Agenda packet — Cannabis Program and Permit Review Committee, November 19, 2024

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www.modestogov.com
AGENDA
City of Modesto

SPECIAL CANNABIS PROGRAM AND PERMIT REVIEW

COMMITTEE / COUNCIL WORKSHOP
2001-40 Del Puerto Room.

Tenth Street Place, 1010 10th Street
Modesto, California
Tuesday, November 19, 2024 at 4:00 PM
Roll Call: David Wright, Chair
Sue Zwahlen, Vice-Chair
Chris Ricci, Member
Alternates: Nick Bavaro, Rosa Escutia-Braaton, Eric Alvarez, Jeremiah Williams Council has not delegated directive or final approval authority to the Committees.

Committee actions are recommendations to the full City Council, not final decisions on an issue. * Public Comment will only be in-person. Members of the public who wish to address the Committee, by providing public comment, during the meeting must do so in-person in the 2001-40 Del Puerto Room. As an alternative, members of the public may also provide written public comment submitted via email as indicated in the Submitting Comments by Email instructions on this agenda. Zoom will still be available for viewing and Wordly translation. *Members of the public will be allowed to provide public comment through Zoom if a Committee Member is participating remotely pursuant to the provisions of Assembly Bill 2449. *Effective March 1, 2023, if a technical issue arises with Zoom or the phone dial-in option, the Committee meeting will continue unless the meeting is being held pursuant to the provisions of Assembly Bill 2449. Alternative viewing options are listed below, and the meeting is physically open to the public.
“Wordly” can translate into 25+ different languages! To access written translation during the meeting, please scan the QR Code or click this link https://attend.wordly.ai/join/RJDY-6364.
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"Wordly" puede traducir a más de 25 idiomas diferentes! Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace https://attend.wordly.ai/join/RJDY-6364.

You may observe a livestream of the meeting at http://media.modestogov.com. You may also view or listen to the meeting as indicated below.

THE MEETING CAN BE VIEWED BY ZOOM VIDEO

CONFERENCING OR TELEPHONE
Joining the Committee meeting via Zoom
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Joining the Committee meeting via Telephone
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PUBLIC COMMENTS IN PERSON
Three-minute time limit per speaker.

Only interested persons in the audience may present these matters. Under State law, Committee Members may respond to matters being presented under this item only as follows:
a. Briefly respond to statements made or questions raised. b. Ask a question for clarification.
c. Provide a reference to staff or other resources for factual information. d. Request staff to report back at a subsequent meeting. e. Finally, a Committee Member or the Committee itself may take action to direct staff to place a matter of business on a future agenda.

SUBMITTING COMMENTS BY E-MAIL
Written comments may be submitted via email to: [email protected] (include Agenda Item Number in the subject line). All comments will be shared with the Committee - 2 -
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Members and placed in the record but will not be read aloud during the meeting. Written comments must be received two hours before the meeting.

This Agenda is on file in the City Clerk’s Office, Sixth Floor, 10th Street Place, Posting Board at entry of 10th Street Place, and is available on the City’s Web site at www.modestogov.com.

Materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the Clerk’s office during normal business hours. Such documents are also available online, subject to staff’s ability to post the documents before the meeting, at the following website www.modestogov.com/councilmeetings In accordance with the requirements of Title II of the Americans with Disabilities Act (“ADA”) of 1990, the Fair Employment & Housing Act (“FEHA”), the Rehabilitation Act of 1973 (as amended), Government Code section 11135 and other applicable codes, the City of Modesto (“City”) will not discriminate against individuals on the basis of disability in the City’s services, programs, or activities. For more information, please visit the City of Modesto website at https://www.modestogov.com/865/Americans-with-Disabilities-Act-ADA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk (209) 577-5396. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting
Any and all of the following agenda items are subject to action by the Modesto City Council.

HEARINGS
Published in the Modesto Bee on November 8, 2024.

1. Consider approving four commercial cannabis permit applications for non-retail operations at various locations in the City of Modesto with appropriate conditions. (Funding Source: Cannabis Business Permit Application Fee)  Resolution approving a commercial cannabis distribution Type 11 permit for Que Tees, LLC, located at 1127 Kansas Ave, Suite 47 for a two year period ending June 30, 2026, with appropriate conditions.
 Resolution approving a commercial cannabis cultivation Type 1-C permit for Power High 99, LLC located at 1127 Kansas Ave, Suite 52 for a two year period ending June 30, 2026, with appropriate conditions.  Resolution approving a commercial cannabis microbusiness Type 12 permit for Modesto’s Finest, LLC, located at 1006 Lone Palm Ave for a two year period ending June 30, 2026, with appropriate conditions.
 Resolution approving a commercial cannabis distribution Type 11 permit for CLD, LLC located at 903 Kansas Ave, Unit P, for a two year period ending June 30, 2026, with appropriate conditions.

CED; Sean Rando, 209-577-5473, [email protected]
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NEW BUSINESS

2. Consider providing a recommendation regarding the submission of a Grant Application for the Governor’s Office of Business and Economic Development (GO-Biz) Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement and forwarding to Council for consideration. (Funding Source:

Not Applicable)
 Motion providing a recommendation regarding the submission of a Grant Application for the Governor’s Office of Business and Economic Development (GO-Biz) Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement and forwarding to Council for consideration.

CED; Sean Rando, 209-577-5473, [email protected]

ADJOURNMENT
Posted pursuant to Government Code Section 54954.2 on the bulletin board at Tenth Street Place on at by
date time signature
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

November 19, 2024
Date: October 11, 2024
TO: Cannabis Program and Permit Review Committee
David Wright, Chair
Sue Zwahlen, Vice-Chair
Chris Ricci, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Commercial Cannabis Nonretail Permit Applications CONTACT: Sean Rando, Business Analyst,
[email protected], 209-577-5473
DESCRIPTION:

Consider approving four (4) commercial cannabis permit applications for non-retail operations at various locations in the City of Modesto with appropriate conditions. (Funding Source: Cannabis Business Permit Application Fee)
STRATEGIC PLAN ELEMENT:

This item is consistent with the City Council 2020-2025 Strategic Plan Goal E, Drive Economy Vitality.

BACKGROUND:

In December 2017, the City Council adopted Ordinance 3684-C.S. legalizing certain commercial cannabis business operations in particular zoning districts. The City Council was the approving body regarding all cannabis businesses operating in the City at the onset of the permit program.

On April 13, 2021, by Resolution No. 2021-132, Council established the Cannabis Permit Review Committee (Committee) and delegated the authority to approve non-dispensary and non-delivery cannabis businesses to that Committee. On March 1, 2022, by Resolution No. 2022-109, the Council expanded the role of the Committee to advise the Council on all cannabis-related issues and renamed the Committee, the Cannabis Program and Permit Review Committee.

All non-dispensary applications are subject to a non-competitive review process consisting of the following steps:

1. Completion of a commercial cannabis background check for all proposed owners of the business. Pursuant to section 10-3.704 (e)(3) of the Modesto Municipal Code, permits for commercial cannabis uses shall not be permitted for operators with violent or serious #1.
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felony convictions or for convictions that substantially relate to the qualifications, functions, or duties of the business including fraud or embezzlement.

2. Submission of an application packet which includes applicant team information and company history, business plan, site and operating plans, security information and plans, odor control plans, waste disposal and financial information.

Commercial cannabis non-retail businesses are generally required to be in an M-1 or M-2 industrial zone, and all cannabis businesses are subject to the following proximity requirements:

1. No commercial cannabis use shall be located within six hundred (600) feet of a school, childcare center, or youth center; and

2. No commercial cannabis use shall be located within one hundred (100) feet of any residential use; and

3. No commercial cannabis use shall be located within two hundred (200) feet of a park or library; and

4. No commercial cannabis use shall be allowed in the downtown area.

DISCUSSION:

On August 23, 2024, the City received four (4) commercial cannabis permit applications to engage in a variety of commercial cannabis non-retail business activities. The current applicants under consideration are all owned by individuals that participated in the City of Modesto’s Cannabis Program Providing Local Equity Development Grants and Education (PLEDGE). The applicants received a variety of benefits through the PLEDGE program including direct technical assistance and grant funding to assist with opening their businesses. On October 22, 2024, by Resolution No. 2024-385, Council approved four (4) grant agreements to provide $70,000 to each business to assist with general startup and ongoing costs. While the Council approved the individual grants, the commercial cannabis permits require separate approval by the Cannabis Program and Permit Review Committee.

Business
Name:

CLD, LLC Modesto’s
Finest, LLC
Que Tees, LLC Power High 99,
Inc.

