult - use, or both, if applicable.
(4) Payment of an application fee pursuant to section 15014. (5) The physical address of the premises or the assessor parcel number. If the Department is unable to confirm that the address provided is valid, then the applicant shall provide a document that confirms the physical address or location of the premises. 12 Such a document may include a utility bill, printed information from the county assessor, deed, or title.
(6) The mailing address for the commercial cannabis business, if different from the premises address.
(7) The telephone number for the commercial cannabis business. (8) The website address of the commercial cannabis business, if any. (9) The number under which the commercial cannabis business files federal taxes, such as a federal employer identification number, federal taxpayer identification number, individual taxpayer identification number, Social Security number, or national identification number.
(10) Contact information for the owner of the commercial cannabis business who will serve as the designated primary contact person or designated responsible party for the business, including the name, title, phone number, and email address of the individual.
(11) The full legal name, mailing address, primary contact phone number, email address, and preferred method of written communication (e.g., standard mail or email) of each individual or entity serving as agent for service of process for the commercial cannabis business, if any.
(12) A description of the business organizational structure of the commercial cannabis business, such as partnership, joint venture, limited liability company, sole proprietorship, trust, or corporation.
(13) Upon request, business formation documents that are not available online through the California Secretary of State, which may include, but are not limited to operating agreements, bylaws, and other documents that establish ownership or control over the commercial cannabis business. If the commercial cannabis business is held in trust, the applicant shall provide a copy of the certificate of trust establishing trustee authority.
(14) A commercial cannabis business that is a foreign corporation or foreign limited liability company shall include in its application a certificate of qualification, certificate of registration, or certificate of status issued by the California Secretary of State. (15) A complete list of every financial interest holder of the commercial cannabis business as defined in section 15004, who is not an owner as defined in section 15003.

The list of financial interest holders shall include:
(A) For financial interest holders that are individuals, the first and last name of the individual, a contact phone number and email address, and the type and number of the individual's government-issued identification, such as a driver's license. (B) For financial interest holders that are entities, the legal business name, the name and phone number and email address of the entity's primary contact, and federal taxpayer identification number of the entity.
(16) A complete list of every owner of the commercial cannabis business, as defined in section 15003. Each individual named on this list shall submit the following information:
(A) The full name of the owner.
(B) The owner's title within the commercial cannabis business. (C) The owner's date of birth and place of birth.
13 (D) The owner's Social Security number or individual taxpayer identification number.
(E) The owner's mailing address.
(F) The owner's telephone number. This may include a number for the owner's home, business, or mobile telephone.
(G) The owner's email address.
(H) The owner's current employer.
(I) The percentage of the ownership interest held in the commercial cannabis business by the owner.
(J) The number of the owner's government-issued identification. Acceptable forms of identification are a document issued by a federal, state, county, or municipal government that includes the name, date of birth, gender, and photo of the person, such as a driver's license or passport.
(K) A copy of the owner's completed application for electronic fingerprint images submitted to the Department of Justice.
(L) A statement of rehabilitation may be submitted by the owner for any conviction, but is not required. The statement of rehabilitation is to be written by the owner and may contain evidence that the owner would like the Department to consider that demonstrates the owner's fitness for licensure. Supporting evidence may be attached to the statement of rehabilitation and may include, but is not limited to, a certificate of rehabilitation under Penal Code section 4852.01, and dated letters of reference from employers, instructors, or professional counselors that contain valid contact information for the individual providing the reference.
(M) If applicable, a detailed description of any administrative orders or civil judgments for violations of labor standards, any suspension of a commercial cannabis license, revocation of a commercial cannabis license, or sanctions for unlicensed commercial cannabis activity by a licensing authority, local agency, or state agency against the owner in their individual capacity or a business entity in which the owner was an owner or officer within the three years immediately preceding the date of the application. The owner may provide mitigating information including, but not limited to, a statement of rehabilitation to the Department for consideration if any prior discipline disclosed pursuant to this section may result in denial of the application. (N) Attestation to the following statement: Under penalty of perjury, I hereby declare that the information contained within and submitted with this application is complete, true, and accurate. I understand that a misrepresentation of fact is cause for rejection of this application, denial of the license, or revocation of a license issued. (17) Evidence that the commercial cannabis business has the legal right to occupy and use the proposed location that complies with section 15007. (18) An attestation that the proposed premises is in compliance with Business and Professions Code section 26054(b) and, if requested, evidence of compliance. For purposes of this section, evidence of compliance with Business and Professions Code section 26054(b) may be a copy of a valid license, permit, or other authorization issued by the applicable local jurisdiction or a notification from the applicable local jurisdiction stating that the commercial cannabis business is in compliance with local ordinances and regulations.
14 (19) For a commercial cannabis business with 20 or more employees, the applicant shall either provide a notarized statement that the commercial cannabis business will enter into and abide by the terms of a labor peace agreement or demonstrate that the commercial cannabis business has entered into a labor peace agreement by providing a copy of the signature page of the agreement. For a commercial cannabis business with fewer than 20 employees that has not yet entered into a labor peace agreement, provide a notarized statement indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee. (20) The applicant shall provide a valid seller's permit number issued by the California Department of Tax and Fee Administration, if applicable. If the commercial cannabis business has not yet received a seller's permit, the commercial cannabis business shall attest that the commercial cannabis business is currently applying for a seller's permit.
(21) A diagram of the premises as required by section 15006. (22) Proof of a surety bond of at least $5,000 payable to the State of California for each licensed premises. All bonds required under this section shall be issued by a corporate surety licensed to transact surety business in the State of California. An aggregated bond may be used when multiple licenses are held by the same commercial cannabis business.
(23) Additional information as required by section 15011. (24) When an applicant provides a license, permit, or other authorization from the local jurisdiction where the licensed premises will be or is located, the Department will notify the applicable local jurisdiction to confirm the validity of the authorization. If the local jurisdiction does not respond within 10 calendar days, the Department shall consider the authorization valid.
(25) The limited waiver of sovereign immunity required by section 15009, if applicable.
(26) Evidence of exemption from, or compliance with, the California Environmental Quality Act as required by section 15010.
(27) The commercial cannabis business' State Employer Identification Number (SEIN) issued by the California Employment Development Department, if applicable. (28) For a commercial cannabis business with more than one employee, the applicant shall attest that the commercial cannabis business employs, or will employ within one year of receiving a license, one supervisor and one employee who have successfully completed a Cal-OSHA 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course.
(29) An applicant shall disclose whether they have been denied a license or had a license suspended or revoked by the Department or any other state cannabis licensing authority. The applicant shall provide the type of license denied, suspended, or revoked, the name of the licensing authority, and the date of the denial, suspension, or revocation.

(d) An applicant for a cannabis event organizer license shall not be required to comply with subsections (c)(5), (c)(17), (c)(20), (c)(21), (c)(22), (c)(24), (c)(25), and (c)(26).

15 § 15003. Owners of Commercial Cannabis Businesses.

(a) An applicant for a commercial cannabis license or a licensee shall disclose all owners of the commercial cannabis business. An owner of the commercial cannabis business includes all of the following:

(1) A person with an aggregate ownership interest of 20 percent or more in the commercial cannabis business, unless the interest is solely a security, lien, or encumbrance. For purposes of this section, “aggregate” means the total ownership interest held by a single person through any combination of individually held ownership interests in a commercial cannabis business and ownership interests in an entity that has an ownership interest in the same commercial cannabis business. For example, a person who owns 10 percent of the stock in a commercial cannabis business as an individual shareholder and 100 percent of the stock in an entity that owns 10 percent of the stock in the same commercial cannabis business has a 20 percent aggregate ownership interest in the commercial cannabis business.
(2) An individual who manages, directs, or controls the operations of the commercial cannabis business, including but not limited to:
(A) A member of the board of directors of a nonprofit.
(B) A general partner of a commercial cannabis business that is organized as a partnership.
(C) A non -member manager or managing member of a commercial cannabis business that is organized as a limited liability company. (D) The trustee(s) and all persons who have control of the trust and/or the commercial cannabis business that is held in trust.
(E) The chief executive officer, president or their equivalent, or an officer, director, vice president, general manager or their equivalent.

(b) If the commercial cannabis business is owned in whole or in part by an entity and the entity includes individuals who manage, direct, or control the operations of the commercial cannabis business, as described in subsection (a)(2)(E), those individuals shall also be disclosed as owners.

(c) If available evidence indicates that an individual qualifies as an owner, the Department may notify the applicant or licensee that they must either disclose the individual as an owner and submit the information required by section 15002 or demonstrate that the individual does not qualify as an owner.

§ 15004. Financial Interest in a Commercial Cannabis Business.

(a) An applicant for a commercial cannabis license or a licensee shall disclose all financial interest holders. A financial interest holder of the commercial cannabis business includes all of the following, except as provided in subsection (b):

(1) A person with an aggregate ownership interest of less than 20 percent. (2) A person providing a loan to the commercial cannabis business. 16 (3) A person entitled to receive 10 percent or more of the profits of the commercial cannabis business, including:
(A) An employee who has entered into a profit share plan with the commercial cannabis business.
(B) A landlord who has entered into a lease agreement with the commercial cannabis business for a share of the profits.
(C) A consultant who is providing services to the commercial cannabis business for a share of the profits.
(D) A person acting as an agent, such as an accountant or attorney, for the commercial cannabis business for a share of the profits. (E) A broker who is engaging in activities for the commercial cannabis business for a share of the profits.
(F) A salesperson who earns a commission.
(G) A person who has entered into an intellectual property licensing agreement for a share of the profits.

(b) Financial interest holders do not include any of the following:

(1) A bank or financial institution whose interest constitutes a loan; (2) Persons whose only financial interest in the commercial cannabis business is through an interest in a diversified mutual fund, blind trust, or similar instrument; (3) Persons whose only financial interest is a security interest, lien, or encumbrance on property that will be used by the commercial cannabis business; and (4) Persons who hold a share of stock that is less than 10 percent of the total shares in a publicly traded or privately held company.

§ 15005. Personnel Prohibited from Holding Licenses.

(a) A license authorized by the Act and issued by the Department may not be held by, or issued to, any person holding office in, or employed by, any agency of the State of California or any of its political subdivisions when the duties of such person have to do with the enforcement of the Act or any other penal provisions of law of this State prohibiting or regulating the sale, use, possession, transportation, distribution, testing, manufacturing, or cultivation of cannabis or cannabis products.

(b) This section applies to, but is not limited to, any person employed in the State of California Department of Justice as a peace officer, in any district attorney's office, in any city attorney's office, in any sheriff's office, or in any local police department.

(c) No person listed in subsection (a) or (b) may have any ownership interest, directly or indirectly, in any business to be operated or conducted under a cannabis license.

(d) This section does not apply to any person who holds a license in the capacity of executor, administrator, or guardian.

17 § 15006. Premises Diagram.
(a) An applicant shall submit to the Department, with the application, a complete and detailed diagram of the proposed premises. The diagram shall be used by the Department to determine whether the premises meets the requirements under this division and the Act. The Department shall deny an application if the premises does not qualify for licensure pursuant to Business and Professions Code section 26057.
(b) The diagram shall show the boundaries of the property and the proposed premises to be licensed, showing all boundaries, entrances and exits, interior partitions, walls, rooms, windows, and doorways, and shall include a brief statement or description of the principal activity to be conducted therein. The diagram shall also include the dimensions of the boundaries of the premises and structures, including interior and exterior dimensions, to clearly identify the bounds of the premises.
(c) The diagram shall show and identify commercial cannabis activities that will take place in each area of the premises, and identify limited-access areas. Commercial cannabis activities that shall be identified on the diagram include the following, if applicable to the business operations:
storage, batch sampling, loading or unloading of shipments, packaging and labeling, customer sales, loading for deliveries, extraction, infusion, cultivation, and processing. (d) The diagram shall show where all cameras are located and assign a number to each camera for identification purposes unless the premises is exempt from the video surveillance requirement pursuant to section 15315 or section 15044.
(e) The diagram shall be to scale to clearly determine the bounds of the premises. (f) If the proposed premises consists of only a portion of a property, the diagram must be labeled indicating which part of the property is the proposed premises and for what purpose(s) the remaining property is used.
(g) If the proposed premises consists of only a portion of a property that will contain two or more licensed premises, the diagram shall clearly show the designated entrances and walls under the exclusive control of the commercial cannabis business for the premises, as well as the designated entrances and walls for each additional premises. The diagram shall also show all proposed common or shared areas of the property. Such areas may include lobbies, bathrooms, hallways, and breakrooms.
(h) If the commercial cannabis business is seeking a license to conduct cultivation activities on the proposed premises * * *
(i) If the commercial cannabis business is seeking a Type S license to manufacture cannabis * * *
(j) If a proposed premises is located on only a portion of a property that also includes a residence, the diagram shall clearly show the designated buildings for the premises and the residence. (k) If the commercial cannabis business is seeking a license to conduct manufacturing activities * * *

18 § 15007. Landowner Approval.

(a) If the commercial cannabis business is not the landowner of the real property upon which the premises is located, the commercial cannabis business shall provide to the Department a document from the landowner or the landowner's agent that states that the commercial cannabis business has the right to occupy the property and acknowledges that the commercial cannabis business may use the property for the commercial cannabis activity for which the commercial cannabis business is applying for licensure. An applicant shall also provide a copy of the rental agreement, as applicable.

(b) If the commercial cannabis business is the landowner of the real property upon which the premises is located, the commercial cannabis business shall provide to the Department a copy of the title or deed to the property.

(c) If the landowner is a trust, the landowner approval shall come from the person who holds equitable title in the real property.

§ 15010. Compliance with the California Environmental Quality Act (CEQA).

(a) “CEQA Guidelines” means the Guidelines for Implementation of the California Environmental Quality Act codified at title 14, California Code of Regulations, section 15000 et seq.

