Sweet Flower
10000 Culver Blvd.
Culver City, CA 90232
October 10, 2024
Redondo Beach City Council
415 Diamond Street
Redondo Beach, CA 90277
Setting the Standards for Cannabis Retail in Redondo Beach Dear Members of the Redondo Beach City Council:
Sweet Flower commends the City of Redondo Beach for establishing the City’s legal cannabis retail program and for the diligence of City staff and council members in pursuing an optimal process.
We understand the City is committed to a program and process that reflects Redondo Beach’s values of trust, transparency, and community well-being, and provides meaningful revenue generation for the City, creating opportunities for local employment, local business partnerships and local development.
Well-run legal cannabis retailers provide significant community benefits, deepen community engagement in the communities they serve, force out illegal or grey-market cannabis and hemp operators, and improve security, public safety, neighborhood awareness and quality of life in the localities in which they operate.
As a deeply involved and engaged owner, operator and developer in the Southern California legal cannabis retail industry since the advent of legal cannabis, I have witnessed and helped create these positive community impacts firsthand.
As CEO and owner of Sweet Flower, I am proud of the work that Sweet Flower has done in the communities we serve across California, the trust we have established as a partner with the cities, communities and regulators with whom we work daily, at both a state and local level, and of our reputation for operational excellence and deep community engagement. And I have personally attended and participated in multiple community events in Redondo Beach and several council hearings on this matter. I have also provided public comment on this topic on multiple occasions in the past and welcome the Mayor’s invitation to provide deeper feedback on the process today.
Sweet Flower has successfully navigated complex merit-based applications across California, in Pasadena, Culver City, Chico, and Fresno, in addition to directly owning and operating multiple retail licenses in the City of Los Angeles, without incident or complaint. Sweet Flower hires locally and we give back to our communities meaningfully. Since our inception, we have contributed over $300,000 to over two dozen local charities in the communities we serve, supporting causes related to under housing, food insecurity, and improving local quality of life, in addition to tens of millions of sales, excise and local tax dollars.
Having been successful in the most competitive, stringent and complex merit based processes in the state, and now being a valued partner to cities and regulators across the state, we are happy to share for your consideration some perspectives and recommendations on how best to build a merit-based application process to further the goals and objectives of the City of Redondo Beach.
We concur with Councilmember Loewenstein’s comment last Tuesday night – “Past is Prologue.” 2 To achieve these goals, we believe it is critical to evaluate applicants based on their track record of actual ownership and hands-on operations (and not aspirations) in other cities where they operate, on demonstrable accountability, both corporate and personal, and on their ability to uphold the City’s values and operate as responsible, engaged members of the community.
Accordingly, the recommendations below are split into three sections: (1) a restatement of key values that we believe the City of Redondo Beach should look towards, (2) a detailed proposed scoring matrix, including proposed weightings, and (3) a section of other considerations and comments, for review.
This is provided for your consideration with one objective in mind - to ensure that selected operators demonstrate the highest standards of integrity, operational excellence, compliance, financial responsibility, community alignment and neighborhood compatibility to the City and broader community of Redondo Beach.
Section 1 - Key Values Redondo Beach Should Prioritize:
1. Trust and Transparency in Operations
The cannabis industry is one of the most highly regulated industry sectors in California. Operators who prioritize trust and transparency are more likely to conduct business in a manner that upholds public confidence and promotes safe, compliant operations. Trust and transparency manifest through open communication with local and state regulators, accurate record-keeping, adherence to all applicable regulations, and honest interactions with the community.
Why This Matters:
Trustworthy operators minimize the risk of violations, support public safety, and build positive relationships with the community and regulatory authorities. A transparent business is better equipped to address concerns and operate in a manner that is consistent with the expectations of Redondo Beach residents and stakeholders.
What to Look For:
• A proven track record of compliance with local and state regulations. • Detailed and transparent operational plans that outline procedures for ensuring compliance, risk management, and ethical business practices.
• A history of proactive communication and engagement with regulators, demonstrating a commitment to operating openly and honestly.
2. Accountability at the Ownership Level
The ultimate responsibility for the business’s operations, compliance, and impact on the community rests with its individual Owners. When Owners are directly involved in the business, they can be held accountable for decisions, operations, and community relations. Accountability means having individuals at the ownership level who are responsible, engaged, and committed to ensuring the business’s success aligns with the community’s values and expectations. Legal cannabis retail is the type of business that requires active Owners who are hands-on, who live or work close to the business, and who are accountable to all the constituents they serve (neighbors, customers, city staff, and regulators); legal cannabis retail does not work well when Owners are passive, are geographically remote, or are not accountable or accessible.