Business
Type:

Distribution Microbusiness Distribution Cultivation
Address: 903
Kansas Avenue
1006 Lone Palm
Ave
1127
Kansas Avenue
Suite 47
1127
Kansas Avenue
Suite 52
Zoning: M-2
Heavy Industrial
M-1
Light Industrial
M-1
Light Industrial
M-1
Light Industrial
Background checks for the owners of the proposed businesses were processed with each owner being cleared to operate in the legal cannabis industry. Zoning requirements were also satisfied with the locations being within a properly designated industrial zone and there were no proximity issues noted with any of the four proposed locations. Staff cleared the applicants to move to the next step of their application which involves the submission of a business, security, safety, and environmental plans for the City to review.

The contents of a commercial cannabis permit application packet provide the City with a confirmation that the business plan aligns with the permit type being applied for, the business’ commitment to ensuring that the facility will be properly secured in accordance with the Municipal #1.
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Code security standards, and the documents also confirm the business’ commitment to adhering to all applicable environmental standards. The minimum content requirements for the application packets include:
 All necessary information related to the business its operators, including names, birth dates, addresses, social security or tax identification numbers, relevant criminal history, relevant work history, names of businesses owned or operated by the applicant within the last ten (10) years, investor and/or partner information, and APN number of the parcel upon which the business will be located. Such private information will be exempt from disclosure to the public, pursuant to applicable law, to protect an individual's privacy interests and public health and safety.
 Written (and notarized) permission from the property owner and/or landlord to operate a commercial cannabis use on the site.
 Operating plan.
 Business organization documents.
 Security plans.
 Site plans.
 Environmental plans as required per the business type applied for which includes information regarding air quality, greenhouse gas emissions, use of hazardous materials, water supply, and wastewater information.
 Signed affidavit and indemnity provisions.

City staff and the City’s current cannabis consultant reviewed the application materials and determined that the proposed permit applications conform to the City’s cannabis ordinance.

Please refer to attachment five (5) for additional detail regarding the review of the permit applications. All proposed recommendations noted in the permit review reports were completed by the applicants on September 24, 2024.

The Cannabis Ordinance allows for the preparation of conditions of approval in addition to the requirements of the Ordinance, based on the City’s review. Based on review of the application, City staff recommends the following project-specific condition of approval.

According to section 10-3.704 (f)(5) of the Modesto Municipal Code, commercial cannabis permits shall be valid for two (2) years. City staff recommends that the four (4) commercial cannabis permits under consideration carry a two (2) year term ending June 30, 2026, to align with the permit cycle for all other currently permitted non-dispensary cannabis businesses in the City.

FISCAL IMPACT:

Staff and consultant time dedicated to the review of the applications is recovered through an application fee of $6,380. Each business will also be subject to an annual permit fee. On November 14, 2023, by Resolution No. 2023-504, Council approved two separate annual commercial cannabis permit fees which cover costs related to the administration and monitoring of the cannabis permit program. Operational businesses remit a fee of $18,732 while nonoperational businesses are required to pay a lower fee of $4,307. The annual permit fee is #1.
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reviewed and reconciled annually to capture increases or decreases related to administrative oversight of the cannabis permit program. Operational non-retail commercial cannabis businesses are also responsible for the payment of an excise tax on their reportable gross receipts which is outlined in the table below.

Cannabis Business Type Tax Rate-Percentage of Gross Receipts Distribution 2.5%
Manufacturing 4%
Cultivation (Indoor only) 2.5%
Microbusiness (three or more business
types)
The tax rate would be applied at the activity
level. The business would pay at a rate of

2.5% on their gross receipts from distribution
and cultivation sales, however they would be
responsible to pay an excise tax of 4% for any
manufacturing related sales.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Resolution approving a commercial cannabis distribution Type 11 permit for Que Tees, LLC, located at 1127 Kansas Ave, Suite 47 for a two (2) year period ending June 30, 2026, with appropriate conditions.

Resolution approving a commercial cannabis cultivation Type 1-C permit for Power High 99, LLC located at 1127 Kansas Ave, Suite 52 for a two (2) year period ending June 30, 2026, with appropriate conditions.

Resolution approving a commercial cannabis microbusiness Type 12 permit for Modesto’s Finest, LLC, located at 1006 Lone Palm Ave for a two (2) year period ending June 30, 2026, with appropriate conditions.

Resolution approving a commercial cannabis distribution Type 11 permit for CLD, LLC located at 903 Kansas Ave, Unit P, for a two (2) year period ending June 30, 2026, with appropriate conditions.
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Approved by:

Jessica Hill,
Director of Community and Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. Resolution-Que Tees, LLC

2. Resolution-Power High 99, LLC

3. Resolution-Modesto’s Finest, LLC

4. Resolution-CLD, LLC

5. HdL Commercial Cannabis Business Permit Application Review Reports #1.
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CITY OF MODESTO

CANNABIS PROGRAM AND PERMIT REVIEW COMMITTEE
RESOLUTION NO. -2024

RESOLUTION APPROVING A COMMERCIAL CANNABIS DISTRIBUTION TYPE 11 PERMIT FOR QUE TEES, LLC, LOCATED AT 1127 KANSAS AVE, SUITE 47 FOR A TWO (2) YEAR PERIOD ENDING JUNE 30, 2026 , WITH

APPROPRIATE CONDITIONS
WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis uses; and
WHEREAS, the Ordinance establishes certain standards and criteria that apply to all potential commercial cannabis businesses; and
WHEREAS, on April 13, 2021 the City Council by Resolution No. 2021-132 established the Cannabis Permit Review Committee for the purpose of reviewing and approving commercial non-retail and non-delivery cannabis businesses; and WHEREAS, on March 1, 2022, the Council by Resolution No. 2022-109 expanded the role of the Cannabis Permit Review Committee to advise the Council on all cannabis-related matters and renamed the Committee to the Cannabis Program and Permit Review Committee; and
WHEREAS, Que Tees LLC has applied for a Type 11 Distribution permit to be located at 1127 Kansas Ave, Suite 47; and
WHEREAS, the application has been reviewed by City staff and the City’s current cannabis consultant, HdL, and has been determined to be in compliance with the City’s cannabis ordinance and applicable State law; and WHEREAS, the City Council desires to issue commercial cannabis business permits to qualified operators at permitted locations that comply with state and local laws #1.
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and regulations, enhance the diversity of the City’s economy, mitigate negative impacts, provide a variety of locations and types of cannabis businesses to the community, and best promote the public health, safety, and general welfare of Modesto residents and businesses; and
WHEREAS, the permit is exempt from CEQA under Section 15301 of the CEQA Guidelines, which exempts the reuse of existing facilities.

NOW, THEREFORE, BE IT RESOLVED by the City of Modesto Cannabis Program and Permit Review Committee, that it herby approves a commercial cannabis distribution Type 11 permit for Que Tees, LLC, located at 1127 Kansas Ave, Suite 47 for a two (2) year period ending June 30, 2026 , with appropriate conditions:

1. City staff, with assistance and representation of an authorized consultant, will be authorized to access the business site / location before, during and after construction of tenant improvements and business operations to inspect and document various components of business operations, security systems, inventory access and control procedures, and/or any other points of concern.
#1.
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The foregoing resolution was introduced at a regular meeting of the Cannabis Program and Permit Review Committee held on the 19th day of November, 2024 by Committee Member , who moved its adoption, which motion being duly seconded by Chair , was upon roll call carried and the resolution adopted by the following vote:

AYES: Committee Members:

NOES: Committee Members:

ABSENT: Committee Members:

ATTEST: _____________________________
DAVID WRIGHT, Chair
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CITY OF MODESTO

CANNABIS PROGRAM AND PERMIT REVIEW COMMITTEE
RESOLUTION NO. -2024

RESOLUTION APPROVING A COMMERCIAL CANNABIS CULTIVATION
TYPE 1-C PERMIT FOR POWER HIGH 99, LLC LOCATED AT 1127 KANSAS AVE, SUITE 52 FOR A TWO (2) YEAR PERIOD ENDING JUNE 30, 2026, WITH

APPROPRIATE CONDITIONS
WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis uses; and
WHEREAS, the Ordinance establishes certain standards and criteria that apply to all potential commercial cannabis businesses; and
WHEREAS, on April 13, 2021 the City Council by Resolution No. 2021-132 established the Cannabis Permit Review Committee for the purpose of reviewing and approving commercial non-retail and non-delivery cannabis businesses; and WHEREAS, on March 1, 2022, the Council by Resolution No. 2022-109 expanded the role of the Cannabis Permit Review Committee to advise the Council on all cannabis-related matters and renamed the Committee to the Cannabis Program and Permit Review Committee; and
WHEREAS, Power High 99, LLC has applied for a Type 1-C permit to operate a specialty cottage cultivation business at 1127 Kansas Ave, Suite 52; and WHEREAS, the application has been reviewed by City staff and the City’s current cannabis consultant, HdL, and has been determined to be in compliance with the City’s cannabis ordinance and applicable State law; and WHEREAS, the City Council desires to issue commercial cannabis business permits to qualified operators at permitted locations that comply with state and local laws #1.
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and regulations, enhance the diversity of the City’s economy, mitigate negative impacts, provide a variety of locations and types of cannabis businesses to the community, and best promote the public health, safety, and general welfare of Modesto residents and businesses; and
WHEREAS, the permit is exempt from CEQA under Section 15301 of the CEQA Guidelines, which exempts the reuse of existing facilities.

