CC Nz 5/16/2023
(1) Application fee to cover the city's costs incurred in the initial acceptance and review of an application for a Development Agreement, due and payable in full at the time an application is submitted.
(2) Processing fee(s) to cover the costs incurred in the review, investigation, scoring, and/or selection of an applicant for the award of a Development Agreement shall be due and payable in full at the time an application is submitted. The city may charge a separate processing fee for each round of the application review and selection process. Such Agreement shall be granted in accordance with evaluation criteria specified by the City Council in a notice inviting applications, a request for proposal ("RFP), or similar solicitation.
In addition to the fees specified in subsection (a), applicants and Permittees shall timely pay all other applicable fees, including, but not limited to, fees associated with processing applications for conditional use permits, Development Agreements, building permits, and plan checks, as well as the city's cost of preparing a Development Agreement.
(c) In addition to the fees set forth in this ordinance, a Development Agreement may provide for a Permittee to pay the city a fair share contribution towards the city's costs incurred. Such costs may include, without limitation, enforcing the provisions of this ordinance, inspecting for and remediating any direct or secondary negative impacts of the commercial cannabis activities, and mitigating impacts to the city's existing public facilities caused by the commercial cannabis facility. If applicable, the remediation payments described in this ordinance shall be memorialized in a Development Agreement, and paid by a Permittee to the city in strict accordance with the terms thereof. 6-2.05 Development Agreement and Operating Standards.
Permittees, and the premises upon which commercial cannabis activities are operated, shall strictly comply with this ordinance, the Development Agreement, the conditional use permit, the Act, and anything else required by the Department or the State licensing authority. To the extent of a conflict among any of the foregoing, the more restrictive provision shall control unless a different intent is clear from context. (b) A fee of no more than 5% of gross receipts may be required in the Development Agreement. Such a fee shall be negotiated with Permittees and incorporated into the subsequent Development Agreement This fee is to sunset upon the establishment of a local commercial cannabis tax.
(c) All premises where commercial cannabis activities are operated shall comply with the following minimum development and operating standards:
Commercial cannabis activities shall occur in a fully enclosed and permanent building, as described in this ordinance.
ORDINANCE NO. 3240-22
ADDING CHAPTER 6 TO TITLE 6
REGULATING OMEGAL CAN ATTE
PAGE NO. 5
Persons under the age of twenty-one (21) shall be prohibited from the premises at all times, other than as lawful customers permitted under State law in the case of Medicinal cannabis retailers. If such retail establishment sells Medicinal cannabis, persons under the age of twenty-one (21) and over the age of eighteen (18) shall be permitted to enter the establishment only after verification that they possess a valid Medical Marijuana ID card.
posting of a sign outside the preme posted i a conspicunus of lion learn thrtran the the building:
(i) That loitering on and around the premises is prohibited by California Penal Code § 647(e).
(i) That patrons must immediately leave the site upon concluding the reason for their visit, and may not consume cannabis or cannabis products on the premises. (iii) That patrons may be subject to prosecution under federal law. (iv) That the use of cannabis or cannabis products may impair a person's ability to drive a motor vehicle or operate machinery.
(4) Permittees shall provide the name and phone number of an on- site staff person who shall be responsible for notification of any operational problems or emergencies associated with the premises or the operation thereof to the Police Department and City Manager.
All commercial cannabis businesses shall be operated within the specific part of the premises specified in the Development Agreement and/or conditional use permit. No commercial cannabis activities shall take place in an area exceeding the square footage authorized in the controlling Development Agreement, conditional use permit, or the licensee's license; whichever is most restrictive.
(6) All exterior windows, doors, loading and unloading docks or bays, and any points of ingress or egress to the premises where the commercial cannabis business will be operated, shall be secured from unauthorized entry by commercial grade, nonresidential locks, and in a manner specifically approved by the Police Department. The exterior of each of the foregoing areas shall be illuminated during twilight hours.
The ingress and egress points of any storage areas for cannabis or cannabis products shall be locked and secured at all times, and shall be under the control of and accessible only to Permittee's authorized personnel as disclosed to the City.
Each Permittee shall implement a track-and-trace system, compliant with the Act, to record the chain of supply of cannabis or cannabis products from "seed-to-sale."