(b) An applicant shall provide evidence of compliance with, or exemption from, CEQA (division 13 (commencing with section 21000) of the Public Resources Code). The evidence provided may be any one of the following:

(1) A signed copy of a project -specific Notice of Determination or Notice of Exemption and a copy of the associated CEQA document, or reference to where it may be located electronically, a project description, and any accompanying permitting documentation from the local jurisdiction used for review in determining site- specific environmental compliance. Documentation may include a copy of the administrative record previously certified or adopted by the local jurisdiction that has already reviewed the commercial cannabis business' proposed commercial cannabis activities. For purposes of this section, the administrative record may include, but is not limited to:

(A) Environmental documentation, including, but not limited to, exemptions, initial studies, negative declarations, mitigated negative declarations, and environmental impact reports;

(B) Staff reports and related documents prepared by the local jurisdiction;

(C) Transcripts or minutes of the proceedings of the local jurisdiction;

(D) Notice(s) issued by the local jurisdiction to comply with CEQA and the CEQA Guidelines;
19 (E) Proposed decisions or findings considered by the local jurisdiction by its staff or the commercial cannabis business; and

(F) Documentation of the local jurisdiction's final decision.

(2) If the applicant does not have the evidence specified in subsection (b)(1), or if the Department determines that the evidence submitted is not sufficient to determine compliance or exemption from CEQA, then the applicant shall submit the information on a form to be prescribed by the Department. Such information shall include at least the following:
(A) The project location and surrounding land use, which shall:
(i) Describe the project location, including street address, city, county, Assessor's Parcel Number, major cross streets, general plan designation, zoning designation, and any other physical description that clearly indicates the project site location.
(ii) Describe the surrounding land uses and zoning designations within a one-half mile radius of the project and list all abutting land uses. (iii) Include a vicinity map and aerial image to show the project location.
(iv) Include photographs, not larger than 8.5 by 11 inches, of existing visual conditions as observed from publicly accessible vantage point(s). (B) A project description, which shall:
(i) Describe the activities included in the project application and identify any other commercial cannabis activity or activities occurring at the proposed premises.
(ii) Quantify the project size (total floor area of the project), and the lot size on which the project is located, in square feet.
(iii) List and describe any other related public agency permits and approvals, including any entitlements, required for this project, including those required by a planning commission, local air district, or regional water board. (iv) Identify whether the commercial cannabis business is licensed by, or has applied for licensure from, the Department or one of the prior state cannabis licensing authorities (the Bureau of Cannabis Control, the California Department of Food and Agriculture, and the California Department of Public Health) to engage in commercial cannabis activity at the proposed premises.
(v) Estimate the number of anticipated employees onsite, occupancy during operating hours, and frequency of deliveries or shipments originating from and/or arriving to the project site.
(C) The environmental setting, which shall:
(i) Describe natural characteristics (e.g., topography, vegetation, drainage, soil stability, habitat, etc.) on the project site. (ii) Identify whether there are any watercourses or riparian habitats (e.g., drainage swales, stream courses, springs, ponds, lakes, creeks, tributary of creeks, wetlands) within 150 feet of the proposed premises.
20 (iii) Identify the approximate number of vehicle trips per day to be generated by the project and information regarding the days and times most trips are expected to occur.
(iv) Identify whether the property contains natural features of scenic value or rare or unique characteristics (e.g., rock outcroppings, mature trees). (v) Identify whether the property has any historic designations or archeological remains onsite.
(vi) Identify whether the property contains habitat(s) for special status species.
(vii) Identify the location, type, and quantity of hazardous materials, as defined by Health and Safety Code section 25260, that are stored, used, or disposed of at the project site and a copy of the Hazardous Material Business Plan (HMBP) prepared for the proposed premises, if any.
(viii) Discuss whether the project will increase the quantity and type of solid waste, as defined by Public Resources Code section 40191, or hazardous waste, as defined by Health and Safety Code section 25117, that is generated or stored onsite. (ix) Describe the project's anticipated operational energy needs, identify the source of energy supplied for the project and the anticipated amount of energy per day, and explain whether the project will require an increase in energy demand and the need for additional energy resources.

(c) If the Department determines that a project does not qualify for an exemption and further environmental review is required pursuant to the CEQA Guidelines, the Department may charge the applicant for the costs of preparation of any supplemental environmental document as well as the Department's costs for procedures to comply with CEQA.

§ 15011. Additional Information.

(a) A commercial cannabis business applying for a license to cultivate cannabis shall provide the following information: * * *

(b) A commercial cannabis business applying for a license to manufacture cannabis products shall provide the following information * * *

(c) A commercial cannabis business applying for a license to distribute cannabis and cannabis products shall provide the following information * * *.

(d) A commercial cannabis business applying for a license to sell cannabis and cannabis products at retail shall provide the following information, upon request by the Department:

(1) Standard Operating Procedures, Form DCC-LIC-019 (New 2/22). (2) Delivery employee information required by section 15415. (3) Delivery vehicle information required by section 15417.

21 (e) A commercial cannabis business applying for a license to operate as a microbusiness shall provide * * *

(f) Applicants for a cannabis event organizer license shall indicate * * *

(g) Applicants for a testing laboratory license shall provide * * *

(h) The Department may request additional information and documents from the applicant. The Department will provide the applicant with a deadline for submittal of additional information. The Department will consider the complexity of the information requested and the ease with which the information can be obtained and transmitted t o the Department by the applicant in determining the deadline.

(i) Items required by this section may also be requested by the Department at any time following the issuance of a license. Licensees shall maintain the information required by this section and provide it to the Department upon request.

Chapter 1. All Licensees
Article 3. Licensing

§ 15017. Substantially Related Offenses and Criteria for Rehabilitation.

(a) When evaluating whether an applicant or licensee has been convicted of a criminal offense, act, or professional misconduct that is substantially related to the qualifications, functions, or duties of the business for which the application is made, the Department shall consider all of the following criteria:

(1) The nature and gravity of the offense;
(2) The number of years that have elapsed since the date of the offense; and (3) The nature and duties of the particular license in which the applicant seeks licensure or in which the licensee is licensed.

(b) For the purpose of denial, suspension, or revocation of a license, convictions that are substantially related to the qualifications, functions, or duties of the business for which the application is made include, but are not limited to:

(1) A violent felony conviction, as specified in Penal Code section 667.5(c). (2) A serious felony conviction, as specified in Penal Code section 1192.7(c). (3) A felony conviction involving fraud, deceit, or embezzlement. (4) A felony conviction for hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor.
(5) A felony conviction for drug trafficking with enhancements pursuant to Health and Safety Code section 11370.4 or 11379.8.
22 (c) For the purpose of denial of a license to engage in commercial cannabis manufacturing * * *

(d) Except as provided in subsections (b)(4) and (b)(5) and notwithstanding Chapter 2 (commencing with Section 480) of Division 1.5 of the Business and Professions Code, a prior conviction, where the sentence, including any term of probation, incarceration, or supervised release, is completed, for 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 license. Co nviction for any controlled substance felony, subsequent to licensure, shall be grounds for revocation of a license or denial of the renewal of a license.

(e) When evaluating whether an applicant who has been convicted of a criminal offense, act, or professional misconduct that is substantially related to the qualifications, functions, or duties of the business for which the application is made should be issued a license, the Department shall consider the following criteria of rehabilitation:

(1) The nature and gravity of the act, professional misconduct, or offense; (2) Whether the person has a felony conviction based on possession or use of cannabis or cannabis products that would not be a felony if the person was convicted of the offense on the date of the person's application;
(3) The applicant's criminal record as a whole;
(4) Evidence of any act, professional misconduct, or offense committed subsequent to the act, professional misconduct, or offense under consideration that could be considered grounds for denial, suspension, or revocation of a commercial cannabis activity license;
(5) The time that has elapsed since commission of the act, professional misconduct, or offense;
(6) The extent to which the applicant has complied with any terms of parole, probation, restitution, or any other sanctions lawfully imposed against the applicant; (7) If applicable, evidence of dismissal under Penal Code sections 1203.4, 1203.4a, 1203.41, 1203.42, or pursuant to another state's similar law; (8) If applicable, evidence the applicant has been granted clemency or a pardon by a state or federal executive;
(9) If applicable, a certificate of rehabilitation obtained under Penal Code section 4852.01 or another state's similar law; and
(10) Other evidence of rehabilitation submitted by the applicant.

(f) If an applicant has been denied a license based on a conviction, the applicant may request a hearing pursuant to Business and Professions Code section 26058 to determine if the applicant should be issued a license.

(g) For the purpose of this section, “conviction” means a plea or verdict of guilty or a conviction following a plea of nolo contendere.

23 § 15018. Additional Grounds for Denial of a License.

In addition to the reasons for denial in Business and Professions Code section 26057, a license may be denied for the following reasons:

(a) The applicant's proposed premises does not fully comply with standards set in regulation.

(b) The applicant's proposed or licensed premises is substantially different from the diagram of the proposed premises submitted by the applicant, in that the size, layout, location of common entryways, doorways, or passage ways means of public entry or exit, or identification of limited- access areas within the licensed premises is not the same.

(c) The applicant denied the Department access to the licensed premises or the property identified in the application as the premises.

(d) The applicant made a material misrepresentation on the application.

(e) The applicant did not correct the deficiencies within the application in accordance with sections 15002 and 15012.

(f) The applicant has been denied a license, permit, or other authorization to engage in commercial cannabis activity by a state or local licensing authority.

(g) The applicant's proposed premises is not in compliance with Division 13 (commencing with Section 21000) of the Public Resources Code.

(h) The applicant has failed to remit taxes as required under the Revenue and Taxation Code.

(i) The applicant may be denied a license for any violations of law related to the operations of the commercial cannabis business or for any violations of law related to licensure.

(j) The applicant has engaged in conduct that is grounds for disciplinary action specified in section 26030 of the Act.

§ 15019. Excessive Concentration.

(a) In determining whether to grant, deny, or renew a license for a retail premises or microbusiness premises authorized to engage in retail sales, the Department shall consider if an excessive concentration exists in the area where the licensee will operate.

For the purposes of this section “excessive concentration” applies when either of the following conditions exist:

(1) The ratio of licensees to population within the census tract or census division in which the applicant premises is located exceeds the ratio of licensees to population in 24 the county in which the applicant premises is located, unless denial of the application would unduly limit the development of the legal market so as to perpetuate the illegal market for cannabis goods.
(2) The ratio of retail licenses or microbusiness licenses to the population within the census tract, census division, or jurisdiction exceeds that allowable by local ordinance adopted under Business and Professions Code section 26200.

(b) “Population Within the Census Tract or Census Division” as used in this section means the population as determined by the most recent United States decennial or special census. Such population determination shall not operate to prevent an applicant fro m establishing that an increase of resident population has occurred within the census tract or census division.

(c) “Population in the County” as used in this section shall be determined by the most recent annual population estimate for California counties published by the Demographic Research Unit, State Department of Finance.

(d) Beginning July 1, 2018, the Department shall calculate the ratios described in subsection (a) of this section once every six months using the most current available data.

The Department's consideration of whether to grant, deny, or renew a license shal l be based upon the most recent ratio calculated by the Department on the date of the Department's decision.

(e) The existence of an excessive concentration shall not be considered in determining whether to grant, deny, or extend a temporary license under Business and Professions Code section 26050.1.

(f) The applicant may provide reliable evidence establishing, to the satisfaction of the Department, that a denial of a license would unduly limit the development of the legal market so as to perpetuate the illegal market for cannabis goods.

§ 15020. Renewal of License.

(a) To timely renew a license, a completed license renewal form and annual license fee pursuant to section 15014 shall be received by the Department from the licensee no earlier than 60 calendar days before the expiration of the license and no later than 5 :00 p.m. Pacific Time on the last business day before the expiration of the license if the renewal form is submitted to the Department at its office(s), or no later than 11:59 p.m. on the last business day before the expiration of the license if the renewal form is submitted to the Department through its electronic licensing system. Failure to receive a notice for license renewal does not relieve a licensee of the obligation to renew all licenses as required.

(b) In the event the license is not submitted for renewal prior to the expiration date, the licensee must not sell, transfer, transport, manufacture, test, or distribute any commercial cannabis or cannabis products until the license is renewed. 25 (c) A licensee may submit a license renewal form up to 30 calendar days after the license expires. Any late renewal form will be subject to a late fee equal to 50 percent of the applicable licensing fee required by subsection (a). A licensee who does not s ubmit a complete license renewal application, including the late fee, to the Department within 30 calendar days after the expiration of the license shall forfeit their eligibility for a license renewal and be required to submit a new license application.

(d) The license renewal form shall contain the following:

(1) The name of the licensee. For licensees who are individuals, the applicant shall provide both the first and last name of the individual. For licensees who are business entities, the licensee shall provide the legal business name of the commercial cannabis business.
(2) The license number and expiration date.
(3) The licensee's mailing address and licensed premises address. (4) Documentation demonstrating the licensee's gross revenue for the current licensed period, such as a copy of the licensee's state tax return filed with the California Department of Tax and Fee Administration. This subsection does not apply to the renewal of cultivation licenses.
(5) Documentation of any change to any item listed in the original application under section 15002 that has not been reported to the Department through another process pursuant to the Act or this division.
(6) An attestation that all information provided to the Department in the license renewal form and the original application under section 15002 or subsequent notification under sections 15023 and 15024 is accurate and current. (7) If applicable, a limited waiver of sovereign immunity pursuant to section 15009. (8) For a licensee with more than one employee, the licensee shall attest that it employs, or will employ within one year of renewing the license, one supervisor and one employee who has successfully completed a Cal -OSHA 30 -hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course.

(e) Beginning January 1, 2022, an application for renewal of a license to engage in commercial cannabis cultivation shall include the following records * * *

§ 15021. Denial of License.

(a) The Department may deny an application for a new license or a renewal of a license for any reason specified in Business and Professions Code section 26057, and on any additional grounds including grounds for denial under section 15018, and grounds for discipline under the Act or this division.

26 (b) Upon denial of an application for a license or renewal of a license, the Department shall notify the applicant in writing of the reasons for denial, and the right to a hearing to contest the denial.

(c) The applicant may request a hearing to contest the denial by submitting a written request to the Department at [email protected].

(1) The written request for a hearing must be received by the Department or postmarked within 30 calendar days of service of the notification of denial. (2) If the written request for a hearing is not received within the required timeframe, the applicant's right to a hearing is waived.
(3) Upon timely receipt of the written request for hearing, the Department shall set a date for hearing to be conducted in accordance with chapter 5 (commencing with section 11500) of part 1 of division 3 of title 2 of the Government Code.

(d) If a license application is denied due to an owner's conviction history, the Department shall notify the applicant of the process for the owner to request a copy of their complete conviction history and question the accuracy or completeness of the record pursuant to Penal Code sections 11122 through 11127.

§ 15023. Business Modifications.