NOW, THEREFORE, BE IT RESOLVED by the City of Modesto Cannabis Program and Permit Review Committee, that it herby approves a commercial cannabis cultivation Type 1-C permit for Power High 99, LLC located at 1127 Kansas Ave, Suite 52 for a two (2) year period ending June 30, 2026 , with appropriate conditions :

1. City staff, with assistance and representation of an authorized consultant, will be authorized to access the business site / location before, during and after construction of tenant improvements and business operations to inspect and document various components of business operations, security systems, inventory access and control procedures, and/or any other points of concern.
#1.
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The foregoing resolution was introduced at a regular meeting of the Cannabis Program and Permit Review Committee held on the 19th day of November, 2024 by Committee Member , who moved its adoption, which motion being duly seconded by Chair , was upon roll call carried and the resolution adopted by the following vote:

AYES: Committee Members:

NOES: Committee Members:

ABSENT: Committee Members:

ATTEST: _____________________________
DAVID WRIGHT, Chair
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CITY OF MODESTO

CANNABIS PROGRAM AND PERMIT REVIEW COMMITTEE
RESOLUTION NO. -2024

RESOLUTION APPROVING A COMMERCIAL CANNABIS MICROBUSINESS TYPE 12 PERMIT FOR MODESTO’S FINEST, LLC, LOCATED AT 1006 LONE PALM AVE FOR A TWO (2) YEAR PERIOD ENDING JUNE 30, 2026, WITH

APPROPRIATE CONDITIONS
WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis uses; and
WHEREAS, the Ordinance establishes certain standards and criteria that apply to all potential commercial cannabis businesses; and
WHEREAS, on April 13, 2021 the City Council by Resolution No. 2021-132 established the Cannabis Permit Review Committee for the purpose of reviewing and approving commercial non-retail and non-delivery cannabis businesses; and WHEREAS, on March 1, 2022, the Council by Resolution No. 2022-109 expanded the role of the Cannabis Permit Review Committee to advise the Council on all cannabis-related matters and renamed the Committee to the Cannabis Program and Permit Review Committee; and
WHEREAS, Modesto’s Finest, LLC has applied for a Type 12 Microbusiness permit engage in cultivation, manufacturing, and distribution commercial cannabis activities at 1006 Lone Palm Ave; and
WHEREAS, the application has been reviewed by City staff and the City’s current cannabis consultant, HdL, and has been determined to be in compliance with the City’s cannabis ordinance and applicable State law; and #1.
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WHEREAS, the City Council desires to issue commercial cannabis business permits to qualified operators at permitted locations that comply with state and local laws and regulations, enhance the diversity of the City’s economy, mitigate negative impacts, provide a variety of locations and types of cannabis businesses to the community, and best promote the public health, safety, and general welfare of Modesto residents and businesses; and
WHEREAS, the permit is exempt from CEQA under Section 15301 of the CEQA Guidelines, which exempts the reuse of existing facilities.

NOW, THEREFORE, BE IT RESOLVED by the City of Modesto Cannabis Program and Permit Review Committee, that it herby approves a commercial cannabis microbusiness Type 12 permit for Modesto’s Finest, LLC, located at 1006 Lone Palm Ave for a two (2) year period ending June 30, 2026, with appropriate conditions:

1. City staff, with assistance and representation by an authorized consultant, will be authorized to access the business site / location before, during and after construction of tenant improvements and business operations to inspect and document various components of business operations, security systems, inventory access and control procedures, and/or any other points of concern.
#1.
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The foregoing resolution was introduced at a regular meeting of the Cannabis Program and Permit Review Committee held on the 19th day of November, 2024 by Committee Member , who moved its adoption, which motion being duly seconded by Chair , was upon roll call carried and the resolution adopted by the following vote:

AYES: Committee Members:

NOES: Committee Members:

ABSENT: Committee Members:

ATTEST: _____________________________
DAVID WRIGHT, Chair
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CITY OF MODESTO

CANNABIS PROGRAM AND PERMIT REVIEW COMMITTEE
RESOLUTION NO. -2024

RESOLUTION APPROVING A COMMERCIAL CANNABIS DISTRIBUTION TYPE 11 PERMIT FOR CLD, LLC, LOCATED AT 903 KANSAS AVE, UNIT P FOR A TWO (2) YEAR PERIOD ENDING JUNE 30, 2026, WITH

APPROPRIATE CONDITIONS
WHEREAS, the City Council has adopted a Commercial Cannabis Ordinance, Ordinance 3684-C.S., that established the City’s regulatory framework for commercial cannabis uses; and
WHEREAS, the Ordinance establishes certain standards and criteria that apply to all potential commercial cannabis businesses; and
WHEREAS, on April 13, 2021 the City Council by Resolution No. 2021-132 established the Cannabis Permit Review Committee for the purpose of reviewing and approving commercial non-retail and non-delivery cannabis businesses; and WHEREAS, on March 1, 2022, the Council by Resolution No. 2022-109 expanded the role of the Cannabis Permit Review Committee to advise the Council on all cannabis-related matters and renamed the Committee to the Cannabis Program and Permit Review Committee; and
WHEREAS, CLD, LLC has applied for a Type 11 commercial cannabis distribution permit to be located at 903 Kansas Ave, Unit P; and WHEREAS, the application has been reviewed by City staff and the City’s current cannabis consultant, HdL, and has been determined to be in compliance with the City’s cannabis ordinance and applicable State law; and WHEREAS, the City Council desires to issue commercial cannabis business permits to qualified operators at permitted locations that comply with state and local laws #1.
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and regulations, enhance the diversity of the City’s economy, mitigate negative impacts, provide a variety of locations and types of cannabis businesses to the community, and best promote the public health, safety, and general welfare of Modesto residents and businesses; and
WHEREAS, the permit is exempt from CEQA under Section 15301 of the CEQA Guidelines, which exempts the reuse of existing facilities.

NOW, THEREFORE, BE IT RESOLVED by the City of Modesto Cannabis Program and Permit Review Committee, that it herby approves a commercial cannabis distribution Type 11 permit for CLD, LLC, located at 903 Kansas Ave, Unit P for a two (2) year period ending June 30, 2026, with appropriate conditions

1. City staff, with assistance and representation by an authorized consultant, will be authorized to access the business site / location before, during and after construction of tenant improvements and business operations to inspect and document various components of business operations, security systems, inventory access and control procedures, and/or any other points of concern.
#1.
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The foregoing resolution was introduced at a regular meeting of the Cannabis Program and Permit Review Committee held on the 19th day of November, 2024 by Committee Member , who moved its adoption, which motion being duly seconded by Chair , was upon roll call carried and the resolution adopted by the following vote:

AYES: Committee Members:

NOES: Committee Members:

ABSENT: Committee Members:

ATTEST: _____________________________
DAVID WRIGHT, Chair
#1.
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CITY OF MODESTO
120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com

COMMERCIAL CANNABIS BUSINESS PERMIT APPLICATION REVIEW
Review Date September 3, 2024
Reviewer Name HdL Companies
Business Name CLD, LLC
DBA California Legacy Distributors
Permit Type Distributor Type-11
Business Contact
Information
Joshua Burrow
903 Kansas Ave, Unit P
Modesto, CA 95351
(209) 345-9347
[email protected]

SUMMARY
On September 3, 2024, HdL Companies conducted a thorough evaluation of the Commercial Cannabis Permit Application provided by CLD, LLC (“Applicant”) for the Applicant’s proposed cannabis Distributor Type-11 license type facility. HdL has determined the application is complete and compliant with the City’s minimum requirements. The business will operate under state license Type-11 Distribution at a 1500 square foot facility in an appropriately zoned district, at 903 Kansas Ave, Unit P, Modesto, CA. Packaging and pre-roll manufacturing will be the focus of the business. The application and its contents have been prepared by Tulip & Oak Consulting for the Applicant. The Applicant provided and committed to the following:

Ownership:
• CLD, LLC has a single owner, Joshua Burrow. Mr. Burrow files as a resident of Modesto. • The Owner’s Statement of Consent for the proposed business location is signed by the property owner, Eduardo Blandon, and subsequently notarized.
• The applicant states a Letter of Intent and rent agreement for the property at 903 Kansas Ave., Unit P, Modesto, CA is included in the application package. The letter was not located during a review of the application documents.
• Ownership of the property has not been verified by HdL.