ORDINANCE NO. 3240-22
ADDING CHAPTER 6 TO TITLE 6
OF THE REDONDO BEACH MUNICIPAL CODE
REGULATING COMMERCIAL CANNABIS ACTIVITY
PAGE NO. 6
(9) The exterior appearance of the premises, including but not limited to the design, color, landscaping, screening, architectural treatments, signage, and other such aesthetic features of the premises shall comply with the standards applicable to the underlying zoning district, as may be modified or supplemented through the Development Agreement and/or conditional use permit. Except as modified herein, or in a Development Agreement or conditional use permit, the premises shall comply with the development standards applicable to the underlying zoning district.
(10) A valid Development Agreement.
(11) All exterior signage on the premises shall comply with city standards, the Development Agreement and/or conditional use permit. Should these provisions conflict, the terms of the Development Agreement shall control. (12) The exterior of the premises shall comply with the city's generally applicable lighting standards including, without limitation, fixture type, wattage, illumination levels, shielding; and associated approvals and permits. (13) All waste generated by or resulting from commercial cannabis activities shall be disposed of as required by law, and Pending disposal such waste shall be stored in a locked and secure area that is under the control of and accessible only to Permittee's authorized personnel.
(14) On-site sales of alcohol or tobacco products, and consumption of food, alcohol, tobacco, cannabis, or cannabis products on the premises is strictly prohibited except that employees may eat in an area separate from the sales floor on their breaks. (15) The premises shall provide an odor absorbing ventilation and exhaust system so that odor generated inside the structure where commercial cannabis activities are taking place cannot be detected outside the structure, anywhere on adjacent property, public rights-of-way, or within any other unit or structure on the premises where commercial cannabis activities are not taking place.
(16) Be provided with adequate electricity, sewerage, disposal, water, fire protection, and storm drainage facilities for the intended purpose. (17) Whether or not Applicants have obtained a property for the purposes of their commercial cannabis business prior to their selection, shall have no bearing on their selection.
The Permit Administrator shall have the power and authority to promulgate rules, regulations, and requirements consistent with the provisions of this chapter and other law in connection with the issuance of a registration certificate. The Permit Administrator may designate an employee of his or her department to make decisions and investigate and act pursuant to this chapter.
6-2.06 No transfer or change in ownership of location.
ORDINANCE NO. 3240-22
ADDING CHAPTER 6 TO TITLE 6
OF THE REDONDO BEACH MUNICIPAL CODE
REGULATING COMMERCIAL CANNABIS ACTIVITY
PAGE NO. 7
CC N2 5/16/2023
Recommendation:
There are currently over 20 cannabis delivery companies that service Redondo Beach on a daily basis. Redondo should immediately allow and tax those outside cannabis delivery companies to capture the tax revenue.
1) Establish a Cannabis Tax Rate
• Strongly recommend starting low and growing over time to encourage consumers to purchase legal.
2) Begin to permit outside delivery into Redondo Beach
• It currently happening
• Requires no selection process or land use issues
• Brings tax revenue into the city immediately.
• Implement a penalty of $30,000 for delivering into the city without a permit. • First time offense should be excusable if the delivery company signs up for a permit. 3) Continue the discussion around establishing a selection process for cannabis shops to allow for community education, input, and participation through workshops. kennery
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Vote No on Item N2
Staff and the Consultant have not provided what the City Council gave direction for them to do so. The draft selection process goes against city ordinance and city council guidance on multiple items. Some of which are listed below. Recommend involving the community to better define the process.
1. City Council Directed Staff to Involve the Cannabis Committee, and they hadn't.
On June 21, 2022 Redondo City Council introduced a motion that directed staff to ensure that the cannabis consultant HdL "meet with the cannabis committee" to discuss the selection process recommendation. City Manager Witzansky responded with "yep noted and yes". The Motion passed unanimously with the acceptation of City Council member Obagi recusing himself due to self declared investments into cannabis companies seeking retail In the over six months since that motion passed, staff had not reached out to the committee. Multiple calls were made the to Community Development Director until an email response on March 6, 2023, stating:
Brandy Forbes March 6, 2023 at 1:12 PM
RE: Time Sensitive - Cannabis Grant Program
To: Jonatan Cvetko e
Jonatan,
Thank you for forwarding. We are already discussing this with our grant writer to see if it will work for us.