Business modifications shall be made in accordance with the following:

(a) Changes to standard operating procedures may be made without providing notification to the Department, except as required by the Act or this division. Licensees shall maintain a copy of all current and prior operating procedures as required by section 15037.

(b) If at the time of licensure, a licensee employed fewer than 20 employees and later employs 20 or more employees, within 60 days of employing 20 or more employees, the licensee shall provide to the Department a notarized statement that the licensee will enter into a labor peace agreement and will abide by the terms of the agreement or demonstrate that the commercial cannabis business has entered into a labor peace agreement by providing a copy of the signature page of the agreement.

(c) Licenses are not transferrable or assignable to another person or owner. In the event of the sale or other transfer of the business or operations covered by the licensee, changes in ownership shall be made in accordance with the following:

(1) If one or more of the owners change, the new owners shall submit the information required under section 15002(c)(16) for each new owner to the Department within 14 calendar days of the effective date of the ownership change. The business may continue t o operate under the active license while the Department reviews the qualifications of the new owner(s) in accordance with the Act and these regulations to determine whether the change would constitute grounds for denial of the license, if at 27 least one existing owner is not transferring their ownership interest and will remain as an owner under the new ownership structure. If all owners will be transferring their ownership interest, the business shall not operate under the new ownership structure until a new license application has been submitted to and approved by the Department, and all application and license fees for the new application have been paid. The former owner's inventory shall be transferred to the new owner's track and trace account upon issuance of the license.
(A) A change in ownership occurs when a new person meets the definition of owner in section 15003.
(B) A change in ownership does not occur when one or more owners leave the business by transferring their ownership interest to the other existing owner(s). (2) In cases where one or more owners leave the business by transferring their ownership interest to the other existing owner(s), the owner or owners that are transferring their interest shall provide a signed statement to the Department confirming that they have transferred their interest within 14 calendar days of the change.

(d) When there is a change in financial interest holder(s) in the commercial cannabis business who do not meet the requirements for a new license application under this section, the licensee shall submit the information required by section 15002(c)(15) to the Department within 14 calendar days of the change.

(e) When any of the following changes occur, the licensee shall notify the Department within 14 calendar days of the change:

(1) Any change to contact information from the information provided to the Department in the original application.
(2) Any change in name if the licensee is an individual, or any change in legal business name if the licensee is a business entity.
(3) Any change in business trade names, fictitious business names, or doing business as (“DBA”).
(4) Any change in the bond required under section 15002(c)(22).

(f) * * *

(g) * * *

(h) Except as permitted under Business and Professions Code section 26050.2(h), licensees may not be transferred from one premises to another. Licensees shall not operate out of a new premises until they have been issued a new license.

(i) For any business modification or notification under this section, licensees shall use and submit to the Department the Licensee Notification and Request Form, Notifications and Requests to Modify a License, DCC -LIC-027 (Amended 2/22), which is incorpor ated herein by reference, unless the change relates to contact information and can be made through the Department's online system.

28 § 15027. Modification of Premises or Operations.

(a) A licensee shall not, without the prior written approval of the Department, make a physical change, alteration, or modification of the licensed premises that materially or substantially alters the licensed premises or the use of the licensed premises f rom the premises diagram originally filed with the license application. A licensee whose licensed premises is to be materially or substantially changed, modified, or altered is responsible for filing a request for premises modification with the Department.

(b) Material or substantial changes, alterations, or modifications to a licensed cultivation premises requiring prior approval from the Department are * * *

(c) Material or substantial changes, alterations, or modifications to a licensed manufacturing premises that require prior approval from the Department are * * *

(d) Material or substantial changes, alterations, or modifications to a licensed microbusiness premises that require prior approval from the Department are * * *

(e) Material or substantial changes, alterations, or modifications to a licensed distribution, retail, or testing laboratory premises that require prior approval from the Department include, but are not limited to:

(1) Any increase or decrease in the total physical size or capacity of the licensed premises.
(2) Any physical change that would require the installation of additional video surveillance cameras or a change in the video surveillance system to meet the requirements of section 15044, or alarm system to meet the requirements of section 15047.
(3) Any physical change that would require a building permit, zoning change, or other approval from the applicable local jurisdiction.

(f) Licensees shall request approval of a physical change, alteration, or modification through the online licensing system or in writing, by submitting the Licensee Notification and Request Form, Notifications and Requests to Modify a License, DCC -LIC-027 (Amended 2/22), which is incorporated herein by reference, and the request shall include:

(1) A new premises diagram that conforms to requirements in section 15006; and (2) A fee pursuant to section 15014 for all licensees except licensed cultivators.

(g) A licensee shall provide additional documentation requested by the Department to evaluate the licensee's request to modify the licensed premises.

(h) Licensees shall notify the Department of all changes, alterations, or modifications to a licensed premises or the licensee's operations that do not require prior approval pursuant to subsections (b), (c), (d), and (e) through the online licensing system or by submitting the Licensee Notification and Request Form, Notifications and Request to 29 Modify a License, DCC -LIC-027 (Amended 2/22), which is incorporated herein by reference, and a new premises diagram that conforms to requirements in section 15006.

Notifications pursuant to this subsection shall be submitted to the Department no later than three (3) business days after the changes, alterations, or modifications have been made to the licensed premises.

§ 15034. Significant Discrepancy in Inventory.

A significant discrepancy in inventory means a five percent difference between the licensee's physical inventory and the inventory recorded in the track and trace system.

§ 15035. Notification of Criminal Acts, Civil Judgments, Violations of Labor Standards, and Revocation of a Local License, Permit, or Other Authorization After Licensure.

(a) A licensee shall ensure that the Department is notified in writing of a criminal conviction of any owner, either by mail or electronic mail, within 48 hours of the conviction. The written notification to the Department shall include the date of conviction, the court docket number, the name of the court in which the licensee was convicted, and the specific offense(s) for which the licensee was convicted.

(b) A licensee shall ensure that the Department is notified in writing of a civil penalty or judgment rendered against the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of delivery of the verdict or entry of judgment, whichever is sooner. The written notification shall include the date of verdict or entry of judgment, the court docket number, the name of the court in which the matter was adjudicated, and a description of the civil penalty or judgment rendered against the licensee.

(c) A licensee shall ensure that the Department is notified in writing of an administrative order or civil judgment for violations of labor standards against the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of delivery of the order. The written notification shall include the date of the order, the name of the agency issuing the order, and a description of the administrative penalty or judgment rendered against the licensee.

(d) A licensee shall ensure that the Department is notified in writing of the revocation of a local license, permit, or other authorization held by the licensee or any owner in their individual capacity, either by mail or electronic mail, within 48 hours of receiving notice of the revocation. The written notification shall include the name of the local agency involved, a written explanation of the proceeding or enforcement action, and the specific violation(s) that led to revocation.

(e) For any notification required under this section, licensees shall use and submit to the Department the Licensee Notification and Request Form, Notifications and Requests to 30 Modify a License, DCC -LIC-027 (Amended 2/22), which is incorporated herein by reference.

§ 15036. Notification of Theft, Loss, and Criminal Activity.

(a) A licensee shall notify the Department and local law enforcement within 24 hours of discovery of any of the following situations:

(1) The licensee discovers a significant discrepancy, as defined in section 15034, in its inventory.
(2) The licensee discovers diversion, theft, loss, or any other criminal activity pertaining to the operations of the licensee.
(3) The licensee discovers diversion, theft, loss, or any other criminal activity by an agent or employee of the licensee pertaining to the operations of the licensee. (4) The licensee discovers loss or unauthorized alteration of records related to cannabis or cannabis products, customers, or the licensee's employees or agents. (5) The licensee discovers any other breach of security.

(b) The notification to the Department pursuant to subsection (a) shall be submitted on the Licensee Notification and Request Form, Notifications and Requests Regarding Regulatory Compliance, DCC -LIC-028 (New 2/22), which is incorporated herein by reference, and shall include the date and time of occurrence of the theft, loss, or criminal activity, the name of the local law enforcement agency that was notified, and a description of the incident including, where applicable, the item(s) that were taken or lost.

§ 15037. General Record Retention Requirements.

(a) Licensees must keep and maintain records in connection with the licensed commercial cannabis business. Records must be kept for at least seven years from the date of creation, unless a shorter time is specified. Records include, but are not limited to:

(1) Financial records including, but not limited to, bank statements, sales invoices, receipts, tax records, and all records required by the California Department of Tax and Fee Administration (formerly Board of Equalization) under title 18, California Code of Regulations, sections 1698 and 4901.
(2) Personnel records, including each employee's full name, Social Security number or individual taxpayer identification number, date employment begins, and date of termination of employment, if applicable.
(3) Training records including, but not limited to, the content of the training provided and the names of the employees who received the training. (4) Contracts regarding commercial cannabis activity.
(5) Permits, licenses, and other local authorizations to conduct the licensee's commercial cannabis activity.
(6) All other documents prepared or executed by an owner or their employees or assignees in connection with the licensed commercial cannabis business. (7) Records required by the Act or this division.
31 (b) Records must be kept in a manner that allows the records to be produced for the Department in either hard-copy or electronic form.

(c) Records must be legible and accurate. No person may intentionally misrepresent or falsify records.

(d) Records must be stored in a secured area where the records are protected from debris, moisture, contamination, hazardous waste, and theft.

Chapter 1. All Licensees
Article 4. Posting and Advertising

§ 15039. License Posting Requirement.

(a) Upon issuance of a license, the licensee shall prominently display the license on the licensed premises where it can be viewed by state and local agencies. If the licensed premises is open to the public, the license shall be displayed in an area that is within plain sight of the public.

(b) Upon issuance of any license, a retailer, whose licensed premises is open to the public * * *

(c) * * *

(d) * * *

§ 15040. Advertising Placement and Prohibitions.

(a) Any advertising or marketing, as defined in Business and Professions Code section 26150, that is placed in broadcast, cable, radio, print, and digital communications:

(1) Shall only be displayed after a licensee has obtained reliable up- to-date audience composition data demonstrating that at least 71.6 percent of the audience viewing the advertising or marketing is reasonably expected to be 21 years of age or older;
(2) Shall not use any depictions or images of minors or anyone under 21 years of age;
(3) Shall not use any images that are attractive to children, including, but not limited to:
(A) Cartoons;
(B) Any likeness to images, characters, or phrases that are popularly used to advertise to children;
(C) Any imitation of candy packaging or labeling; or
32 (D) The terms “candy” or “candies” or variants in spelling such as “kandy” or “kandeez.”
(4) Shall not advertise free cannabis goods or cannabis accessories. This includes promotions such as:
(A) Buy one product, get one product free;
(B) Free product with any donation; and
(C) Contests, sweepstakes, or raffles.

(b) In addition to the requirements for advertising and marketing in subsection (a), all outdoor signs, including billboards, shall:

(1) Be affixed to a building or permanent structure; and (2) Comply with the provisions of the Outdoor Advertising Act, commencing with section 5200 of the Business and Professions Code, if applicable.

(c) For the purposes of this section, “reliable up- to-date audience composition data” means data regarding the age and location demographics of the audience viewing a particular advertising or marketing medium. “Reliable up- to-date audience composition data” does not include data from the most recent United States decennial or special census, or the annual population estimate for California counties published by the Demographic Research Unit, State Department of Finance.

(d) Immediately upon request, a licensee shall provide to the Department audience composition data as required in subsection (a) for advertising or marketing placed by the licensee.

(e) If the Department determines that audience composition data for advertising or marketing provided by a licensee does not comply with the requirements of subsection (a), or the licensee fails to provide audience composition data to the Department upon request, the licensee shall remove the advertising or marketing placement in question.

(f) In construing and enforcing the advertising provisions of the Act and this division, any action, omission, or failure of an advertising agent, representative, or contractor retained by the licensee shall in every case be deemed the act, omission, or failure of the licensee.

§ 15040.1. Marketing Cannabis Goods as Alcoholic Products.

Licensees shall not market, advertise, sell or transport cannabis goods that are labeled as beer, wine, liquor, spirits, or any other term used to describe a type of alcohol or alcoholic beverage that may create a misleading impression that the product is an alcoholic beverage as defined in division 9 of the Business and Professions Code.

Nothing in this section shall be interpreted as prohibiting a company or brand name associated with alcoholic beverages from appearing on cannabis goods or in marketing and advertisements for cannabis goods provided the cannabis goods do not create a misleading impression that the product is an alcoholic beverage.

33 § 15040.2. Prohibited Business Promotions.

(a) A licensee shall not give away any amount of cannabis or cannabis products, or any cannabis accessory, as part of a business promotion.

(b) A licensee shall not hold a raffle or sweepstakes as part of a business promotion.

§ 15041. Age Confirmation in Advertising.

(a) Prior to any advertising or marketing from the licensee involving direct, individualized communication or dialogue, the licensee shall use age affirmation to verify that the recipient is 21 years of age or older.

(b) For the purposes of this section, direct, individualized communication or dialogue may occur through any form of communication, including in-person, telephone, physical mail, or electronic.

(c) A method of age verification is not necessary for a communication if the licensee can verify that the licensee has previously had the intended recipient undergo a method of age affirmation and the licensee is reasonably certain that the communication will only be received by the intended recipient.

(d) A licensee shall use a method of age affirmation before having a potential customer added to a mailing list, subscribe, or otherwise consent to receiving direct, individualized communication or dialogue controlled by a licensee.

Chapter 1. All Licensees
Article 5. Security Measures

§ 15042. Premises Access Requirements.

(a) For a premises that is not open to the public, the licensee shall establish and implement an identification and sign- in/sign-out procedure for all persons accessing the premises, including authorized individuals, suppliers, and visitors.

(b) Licensees shall ensure that only employees of the licensee and other authorized individuals access the licensed premises.

(c) For the purpose of this section, “authorized individuals” include outside vendors, contractors, or other individuals conducting business that requires access to the licensed premises.

(d) An individual who enters the licensed premises and is not employed by the licensee shall be escorted by an employee of the licensee at all times while within the licensed premises.

34 (e) A licensee shall maintain a record of all authorized individuals who are not employees of the licensee who enter the licensed premises. The record shall include the name of the individual, the company the individual works for, the reason the individual entered the licensed premises, the date, and the times the individual entered and exited the licensed premises. These records shall be made available to the Department immediately upon request.

(f) A licensee shall not receive consideration or compensation for permitting an individual to enter the licensed premises.

§ 15043. Licensee Employee Badge Requirement.