Community Relations Plan:
• CLD’s plan is to build a relationship between the business and community members. CLD has identified several ways to achieve this goal: designated community relations liaison, community dispute resolution procedure, and a Good Neighbor Policy.
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Tax Compliance:
• CLD will operate in compliance with City, County, State and Federal tax regulations.

Insurance:
• The applicant did not submit a certificate of insurance.

Budget:
• The 12-month budget includes costs for applicable licenses, buildout, security, overhead, administration, distribution, and CAPEX.

Financial Capacity:
• The business will be primarily funded by the City of Modesto PLEDGE Social Equity program. The owner received a Certificate of Completion for his education and eligibility to apply for qualified grants. In addition to grants and loans from the PLEDGE program, the owner will use personal funds and possibly outside investors to fund the business.

BUSINESS ORGANIZATION DOCUMENTS
• CLD filed the Articles of Organization CA LLC with the State of California on 8/6/2024. Joshua Burrow is listed as the agent and sole manager.
• A signed Operating Agreement for Member-Managed Limited Liability Company was submitted by Joshua Burrow.
• CLD is not shown as being licensed with the Department of Cannabis Control.

SECURITY PLAN
• The applicant’s Security Plan was prepared by a qualified professional, Tulip & Oak Consulting. • The applicant’s security plan contains policy and procedures for overall operational security and premise management. Components of the plan will be highlighted below. • Target Hardening: Structural reinforcement measures include galvanized steel frame and insulated corrugated steel shell, 12 foot roll-up door, steel entrance door, and window on the front wall, with no inlets on the other walls. Carbon steel expanded mesh will be installed 6 feet from the floor. A security gate will secure the roll up door and security bars will be used to protect the entrance door and office window. • Secure Storage Area: Access is restricted to the operator and authorized staff. Video surveillance cameras will monitor the inside and outside of this area. The video surveillance DVR and related network equipment, cannabis products, and document storage will be kept in this area. The area will be secured with a 10-gauge wire welded cage, with a sliding wire door with a removable lock. A TL30 rated safes will be used to cannabis and quarantined batches.
• Internal Theft & Diversion Prevention: The applicant will conduct pre-employment background checks. Annual checks will be performed on existing employees. Policy will limit access to storage and security areas, and movement of visitors. Prohibitions on employment, reporting procedures, and whistleblower protections are outlined in the plan. Notification of convictions, civil penalties, or revocations affecting the licensee or owner will be reported to the Modesto Police Department within 24-hours. • Access Control: All doors will have commercial grade locks compliant with state regulations. Electronic access control systems will be used for limited access areas. Activity logs will be kept for 90-days. Spare locks will be kept onsite to replace worn or tampered equipment.
• ID Badges: Owners and staff will wear compliant, valid ID badges from the City of Modesto. Visitors must wear badges and be escorted while on the premises. Vendors and visitors will be signed in METRC compliant POS software before entering the retail area. A separate log will be used for visitors. Logs will be retained for at least 180 days.
• Inventory: Inventory access, transactional security/track and trace, and storage standards are within industry standards and state regulations.
• Cash Handling: Debit cards and ACH transactions will be used to reduce cash handling. Currency handling policy will have drawer limits and currency will be secured in TL-30 rated safes. Armored carrier services will be used to transport bulk currency to and from the facility.
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• Alarm System: A fire and burglar alarm system will be installed on the facility. Fire and burglar systems will be two separate systems compliant with state and local regulations. Both systems will be monitored 24/7 by a licensed alarm company. Private patrol will be contracted to respond within 20 minutes of alarm notifications.

The systems will have 24-hour battery and cell back-up capability in the event of an electrical or network outage. • Surveillance System: A video surveillance system will be installed by a licensed installer. Coverage will be compliant with state and local regulations. Local law enforcement and private security will have remote IP access to exterior surveillance. Recordings will be stored for at least 90-days. • Distribution Events: The plan addresses documentation and scheduling, personnel and access control, security measures, arrival and verification, secure loading area, and departure control. The processes and procedures meet industry standards and compliance with METRC procedures for the transfer of product.

FLOOR PLAN
• The scaled floor plan was prepared by the applicant’s consultant, Tulip & Oak. • The floor plan contained the locations of lighting fixtures, steel reinforcement, security bollards, cannabis storage, limited access areas, security cameras, HVAC/fans, and common areas. • Entrances, exits, storage areas, and walls were included in the plan. • Bollards are depicted in the Floor Plan. No bollards are shown in front of the 12-foot roll-up door at the front of the business.

SITE PLAN
• The scaled and dimensioned site plan was prepared by the applicant’s consultant, Tulip & Oak. • The site plan included the business site, building, driveways, parking areas, gate, and boundaries. • The neighboring units/structures, fences and gate, and roof overhang were included in the plan.

LIGHTING PLAN
• The lighting plan submitted shows interior and exterior lights to provide adequate security lighting for the business site.
• Interior lighting: Internal lights will be used when the business is occupied. All areas of the interior will be illuminated to maximize visibility of all security and safety threats, and to ensure video surveillance equipment is able to record accurately all activity at the facility. • Flashlights and lanterns will be available at the facility in the event of a power outage. • External lighting: External lights will be activated from dusk to dawn. Lighting is designed to provide full visibility to people entering and exiting the facility.

WATER EFFICIENCY PLAN
• Applicant is not required to submit a water efficiency plan. The applicant will not be permitted or licensed for cultivation or manufacturing outside of pre-roll manufacturing. The facility will use small amounts of water outside of restroom usage.

WASTEWATER PLAN
• Applicant is not required to submit a wastewater plan. The applicant will not be permitted or licensed for cultivation or manufacturing outside of pre-roll manufacturing.

AIR QUALITY PLAN
• The business will not conduct activities based on the license type that would discharge particles into the air. • CLD will provide a calculation of the anticipated emissions of air pollutants and greenhouse gases should the City deem it necessary for compliance with CEQA or state cannabis regulations. • The business will comply with applicable best practices by the San Joaquin Valley Air Pollution Control District. #1.
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ODOR CONTROL PLAN
• CLD will not cultivate or extract any cannabis at their facility. They do not anticipate cannabis many cannabis odors detected outside the facility.
• A combination of odor control methods will be used to mitigate odor particles:
o Free-standing HEPA Filtration Modules
o Air-Tight Packaging and Storage Containers

HAZARDOUS MATERIALS PLAN
• The applicant has prepared a hazardous material plan to address solid waste, hazardous materials, hazardous waste, cannabis waste, and cannabis hazardous waste.

ENERGY EFFICIENCY PLAN
• The applicant did not submit an Energy Efficiency Plan.

RECOMMENDATIONS
Although the business has been determined to meet the City’s minimum requirements, HdL did note areas that may need corrective action prior to a pre-license inspection:
• The Floor Plan should include removable bollards be installed, during non-business hours, in front of the roll-up door to prevent vehicle entrance into the building.
• Clarify in the Floor Plan where the security bars will be installed on the front door and office window. Note, the local ordinance requires bars to be installed on the interior of the building. • A power outage event was not included in the Security Plan. Per City code, each commercial cannabis business shall have the capability to remain secure during a power outage and shall ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage. #1.
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CITY OF MODESTO
120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com

COMMERCIAL CANNABIS BUSINESS PERMIT APPLICATION REVIEW
Review Date September 3, 2024
Reviewer Name HdL Companies
Business Name Que Tees LLC

DBA N/A
Permit Type Distribution – Type 11
Business Contact
Information
Eric Washington
2601 Oakdale Rd. H2 #47
Modesto, CA 95355
(209) 576-5860
[email protected]

SUMMARY
On September 3, 2024, HdL Companies conducted a thorough evaluation of the Commercial Cannabis Permit Application provided by Que Tees LLC (“Applicant”) for the Applicant’s proposed Distribution Type 11 license type facility. HdL has determined the application is complete and compliant with the City’s minimum requirements. The business will operate under state license Type 11 Distribution; a 500 sq ft room leased from LaPrice Reynolds of Power High 99 LLC at 1127 Kansas Ave, Ste 47, Modesto, CA. Packaging and pre-roll manufacturing will be the focus of the business. The application and its contents have been prepared by Tulip & Oak Consulting for the Applicant. The Applicant provided and committed to the following:

BUSINESS OPERATIONS PLAN
Business Plan:
• Restricted parking areas will be available for vendor and inventory deliveries. A designated representative will oversee all deliveries and ensure that all cannabis products are stored in the secure storage area pursuant to state and local laws. Employees will park in designated or public parking spaces in compliance with city regulations. • A daily thorough check of the premises exterior will be conducted to ensure there are no security threats prior to entering the facility, and interior to ensure functionality of all cameras, alarms and locks. • Pursuant to state and local laws all permits and license will be posted in a location viewable to the public and to anyone entering the lobby of the premises.
• The proposed business would utilize the METRC database and an inventory management system, DISTRU, to track and report all aspects of the commercial cannabis activity. Inventory will be reconciled bi-weekly to ensure accuracy.
• All documents and records will be retained for a minimum of seven (7) years. • The applicant will utilize a bank account so that transactions are handled in a cashless manner. Any cash would be stored securely, and an armored carrier service will transport bulk currency with scheduled retrievals.