Also, I received your voicemails and appreciate your continued interest. At this time we don't foresee that the City Manager will be working with the cannabis steering committee, but if he decides to re-engage that group, I will be sure to reach out.
Thanks,
Brandy Forbes
mmunity Development Direct
15 Diamond SCreenunity Developme
Redondo Beach, CA 90277
(310) 318-0637 x2200
[email protected]
www.redondo.org
The staff and consultant report does not even make mention of the committee's selection process recommendations.
2. No Cannabis Property Requirement
It is a well documented fact that the Redondo's cannabis ordinance does not require a property as part of the selection process:
REDONDO CANNABIS ORDINANCE NO. 3240-22
(17) Whether or not Applicants have obtained a property for the purposes of their commercial cannabis business prior to their selection, shall have no bearing on their selection.
There were a number of reasons that lead to this provision in the ordinance:
1. Discourages landlords from price gouging
2. It avoids selecting an applicant with the most money vs the best applicant
3. It mitigates potential lawsuits, such as in the case of City of Corona where HdL ended up selecting two applicants that had the exact same property.
4. It avoids forcing the licensee from paying for a property unnecessarily due to unforeseen circumstances, such as what happened in the City of LA where licenses paid for properties they couldn't use for over 3 years, until the City finally changed it's rules to make it unnecessary to retain a property while they waited.
To discourage others from seeking to gain an unfair advantage. As we saw with the outside ballot initiative brought on by Elliot Lewis, Barry Walker, and Adam Spiker, they acquired property in advance in hoping to gain an unfair advantage.
Most recently a Cannabis Real Estate company began to advertise various Redondo properties that would be within the approved zoning. This same real estate firm was founded by none other than Melahat Rafiei and her brother Meilad Rafiei, know as WeCann.
Melahat Rafiei is directly associated with Elliot Lewis, being his long time consultant after initially selling him a license her family had won in the City of Santa Ana.
Melahat Rafiei has are been the primary target of the FBI which arrested her for her role in attempting to bribe councilmember in Irvine for favorable decisions on selecting various cannabis clients. She recently plead guilty as is awaiting to be sentenced later this year.
Melahat Rafiei:
https://www.ocregister.com/2022/05/19/democratic-leader-cannabis-consultant-melahat- rafiei-key-to-fbis-anaheim-corruption-investigation/
Orange County Register
Cannabis licensing efforts tied to Anaheim corruption
investigation
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May 19, 2022
Orange County Register
Melahat Rafiei resigns from DNC, fair board roles amid
fallout from Anaheim corruption probe
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May 22, 2022
https://www.ocregister.com/2022/05/22/melahat-rafiei-resigns-from-dnc-fair-board-roles-amid- fallout-from-anaheim-corruption-probe/
Orange County Register
Melahat Rafiei, who was central to the FBl's Anaheim
investigation, takes plea deal
Subscribers are entitled to 10 gift sharing articles each month. These can be shared with friends and family who are not subscribers.
Jan 18, 2023
https://www.latimes.com/california/story/2023-01-19/former-ca-democratic-party-leader-who- helped-fbi-in-anaheim-probe-agrees-to-plead-guilty-to-wire-fraud Long Beach Post
Ex-director of OC Democratic Party pleads guilty to
attempted fraud
A former executive director of the Democratic Party of Orange County pleaded guilty today to a felony charge for attempting to defraud one... 1 month ago
https://lbpost.com/news/ex-director-of-oc-democratic-party-pleads-guilty-to-attempted-fraud/
Melahat Rafiei Founded WeCann with her Brother Meilad Rafiei
CADEM DONATE
MELAHAT RAFIEI
SECRETARY
WeCann ABOUT US - PREMIER LISTINOS
SERVICES REAL ESTATE RESOURCES WENEWS
ABOUE US
AHILAD RATUE!
MELANAT RATID
JASON PIAZZA
GRES CONWAY
ATE ROOCH
ЗAMCAMARENA
ARE YOU LOOKTIVO
TO OBTAIN A CANNABIS BUSINESS LICENSE?
DM Ot 72 CAlAMAR, UNANA? Read WeCann's 2nd Quarter 22
Municipality Updates
WeCann
02 2022
CA MUNICIPALITY
UPDATES
000
WeCann:
< All Inboxes Spotted! Redondo Bea... ^ V All Inboxes Spotted! Redondo Bea...