Why This Matters:
3 Direct involvement from Owners reduces the likelihood of absentee management or passive investment strategies that can lead to non-compliance or unethical business practices. When Owners are actively engaged, they can respond swiftly to any issues, ensuring that the business remains a positive force in the community.
What to Look For:
• Owners who are named on the licenses they claim to hold and for the businesses they claim to be engaged in, and who are actively involved in the business and in day-to-day operations. • Ownership structures that are straightforward, clear, transparent and non-opaque, and reflect a commitment to long-term investment in the business.
• Owners with a history of positive engagement in their own business’s operations, regulatory adherence, and community involvement.
• Owners who are geographically proximate to the location, are personally committed to the success of the business, and have a track record of accountability.
3. A History of Strong and Compliant Operations
Compliance with regulations starts “at the top,” and is not just about avoiding penalties—it is a direct reflection of the Owners’ and the business’s commitment to operating ethically and responsibly. A strong compliance record indicates that the Owners and the business have the personal and institutional knowledge and systems in place to adhere to complex regulatory requirements, ensuring that they operate safely and within the bounds of the law.
Why This Matters:
A business with a demonstrated history of compliance reduces the likelihood of enforcement actions that could disrupt operations and negatively impact the community. Redondo Beach should prioritize applicants who have demonstrated their ability to operate under current legal frameworks, showing a consistent commitment to high standards and ethical practices.
What to Look For:
• A compliance record free of serious violations, infractions, or unresolved issues. • Evidence of corrective actions taken promptly in response to any compliance issues. • A commitment to maintaining high standards of compliance through regular training, participation in industry best practices, thorough and detailed Standard Operating Procedures and proactive risk management.
4. A Shared Commitment to the Community of Redondo Beach Cannabis businesses should not only comply with regulations but also actively contribute to the communities in which they operate. A shared commitment to the community means engaging with local residents and businesses, supporting local initiatives, and contributing to the social and economic fabric of the City of Redondo Beach. A positive presence in the community helps build trust, reduce stigma, and create a mutually beneficial relationship between the business and its neighbors.
Why This Matters:
A business that prioritizes community engagement is more likely to be viewed as a positive addition to the neighborhood, supporting local needs and addressing concerns proactively. This type of engagement fosters a sense of partnership between the business and the community, leading to a more harmonious relationship and reducing the risk of community opposition. 4 What to Look For:
• Active participation in local events, charitable contributions, and support for community programs.
• A well-developed Neighborhood Compatibility Plan that outlines how the business will engage with and support Redondo Beach residents and businesses. • A commitment to maintaining open communication and being responsive to community concerns and needs.
• A detailed Community Benefits Plan, demonstrating effective integration into the local community and awareness of the issues and concerns of that community. • A prior track record of “doing,” over aspirational statements or just “saying.” To that end, has the business followed through on its commitments to the communities it serves elsewhere, or were past commitments made with qualifiers? For example, when an operator pledges to give back a percentage of its sales to the communities it serves, was that pledge satisfied by actual dollars donated, or merely by “in kind” contributions of employee volunteer hours?
5. Effective Business Operations and Revenue Generation A cannabis business that incorporates trust, transparency, accountability, and community engagement is not just a good community partner—it is also a successful financial enterprise. Effective business operations and revenue generation are indicators that the business is well-managed, stable, and capable of contributing positively to the local economy. Financial success, when coupled with responsible business practices, supports long-term sustainability and provides economic benefits to the community.
Why This Matters:
Financially successful businesses are better able to contribute to the community, support their employees, and invest in compliance and operational excellence. Redondo Beach should select businesses that have a track record of operational success, the wherewithal to launch and sustain their business in Redondo Beach, and a well-defined plan for achieving sustained growth and profitability.
What to Look For:
• A history of operational success that complies with regulatory requirements. • Financial stability and resources to support long-term business operations and investments in community initiatives.
• A clear, well-developed business plan that prioritizes both profitability and community engagement.
Section 2. Proposed Scoring Rubric
We set out below a proposed scoring rubric enumerating ten specific areas of review and assessment for potential cannabis retail operators in the City of Redondo Beach.