Ownership:
• Applicant provided a signed and notarized Owner’s Statement of Consent from property owner Richard Rand/Kinney Family Trust dated August 26, 2024.
• The Applicant will be leasing directly from the lease holder, LaPrice Reynolds of Power High 99 LLC. • Que Tees LLC has a single owner, Eric Washington, and is a resident of Modesto.

Community Relations Plan:
• The appointed liaison, a resident of Modesto and an employee of Que Tees LLC, will have their contact information posted on the website for the business, included on any outreach materials, and will be provided to the Police Chief of the Modesto Police Department.
• A good neighbor policy would be in place to ensure that employees engage with local businesses and have protocols in place to ensure the proposed location is clean, secure and a professional environment to reduce potential loitering or nuisance activities.
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Tax Compliance:
• Que Tees LLC will operate in compliance with City, County, State and Federal tax regulations.

Insurance:
• The applicant did not submit a certificate of insurance.

Budget:
• CapEx budget included costs for city and state licenses, construction, secure product storage items, office equipment, distribution material and operational overhead for 12 months.

Financial Capacity:
• Applicant will secure primary funding through the City of Modesto’s PLEDGE Social Equity program for at least $70k for startup and ongoing operation expenses. The owner received a Certificate of Completion for his education and eligibility to apply for qualified grants
• Additional grants and loans will be sought through the PLEDGE program and explore other funding options such as personal resources and potential external investments.

BUSINESS ORGANIZATION DOCUMENTS
• Applicant filed the Articles of Organization with the State of California on 7/22/2024, the proposed business is a Limited Liability Company. Review of the Secretary of State website showed that Que Tees LLC was operated by its sole owner, Eric Washington.
• A signed Operating Agreement for Member-Managed Limited Liability Company was submitted by Eric Washington.
• Search on the Department of Cannabis Control (DCC) website showed that Eric Washington of Que Tees LLC did not hold a license.

SECURITY PLAN
• The Applicant’s Security Plan was prepared by a qualified professional, Tulip & Oak Consulting. • The applicant’s security plan contains policy and procedures for overall operational security and premise management. Components of the plan will be highlighted below. • Target Hardening: Structural reinforcement measures for which their distribution facility is housed in is constructed with steel frame and insulated rockwall/drywall, 12 ft roll-up door, two (2) steel entrance doors, and three (3) exterior windows. Carbon steel expanded mesh will be installed at any weak points, complemented by a steel accordion security gate for the roll-up door and additional security bars for the entrance door and windows. • Secure Storge Area: Access is restricted to the operator and authorized staff. Video surveillance cameras will monitor the inside and outside of this area. The video surveillance DVR and related network equipment, cannabis products, and document storage will be kept in this area. The area will be secured with a 10-gauge welded wire cage, with a sliding wire door with a removable lock. A TL30 rated safes will be used for cannabis and quarantined batches.
• Access Control: All doors will have commercial grade locks compliant with state regulations. Electronic access control systems will be used for limited access areas. Activity logs will be kept for 90-days. Spare locks will be kept onsite to replace worn or tampered equipment
• ID Badges: Owners and staff will wear compliant, valid ID badges from the City of Modesto. Visitors must wear badges and be escorted while on the premises. Vendors and visitors will be logged in METRC compliant POS software before entering the distribution area. A separate log will be used for visitors. Logs will be retained for at least 180 days.
• Internal Theft & Diversion Prevention: The applicant will conduct pre-employment background checks. Annual checks will be performed on existing employees. Policy will limit access to storage and security areas, and movement of visitors. Prohibitions on employment, reporting procedures, and whistleblower protections are outlined in the plan. Notification of convictions, civil penalties, or revocations affecting the licensee or owner will be reported to the Modesto Police Department within 24-hours. • Inventory: Inventory access, transactional security/track and trace, and storage standards are within industry standards and state regulations.
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• Cash Handling: Debit cards and ACH transactions will be used to reduce cash handling. Cash handling policy will have drawer limits and currency will be secured in TL-30 rated safes. Armored carrier services will be used to transport bulk currency to and from the facility.
• Alarm System: A fire and burglar alarm system will be installed on the facility. Fire and burglar systems will be two separate systems compliant with state and local regulations. Both systems will be monitored 24/7 by a licensed alarm company. Private patrol will be contracted to respond within 20 minutes of alarm notifications.

FLOOR PLAN
• The scaled floor plan was prepared by the Applicant’s consultant, Tulip & Oak. • The floor plan contained the locations of lighting fixtures, steel reinforcement, security bollards, cannabis storage, security cameras, HVAC/fans, limited-access areas, and common areas. • Location of entrances, exits, storage areas, and walls were included in the plan.

SITE PLAN
• The scaled and dimensioned site plan was prepared by the Applicant’s consultant, Tulip & Oak. • The site plan included business site, building, driveways, parking areas, gate and boundaries. • The neighboring units, fences and gates, and roof overhang were included in the plan.

LIGHTING PLAN
• The lighting plan submitted shows interior and exterior lights to provide adequate security lighting for the business site.
• Interior lighting will be used when the business is occupied. All areas of the interior will be illuminated to maximize visibility of all security and safety threats, and to ensure video surveillance equipment is able to record accurately all activity at the facility. The location of interior lights was included on the floor plan. Exterior lighting for key areas include entrances, parking areas and walkways, and is activated from dusk to dawn. Lighting is designed to provide full visibility to people entering and exiting the facility. The floor plan depicting exterior lighting was not included.
• Flashlights and lanterns will be available in the event of a power outage.

WATER EFFICIENCY PLAN
• Applicant is not required to submit a water efficiency plan. The applicant will not be permitted or licensed for cultivation or manufacturing beyond pre-roll production. The facility will use minimal amounts of water outside of restroom usage.

WASTEWATER PLAN
• Applicant is not required to submit a wastewater plan. The applicant will not be permitted or licensed for cultivation or manufacturing outside of pre-roll production.

AIR QUALITY PLAN
• The Applicant will not conduct activities based on the license type that would release particles or emissions into the air.
• Applicant will provide a calculation of any anticipated emissions of air pollutants and greenhouse gases should the City and San Joaquin Valley Air Pollution Control District deem it necessary. • The applicant will comply with applicable best practices by the San Joaquin Valley Air Pollution Control District. #1.
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ODOR CONTROL PLAN
• The proposed business will not cultivate or extract any cannabis and does not anticipate cannabis odors outside of the premises.
• A combination of free-standing HEPA Filtration Modules and Air-Tight packing storage containers will be utilized to control odors and preserve cannabis products.

HAZARDOUS MATERIALS PLAN
• Application included a Hazardous Materials Plan that meets industry standards to address solid waste, hazardous material, hazardous waste, cannabis waste, and cannabis hazardous waste.

ENERGY EFFICIENCY PLAN
• Applicant provided an Energy Efficiency Plan that meets industry standards. It did not include information of the Modesto Irrigation District (MID) or Turlock Irrigation District (TID) representative that was contacted.