DOYIIIICH B0000YC1 tourist attractions. With ample parking including 10 dedicated spots and
From: Ryan - WeCann <[email protected]?
plenty of street parking, this property
Date: April 13, 2023 at 10:04:36 AM PDT
offers excellent accessibility for both
tourists and locals alike. Renovated in
Subject: Spotted! Redondo Beach High Traffic 2008, this highly visible cannabis- Cannabis Retail Eligible Property
eligible retail property is a fantastic
Reply-To: [email protected] opportunity for the right buyer. Act fast as we anticipate city applications
will be due soon!
Call us directly at (657) 888-2795
WeCann or complete the form on our
website to secure this location!
POWERED BY 1 CREC
View Redondo Beach Retail
Eligible Property
Redondo Beach Listing
Highlights
High Traffic Redondo
Beach Cannabis • 4,500 SF, two-story building.
• About 10 dedicated on-site
Retail Eligible parking spots
• Ample street parking.
Property for Sale
• Corner Location
• 32,000 cars per day
Prime cannabis retail eligible property • 3-Mile Demographics:
in Redondo Beach, one of LA's famed • Population: 145,199 beach cities! This 4,500 SF, two-story • Average House Income:
building is just 1,700 feet from the $180,203
ocean shoreline and located near • Average Home Value: $977,609 several complimentary businesses and • Located near several tourist attractions. With ample parking complementary businesses. including 10 dedicated spots and • Just 1,700 feet from a popular plenty of street parking, this property beach.
offers excellent accessibility for both
tourists and locals alike. Renovated in * Renovated in 2008 Buyer to verify all details before 2008, this highly visible cannabis- finalizing the purchase. eligible retail property is a fantastic
This is exactly what Redondo was seeking to protect against in by not having a property requirement in the selection process. However, HdL and staff presented a selection process that does require a property.
HdL and Redondo Staff Proposed Site Plan Requirement
SECTION H: PROPOSED SITE PLAN (400 points)
1. Provide the following information about the existing site:
A. Physical address;
B. Narrative description of the existing site, including building(s), parking spaces, driveways, pedestrian sidewalks/rights-of-way,
C. Photographs of the existing property and building(s); Note: Photographs of building interior are not required.
D. Description of how the site is currently being used; E. Description of any businesses currently operating on the parcel (if any), and any parcels directly adjacent to the existing site.
2. Provide the following information about the proposed site:
A. A site plan, drawn to scale, of the proposed business showing perimeter fencing, driveways, streets, property lines, buildings, parking areas, and outdoor areas. 13 B. A narrative description of proposed site improvements, including façade rehabilitation, building expansion, parking, landscaping, fencing, or other exterior site improvements;
i. Note: Descriptions of interior site improvements are not a requirement of this section.
C. A narrative description of the proposed ventilation, air purification, and fire prevention systems
). Visual depictions of the proposed exterior of the cannabis business
3. Describe how the proposed modifications and utilization of the site for cannabis Retailer activity will impact the public health, safety, welfare, environmental quality, and/or quality of life in the surrounding area.
This proposed selection process violates Redondo Beach's Cannabis Ordinance. More should have been expected from the paid 3rd party consultant and staff.
3. Community Benefit Fund
Measure E by Elliot Lewis, Barry Walker, and Adam Spiker included a community benefit fund.
City Council agreed with the Cannabis advisory committee that it was in advisable to establish such as requirement for several reasons
1) It was overly burdensome to a business that is already taxed on multiple levels in benefit to the city.
2) It was difficult to enforce and hold the operator accountable for such a provision. What would the consequences be if the business fell on hard times and was unable to met it's state obligations.
3) Nothing stops the operator from establishing their own non-profit to their own benefit.
A City Mandate of a community benefit fund does not guarantee the success of such an action, and in it's failure the city must be prepared on how it intends to enforce against the operator should the operator be unable to fulfill it's promises.
Despite the City Council's disapproval of such a thing in Measure E, the consultant and staff report still included it in their draft.
SECTION G: COMMUNITY BENEFITS AND INVESTMENTS PLAN (400 points)
1. Describe the benefits that the business will provide to the local community, for example by directly aiding, participating in, or funding the work of local non-profits, community- based organizations, civic organizations, or social services organizations (Community Note: Applicants should not identify any specific Community Organization at this time, or provide commitment letters) from local Community Organizations in the application submittal. This section is only intended to capture the overall commitment of Applicants to fund or support local community-based activity in general.