All agents, officers, or other persons acting for or employed by a licensee conducting retail sales or participating in a temporary cannabis event shall display a laminated or plastic - coated identification badge issued by the licensee at all times while engaging in commercial cannabis activity. The identification badge shall, at a minimum, include the licensee's “doing business as” name and license number, the employee's first name, an employee number exclusively assigned to that employee for identification purposes, and a color photograph of the employee that clearly shows the full front of the employee's face and that is at least 1 inch in width and 1.5 inches in height.

§ 15044. Video Surveillance System.
(a) Each licensed premises shall have a digital video surveillance system with a minimum camera resolution of 1280 x 720 pixels on the licensed premises. This requirement does not apply to a licensed premises authorized exclusively for cultivation activities or the cultivation area of a licensed microbusiness premises.
(b) The video surveillance system shall at all times be able to effectively and clearly record images of the area under surveillance.
(c) Each camera shall be permanently mounted and in a fixed location. Each camera shall be placed in a location that allows the camera to clearly record activity occurring within 20 feet of all points of entry and exit on the licensed premises, and allows for the clear and certain identification of any person and activities in all areas required to be filmed under subsection (d). (d) Areas that shall be recorded on the video surveillance system include the following:
(1) Areas where cannabis or cannabis products are weighed, packed, stored, loaded, and unloaded for transportation, prepared, or moved within the licensed premises; (2) Limited-access areas;
(3) Security rooms;
(4) Areas storing a surveillance-system storage device with at least one camera recording the access points to the secured surveillance recording area; and (5) Entrances and exits to the licensed premises, which shall be recorded from both indoor and outdoor vantage points.
35 (e) Licensed retailers and licensed microbusinesses authorized to engage in retail sales shall also record point-of-sale areas and areas where cannabis goods are displayed for sale on the video surveillance system. At each point -of-sale location, camera pl acement must allow for the recording of the facial features of any person purchasing or selling cannabis goods, or any person in the retail area, with sufficient clarity to determine identity. (f) Cameras shall record continuously 24 hours per day and at a minimum of 15 frames per second (FPS).
(g) The physical media or storage device on which surveillance recordings are stored shall be secured in a manner to protect the recording from tampering or theft. (h) Surveillance recordings shall be kept for a minimum of 90 calendar days. (i) Surveillance recordings are subject to inspection by the Department and shall be kept in a manner that allows the Department to view and obtain copies of the recordings at the licensed premises immediately upon request. The licensee shall also send or otherwise provide copies of the recordings to the Department upon request within the time specified by the Department. (j) Recorded images shall clearly and accurately display the time and date. Time is to be measured in accordance with the standards issued by the United States National Institute of Standards and Technology. The displayed date and time shall not cover the view of recorded images in a manner that prevents the ready identification of any person or activity in the captured image.
(k) The video surveillance system shall be equipped with a failure notification system that provides notification to the licensee of any interruption or failure of the video surveillance system or video surveillance-system storage device.
(l) If multiple licensed premises are contained within the same building or on the same parcel of land, a single video surveillance system covering the entire building or parcel of land may be used by all of the licensees if all licensees have immediate access to the surveillance recordings to produce them pursuant to subsection (i). All licensees sharing a video surveillance system shall be held responsible and subject to discipline for any violations of the video surveillance requirements.
(m) Notwithstanding subsection (a), a licensed distributor transport only licensee engaged in self- distribution whose premises is on the same parcel of land as their licensed cultivation premises shall not be required to comply with the provisions of this section. § 15046. Locks.

A licensee shall ensure that all limited- access areas can be securely locked using commercial-grade, nonresidential door locks. A licensee shall also use commercial - grade, nonresidential door locks on all points of entry and exit to the licensed premises.

This requirement does not apply to a licensed premises authorized exclusively for cultivation activities or the cultivation area of a licensed microbusiness premises.

36 § 15047. Alarm System.

(a) A licensee shall maintain an alarm system as defined in Business and Professions Code section 7590.1(c) at the licensed premises. This requirement does not apply to a licensed premises authorized exclusively for cultivation activities or the cultivation area of a licensed microbusiness premises.

(b) A licensee shall ensure a licensed alarm company operator or one or more of its registered alarm agents installs, maintains, monitors, and responds to the alarm system.

(c) Upon request, a licensee shall make available to the Department all information related to the alarm system, monitoring, and alarm activity.

(d) If multiple licensed premises are contained within the same building or parcel of land, a single alarm system covering the entire building or parcel of land may be used by all of the licensees if all licensees have access to and are able to provide the information under subsection (c). All licensees shall be held responsible and subject to discipline for any violations of the alarm system requirements.

§ 15047.1. Definitions.

(a) “Plant tag” means the tag that is labeled with a UID number and provided by the Department or the Department's designee for attaching to a cannabis plant.

(b) “Package tag” means the RFID -enabled tag that is labeled with a UID number and provided by the Department or the Department's designee for attaching to batches of cannabis or cannabis products.

§ 15047.2. General Requirements.

(a) A licensee shall create and maintain an account within the track and trace system prior to engaging in any commercial cannabis activity.

(b) All commercial cannabis activity shall be accurately recorded in the track and trace system.

(c) A licensee is responsible for the accuracy and completeness of all data and information entered into the track and trace system. The licensee is responsible for all actions taken by the designated account manager or other account users while performing track and trace activities.

(d) A person shall not intentionally misrepresent or falsify information entered into the track and trace system.

37 Chapter 1. All Licensees
Article 6. Track and TRACE Requirements

§ 15048. Training and Credentialing.

(a) Each applicant or licensee shall identify an owner of the commercial cannabis business as the track and trace system account manager. A licensee may change the account manager by submitting a written request to the Department.

(b) No later than 10 calendar days after license issuance, the designated account manager shall:

(1) Complete new user system training provided by the Department. (2) Email [email protected] from the designated account manager's email address to request access to the track and trace system. (3) Complete the credentialing process to establish a login.

(c) The account manager and each user shall utilize a unique login, consisting of a username and password. The account manager and each user shall only access the track and trace system under their assigned login. No account manager or user shall share their login, username, or password, with any other individual for any reason.

§ 15048.1. Responsibilities of the Designated Account Manager.

(a) A licensee and their designated account manager(s) shall:

(1) Designate track and trace system users, as needed, and require the system users to be trained in the proper and lawful use of the track and trace system before the users are permitted to access the track and trace system; (2) Maintain an accurate and complete list of all of the licensee's track and trace system users, including full names and usernames, and update the list immediately when changes occur;
(3) Remove a user from the licensee's track and trace system account when that individual is no longer authorized to represent the licensee; (4) Correct any data entry errors within three (3) calendar days of discovery of the error;
(5) Tag and enter all inventory in the track and trace system as required by section 15049;
(6) Monitor all system notifications and resolve all issues identified. The notification shall not be dismissed by an account manager before resolution of the issue(s) identified in the notification;
(7) Notify the Department of any loss of access to the track and trace system that exceeds 72 hours; and
(8) Reconcile the inventory of cannabis and cannabis products on the licensed premises with the track and trace system database at least once every thirty (30) calendar days.
38 § 15048.2. General Tag Requirements.

(a) A licensee shall only use plant and package tags provided and distributed by the Department or the Department's designee.

(b) A licensee shall only use plant and package tags assigned in the track and trace system to that licensee and shall not transfer unused tags to any other licensee.

(c) A licensee shall maintain a sufficient supply of tags to support tagging in accordance with this chapter.

(d) Plant and package tags shall be discarded after they are no longer required for use.

§ 15049. Track and Trace Reporting.

(a) All cannabis and cannabis products on the licensed premises shall be assigned a plant or package tag, as applicable, except for harvested plants that are being dried, cured, graded, or trimmed, as specified in this division, and recorded in the track a nd trace system.

(b) Each of the following activities shall be recorded in the track and trace system within 24 hours of occurrence:

(1) Receipt of cannabis or cannabis products.
(2) Rejection of transferred cannabis or cannabis products. (3) Manufacturing of cannabis or cannabis products.
(4) Use of cannabis or cannabis product for internal quality control testing or product research and development.
(5) Destruction or disposal of cannabis or cannabis products. (6) Packaging or repackaging of cannabis or cannabis products, except that cultivation licensees shall comply with section 15049.1(b)(5). (7) Laboratory testing, including testing results.
(8) Sale or donation of cannabis or cannabis products.

(c) The following information shall be recorded in the track and trace system for each activity entered pursuant to subsection (b):

(1) The type of cannabis or cannabis products.
(2) The weight, volume, or count of the cannabis or cannabis products. (3) The date of activity.
(4) The UID assigned to the cannabis or cannabis products. (5) The brand name of the cannabis goods.
(6) If cannabis or cannabis products are being destroyed or disposed of, the licensee shall record the following information in the notes section:
(A) The name of the employee performing the destruction or disposal; (B) The reason for destruction or disposal; and
39 (C) The method of disposal.

(d) If a package adjustment is used to adjust the quantity of cannabis or cannabis products in the track and trace system, the licensee shall include a description explaining the reason for adjustment.

(e) If a licensee rejects a partial shipment of cannabis goods pursuant to section 15052.1(b), the licensee shall record the partial rejection in the track and trace system.

§ 15049.2. Recording Transfers of Cannabis and Cannabis Products.

(a) A licensee shall prepare a shipping manifest through the track and trace system prior to transferring cannabis and cannabis products off of a licensed premises. The following information shall be recorded on the shipping manifest by the licensee initiating the transfer:

(1) The name, license number, and premises address of the originating licensee; (2) The name and license number of the distributor transporting the cannabis and cannabis products;
(3) The name, license number, and premises address of the licensee receiving the cannabis or cannabis products into inventory or storage; (4) The UID numbers for all items being transferred;
(5) The item name, item category and weight or count of cannabis or cannabis products associated with each package tag;
(6) The estimated date and time of departure from the licensed premises; (7) The estimated date and time of arrival at each licensed premises; and (8) The driver's license number of the personnel transporting the cannabis and cannabis products, and the make, model, and license plate number of the vehicle used for transport.

(b) The distributor who transports the cannabis or cannabis product shall record the following additional information on the shipping manifest:

(1) The actual date and time of departure from the licensed premises; and (2) The actual date and time of arrival at each licensed premises.

(c) Upon pick-up or receipt of cannabis and cannabis products for transport, storage, or inventory, a licensee shall ensure that the cannabis or cannabis products received are as described in the shipping manifest. The licensee shall record acceptance or r eceipt, and acknowledgment of the cannabis or cannabis products in the track and trace system.

(d) If there are any discrepancies between type or quantity of cannabis or cannabis products specified in the shipping manifest and the type or quantity received by the licensee, the licensee shall reject the shipment.

40 § 15049.3. Track and Trace Requirements for Delivery.

(a) A licensed retailer conducting delivery of cannabis goods shall create a delivery inventory ledger in the track and trace system and record the information required under subsections (b)(1) through (7) prior to the delivery employee leaving the licensed retail premises for each delivery trip. A delivery trip begins when the delivery employee leaves the licensed retail premises to conduct delivery of cannabis goods.

(b) The delivery inventory ledger shall include the following information:

(1) The delivery inventory ledger number generated by the track and trace system and assigned to the specific delivery trip.
(2) The name and license number of the licensed retailer. (3) The delivery employee's name, employee ID, and driver's license number. (4) The delivery vehicle's make, model, and license plate number. (5) The item name and category of each cannabis good to be carried on the delivery trip, the UID(s) assigned to those cannabis goods, and the number of units associated with each UID on the delivery inventory ledger. (6) The UID(s) of any cannabis goods ordered by customers and processed by the licensed retailer prior to the delivery employee leaving the licensed retail premises. (7) The date and time the delivery employee begins the delivery trip.

(c) For each delivery of cannabis goods, the following information shall be recorded within the track and trace system by the end of the calendar day on which the delivery was completed:

(1) The date and time the delivery was completed. A delivery is completed at the time the cannabis goods are physically provided to the customer. (2) Whether the customer is an adult-use customer, medicinal cannabis patient, or patient's primary caregiver.
(3) The UID and quantity of each cannabis good delivered. (4) The purchase price of each cannabis good delivered. (5) The city, county, and zip code in which the delivery was completed.

(d) If a delivery employee returns to the licensed retail premises to obtain additional inventory of cannabis goods for delivery to be conducted on the same day and by the same delivery employee, the licensed retailer may continue the existing delivery tri p in the track and trace system. If the licensed retailer chooses to continue the existing delivery trip, the additional inventory is considered part of the existing delivery trip and a new delivery inventory ledger is not required. The licensed retailer shall record the following information within the track and trace system under the existing delivery inventory ledger number for any additional cannabis goods to be carried on the same delivery trip:

41 (1) The item name and category of each additional cannabis good to be carried on the delivery trip, the UID(s) assigned to those cannabis goods, and the number of units associated with each UID on the delivery inventory ledger. (2) The date and time the delivery employee leaves the licensed retail premises to continue the delivery trip.

(e) (1) The end date and time of the delivery trip shall be:
(A) Except as provided in subsection (e)(1)(B), the date and time the delivery employee returned to the licensed retail premises after conducting all deliveries that are part of the same delivery trip.
(B) If the delivery employee does not carry any unsold cannabis goods and does not return to the licensed retail premises on the same day after delivering all cannabis goods carried in the vehicle on the delivery trip, the date and time at which the delivery employee completed the last delivery of cannabis goods on the delivery trip. (2) No later than the end of the calendar day on which the delivery trip occurred:
(A) If a delivery employee still carries unsold cannabis goods at the end of a delivery trip, the delivery employee must return to the licensed premises, remove the unsold cannabis goods from the delivery inventory ledger, and return the unsold cannabis goods to the licensed retailer's inventory within the track and trace system. (B) The licensed retailer shall record the end date and time of the delivery trip in the track and trace system.

(f) Notwithstanding subsections (a) through (e), prior to April 1, 2023 * * *

§ 15050. Loss of Access.

(a) If at any point a licensee loses access to the track and trace system for any reason, the licensee shall prepare and maintain comprehensive records detailing all commercial cannabis activities that were conducted during the loss of access.

(b) The licensee shall not initiate transport for, receive, or deliver any cannabis or cannabis products until such time as access is restored.

(c) Once access has been restored, the licensee shall:

(1) Within three calendar days, enter all commercial cannabis activity that occurred during the loss of access into the track and trace system. (2) Document the cause for loss of access, and the dates and times for when access to the track and trace system was lost and when it was restored.