We believe this is tailored to the specific values, goals and objectives of the program as expressed directly to us by the many Redondo Beach residents we have meet with in numerous community meetings we have held in the City, and by the City of Redondo Beach council in the public discussions we have participated in since deliberations on this matter commenced.
For ease, the total scoring matrix is 1000 points, and we have focused each section on what we believe are the most important aspects of each section for review; we have tried to avoid being prescriptive in each section, leaving room for executive judgement and administrative discretion. 5 Section 1: Owner Qualifications and Experience (150 points) Description:
The individual Owners of a cannabis business bear the primary responsibility for ensuring compliance, fostering community engagement, and overseeing operations. This section evaluates the Owner-level experience in California’s regulated cannabis market, the number of successfully managed licensed locations, and the compliance history and track record of the business under these Owners.
The emphasis is on Owner applicants with a proven record of compliance, hands-on operations, accountability, demonstrated success and an understanding of the unique regulatory landscape since January 1, 2018, with the inception of legal cannabis retail in California under Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA)1.
Criteria for Scoring:
1. Qualifications of Owners
Points are awarded based on Owner-level qualifications, including experience in cannabis retail operations since January 1, 2018, and in launching new cannabis retail or general retail stores, or in relevant professional fields, such as general management and operations, finance, retail marketing, retail operations, business, strategy, law, compliance or human resources. Points awarded also consider professional qualifications, degrees, and, where relevant, awards and recognition at a community or industry level.
2. Prior Experience as an Owner in the Legal Cannabis Retail Industry (Post-2018) Points are awarded based on the total years of Owner-level experience in the legal cannabis industry since January 1, 2018 AND on the level of engagement and depth of experience demonstrated during those years, with extra points for active and hands-on engagement in retail operations, compliance and business. Experience prior to this date should be disregarded or discounted (under prior pseudo-regulatory schemes no longer relevant). Experience in other fields, such as cannabis distribution, cultivation or manufacturing should also be discounted (not directly applicable to cannabis retail). Experience as a non-Owner (i.e. consultant, advisor or lobbyist) is either irrelevant or discounted – depending on circumstances, may be relevant in Section 2 – Non-Owner Management (next), but this Section is focused on the proposed Owner’s experience as an Owner.
3. Number of Licensed Retail Locations Operated (Including Past and Present) Points are awarded for the total number of licensed retail cannabis locations currently owned and operated by the Owner in California. California retail licenses where a proposed Owner claims an interest or a level of involvement but is not listed as an Owner by the Department of Cannabis Control, or as a director or officer of the direct ownership entity of the license, should be disregarded. Again, experience as a non-Owner (i.e. consultant, advisor or lobbyist) is either irrelevant or discounted.
4. Compliance Record of the Owner
1 “Owner” is defined in the Ordinance as: "Owner" means any of the following:
(a) All persons identified as an "owner" on any permit, license, or other authorization issued by a state agency or local government which authorizes the persons to establish and operate the cannabis facility.
(b) Any person identified or required to be identified as an "owner" on an application filed with any state agency and any local government, wherein the application requests the privilege to operate the cannabis facility.
(c) An Owner is further defined as follows:
(1) A person who has any ownership interest in the corporate entity, partnership, or other business entity applying for a permit or a permittee, regardless of percentage of ownership; unless the interest is solely a security, lien, or encumbrance.
(2) The chief executive officer of a nonprofit or other entity. (3) A member of the board of directors of a nonprofit.
(4) An individual who will be participating in the direction, control, or management of the person applying for a permit. 6 Evaluation based on the demonstrated compliance history of the businesses that the Owner owns/operates across all currently and previously operated cannabis businesses, including the number and severity of any violations and the promptness of corrective actions.
5. Community Engagement and Contributions
Assessed based on the Owner’s involvement in past local community initiatives, participation in social equity programs and in the cannabis industry as a whole and contributions to community well-being across the Owner’s other legal cannabis retail businesses in other cities and communities.
6. Owner’s level of accountability and engagement
Assessed based on the Owner’s operational commitment to the business, and their accountability and responsibility to the business. Level of involvement to date in Redondo Beach, geographic proximity to the business, and commitment to involvement at an operational level going forward.