CITY OF MODESTO
120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com

COMMERCIAL CANNABIS BUSINESS PERMIT APPLICATION REVIEW
Review Date September 3, 2024
Reviewer Name HdL Companies
Business Name Power High 99 LLC

DBA N/A
Permit Type Cultivation – Type 1C
Business Contact
Information
La Price Reynolds
2601 Oakdale Rd. #52
Modesto, CA 95355
(209) 735-9126
[email protected]

SUMMARY
On September 3, 2024, HdL Companies conducted a thorough evaluation of the Commercial Cannabis Permit Application provided by Power High 99 LLC (“Applicant”) for the Applicant’s proposed Cultivation Type-1C license type facility. HdL has determined the application is complete and compliant with the City’s minimum requirements. The business will operate under state license Type-1C Cultivation at a 3200 sq ft facility that includes a 480 sq ft canopy in an appropriately zoned district, at 1127 Kansas Ave, Ste 52, Modesto, CA. Indoor cultivation will be the focus of the business. The application and its contents have been prepared by Tulip & Oak Consulting for the Applicant. The Applicant provided and committed to the following:

BUSINESS OPERATIONS PLAN
Business Plan:
• All staff will be required to wear identification badges pursuant to state and local laws. • Limited-Access areas of the premises will only be accessible to owners and management staff employees. All other individuals will be escorted at all times by authorized personnel. A visitor log will be maintained for all nonemployees and visitors. • Restricted parking areas will be available for vendor and inventory deliveries. A designated representative will oversee all deliveries and ensure that all cannabis products are stored in the secure storage area pursuant to state and local laws.
• A daily thorough check of the premises exterior will be conducted to ensure there are no security threats prior to entering the facility, and interior to ensure functionality of all cameras, alarms and locks. • Pursuant to state and local laws all permits and license will be posted in a location viewable to the public and to anyone entering the lobby of the premises.
• The proposed business would utilize the METRC database and an inventory management system, Cycle Counts, to track and report all aspects of the commercial cannabis activity. Inventory will be reconciled every 14 days to ensure accuracy.
• All documents and records will be retained for a minimum of seven (7) years. • Reducing the amount of cash handled on-site, the applicant will maintain a bank account so that transactions are handled in a cashless manner. Any cash would be stored in a secure, alarmed vault located in a highly restricted limited access area, and cash pickups will be scheduled frequently to minimize the amount cash stored on-site.

Ownership:
• Applicant provided a signed and notarized Owner’s Statement of Consent from property owner Richard Rand/Kinney Family Trust dated August 26, 2024.
• The Applicant stated a letter of intent, including a lease agreement will be submitted after the application submission.
• Power High 99 LLC has a single owner, LaPrice Reynolds and is a resident of Modesto. #1.
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Community Relations Plan:
• The applicant, LaPrice Reynolds, will serve as the Community Relations Representative; contact information will be posted on the website for the business, included on any outreach materials, and will be provided to the Police Chief of the Modesto Police Department.
• A good neighbor policy would be in place to ensure that employees engage with local businesses and have protocols in place to ensure the proposed location is clean, secure and a professional environment to reduce potential loitering or nuisance activities.
• The Community Relations Representative is committed to handling all community feedback, maintaining open communication with the community and addressing any security or operational concerns promptly.

Tax Compliance:
• Power High 99 LLC will operate in compliance with City, County, State and Federal tax regulations.

Insurance:
• The application did not include a certificate of commercial general liability insurance and endorsements and certificates of all other insurance related to the operation of the business.

Budget:
• CapEx budget included costs for city and state licenses, construction, secure product storage items, office equipment, cultivation material and operational overhead for six (6) months rather than 12 months.

BUSINESS ORGANIZATION DOCUMENTS
• Applicant filed the Articles of Organization with the State of California on 3/2/2022, the proposed business is a Limited Liability Company. Review of the Secretary of State website showed that Power High 99 LLC was operated by its sole owner, LaPrice Reynolds.
• A signed Operating Agreement for Member-Managed Limited Liability Company was submitted by LaPrice Reynolds.
• Search on the Department of Cannabis Control (DCC) website showed that LaPrice Reynolds of Power High 99 LLC did not hold a license.

A separate log will be used for visitors.
• Secure Storage Area: All cannabis will be stored in secure, access-controlled areas within the facility. #1.
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• Cash Handling: Cash would be stored in a secure, alarmed vault located in a highly restricted limited access area, and cash pickups will be scheduled frequently to minimize the amount cash stored on-site. All cash transactions would be processed in a secure area in clear view of video surveillance. • Training: The Applicant would implement a security and emergency preparedness training program to train all employees. Security and safety training would consist of the examination and discussion of the Security Plan, emergency training, and situational training.

FLOOR PLAN
• The scaled floor plan was prepared by the Applicant’s consultant, Tulip & Oak. • The floor plan contained the locations of lighting fixtures, steel reinforcement, security bollards, cannabis storage, motion detectors, security cameras, HVAC/fans, plumbing, limited-access areas, and common areas. • Entrances, exits, storage areas, and walls were included in the plan.

LIGHTING PLAN
• The Applicant’s Lighting Plan described the interior as illuminated while the facility is occupied. The location of interior lights was included on the floor plan. Exterior lighting for key areas included entrances, exits and parking zones. Exterior lighting is activated from dusk to dawn. The floor plan depicting exterior lighting was not included. • Flashlights and lanterns will be available in the event of a power outage.

WATER EFFICIENCY PLAN
• Applicant will implement a “Tall Boy” filtration system that reduces water loss and conserves thousands of gallons of water annually. The system supplies clean filtered water to two (2) 500-gallon storage tanks that are then distributed through a DAB Box to ensure water is delivered at the correct pressure and volume.

WASTEWATER PLAN
• Applicant is committed to ensuring that wastewater out does not exceed acceptable limits and does not strain the city’s infrastructure and is prepared to collaborate with the City Engineer to continuously monitor and manage wastewater output.

AIR QUALITY PLAN
• The use of high-efficiency HVAC systems and LED lighting will be in place to minimize the power of consumption and reduce related emissions.
• An air filtration system will be in place to prevent the release of any volatile organic compounds. • Applicant will provide a calculation of any anticipated emissions of pollutants should the City and San Joaquin Valley Air Pollution Control District deem it necessary. • The applicant will comply with applicable best practices by the San Joaquin Valley Air Pollution Control District.

ODOR CONTROL PLAN
• A combination of high-efficiency filtration that utilizes HEPA filters and carbon technology to reduce the risk of airborne contaminants and odors.
• The use of Air-Tight packing and storage containers will be utilized to control odors and preserve cannabis products.
• All rooms will be sealed to prevent odors from spreading to other areas within the interior and exterior of the premises.
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HAZARDOUS MATERIALS PLAN
• Application included a Hazardous Materials Plan which described the hazardous materials that would be present at the facility, storage and handling precautions, waste management, emergency response and spill management procedures.

RECOMMENDATIONS
Although the business has been determined to meet the City’s minimum requirements, HdL did note areas that may need corrective action prior to a pre-license inspection:
• Clarify in the Floor Plan where the security bars will be installed on the front door and all windows. Note, the local ordinance requires bars to be installed on the interior of the building. • Floor Plan should include the location of exterior lighting. • A power outage event was not included in the Security Plan. Per City code, each commercial cannabis business shall have the capability to remain secure during a power outage and shall ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage. • Applicant should clarify if the Modesto Irrigation District (MID) or Turlock Irrigation District (TID) was contacted. If so, provide the date they were contacted and the name of MID/TID representative. #1.
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CITY OF MODESTO
120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com

COMMERCIAL CANNABIS BUSINESS PERMIT APPLICATION REVIEW
Review Date September 3, 2024
Reviewer Name HdL Companies
Business Name Modesto's Finest, LLC

DBA N/A
Permit Type Microbusiness Type-12
Business Contact
Information
Jacob Resendez
1006 Lone Palm Ave.

Modesto, CA 95351
(209) 566-5842
[email protected]

SUMMARY
On September 3, 2024, HdL Companies conducted a thorough evaluation of the Commercial Cannabis Permit Application provided by Modesto's Finest, LLC (“Applicant”) for the Applicant’s proposed cannabis Microbusiness Type-12 license type. facility. HdL has determined the application is complete and compliant with the City’s minimum requirements. The business will operate under state license Microbusiness Type-12 at a 3,600 square foot facility, in an appropriately zoned district, at 1006 Lone Palm Ave., Modesto, CA 95351. The business activities will be cannabis cultivation, manufacturing, and distribution. The application and its contents have been prepared by Tulip & Oak Consulting for the Applicant. The Applicant provided and committed to the following:

Ownership:
• Modesto’s Finest, LLC has two owners, Jacob Resendez and Modesto Resendez. The address listed on the application for the owners is a personal mailbox at 2347 Claribel Road, PMB 1009, Riverbank, CA 95367. • The Owner’s Statement of Consent for the proposed business location is signed by the property owner, Steven T.