§ 15051. Track and Trace System Reconciliation.

(a) The license shall review the information recorded in the track and trace system at least once every 30 calendar days to ensure its accuracy, including, at a minimum:

42 (1) Reconciling on- hand inventory of cannabis and cannabis product with the records in the track and trace system; and
(2) Reviewing the licensee's authorized users and removing any users who are no longer authorized to enter information into the track and trace system.

(b) If a licensee finds a discrepancy between the on- hand inventory and the track and trace system, the licensee shall conduct an audit and notify the Department in writing if the discrepancy is significant as defined in section 15034.

Chapter 1. All Licensees
Article 7. Acceptance or Rejection of Shipments

§ 15052. Returns.

(a) Cannabis and cannabis products may be returned from the licensee currently in possession to the originating licensee for any lawful business purpose in accordance with the following:

(1) Cannabis and cannabis products shall not be reprocessed, rebranded, relabeled, physically repackaged, have their expiration dates amended, or be modified in any way without prior approval from the Department. To receive approval to modify the cannabis or cannabis products, licensees shall submit a corrective action plan that meets the requirements specified in section 17305.
(2) After being returned, cannabis and cannabis products shall be transported to a licensed distributor to undergo laboratory testing in accordance with chapters 2 and 6 and quality assurance review pursuant to sections 15307 and 15307.1 prior to being transported to a licensed retailer.

(b) Returns of cannabis and cannabis products shall be recorded in the track and trace system on a return manifest that shall contain the reason for the return.

(c) Cannabis and cannabis products shall not be transported pursuant to a return unless the licensee returning the cannabis and cannabis products and the licensee receiving the cannabis and cannabis products have both consented to the return. The licensee who receives the return shall physically accept the return and enter it into the track and trace system.

§ 15052.1. Acceptance or Rejection of Shipments.

(a) Licensees shall accept or reject, in whole, shipments of cannabis or cannabis products.

(b) Notwithstanding subsection (a), partial shipments of cannabis or cannabis products shall be rejected in the following circumstances:
43 (1) If a licensee receives a shipment containing cannabis or cannabis products that differ from those listed on the sales invoice or receipt, the licensee shall reject the portion of the shipment that is not accurately reflected on the sales invoice or receipt. (2) If a licensee receives a shipment containing any cannabis or cannabis products that were damaged during transportation, the licensee shall reject that portion of the shipment that was damaged.
(3) If a licensee receives a shipment containing cannabis or cannabis products that is non-compliant with labeling requirements or exceeds its provided expiration date, the licensee shall reject the portion of the shipment that is non- compliant with labeli ng requirements or expired.

(c) The licensee rejecting a shipment of cannabis or cannabis products, whether in whole or in part, shall record in the track and trace system and indicate on any relevant manifest, invoice, or sales receipt the specific reason for rejection.

(d) The licensee who originated a rejected shipment shall physically accept the rejected shipment and record it in the track and trace system.

Chapter 3. Retailers

§ 15403. Hours of Operation.

A licensed retailer shall sell and deliver cannabis goods only between the hours of 6:00 a.m. Pacific Time and 10:00 p.m. Pacific Time.

§ 15403.1. Requirements While Not Open for Business.

At any time the licensed premises is not open for retail sales, a licensed retailer shall ensure that:

(a) The licensed premises is securely locked with commercial-grade, nonresidential door locks as required in section 15046 of this division;

(b) The licensed premises is equipped with an active alarm system pursuant to section 15047 of this division, which shall be activated when the licensed retailer or its employees are not on the licensed premises; and

(c) Only employees of the licensee and other authorized individuals are allowed access to the licensed premises. For the purposes of this section, authorized individuals include individuals employed by the licensee as well as any outside vendors, contractors, or other individuals conducting business that requires access to the licensed premises.

44 § 15404. Retail Customers.

(a) A licensed retailer shall only sell adult -use cannabis goods to individuals who are at least 21 years of age after confirming the customer's age and identity by inspecting a valid form of identification provided by the customer as required by subsection (c) of this section.

(b) A licensed retailer shall only sell medicinal cannabis goods to individuals who are at least 18 years of age and possesses a valid physician's recommendation after confirming the customer's age, identity, and physician's recommendation as required by subsection (c) of this section.

(c) Acceptable forms of identification include the following:

(1) A document issued by a federal, state, county, or municipal government, or a political subdivision or agency thereof, including, but not limited to, a valid motor vehicle operator's license, that contains the name, date of birth, height, gender, and photo of the person;
(2) A valid identification card issued to a member of the Armed Forces that includes the person's name, date of birth, and photo; or
(3) A valid passport issued by the United States or by a foreign government.

§ 15406. Cannabis Goods for Sale.

A licensed retailer shall not make any cannabis goods available for sale or delivery to a customer unless:

(a) The cannabis goods were received by the licensed retailer from a licensed distributor or licensed microbusiness authorized to engage in distribution;

(b) The licensed retailer has verified that the cannabis goods have not exceeded their best-by, sell-by, or expiration date if one is provided;

(c) In the case of manufactured cannabis products, the product complies with all requirements of Business and Professions Code section 26130 and this division;

(d) The cannabis goods have undergone regulatory compliance testing as required by the Act and chapter 6;

(e) The batch number, if any, is labeled on the package of cannabis goods and matches the batch number on the corresponding certificate of analysis for regulatory compliance testing;

(f) The packaging and labeling of the cannabis goods complies with Business and Professions Code section 26120 and this division; and

45 (g) The cannabis goods comply with all applicable requirements found in the Act and the division.

§ 15407. Sale of Non-Cannabis Goods.

(a) In addition to cannabis goods, a licensed retailer may sell only cannabis accessories and the branded merchandise of any licensee. Licensed retailers may provide customers with promotional materials.

(b) Notwithstanding subsection (a), a licensed retailer or licensed microbusiness authorized for retail sales who operates a consumption area on the licensed premises in accordance with Business and Professions Code section 26200(g) may also sell prepackaged, non-cannabis-infused, non-alcoholic food and beverages if the applicable local jurisdiction allows such sales.

(c) Nothing in this section shall be interpreted to prevent consumers from bringing or receiving non-cannabis-infused, non-alcoholic food and beverages from a restaurant or food delivery service for consumption in the designated consumption area on the licensed premises, if the applicable local jurisdiction allows such activities.

§ 15408. Sale of Live Plants and Seeds.

(a) A licensed retailer shall only sell live, immature cannabis plants and cannabis seeds if all of the following requirements are met:

(1) The plant is not flowering and is shorter and narrower than 18 inches; and (2) The plant or seed originated from a licensed nursery that holds a valid license from the Department or a licensed microbusiness authorized to engage in cultivation.

(b) A licensed retailer shall not apply or use any pesticide, on live plants. A licensed retailer shall not cause any pesticide to be applied or used on live plants.

§ 15409. Daily Limits.

(a) A licensed retailer shall not sell more than the following amounts to a single adult-use cannabis customer in a single day:

(1) 28.5 grams of non-concentrated cannabis.
(2) 8 grams of cannabis concentrate as defined in Business and Professions Code section 26001, including cannabis concentrate contained in cannabis products. (3) 6 immature cannabis plants.

(b) A licensed retailer shall not sell more than the following amounts to a single medicinal cannabis patient, or to a patient's primary caregiver purchasing medicinal cannabis on behalf of the patient, in a single day:

46 (1) 8 ounces of medicinal cannabis in the form of dried mature flowers or the plant conversion as provided in Health and Safety Code section 11362.77. (2) 12 immature cannabis plants.

(c) Notwithstanding subsection (b) of this section, if a medicinal cannabis patient's valid physician's recommendation contains a different amount than the limits listed in this section, the medicinal cannabis patient may purchase an amount of medicinal cannabis consistent with the patient's needs as recommended by a physician and documented in the physician's recommendation.

(d) The limits provided in subsection (a) and subsection (b) of this section shall not be combined to allow a customer to purchase cannabis goods in excess of any of the limits provided in this section.

(e) For the purposes of this section, a licensed retailer shall be responsible for determining that the amount of cannabis concentrates found in manufactured cannabis products sold to customers comply with the requirements of this section.

§ 15410. Customer Return of Cannabis Goods.

(a) For the purposes of this section, “customer return” means a customer's return of cannabis goods that were purchased from a licensed retailer, back to the licensed retailer from whom the cannabis goods were purchased.

(b) A licensed retailer may accept customer returns of cannabis goods that were previously sold to a customer.

(c) A licensed retailer shall not resell cannabis goods that have been returned.

(d) A licensed retailer shall treat any cannabis goods abandoned on the licensed retailer premises as a customer return.

(e) Defective manufactured cannabis products returned by customers to a licensed retailer may be destroyed or returned to the licensed distributor from whom the cannabis goods were obtained.

§ 15411. Requirements for Providing Free Cannabis Goods to Medicinal Consumers.

(a) A licensed retailer shall not provide free cannabis goods to any person. A licensed retailer shall not allow individuals who are not employed by the licensed retailer to provide free cannabis goods to any person on the licensed premises.

(b) Notwithstanding subsection (a), in order to provide access to medicinal cannabis patients who have difficulty accessing medicinal cannabis goods, a licensee who holds an M -Retailer license, an M -Retailer Non -storefront license, or an M -Microbusiness 47 license that is authorized for retail sales may provide free medicinal cannabis goods if the following criteria are met:

(1) Free cannabis goods are provided only to a medicinal cannabis patient or primary caregiver who possesses a valid physician's recommendation for medicinal cannabis or cannabis products or a valid identification card issued under Health and Safety Code section 11362.71.
(A) Before providing free cannabis goods to a medicinal cannabis patient who does not possess a valid identification card issued under Health and Safety code section 11362.7, the licensed retailer shall do the following:
(i) Verify with the Medical Board of California, the Osteopathic Medical Board of California, or the California Board of Podiatric Medicine that the attending physician providing the patient's medicinal cannabis recommendation has a license in good standing to practice medicine or osteopathy in the State of California; (ii) Keep a copy of the patient's or primary caregiver's driver's license or other government-issued identification; and
(iii) Prepare and retain written certification that the licensed retailer verified the physician's recommendation as required by this section that includes the date and time of the verification, the name of the employee who conducted the verification, the name of the licensing board(s) contacted, the method by which the licensing board was contacted, and the name of the person at the licensing board who provided the verification if it was conducted orally, or a copy of the verification if it was provided in writing. (B) After initially verifying a physician's recommendation for a specific medicinal cannabis patient as required by this section, a licensed retailer shall also verify the physician's recommendation at least annually, for the time period that the physician's recommendation is valid.
(C) A licensee shall not provide free cannabis goods to a medicinal cannabis patient or the patient's primary caregiver if the physician's recommendation has expired.
(2) Prior to being provided to the patient or the patient's primary caregiver, the cannabis goods have been properly designated for donation and recorded in the track and trace system.
(3) Except as provided under Revenue and Taxation Code section 34012.1, the donated cannabis goods shall comply with all statutory and regulatory requirements that apply to cannabis goods for sale, including those for cultivating, manufacturing, distributing, processing, storing, regulatory compliance testing, packaging, labeling, transporting, and delivering.
(4) The cannabis goods provided to a medicinal cannabis patient or the patient's primary caregiver pursuant to this section shall be applied toward the daily purchase limit for a medicinal cannabis customer contained in section 15409 and the possession lim its contained in Health and Safety Code section 11362.77.
(5) If cannabis goods are donated by a licensed retailer, then the sales invoice or receipt for the cannabis goods shall indicate that the cannabis goods were donated. (6) The provision of free cannabis goods shall be recorded in the track and trace system and the licensed retailer's inventory records. The inventory records shall also include either the number of the medicinal cannabis patient's identification card issued 48 under Health and Safety Code section 11362.7 or a copy of a valid physician's recommendation and the written certification that the recommendation was verified as required by this section.

(c) In addition to the provision of free cannabis goods in subsection (b), a licensed retailer may donate cannabis goods and the use of equipment in compliance with any compassionate use, equity, or other similar program administered by a local jurisdiction.

The licensee shall ensure that all cannabis goods provided pursuant to this subsection comply with subsections (b)(4), (b)(5), and (b)(6).

(d) A licensed retailer may contract with an individual or organization to coordinate the provision of free cannabis goods on the licensee's retail premises. All cannabis goods provided through an individual or organization pursuant to this subsection shal l comply with the requirements of this section. The licensed retailer may be disciplined for violations of the Act that are committed by an individual or organization with whom the licensee has contracted.

(e) A licensed retailer authorized to engage in retail sales only through delivery shall provide free cannabis goods only by delivery. Free cannabis goods provided through delivery shall comply with the requirements of this section.

§ 15412. Prohibition on Packaging and Labeling by a Retailer.

(a) A licensed retailer shall not accept, possess, or sell cannabis goods that are not packaged as they will be sold at final sale, in compliance with this division.

(b) A licensed retailer shall not package or label cannabis goods.

(c) Notwithstanding subsection (b) of this section, a licensed retailer may place a barcode or similar sticker on the packaging of cannabis goods to be used in inventory tracking. A barcode or similar sticker placed on the packaging of a cannabis goods shall not obscure any labels required by the Act or this division.

§ 15413. Cannabis Goods Packaging and Exit Packaging.

(a) All cannabis goods sold by a licensed retailer shall be in compliance with the packaging requirements in chapter 11.

(b) A package containing cannabis goods shall be tamper -evident and child-resistant. If the package contains multiple servings, the package must also be resealable.

(c) All cannabis goods purchased by a customer shall not leave the licensed retailer's premises unless the goods are placed in an opaque exit package.

(d) Immature plants and seeds sold by a licensed retailer are not required to be placed in resealable, tamper-evident, child-resistant packaging.

49 § 15414. Non-Storefront Retailer.

(a) A non-storefront retailer licensee shall be authorized to conduct retail sales exclusively by delivery as defined in Business and Professions Code section 26001(o).

(b) A complete application for a non- storefront retailer license shall include all the information required in an application for a retailer license.

(c) A non-storefront retailer licensee shall comply with all the requirements applicable to retailer licensees, except for those provisions related to public access to the licensed premises and the retail area.

(d) The licensed premises of a non- storefront retailer licensee shall be closed to the public.

§ 15415. Delivery Employees.

(a) All deliveries of cannabis goods shall be performed by a delivery employee who is directly employed by a licensed retailer.