Section 2: Management Team and Non-Owner Experience (100 points) Description:
Established cannabis retailers will have a non-Owner management team that contribute significantly to the business’s success; the management team’s qualifications and experience play a critical role in executing the Owner’s vision and maintaining the operational integrity of the business. This section evaluates the professional background and expertise of key non-Owner managers, such as compliance officers, buyers, marketing heads, controllers and HR leads. A strong management team should have a mix of industry-specific experience, professional certifications, and a history of successfully managing cannabis retail and other highly regulated and complex operations.
Criteria for Scoring:
1. Relevant Industry Experience and Expertise
Points are awarded based on the years of experience in relevant roles, such as compliance management, buying, inventory management, marketing, or other key operational areas within the legal cannabis industry.
2. Track Record of Success in Current and Previous Roles Evaluation of the management team’s record in successfully running cannabis businesses or other regulated enterprises.
3. Professional Qualifications and Certifications
Consideration of professional certifications (e.g., compliance certification, security training, or business management credentials) that demonstrate the management team’s capability to run a compliant and effective cannabis business.
4. Involvement in Community and Local Engagement
Consideration of the management team’s involvement in the legal cannabis industry, community engagement, and support for local programs and businesses.
Section 3: Community Engagement and Community Benefits (100 points) Description:
Cannabis retail operators should be active participants in the local community, fostering positive relationships and supporting local initiatives. This section evaluates the applicant’s history of supporting local initiatives, engaging with Redondo Beach residents and businesses, and their proposed plans for ongoing community contributions. Special consideration is given to applicants who 7 demonstrate a deep understanding of neighborhood and community dynamics and a proactive approach to being a good neighbor.
Criteria for Scoring:
1. Engagement with Redondo Beach Residents and Businesses Evaluate the applicant’s history of working with local stakeholders, support for local events, and contributions to civic initiatives.
2. Community Benefit Plans
Assess the applicant’s proposed contributions to the local economy, such as job creation, charitable donations, and support for other local businesses.
3. Neighborhood Compatibility Plan
Consider how the applicant plans to integrate into the neighborhood, including measures to minimize disruptions and ensure a positive relationship with nearby residents and businesses.
Section 4: Labor Plan (50 points)
Description:
A robust labor plan reflects the applicant’s commitment to providing quality employment opportunities and maintaining positive labor relations. Applicants with strong commitments to labor relations, employee benefits and local hiring, demonstrated by collective bargaining agreements (CBAs) in place, or by local hiring preferences in other cities should be awarded additional points, as these agreements and preferences indicate a higher level of employee support than applicants without.
Criteria for Scoring:
1. Labor Relations
Evidence that the applicant has a labor peace agreement in place, as required by state law for its proposed business in the City of Redondo Beach with more than 10 employees.
Award extra points for applicants who have established CBAs with recognized unions, demonstrating a higher level of commitment to fair labor practices.
2. Employee Benefits and Training Programs
Evaluate the applicant’s approach to employee benefits, including health insurance, professional development opportunities, retention and promotion, and training programs.
3. Employee Support and Engagement
Consider how the applicant supports their employees, addresses workplace concerns, and maintains a positive and productive work environment.
4. Local Hiring/Social Plan
Points awarded for commitment to a local hiring preference in the City of Redondo Beach, and for retaining and promoting from within. Further, points to be awarded based on the commitment to hire from socially or economically disadvantaged areas, and to hire veterans, long-term unemployed, seniors and from other disadvantaged groups traditionally overlooked by other employers.
5. Employee Screening and Safety
Points awarded for employee screening, background checks, for policies aimed at maintaining a drug-free workplace, and a safe working environment for all employees in accordance with applicable laws.
8 Section 5: Operational Plan and Business Strategy (150 points) Description:
A comprehensive operational plan is critical for the smooth operation of any cannabis retail business.
This section evaluates the applicant’s proposed day-to-day operations, compliance strategy, and business sustainability planning. An effective operational plan should detail how the business will manage key areas such as staffing, inventory control, cash handling, access protocols, and customer service. The plan should also demonstrate the business’s capacity to achieve the plan, and adapt to changes in regulations and market conditions, ensuring long-term stability and success.
Criteria for Scoring:
1. Detailed Description of Day-to-Day Operations
Assess the clarity and comprehensiveness of the applicant’s proposed daily operations, including opening and closing procedures, staff management, security protocols, youth access prevention, check in and check out, and customer service protocols.
2. Compliance Strategy and Regulatory Adherence
Consider the applicant’s approach to maintaining compliance with local and state regulations, managing risk, and preventing non-compliance issues. Points awarded for product selection strategy reflecting knowledge of Redondo Beach market, inventory management, cash management and METRC compliance.