2. Describe the Applicant's plans for local outreach to City of Redondo Beach residents for open positions, and any other actions proposed by the Applicant that are intended to benefit the local workforce and/or Applicant's local employees.
3. Identify the minimum wage that will be offered to employees of the proposed business, excluding tips and gratuities. If entry-level employees are salaried, the Applicant should divide the minimum annual salary by 2,087 hours to arrive at an hourly rate.
4. Describe the benefits that will be provided to employees, including but not limited to health care, vacation, and medical leave, to the degree they are offered as part of employment.
5. Describe how the business will secure supplies and equipment from local sources.
4. County Health Permit
Redondo's Cannabis Ordinance requires a County Health Permit from the County's Cannabis Compliance and Enforcement Program. In the proposed selection process by the consultant, it makes no mention of such a requirement, despite their recommendation of the property requirement. What would happen if an applicant was selected based on their property designs but those designs weren't approved by the County Health Permit program? The consultant who reviewed the City's Cannabis licensing program should have been aware of this.
6-2.08 County Health Permit. The City shall work with The County of Los Angeles to adopt the county s Cannabis Compliance and Enforcement Program and require the city's cannabis Permittees to obtain the county's health permit prior to operation.
5. Banking
Federally Banking still remains illegal for cannabis companies. Despite some credit unions providing limited banking services to cannabis operators, cash still remains king in the cannabis industry. Requiring banking as part of the selection process presents an unfair barrier to entry when it is not universally, nor easily accessible by all operators.
HdL/Staff Selection Process Requirement
Section A: Business Plan (400 points)
D. A letter from a bank, credit union, or similar financial institution stating that the cannabis applicant has, or will be provided, access to banking services.
6. Public Input through community workshops?
The public should be given an opportunity to clearly understand what the requirements the section process involves. City Staff and Council should host a series of community workshops to allow the public to educate themselves and participate in providing recommendations to what they value in the selection process.
It is incredibly important that we promote a transparent process to avoid the appearance of any potential impropriety as has been well documented most recently:
Corruption is widespread in California's weed industry. Now, the state is taking action.
- LA Times March 23, 202
About HdL
Here's some articles on other cities that brought in HdL to assist with their cannabis licensing section process.
1) Fairfield Council Puts Breaks on Cannabis Licensing
far paid to the company for its services related to the cannabis permit process." "They also voted to fire HdL Companies and demand a refund of all money thus 2) Cannabis Licensing Scandal Sweeps Pasadena
" In emails obtained by the Pasadena Star-News, despite the city passing a clear ordinance outlining the selection process, when it came time to score the applications, the city hired HDL Companies, a California cannabis and tax said a "handful of employees" would grade the applications. These scores were consulting firm, in order to "streamline the process." In the final proposal, HDL then "reviewed," and later signed, by the firm's "marijuana compliance manager," who was in contact with each team member during weekly conference calls, erasing any notion of scorer independence.
3) Chula Vista faces a third cannabis dispensary lawsuit During an appeal hearing, Sobel says that a consulting company hired by Chula Vista to review and score the applications didn't follow the city's grading criteria.
The consultants, HdL, allegedly deducted points because of the format of the had asked Cannabis Village to submit. HdL's representative at the appeal hearing, application and refused to consider supplementary information that Chula Vista Matthew Eaton, said he did not personally evaluate Cannabis Village's application. "In fact, he testified that his company diluted the experience component in the Information submitted by CVCV at the request of the city in preparation for the contravention of the rules, and completely failed to consider the Supplemental interview," the lawsuit states. "Such testimony by Mr. Eaton reveals his ignorance of the facts, and the arbitrary handling of the evaluation process by HdL's assigned clerk."
Industry Updates:
High tax rates and low enforcement against illegal cannabis operations has lead the an economic collapse of the industry that continue to play out. 1) California's Debt Bubble on the Verge of Bursting. 11/15/22 2) California's Cannabis Industry Owes State a Quarter of Billion Dollars in Taxes. 12/9/22
For the past 2 years quarter after quarter, state cannabis tax revenues have dropped quarter after quarter for the past 2 years. In Q4 2022, it was down $109M year over year. The industry does not expect to stabilize for at least two more years.