(b) Each delivery employee of a licensed retailer shall be at least 21 years of age.

(c) All deliveries of cannabis goods shall be made in person. A delivery of cannabis goods shall not be made through the use of an unstaffed vehicle.

(d) Deliveries of cannabis goods shall be received by customers only during the hours of operation established by section 15403. Delivery employees shall return to the licensed premises after making their last delivery of the day if they have any unsold cannabis goods to return to the premises.

(e) During the process of delivery, the licensed retailer's delivery employee may not engage in any activities except for cannabis goods delivery and necessary rest, fuel, or vehicle repair stops.

(f) A delivery employee of a licensed retailer shall, during deliveries, carry a copy of the retailer's current license, a copy of the QR Code certificate issued by the Department, which complies with section 15039, subsection (d), the employee's government -issued identification, and an identification badge provided by the employer pursuant to section 15043. A delivery employee shall provide a copy of the retail license, a copy of the QR Code certificate, and their employee identification badge to a deliver y customer upon request.

(g) Prior to providing cannabis goods to a delivery customer, a delivery employee shall confirm the identity and age of the delivery customer as required by section 15404 and ensure that all cannabis goods sold comply with requirements of section 15413.

50 (h) A licensed retailer shall maintain an accurate list of the retailer's delivery employees and shall provide the list to the Department upon request.

§ 15415.1. Deliveries Facilitated by Technology Platforms.

(a) A licensed retailer or licensed microbusiness shall not sell or otherwise transfer any cannabis goods to a customer through the use of an unlicensed third party, intermediary business, broker, or any other business or entity.

(b) Notwithstanding subsection (a) of this section, a licensed retailer or licensed microbusiness may contract with a service that provides a technology platform to facilitate the sale and delivery of cannabis goods, in accordance with all of the following:

(1) The licensed retailer or licensed microbusiness does not allow for delivery of cannabis goods by the technology platform service provider. (2) The licensed retailer or licensed microbusiness does not share in the profits of the sale of cannabis goods with the technology platform service provider, or otherwise provide for a percentage or portion of the cannabis goods sales to the technology platform service provider.
(3) The licensed retailer or licensed microbusiness shall not advertise or market cannabis goods in conjunction with the technology platform service provider, outside of the technology platform, and shall ensure that the technology platform service provider does not use the licensed retailer's or licensed microbusiness's license number or legal business name on any advertisement or marketing that primarily promotes the services of the technology platform.
(4) The licensed retailer or licensed microbusiness shall ensure the following information is provided to customers:
(A) Any cannabis goods advertised or offered for sale on or through the technology platform shall disclose, at a minimum, the licensed retailer's or licensed microbusiness's legal business name and license number. (B) Customers placing an order for cannabis goods through the technology platform shall be able to easily identify the licensed retailer or licensed microbusiness that each cannabis good is being ordered or purchased from. This information shall be available to the customer prior to the customer placing an order or purchasing the cannabis goods.
(5) All required sales invoices and receipts, including any receipts provided to the customer, shall disclose, at a minimum, the licensed retailer's or licensed microbusiness's legal business name and license number.
(6) All other delivery, marketing, and advertising requirements under this division are complied with.

§ 15416. Delivery to a Physical Address.

(a) A delivery employee may only deliver cannabis goods to a physical address in California.
51 (b) A delivery employee shall not leave the State of California while possessing cannabis goods.

(c) A delivery employee shall not deliver cannabis goods to an address located on publicly owned land or any address on land or in a building leased by a public agency. This prohibition applies to land held in trust by the United States for a tribe or an i ndividual tribal member unless the delivery is authorized by and consistent with applicable tribal law.

(d) A delivery employee may deliver to any jurisdiction within the State of California provided that such delivery is conducted in compliance with all delivery provisions of this division.

(e) A delivery employee shall not deliver cannabis goods to a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center.

§ 15417. Delivery Vehicle Requirements.

(a) A licensed retailer's delivery employee, carrying cannabis goods for delivery, shall only travel in an enclosed motor vehicle. Any vehicle used in the delivery of cannabis goods shall be operated by a delivery employee of the licensee. A vehicle used i n the delivery of cannabis goods shall not have any marking or other indications on the exterior of the vehicle that may indicate that the delivery employee is carrying cannabis goods for delivery. Only the licensee or an employee of the retailer licensee for whom delivery is being performed shall be in the delivery vehicle.

(b) While carrying cannabis goods for delivery, a licensed retailer's delivery employee shall ensure the cannabis goods are not visible to the public. Cannabis goods shall be stored in a secure, fully enclosed trunk that cannot be accessed from inside the vehicle, or in a secured area or compartment within the interior of the vehicle. A “secured area” is defined as an area where solid or locking metal partitions, cages, or high- strength shatterproof acrylic can be used to create a secure compartment in the fully enclosed vehicle. The secured area may be comprised on three sides by any part of the body of the vehicle, provided the parts of the vehicle used for the purposes of this section are shatterproof and are not made of glass.

(c) A licensed retailer's delivery employee shall not leave cannabis goods in an unattended motor vehicle unless the motor vehicle is locked and equipped with an active vehicle alarm system. Any cannabis goods left in an unattended vehicle must be stored in a container as required in subsection (b).

(d) A vehicle used for the delivery of cannabis goods shall be outfitted with a dedicated Global Positioning System (GPS) device for identifying the geographic location of the delivery vehicle and recording a history of all locations traveled to by the del ivery employee while engaged in delivery. A dedicated GPS device must be owned by the 52 licensee and used for delivery only. The device shall be either permanently or temporarily affixed to the delivery vehicle and shall remain active and inside of the delivery vehicle at all times during delivery. At all times, the licensed retailer shall be able to identify the geographic location of all delivery vehicles that are making deliveries for the licensed retailer and document the history of all locations traveled to by a delivery employee while engaged in delivery. A licensed retailer shall provide this information to the Department upon request. The history of all locations traveled to by a delivery employee while engaging in delivery shall be maintained by the licensee for a minimum of 90 days.

(e) Upon request, a licensed retailer shall provide the Department with information regarding any motor vehicle used for the delivery of cannabis goods, including the vehicle's make, model, color, Vehicle Identification Number, license plate number and Department of Motor Vehicles registration information.

(f) Any motor vehicle used by a licensed retailer to deliver cannabis goods is subject to inspection by the Department. Vehicles used to deliver cannabis goods may be stopped and inspected by the Department at any licensed premises or during delivery.

§ 15418. Cannabis Goods Carried During Delivery.

(a) A licensed retailer's delivery employee shall not carry cannabis goods in the delivery vehicle with a value in excess of $10,000 at any time.

(b) For the purposes of this section, the value of cannabis goods shall be determined using the current retail price of all cannabis goods carried by, or within the delivery vehicle of, the licensed retailer's delivery employee.

(c) A delivery employee may only carry cannabis goods, cannabis accessories, branded merchandise of any licensee, or promotional materials in the delivery vehicle and may only perform deliveries for one licensed retailer at a time. A delivery employee must depart and return to the same licensed premises before taking possession of any cannabis goods from another licensee to perform deliveries.

(d) Before leaving the licensed premises, the licensed retailer's delivery employee must have a delivery inventory ledger of all cannabis goods provided to the licensed retailer's delivery employee. The contents of the delivery inventory ledger must comply with the requirements of section 15049.3. During the delivery trip, as defined in section 15049.3, the delivery employee shall maintain the delivery inventory ledger in hard copy or electronically, the latter of which may be an electronic copy maintained in the track and trace system. The delivery inventory ledger must be updated after each completed delivery to reflect the remaining inventory carried by the delivery employee. The delivery inventory ledger must otherwise be updated in accordance with the requirements of section 15049.3, and then entered into the track and trace system no later than the end of the calendar day on which the delivery trip occurred.

53 (e) The licensed retailer's delivery employee shall maintain a log that includes all stops from the time the licensed retailer's delivery employee leaves the licensed premises to the time that the licensed retailer's delivery employee returns to the licens ed premises, and the reason for each stop. The log shall be turned in to the licensed retailer when the licensed retailer's delivery employee returns to the licensed premises. The licensed retailer must maintain the log as a commercial cannabis activity record as required by this division. The log may be maintained electronically.

(f) Prior to arrival at any delivery location, the licensed retailer must have received a delivery request from the customer and provided the delivery request receipt to the licensed retailer's delivery employee electronically or in hard copy. The delivery request receipt provided to the licensed retailer's delivery employee shall contain all of the information required in section 15420, except for the date and time the delivery was made, and the signature of the customer.

(g) Immediately upon request by the Department or any law enforcement officer, the licensed retailer's delivery employee shall provide:

(1) The delivery inventory ledgers from the time the licensed retailer's delivery employee left the licensed premises up to the time of the request; (2) All delivery request receipts for cannabis goods carried by the delivery employee, in the delivery vehicle, or any deliveries that have already been made to customers; and
(3) The log of all stops from the time the licensed retailer's delivery employee left the licensed premises up to the time of the request.

(h) If a licensed retailer's delivery employee does not have any delivery requests to be performed for a 30-minute period, the licensed retailer's delivery employee shall not make any additional deliveries and shall return to the licensed premises. Required meal breaks shall not count toward the 30-minute period.

(i) Upon returning to the licensed premises, all undelivered cannabis goods shall be returned to the licensed retailer's inventory and recorded within the track and trace system in accordance with section 15049.3.

§ 15419. Cannabis Consumption During Delivery.

A licensed retailer's delivery employees shall not consume cannabis or cannabis products while delivering cannabis goods to customers.

§ 15420. Delivery Request Receipt.

A licensed retailer shall prepare a hard copy or electronic delivery request receipt for each delivery of cannabis goods.

54 (a) The delivery request receipt shall contain the following:

(1) The legal business name and license number of the licensed retailer; (2) The first name and employee number of the licensed retailer's delivery employee who delivered the order;
(3) The first name and employee number of the licensed retailer's employee who prepared the order for delivery;
(4) The first name of the customer and a licensed retailer -assigned customer number for the person who requested the delivery;
(5) The date and time the delivery request was made;
(6) The delivery address;
(7) A detailed description of all cannabis goods requested for delivery. The description shall include the weight, volume, or any other accurate measure of the amount of all cannabis goods requested;
(8) The total amount paid for the delivery, including any taxes or fees, the cost of the cannabis goods, and any other charges related to the delivery; and (9) Upon delivery, the date and time the delivery was made, and the handwritten or electronic signature of the customer who received the delivery.

(b) At the time of the delivery, the delivery employee of the retailer shall provide the customer who placed the order with a hard or electronic copy of the delivery request receipt. The delivery employee shall retain a hard or electronic copy of the signed delivery request receipt for the licensed retailer's records.

(c) For the purposes of this section, an employee number is a distinct number assigned by a licensed retailer to an employee that would allow the licensed retailer to identify the employee in documents or records using the employee number rather than the employee's full name. A licensed retailer shall be able to identify the employee associated with each employee number upon request from the Department.

(d) For the purposes of this section, a customer number is a distinct number assigned by a licensed retailer to a customer that would allow the licensed retailer to identify the customer in documents or records using the customer number rather than the customer's full name. A licensed retailer shall be able to identify the customer associated with each customer number upon request from the Department.

§ 15421. Delivery Route.

While making deliveries of cannabis goods, a licensed retailer's delivery employee shall only travel from the retailer's licensed premises to the delivery address; from one delivery address to another delivery address; or from a delivery address back to the retailer's licensed premises. A delivery employee of a licensed retailer shall not deviate from the delivery path described in this section, except for necessary rest, fuel, or vehicle repair stops, or because road conditions make continued use of the ro ute unsafe, impossible, or impracticable.

55 § 15422. Receiving Shipments of Inventory.

(a) A licensed retailer shall receive a shipment of cannabis goods only from a licensed distributor or licensed microbusiness authorized to engage in distribution.

(b) A licensed retailer shall accept shipments of cannabis goods only between the hours of 6:00 a.m. Pacific Time and 10:00 p.m. Pacific Time.

(c) During business hours, shipments of cannabis goods shall not enter the licensed premises through an entrance or exit that is available for use by the public.

(d) A licensed retailer whose licensed premises only has one entryway may be exempt from the requirements of subsection (c) of this section if the licensed retailer obtains authorization from the local jurisdiction explicitly authorizing this activity. The licensed retailer shall be required to provide this authorization to the Department upon request.

For this section to apply, the licensed premises must physically have only one entryway and cannot have any other entryways.

§ 15423. Inventory Documentation.

A licensed retailer shall maintain an accurate record of its inventory. A licensed retailer shall provide the Department with the record of inventory immediately upon request. A licensed retailer shall keep a record of the following information for all cannabis goods the licensed retailer has in its inventory:

(a) A description of each item such that the cannabis goods can easily be identified;

(b) An accurate measurement of the quantity of the item;

(c) The date and time the cannabis goods were received by the licensed retailer;

(d) The sell-by or expiration date provided on the package of cannabis goods, if any;

(e) The name and license number of the licensed distributor or licensed microbusiness that transported the cannabis goods to the licensed retailer; and

(f) The price the licensed retailer paid for the cannabis goods, including taxes, delivery costs, and any other costs.

§ 15424. Inventory Reconciliation.

(a) A licensed retailer shall be able to account for all of its inventory.

(b) In conducting an inventory reconciliation, a licensed retailer shall verify that the licensed retailer's physical inventory is consistent with the licensed retailer's records pertaining to inventory.
56 (c) The result of inventory reconciliation shall be retained in the licensed retailer's records and shall be made available to the Department upon request.

(d) If a licensed retailer identifies any evidence of theft, diversion, or loss, the licensed retailer shall notify the Department and law enforcement pursuant to section 15036 of this division.

(e) If a significant discrepancy as defined in section 15034 of this division is discovered between a licensed retailer's physical inventory and the licensed retailer's inventory records, the licensed retailer shall notify the Department and law enforcement pursuant to section 15036 of this division.

§ 15427. Retailer Premises-to-Retailer Premises Transfer.

(a) A licensee who holds multiple retail licenses may arrange for the transfer of cannabis goods from one licensed retail premises to another licensed retail premises if both retail licenses are held by the same sole proprietor or business entity.

(b) Cannabis goods transferred to a licensed retail premises under subsection (a) may be sold by the licensed retailer receiving the cannabis goods only if the cannabis goods comply with all requirements found in the Act and this division.

(c) The transportation of cannabis goods under this section must comply with all requirements found within the Act and this division.