Holder, and subsequently notarized.
• The applicant states a Letter of Intent and rent agreement for the property at 1006 Lone Palm Ave., Modesto, CA is included in the application package. The letter was not located during a review of the application documents submitted to HdL.
• Ownership of the property has not been verified by HdL. • The applicant disclosed an association with another Modesto cannabis business, Exclusive VIP, LLC. The DCC lists Modesto Resendez as one of the registered owners. Exclusive VIP is licensed as a small indoor cultivation business.

The DCC license expires on 12/31/2024.
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Community Relations Plan:
• Modesto’s Finest plan is to build a relationship between the business and community members. Modesto’s Finest has identified several ways to achieve this goal: designated community relations liaison, community dispute resolution procedure, and a Good Neighbor Policy.

Tax Compliance:
• Modesto’s Finest will operate in compliance with City, County, State and Federal tax regulations.

Insurance:
• The applicant did not submit a certificate of insurance.

Budget:
• The 12-month budget includes costs for applicable licenses, buildout, security, overhead, administration, distribution, and CAPEX.

Financial Capacity:
• The business will be primarily funded by the City of Modesto PLEDGE Social Equity program. The owners received a Certificate of Completion for their education and eligibility to apply for qualified grants. In addition to grants and loans from the PLEDGE program, the owners will use personal resources and possibly outside investors to support the business.

BUSINESS ORGANIZATION DOCUMENTS
• Modesto’s Finest filed the Articles of Organization CA LLC with the State of California on 8/7/2024. Jacob Resendez and Modesto Resendez are listed as the organizers. Jacob Resendez is listed as the agent. The LLC will be managed by more than one manager.
• A signed Operating Agreement for Member-Managed Limited Liability Company was submitted by Modesto Resendez and Jacob Resendez on 8/8/24. Both parties are listed as having 50% interest each in the LLC. • Modesto’s Finest is not shown as being licensed with the Department of Cannabis Control.

SECURITY PLAN
• The applicant’s Security Plan was prepared by a qualified professional, Tulip & Oak Consulting. • The applicant’s security plan contains policy and procedures for overall operational security, premise management, and details of security equipment to protect the facility and staff. Components of the plan will be highlighted below.
• General Facility Security: A video surveillance system will be used to safeguard all areas of the business including cultivation, manufacturing, distribution areas, all entry and exit points, internal corridors, and critical operational areas. Recording footage will be securely stored for a minimum of 90 days. • Perimeter Security: The perimeter of the facility will be secured with a barrier such as a high-security fence equipped with anti-climb measures and monitored by video surveillance cameras. Access gates will be equipped with electronic locks and access control systems. Keycards or biometric verification will be used for entry. • Access Control: A multi-tiered access control system will be used to gain access into the facility. Employees will be required to use badges and biometric authentication to access different areas of the facility depending on their level of authorization.
• Interior Security: Target hardening measures will include reinforced doors, secure locking mechanisms, and alarm systems
• Cannabis Security: Cannabis products will be stored in secure, access-controlled areas within the facility and monitored by video surveillance and alarm systems. Products will be secured in locked, tamper evident containers. Inventory management will occur at regular intervals to ensure accuracy and prevent theft or loss. • Panic Button Installation & Configuration: Panic buttons will be strategically placed throughout the facility to ensure a rapid response in emergencies.
• Currency Security: All cash transactions will be recorded electronically, and cash will be stored in a secure, alarmed vault. The vault will be located in a restricted area with limited access. Regular audits will be conducted to ensure the accuracy of financial records and the security of stored currency. #1.
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• Transport Security: Cannabis and currency being transported will be done under stringent security measures.

Vehicles and drivers will meet state and local regulations. Vehicles will be equipped with GPS tracking and alarm system.
• Security Personnel: Security personnel will be used oversee and manage security operations at the facility.

Security staff will be equipped with communication devices and conduct regular patrols to monitor security systems.
• Training Programs: All employees will receive training on security protocols, cannabis handling, currency management, and emergency procedures. Refresher courses will be required to maintain proficiency. • Record Keeping: Records will be maintained for all security related activities including incidents, training, and equipment maintenance. Records will be kept in physical and digital formats and compliant with state and local regulations.
• Distribution Protocols: The plan addresses documentation and scheduling, personnel and access control, security measures, arrival and verification, secure loading area, and departure control. The processes and procedures meet industry standards and compliance with METRC procedures for the transfer of product. • All employees will receive training on security responsibilities, threat identification, emergency response, and securing cannabis and currency. Operation of the security equipment, emergency procedures, and incident reporting are included in the training. Refresher courses will be required to maintain proficiency. • General Security: This section contains policy and procedures for access control and personnel management, surveillance and monitoring, process and equipment security, inventory and material tracking, quality control and compliance, physical security measures, staff training and procedures, emergency response plan, maintenance and testing of security measures, record keeping and documentation, and compliance regulations. • Cultivation Control: The components of this section include cultivation area access control, surveillance and monitoring, environmental controls, inventory management, physical security measures, staff training and procedures, emergency response plan, maintenance of cultivation security measures, compliance with regulations, record keeping and documentation. These security measures will adhere to local, county, and state regulations, including those by the City of Modesto and the Department of Cannabis Control. METRC will be used for tracking and reporting.
• General Security: This section lists the designated security/community representative, information and records security, waste management, security plan maintenance, and additional considerations. All required records and documents will be maintained for a minimum of five (5) years.

FLOOR PLAN
• The scaled floor plan was prepared by the applicant’s consultant, Tulip & Oak. • The floor plan contained the locations of lighting fixtures, steel reinforcement, security bollards, cannabis storage, limited access areas, security cameras, HVAC/fans, and common areas. • Entrances, exits, storage areas, and walls were included in the plan. • Bollards are depicted in the Floor Plan at the front entrance into the Accounting Office, Intake/Pickup Area roll-up door, and Distribution Area roll-up door. No bollards are shown in front of the roll-up door leading to the cultivation area of the facility.

LIGHTING PLAN
• The lighting plan submitted shows interior and exterior lights to provide adequate security and safety lighting for the business site.
• Interior lighting: Internal lights will be used when the business is occupied. All areas of the interior will be illuminated to maximize visibility of all security and safety threats, and to ensure video surveillance equipment is able to record accurately all activity at the facility. • Flashlights and lanterns will be available at the facility in the event of a power outage. #1.
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• External lighting: External lights will be activated from dusk to dawn. Lighting is designed to provide full visibility to parking zones, and people entering and exiting the facility. • The lighting plan meets industry standards.

WATER EFFICIENCY PLAN
• The business is committed to sustainable and efficient water usage utilizing the City’s potable water services. • To mitigate water waste, the business will use an advanced filtration system, HydroLogic Tall Boy® filtration system. This system filters water without significant loss, saving thousands of gallons of water annually.

WASTEWATER PLAN • To minimize wastewater, the business will use an advanced irrigation system and controlled environment to irrigate their 600 square foot indoor cannabis cultivation facility. • The applicant believes the existing wastewaters capacity is sufficient to accommodate their needs. • The applicant will work with the City to ensure wastewater output remains within acceptable limits.

AIR QUALITY PLAN
• The business will comply with both the California Environmental Quality Act (CEQA) and state cannabis regulations, particularly concerning the emission of air pollutants and greenhouse gasses (GHGs). This plan outlines the approach to managing air quality in accordance with Best Management Practices (BMPs) established by the San Joaquin Valley Air Pollution Control District (SJVAPCD). • Modesto’s Finest assessed their anticipated emissions of air pollutants and greenhouse gases. • The business will use energy efficiency systems, CO2 enrichment control, air filtration systems, and regular monitoring and reporting to meet air quality requirements.

ODOR CONTROL PLAN
• Modesto’s Finest will use a combination of control methods to mitigate odors derived by cannabis products:
• HVAC Exhaust Systems
• Ceiling Mounted HEPA Filtration Modules
• Air-Tight Packaging and Storage Containers
• Room Sealing

HAZARDOUS MATERIALS PLAN
• The applicant has prepared a hazardous material plan to address solid waste, hazardous materials, hazardous waste, cannabis waste, cannabis hazardous waste, storage and handling, emergency response and spill management, training, and documentation.
• The business will use the Type-6 non-solvent manufacturing process.