(d) Any movement of cannabis goods under this section shall be properly entered into the track and trace system.

Chapter 9. Other Responsibilities

§ 17221. Weighing Devices and Weighmasters.

(a) A licensee shall use weighing devices approved, tested, and sealed in accordance with the requirements in Business and Professions Code, division 5, chapter 5 (commencing with section 12500) and its implementing regulations, and registered with the county sealer consistent with Business and Professions Code, division 5, chapter 2 (commencing with section 12240) and its implementing regulations whenever:

(1) Cannabis or cannabis product is bought or sold by weight or count; (2) Cannabis or cannabis product is packaged for sale by weight or count; (3) Cannabis or cannabis product is weighed or counted for entry into the track and trace system; and
(4) The weighing device is used for commercial purposes as defined in Business and Professions Code section 12500.
57 (b) Whenever the licensee is determining the weight, measure, or count of cannabis and cannabis products for the purposes specified in subsection (a), the weight, measure, or count shall be determined by a licensed weighmaster in compliance with the requirements of Business and Professions Code, division 5, chapter 7 (commencing with section 12700).

(c) A licensee shall obtain a weighmaster certificate that complies with the requirements of Business and Professions Code, division 5, chapter 7 (commencing with section 12700) whenever:

(1) Payment for the cannabis or cannabis product is dependent upon the quantity determined by the weighmaster; or
(2) Payment for service or processing of the cannabis or cannabis product is dependent upon the quantity determined by the weighmaster.

(d) The weighmaster certificate shall not be required when cannabis or cannabis products are weighed or counted for entry into the track and trace system.

(e) In any county in which a county sealer refuses or is not required to approve, register, test, and seal weighing devices used by a licensee, the licensee may have a service agency registered pursuant to Business and Professions Code, division 5, chapter 5.5 perform testing of a weighing device consistent with the requirements in title 4, California Code of Regulations, section 4070. The licensee shall keep a copy of the registered service agency's written inspection report attesting to the accuracy of the device for each device operated by the licensee.

§ 17223. Waste Management.

(a) A licensee shall dispose of all waste in accordance with the Public Resources Code and any other applicable state and local laws. It is the responsibility of the licensee to properly evaluate waste to determine if it should be designated and handled as a hazardous waste, as defined in Public Resources Code section 40141.

(b) A licensee shall establish and implement a written cannabis waste management plan that describes the method or methods by which the licensee will dispose of cannabis waste, as applicable to the licensee's activities. A licensee shall dispose of cannabi s waste using only the following methods:

(1) On-premises composting of cannabis waste.
(2) Collection and processing of cannabis waste by a local agency, a waste hauler franchised or contracted by a local agency, or a private waste hauler permitted by a local agency in conjunction with a regular organic waste collection route. (3) Self-haul cannabis waste to one or more of the following:
(A) A staffed, fully permitted solid waste landfill or transformation facility; 58 (B) A staffed, fully permitted composting facility or staffed composting operation;
(C) A staffed, fully permitted in- vessel digestion facility or staffed in- vessel digestion operation;
(D) A staffed, fully permitted transfer/processing facility or staffed transfer/processing operation;
(E) A staffed, fully permitted chip and grind operation or facility; or (F) A recycling center as defined in title 14, California Code of Regulations, section 17402.5(d) that meets the following:
(i) The cannabis waste received shall contain at least ninety (90) percent inorganic material;
(ii) The inorganic portion of the cannabis waste is recycled into new, reused, or reconstituted products that meet the quality standards necessary to be used in the marketplace; and
(iii) The organic portion of the cannabis waste shall be sent to a facility or operation identified in subsections (b)(3)(A)-(E). (4) Reintroduction of cannabis waste back into agricultural operation through on- premises organic waste recycling methods including, but not limited to, tilling directly into agricultural land and no-till farming.

(c) The licensee shall maintain any cannabis waste in a secured waste receptacle or secured area on the licensed premises until the time of disposal. Physical access to the receptacle or area shall be restricted to the licensee, employees of the licensee, the local agency, waste hauler franchised or contracted by the local agency, or private waste hauler permitted by the local agency only. Nothing in this subsection prohibits licensees from using a shared waste receptacle or area with other licensees, provi ded that the shared waste receptacle or area is secured and access is limited as required by this subsection.

(d) A licensee that disposes of waste through an entity described in subsection (b)(2) shall do all of the following:

(1) Maintain and make available to the Department upon request the business name, address, contact person, and contact phone number of the entity hauling the waste; and
(2) Obtain documentation from the entity hauling the waste that evidences subscription to a waste collection service.

(e) If a licensee is self -hauling cannabis waste as allowed by the local jurisdiction, the licensee shall be subject to all of the following requirements:

(1) Self -hauled cannabis waste shall only be transported by the licensee or its employees;
(2) Self-hauled cannabis waste shall only be transported to a facility specified in subsection (b)(3); and
59 (3) The licensee or its employee who transports the waste shall obtain for each delivery of cannabis waste a copy of a certified weight ticket or receipt from the solid waste facility.

(f) A batch of cannabis or cannabis products that is being disposed of because the batch has failed internal quality testing, quality assurance review by a distributor, or regulatory compliance testing shall comply with the following additional requirements:

(1) All cannabis or cannabis products in the batch shall be rendered unusable prior to disposal;
(2) Rendering of the cannabis or cannabis products shall be done under video surveillance, unless the rendering is performed by a licensee engaging in cultivation activities on a licensed premises authorized exclusively for cultivation activities or the cultivation area of a licensed microbusiness premises; and (3) The reason for disposal and the disposition of the batch shall be noted in the track and trace system.

§ 17225. Product Complaints.

(a) A licensee shall review all product complaints made to the licensee to determine whether the complaints involve possible misbranding or adulteration of a cannabis good, and shall investigate the complaints to the extent practicable based on the informa tion received and the records the licensee is required to maintain.

(b) For purposes of this section, “product complaint” means any written, electronic, or oral communication received by a licensee that contains any allegation expressing concern, for any reason, with the quality of a cannabis good. Examples of product complaints may include, but are not limited to: foul odor, caused illness or injury, foreign material in a cannabis product container, improper packaging, mislabeling, cannabis products that contain an incorrect concentration of cannabinoids, and cannabis products that contain an unidentified ingredient, or any form of contaminant.

(c) The licensee shall maintain written records for every product complaint received and any subsequent investigation. The records shall include:

(1) The name and description of the cannabis good;
(2) The batch number or UID of the cannabis good, if available; (3) The date the complaint was received and the name, address, and telephone number of the complainant, if available;
(4) The nature of the complaint including, if known, how the product was used; (5) The reply to the complainant, if any;
(6) The findings of the investigation or follow-up action taken when an investigation is performed;
(7) The basis for any determination not to conduct an investigation, if applicable; and
(8) The notification to the licensee that made the cannabis good, if applicable. 60 (d) The licensee shall conduct a recall, as specified in section 17226, when the investigation evidences adulteration or misbranding.

§ 17226. Voluntary Recalls.

(a) Licensees shall establish and implement written procedures for recalling cannabis goods that are determined to be misbranded or adulterated. The recall procedures shall be implemented upon discovery, or notification from the Department, that one or mor e batches of cannabis goods are adulterated or misbranded. These procedures shall include:

(1) Factors that necessitate a recall;
(2) Personnel responsible for implementing the recall procedures; (3) Notification protocols, including:
(A) A mechanism to notify all customers that have, or could have, obtained the cannabis goods, including communication and outreach via media, as necessary and appropriate;
(B) A mechanism to notify any licensees that supplied or received the recalled cannabis goods; and
(C) Instructions to the general public and other licensees for the return or destruction of the recalled cannabis goods; and
(4) Procedures for the collection and destruction of any recalled cannabis goods.

These procedures shall meet the following requirements:
(A) All recalled cannabis goods that are intended to be destroyed shall be quarantined for a minimum of 72 hours, unless a longer holding time is requested by the Department. The licensee shall affix to the recalled cannabis goods any bills of lading, shipping manifests, or other similar documents with the cannabis goods information and weight. The cannabis goods held in quarantine shall be subject to auditing by the Department.
(B) Following the quarantine period, the licensee shall render the recalled cannabis goods unusable and dispose of them in accordance with section 17223.

(b) In addition to the tracking requirements set forth in section 15049, a licensee shall use the track and trace system and onsite documentation to ensure that recalled cannabis goods intended for destruction are identified, weighed, and tracked while on the licensed premises and when disposed of in accordance with this section. For recalled cannabis goods, the licensee shall enter the following details into the track and trace system: the weight and count of the cannabis goods, reason for destruction, and date the quarantine period will begin.

(c) The licensee shall notify the Department of any recall within 24 hours of initiating the recall.

(d) A licensed manufacturer may submit a corrective action plan to the Department for recalled cannabis goods in accordance with section 17305. If the corrective action plan 61 is not approved by the Department, the cannabis goods shall be destroyed pursuant to the procedures required by subsection (a)(4).

§ 17227. Mandatory Recalls.

(a) The Department may require licensees to conduct a recall of a cannabis good that is adulterated or misbranded in accordance with Business and Professions Code section 26039.1.

(b) The licensee shall conduct the mandatory recall in the same manner as a voluntary recall as provided in section 17226.

Chapter 12. Enforcement
Article 1. Authority

§ 17800. Right of Access.

(a) The Department and its authorized representatives, for purposes of inspection, investigation, review, or audit, shall have full and immediate access to:

(1) Enter any premises licensed by the Department.
(2) Inspect and test any vehicle or equipment possessed by, in control of, or used by a licensee or their agents and employees for the purpose of conducting commercial cannabis activity.
(3) Test any cannabis goods or cannabis-related materials or products possessed by, in control of, or used by a licensee or their agents and employees for the purpose of conducting commercial cannabis activity.
(4) Copy any materials, books, or records of any licensee or their agents and employees.

(b) Failure to cooperate with and participate in any Department investigation pending against the licensee may result in a licensing violation subject to discipline. This subsection shall not be construed to deprive a licensee of any privilege guaranteed by the Fifth Amendment to the Constitution of the United States, or any other constitut ional or statutory privileges. This subsection shall not be construed to require a licensee to cooperate with a request that would require the licensee to waive any constitutional or statutory privilege or to comply with a request for information or other matters within an unreasonable period of time in light of the time constraints of the licensee's business. Any constitutional or statutory privilege exercised by the licensee shall not be used against the licensee in a regulatory or disciplinary proceeding against the licensee.

(c) Prior notice of an inspection, investigation, review, or audit is not required.

(d) Any inspection, investigation, review, or audit of a licensed premises shall be conducted anytime the licensee is exercising privileges under the license, or as otherwise 62 agreed to by the Department and the licensee or its agents, employees, or representatives.

(e) If the licensed premises is not accessible because access is only available by going through another licensed premises and the licensee occupying the other licensed premises denies the Department access, the licensees shall both be held responsible and subject to discipline.

Chapter 12. Enforcement
Article 2. Compliance and Enforcement Actions

§ 17801. Notice to Comply.

(a) The Department may issue a Notice to Comply to a licensee for violation(s) of the Act or this division discovered during an investigation or audit or observed during an inspection.

(b) The Notice to Comply shall be in writing and describe the nature and facts of each violation, including a reference to the statute or regulation violated, and may indicate the manner in which the licensee must correct the violation(s) to achieve compliance.

(c) The Department may serve the Notice to Comply personally, by email, or by mail to the licensee or an employee, agent, or person delegated by the licensee to accept notice.

(d) The licensee shall sign and return the Notice to Comply and describe how compliance was achieved within 30 calendar days after the date of personal service or the date of emailing or mailing of the notice or a different date specified by the Department . The Department may also require the licensee to provide a plan for review and approval by the Department on a case-by-case basis.

(e) Failure to correct the violation(s) in the Notice to Comply may result in disciplinary action.

§ 17801.1. Notice of Violation.

(a) Until October 1, 2021, the Department may issue a Notice of Violation to a licensee for violation(s) of the Act or this division that shall inform the licensee of:

(1) The violation(s) alleged;
(2) The proposed fine amount; and
(3) The licensee's right to request a hearing pursuant to subsection (b).

(b) Within 30 calendar days after issuance by the Department, a licensee may appeal a Notice of Violation by submitting a written request for an informal hearing by mail to the Department of Cannabis Control, Legal Affairs Division, 2920 Kilgore Road, Ranc ho 63 Cordova, CA 95670, or by email to [email protected]. The request shall include the following:

(1) The licensee's name, mailing address, and daytime phone number; (2) The license number issued by the Department;
(3) A copy of the Notice of Violation; and
(4) A clear and concise statement of the basis of the appeal.

(c) If the licensee fails to submit a timely request for hearing pursuant to subsection (b), the Notice of Violation is not appealable and the Department may proceed upon the noticed violation(s) without a hearing.

(d) A hearing requested to appeal a Notice of Violation will be scheduled and conducted in accordance with chapter 5 (commencing with section 11500) of part 1 of division 3 of the Government Code.

(e) For all written requests for a hearing submitted by licensees and received by the Department prior to October 1, 2021, with hearings scheduled to take place on or after October 1, 2021, the following will occur:

(1) Informal hearing proceedings noticed prior to October 1, 2021, shall be converted to adjudicative proceedings under chapter 5 (commencing with section 11500) of part 1 of division 3 of the Government Code.
(2) Any scheduled informal hearings will be vacated, and a new hearing date, location and time will be noticed by the Department.

§ 17802. Citations; Orders of Abatement; Administrative Fines.

(a) The Department may issue citations containing orders of abatement and fines against a licensee, or an unlicensed person, for any acts or omissions that are in violation of any provision of the Act or this division, or any another California laws applicable to cannabis licensees including, but not limited to, state labor law.

(b) The Department may issue a citation under this section to a licensee for a violation of a term or condition contained in a decision placing that licensee on probation.

(c) Each citation may contain either order(s) of abatement, monetary fine(s), or both, and shall:

(1) Be in writing and describe with particularity the nature of the violation, including a reference to the statute or regulation determined to have been violated; (2) Fix a reasonable time for abatement of the violation if the citation contains an order of abatement;
(3) Assess an administrative fine of up to $5,000 per violation, per day, by a licensee and up to $30,000 per violation, per day, by an unlicensed person if the citation contains a fine;
64 (4) Be served personally or by certified mail; and
(5) Inform the licensee or person that they may request an informal conference, or contest the citation, or both, pursuant to section 17803.