ENERGY EFFICIENCY PLAN
• The Energy Efficiency Plan outlines measures the business will implement to ensure energy efficiency in compliance with the regulations of the City of Modesto, Modesto Irrigation District, and Turlock Irrigation District. • This goal will be achieved using energy efficient lighting, heating, ventilation, HVAC systems, facility improvements, energy and water management systems and water efficient fixtures, renewable energy sources and employee training.
#1.
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RECOMMENDATIONS
Although the applicant was determined to meet the City’s minimum requirements, HdL did note areas that may need corrective action prior to a pre-license inspection:
• The Floor Plan should be revised to include removable bollards be installed, during non-business hours, outside in front of the cultivation area roll-up door to prevent vehicle entrance into the building. • The applicant should clarify in the Security Plan if BSIS licensed security is being used and hours they will be onduty at the facility. • A power outage event should be included in the Security Plan. Per City code, each commercial cannabis business shall have the capability to remain secure during a power outage and shall ensure that all access doors are not solely controlled by an electronic access panel to ensure that locks are not released during a power outage. #1.
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CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

November 19, 2024
Date: October 11, 2024
TO: Cannabis Program and Permit Review Committee
David Wright, Chair
Sue Zwahlen, Vice-Chair
Chris Ricci, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions CONTACT: Sean Rando, Business Analyst,
[email protected], 209-577-5473
DESCRIPTION:

Consider providing a recommendation regarding the submission of a Grant Application for the Governor’s Office of Business and Economic Development (GO-Biz) Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement and forwarding to Council for consideration. (Funding Source: Not Applicable) STRATEGIC PLAN ELEMENT:

Expanding opportunity and reducing barriers to enter the regulated commercial cannabis market promotes economic vitality consistent with the City Council 2020-2025 Strategic Plan Goal E, Drive Economy Vitality.

BACKGROUND:

Individuals convicted of a cannabis offense during the era of prohibition and criminalization policies have a more difficult time entering the new adult-use cannabis industry due, in part, to a lack of access to capital, business space, technical support, and regulatory compliance assistance. The State of California’s Cannabis Equity Grants Program for Local Jurisdictions is designed to promote economic opportunity for individuals negatively impacted by cannabis prohibition and criminalization policies by reducing barriers to enter the regulated cannabis industry for equity applicants and licensees.

On December 13, 2022, by Resolution No. 2022-478, Council accepted the findings in the City of Modesto Cannabis Equity Assessment Report and on the same date by Resolution No. 2022- 479, Council adopted a City of Modesto Cannabis Equity Program. To fund this adopted #2.
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Cannabis Program and Permit Review Committee, November 19, 2024 Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions

Page 2 of 4 ends

program, GO-Biz provides a Type 2 grant1 to aid local equity program participants in the form of grants for eligible startup expenses as well as direct technical assistance.

On January 31, 2023, GO-Biz informed the City that it was deemed eligible to receive a grant award in the amount of $350,000. On March 14, 2023, by Resolution No. 2023-110, Council formally authorized a grant agreement with GO-Biz to secure this funding. The award was required to be spent towards the following tasks:

1. Providing grants, no-interest loans, or low interest loans to local equity applicants.

2. No more than ten (10) percent may be used to provide direct technical assistance in the amount of $35,000.

3. No more than ten (10) percent may be used for administrative expenses related to the operation of the cannabis equity program in the amount of $35,000.

DISCUSSION:

Following the receipt of grant funding form GO-Biz, Staff worked diligently on implementing the City of Modesto’s local cannabis equity program known as the Cannabis Program Providing Local Equity Development Grants and Education (PLEDGE). Applications to participate in the PLEDGE program were accepted and reviewed by staff in April 2024. Twelve (12) applications were received in total with five (5) being deemed eligible to participate. The verified PLEDGE participants were required to complete a technical assistance workshop to qualify for grant funding for any business venture they may be interested in pursuing. The City of Modesto partnered with Tulip & Oak Consulting to provide a six (6) week direct technical assistance workshop which covered general business and cannabis industry specific skills to assist applicants in becoming successful entrepreneurs in the newly legalized commercial cannabis market.

The City requested applications for grant funding from the PLEDGE program participants immediately after the conclusion of the direct technical assistance workshops. The applicants were required to submit a grant application form, and a complete commercial cannabis permit application which met the minimum requirements pursuant to Modesto Municipal Code section 10-3.704 (g)(4). Staff received four (4) complete applications for the following businesses owned by PLEDGE program participants:

Owner: Joshua
Burrow
Jacob
and
Modesto
Resendez
Eric
Washington
LaPrice
Reynolds
Business
Name:

CLD, LLC Modesto’s
Finest, LLC
Que Tees, LLC Power High 99,
Inc.

Business
Type:

Distribution Distribution Distribution Cultivation
Address: 903
Kansas Avenue
1006 Lone Palm
Ave
1127
Kansas Avenue
Suite 47
1127
Kansas Avenue
Suite 52
Zoning: M-2
Heavy Industrial
M-1
Light Industrial
M-1
Light Industrial
M-1
Light Industrial
Grant Amount: $70,000 $70,000 $70,000 $70,000
1 GO-Biz Cannabis Equity Grants Program for Local Jurisdictions Webpage-https://business.ca.gov/cannabis-equity-grantsprogram-for-local-jurisdictions/ #2.
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Cannabis Program and Permit Review Committee, November 19, 2024 Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions

Page 3 of 4 ends

On October 22, 2024, by Resolution No. 2024-385, Council approved the grant agreements to provide funding to the four (4) commercial cannabis businesses owned by verified PLEDGE participants in amounts not exceeding $70,000. On October 31, 2024, the current grant agreement with GO-Biz expired. The current roster of PLEDGE businesses has indicated that they would seek additional funding through the City’s local equity program to fund their new enterprises. Additional funding from the State is required to continue the operation of the PLEDGE program.

A total of $15,000,000 is available for fiscal year 2024-2025 through the GO-Biz cannabis equity grants program for local jurisdictions. The City grant application would be for a type two (2) funding request for the purpose of aiding local equity applicants and licensees. Type two (2) applications are subject to a maximum request of $3,000,000. The final award will be allocated using a point-based scoring system and funding formula based on total equity applicants that a jurisdiction currently has enrolled in their programs. Beginning this fiscal year, type two (2) applications will be subject to a newly implemented match requirement:
 Grant awards exceeding $500,000 will require a 100% match from the local jurisdiction during the grant term for the amount above $500,000.
 Awards up to $500,000 will not require any matching funds from the local jurisdiction during the grant term.

GO-Biz’s funding formula will also limit the total award that would be made available to the City of Modesto. According to the fiscal year 2024-2025 grant solicitation guide, jurisdictions may not be awarded an amount exceeding $50,000 multiplied by the total number of equity applicants or licensees reported by the grant applicant. The City of Modesto currently has five (5) verified equity applicants at this time. The maximum grant award that could be made available to the City would be $250,000 at GO-Biz’s discretion.

Should the City be awarded grant funding, the payment would take place over four (4) equal installments of 25% of the total award. For example, if the City were to be approved for $250,000 then the expected payment schedule would be the following:

Installment Amount
First Installment-paid after the execution of
the grant agreement.
$62,500
Second installment-paid after the first
installment is expended.
$62,500
Third Installment-paid after the second
installment is expended.
$62,500
Fourth and final installment-paid after the
third installment is expended. This final
payment will be provided to the City on a
reimbursement basis.
$62,500
Total $250,000
#2.
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Cannabis Program and Permit Review Committee, November 19, 2024 Grant Application for the Governor’s Office of Business and Economic Development Cannabis Equity Grants Program for Local Jurisdictions

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The grant would also be further allocated to cover direct technical assistance, administrative costs, and grants or loans to equity program participants. This allocation may be illustrated with the following breakdown.

Amount
per Installment
Total
Grant Award
10% allocation to direct technical
assistance
$6,250 $25,000
10% allocation to administrative
costs
$6,250 $25,000
Subtotal-City related costs $12,500 $50,000
Grants and loans to program
participants.
$50,000 $200,000
Grand Total $62,500 $250,000
FISCAL IMPACT:

There may be administrative costs associated with carrying out the commitments of the award should costs exceed the amount awarded; however, these expenditures are unknown at this time. If awarded, City administrative costs would be recovered up to a maximum amount of $25,000. Administrative costs beyond this amount, should they be incurred, would be paid for through the General Fund. Separate from general administrative expenses, an allocation of $25,000 may also be dedicated to providing program participants with direct technical assistance services. Anticipated administrative staff costs are adequately budgeted within the current fiscal year 2025 operating budget.

RECOMMENDED COMMITTEE ACTION:

Motion providing a recommendation regarding the submission of a Grant Application for the Governor’s Office of Business and Economic Development (GO-Biz) Cannabis Equity Grants Program for Local Jurisdictions for an amount up to $250,000 without a local match requirement and forwarding to Council for consideration.

Approved by:

Jessica Hill,
Director of Community and Economic Development
Joseph P. Lopez, City Manager
#2.
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Cannabis Program and Permit Review CommitteeNovember 19, 2024

Cannabis Program and Permit Review Committee
November 19, 2024