(d) Fines issued with a citation must be paid within 30 calendar days after service of the citation, unless the fine is contested. If a citation is not appealed and the fine is not paid, the full amount of the assessed fine shall be added to the fee for re newal of the license.

A license shall not be renewed without payment of the renewal fee and fine.

(e) The amount of any fine assessed by the Department under this section shall take into consideration the factors listed in Business and Professions Code section 26031.5(a)(1)- (3).

(f) Nothing in this section shall be deemed to prevent the Department from filing an accusation to suspend or revoke a license where grounds for such suspension or revocation exist.

§ 17803. Contesting Citations.

(a) A cited licensee or person may, within 30 calendar days after service of the citation, contest the citation by submitting to the Department a written request for a hearing, conducted in accordance with chapter 5 (commencing with section 11500) of part 1 of division 3 of the Government Code. If a hearing is not requested, it is waived and payment of a fine will not constitute an admission of the violation charged.

(b) In addition to requesting a hearing provided for in subsection (a), the cited licensee or person may, within 15 calendar days after service of the citation, submit a written request for an informal conference with the Department regarding the acts or omissions charged in the citation.

(c) The Department shall, within 15 calendar days after receipt of the written request, hold an informal conference with the cited licensee or person and/or their legal counsel or authorized representative.

(d) At the conclusion of the informal conference, the Department may affirm, modify, or dismiss the citation, including any fines levied or orders of abatement issued. A written decision stating the reasons for the decision shall be mailed to the cited licensee or person and their legal counsel, if any, within 15 calendar days after the date of the informal conference. This decision shall be deemed to be a final order with regard to the citation issued, including the levied fine and the order of abatement, if any.

(e) If the citation is dismissed, any request for a hearing shall be deemed withdrawn. If the citation is affirmed or modified, the cited licensee or person may either withdraw the request for a hearing or proceed with the administrative hearing process.

65 (f) If the citation, including any fines levied or orders of abatement issued, is modified, the citation originally issued shall be considered withdrawn and new citation issued. If a hearing is requested for the subsequent citation, it shall be requested within 30 calendar days after issuance of the citation.

§ 17804. Citation Compliance.

(a) If a citation with an order of abatement is issued, the time to abate or correct a violation as provided for in the order of abatement may be extended for good cause. If a cited licensee or person who has been issued an order of abatement is unable to complete the correction within the time set forth in the citation because of conditions beyond their control after the exercise of reasonable diligence, the cited licensee or person may request an extension of time from the Department in which to complete the correction.

The request must be in writing and made within the time set forth for abatement.

(b) When a citation is not contested, or if it is contested and the cited licensee or person does not prevail, failure to abate the violation within the time allowed or pay a fine that was imposed shall constitute a separate violation.

(c) Failure to timely comply with an order of abatement or pay a fine that was imposed may result in further action being taken by the Department, including, but not limited to, suspension or revocation of a license, or further administrative or civil proceedings.

Chapter 12. Enforcement
Article 3. Disciplinary Actions

§ 17808. Additional Grounds for Discipline.

The following include, but are not limited to, additional grounds that constitute a basis for disciplinary action:

(a) Failure to pay a fine imposed by the Department or agreed to by the licensee.

(b) Failure to take reasonable steps to correct objectionable conditions on the licensed premises, including the immediately adjacent area that is owned, leased, or rented by the licensee, that constitute a nuisance, within a reasonable time after receipt of notice to make those corrections, under Penal Code section 373a.

(c) Failure to take reasonable steps to correct objectionable conditions that occur during operating hours on any public sidewalk abutting a licensed premises and constitute a nuisance, within a reasonable time after receipt of notice to correct those conditions from the Department. This subsection shall apply to a licensee only upon written notice to the licensee from the Department. The Department shall issue this written notice upon its own determination, or upon a request from the local law enforcement agency in whose jurisdiction the licensed premises is located, that is supported by substantial evidence 66 that persistent objectionable conditions are occurring on the public sidewalk abutting the licensed premises. For purposes of this subsection:

(1) “Any public sidewalk abutting a licensed premises” means the publicly owned, pedestrian-traveled way, not more than 20 feet from the licensed premises, that is located between a licensed premises, including any immediately adjacent area that is owned, leased, or rented by the licensee, and a public street. (2) “Objectionable conditions that constitute a nuisance” means disturbance of the peace, public intoxication, drinking alcoholic beverages in public, smoking or ingesting cannabis or cannabis products in public, harassment of passersby, gambling, prostitution, loitering, public urination, lewd conduct, drug trafficking, or excessive loud noise. (3) “Reasonable steps” means all of the following:
(A) Calling the local law enforcement agency. Timely calls to the local law enforcement agency that are placed by the licensee or their agents or employees shall not be construed by the Department as evidence of objectionable conditions that constitute a nuisance.
(B) Requesting that those persons engaging in activities causing objectionable conditions to cease those activities, unless the licensee or their agents or employees feel that their personal safety would be threatened in making that request. (C) Making good faith efforts to remove items that facilitate loitering, such as furniture, except those structures approved or permitted by the local jurisdiction. The licensee shall not be liable for the removal of those items that facilitate loitering. (4) When determining what constitutes “reasonable steps,” the Department shall consider site configuration constraints related to the unique circumstances of the nature of the business.
(5) Even after correcting the objectionable conditions that constitute a nuisance, the licensee has a continuing obligation to meet the requirements of subsections (b) and (c), and failure to do so shall constitute grounds for disciplinary action.

(d) Knowingly permitting the illegal sale, or negotiations for the illegal sale, of controlled substances or dangerous drugs upon the licensed premises. Successive sales, or negotiations for sales, over any continuous period of time shall be deemed evidenc e of permission. As used in this section, “controlled substances” has the same meaning as in Health and Safety Code section 11007, and “dangerous drugs” has the same meaning as in Business and Professions Code section 4022.

(e) If the licensee has employed or permitted any person to solicit or encourage others, directly or indirectly, to buy that person's cannabis goods in the licensed premises under any commission, percentage, salary, or other profit-sharing plan, scheme, or conspiracy.

§ 17809. Disciplinary Actions.

(a) When an accusation recommending disciplinary action against a licensee has been filed pursuant to Business and Professions Code section 26031, the accusation shall be served on the licensee in accordance with Government Code section 11505.

67 (b) A hearing shall be conducted in accordance with the provisions of chapter 5 (commencing with section 11500) of part 1 of division 3 of title 2 of the Government Code to determine if cause exists to take action against the licensee. At the hearing, the Department shall have all of the powers granted by the statutes cited above and by the Business and Professions Code.

(c) If a hearing on an accusation against a licensee results in a finding that the licensee has committed any of the acts or omissions constituting grounds for disciplinary action, the Department may order the license revoked, suspended outright for a specified period of time, or suspended on probationary restriction for a specified period of time, including terms and conditions of probation the Department considers appropriate on the basis of its findings, impose a fine, or any combination thereof. The Department may also issue other lawful orders it considers appropriate on the basis of its findings.

(d) An accusation may be terminated by written stipulation at any time prior to the conclusion of the hearing on the accusation. If a licensee submits a proposed stipulation to the Department for its consideration and the Department subsequently declines t o accept the proposed stipulation, the Department shall not thereafter be disqualified from hearing evidence on the accusation and taking action thereon as authorized in this section.

§ 17810. Interim Suspension.

(a) Pursuant to Business and Professions Code section 494, the Department may petition for an interim order to suspend any license or impose licensing restrictions upon any licensee if:

(1) The licensee has engaged in acts or omissions constituting a violation of the Business and Professions Code or this division, or been convicted of a crime substantially related to the licensed activity, and
(2) Permitting the licensee to continue to engage in the licensed activity would endanger the public health, safety, or welfare.

(b) An interim order for suspension or restrictions may be issued with notice, as follows:

(1) The Department shall provide the licensee with at least 15 days' notice of the hearing on the petition for an interim order.
(2) The notice shall include all documents submitted in support of the petition.

(c) An interim order for suspension or restrictions may be issued without notice to the licensee if it appears from the Department's petition and supporting documents that serious injury would result to the public before the matter could be heard on notice.

(1) The licensee shall be entitled to a hearing on the petition within 20 days after issuance of the initial interim order.
68 (2) Notice of the hearing shall be provided to the licensee by the Department within two days after issuance of the initial interim order.
(3) The licensee shall receive all documents in support of the petition.

(d) The Department shall file an accusation, pursuant to chapter 5 (commencing with section 11500) of part 1 of division 3 of title 2 of the Government Code, within 15 calendar days after issuance of the interim order.

§ 17813. Enforcement Costs.

(a) In any order in resolution of a disciplinary proceeding for suspension or revocation of a license, the Department may request the administrative law judge to direct a licensee found to have committed a violation or violations of the Act or this division to pay a sum not to exceed the reasonable costs of the investigation and enforcement of the case.

(b) A certified copy of the actual costs, or a good faith estimate of costs where actual costs are not available, signed by the Department's designated representative shall be prima facie evidence of reasonable costs of investigation and prosecution of the case.

The costs shall include the amount of investigative and enforcement costs up to the date of the hearing, including, but not limited to, charges imposed by the Attorney General.

(c) The administrative law judge shall make a proposed finding of the amount of reasonable costs of investigation and prosecution of the case when requested pursuant to subsection (a). The Department may reduce or eliminate the cost award, or remand to the administrative law judge where the proposed decision fails to make a finding on costs requested pursuant to subsection (a).

(d) Where an order for recovery of costs is made and timely payment is not made as directed in the decision, the Department may enforce the order for repayment in any appropriate court. This right of enforcement shall be in addition to any other rights the Department may have to recover costs.

(e) In any action for recovery of costs, proof of the decision shall be conclusive proof of the validity of the order of payment and the terms for payment.

(f) Except as provided in subsection (g), the Department shall not renew or reinstate any license of a licensee who has failed to pay all of the costs ordered under this division.

(g) Notwithstanding subsection (f), the Department may, in its discretion, conditionally renew or reinstate for a maximum of one year the license of any licensee who demonstrates financial hardship and enters into a formal agreement with the Department for reimbursement within that one-year period for the unpaid costs.

(h) Nothing in this section shall preclude the Department from including recovery of the costs of investigation and enforcement of a case in any stipulated settlement.

69 § 17814. Disciplinary Guidelines.

In reaching a decision on a disciplinary action under the Act and the Administrative Procedure Act (Govt. Code section 11400 et seq.), the Department shall consider the disciplinary guidelines entitled “Department of Cannabis Control Disciplinary Guidelines for All Commercial Cannabis Licenses Amended July 2022,” which are hereby incorporated by reference. Deviation from these guidelines and orders, including the standard terms of probation, is appropriate where the Department in its sole discretion determines that the facts of the particular case warrant such a deviation (e.g., the presence of mitigating factors, the age of the case, or evidentiary problems).

§ 17816. Posting of Notice of Suspension.

(a) A licensee whose license has been suspended shall conspicuously and continuously display a notice on the exterior of the licensee's premises for the duration of the suspension.

(b) The notice shall be 11 inches in length and 8.5 inches in width. The notice shall read:

NOTICE OF SUSPENSION
The Department of Cannabis Control License(s) Issued For This Premises Has Been
Suspended For Violation of State Law

(c) Advertising or posting signs to the effect that the licensed premises has been closed or that business has been suspended for any reason other than the reason provided in the decision suspending the license, shall be deemed a violation of this section.

(d) Failure to display the notice as required in this section or removal of the notice prior to the expiration of the suspension shall be a violation of this section and may result in additional disciplinary action.

(e) A licensee shall notify the Department by submitting the Licensee Notification and Request Form, Notifications and Requests Regarding Regulatory Compliance, DCC-LIC- 028 (New 2/22), incorporated herein by reference, within 24 hours of discovering that the notice under subsection (b) has been removed or damaged to an extent that makes the notice illegible.

§ 17817. Posting of Notice of Revocation.

(a) A person whose license has been revoked shall conspicuously display a notice on the exterior of the premises indicating that the license has been revoked. The notice shall remain continuously on the premises for at least 15 calendar days.

(b) The notice shall be 11 inches in length and 8.5 inches in width. The notice shall read:

70 NOTICE OF REVOCATION
The Department of Cannabis Control License(s) Issued For This Premises Has Been
Revoked For Violation of State Law

(c) Advertising or posting signs to the effect that the premises has been closed, or that business has been suspended for any reason other than the reason provided in the decision revoking the license, shall be deemed a violation of this section.

(d) If the Department revokes a license at a licensed premises that has one or more licenses at the location that will remain active after the revocation, the revocation notice shall remain posted for a period of at least 15 calendar days.

(e) Failure to display the notice for the time required in this section shall be a violation of this section and may result in additional disciplinary action.

(f) A person whose license has been revoked shall notify the Department by submitting the Licensee Notification and Request Form, Notifications and Requests Regarding Regulatory Compliance, DCC -LIC-028 (New 2/22), incorporated herein by reference, within 24 hours of discovering that the notice under subsection (b) has been removed or damaged to an extent that makes the notice illegible.

71 § 26030. Grounds for disciplinary action
Grounds for disciplinary action include, but are not limited to, all of the following:
(a) Failure to comply with the provisions of this division or any rule or regulation adopted pursuant to this division.
(b) Conduct that constitutes grounds for denial of licensure pursuant to Chapter 2 (commencing with Section 480) of Division 1.5 or discipline of a license pursuant to Chapter 3 (commencing with Section 490) of Division 1.5. (c) Any other grounds contained in regulations adopted by the department pursuant to this division.
(d) Failure to comply with any state law including, but not limited to, the payment of taxes as required under the Revenue and Taxation Code, except as provided for in this division or other California law.
(e) Knowing violations of any state or local law, ordinance, or regulation conferring worker protections or legal rights on the employees of a licensee. (f) Failure to comply with the requirement of a local ordinance regulating commercial cannabis activity.
(g) The intentional and knowing sale of cannabis or cannabis products by an A- licensee to a person under 21 years of age.
(h) The intentional and knowing sale of medicinal cannabis or medicinal cannabis products by an M-licensee to a person without a physician’s recommendation.
(i) Failure to maintain safe conditions for inspection by the department. (j) Failure to comply with any operating procedure submitted to the department pursuant to subdivision (b) of Section 26051.5. (k) Failure to comply with license conditions established pursuant to subdivision (b) of Section 26060.1