3. Business Integrity and Continuity
Evaluate the applicant’s plan for managing unforeseen challenges, adapting to regulatory changes, and ensuring business continuity. Points should be awarded for transparent banking and insurance practices (i.e. where the bank or insurer is aware they are working with a cannabis operation), and for having secure cash processes and non-cash payment solutions available for both customers and other businesses (minimizing cash on hand).
Section 6: Financial Plan and Business Model (150 points) Description:
Financial stability is crucial for the successful launch and ongoing operations of a cannabis retail business. This section evaluates the applicant’s business model, and financial capacity to support capital expenditures for build-out, TI, initial staffing and inventory and initial operational expenditures per the business model. Applicants must show availability of funds to support either 24 months of total expenses or $2 million, whichever is greater. This ensures that the business has the resources needed to successfully launch and maintain operations. A track record of quickly opening stores is beneficial (some operators collect licenses without opening).
Criteria for Scoring:
1. Business Model - pre-launch through Year 3 Full
Detailed 3 year business model outlining dispensary construction, launch and operations from pre-build out (including license pursuit costs) to store launch, plus 3 years post-launch.
2. Availability of Funds for Initial Launch and Operations Applicants must demonstrate financial readiness by showing availability of funds to support either 24 months of TI, CapEx, build-out, and OpEx, or $2 million, whichever is greater.
3. Financial Statements and Documentation
Submission of financial statements, letters of credit, or other documentation that demonstrates the financial capacity to sustain ongoing operations and overall financial resources and 9 credibility. Documentation could come from corporate parent (balance sheet). Points awarded for completeness, transparency and indication of appropriate financial resources.
4. Business Plan Detailing Fund Allocation
The business plan should outline how funds will be allocated for the build-out, operational expenses, and ongoing business activities, demonstrating a clear strategy for managing financial resources.
5. Contingency Planning for Financial Challenges
Consider the applicant’s plans for managing unforeseen financial challenges or delays, ensuring that they have a clear strategy for maintaining operations even in the face of unexpected setbacks.
6. Track Record of Opening Retail Locations, Quickly
Points awarded for applicants with a proven track record of opening stores swiftly after being awarded a Conditional Use Permit (CUP). Applicants should submit their average time to opening after receiving a CUP to demonstrate their ability to meet project timelines and begin operations promptly, along with a deduction of points for prior licenses granted to the Owner group but not yet launched, unless adequately explained in each case (points awarded to encourage operators to open, not just collect and sit on licenses awarded).
Section 7: Building Plans and Site Improvements (100 points) Description:
The design and functionality of the proposed cannabis retail location play a significant role in community perception and overall business success. This section evaluates the applicant’s building plans, architectural design, and proposed site improvements. Plans and renderings should include details on interior and exterior design, accessibility, and integration with the surrounding environment.
High-quality, aesthetically pleasing design and thoughtful site improvements can enhance neighborhood compatibility and minimize any negative impacts.
Criteria for Scoring:
1. Architectural Design and Building Plans
Consider the quality of the proposed architectural design and building plans, focusing on how the location will fit within the existing neighborhood and contribute positively to the community’s aesthetic. Award extra points for lack of identifiable cannabis logos and motifs (eg.
Green crosses), other descriptive cannabis/dispensary terms, and lack of visibility from the street into the shopping area, and lack of product visibility and related signage from the street.
2. Site Improvements
Evaluate the applicant’s proposed site improvements, such as parking, landscaping, traffic flow, and accessibility, ensuring that the business is functional, accessible, and visually appealing.
Consider extra points for sites that upgrade or replace existing blight or nuisances (e.g. blighted buildings or “nuisance” businesses in Redondo Beach).
3. Integration with the Surrounding Environment
Assess the applicant’s plans for integrating and improving the retail location with the neighborhood, including measures to minimize disruptions, enhance visual appeal, and ensure compatibility with surrounding properties. Include renderings that demonstrate how the store will blend with the neighborhood, enhance local aesthetics, and contribute positively to the community through site maintenance and cleanliness.
4. Compliance with Local Building Codes and Community Standards Ensure that the building plans meet all local building codes and align with Redondo Beach’s community standards and expectations.
10 Section 8: Security Plan (100 points)
Description:
Given the sensitive nature of cannabis retail operations, a robust security plan is crucial for ensuring the safety of employees, customers, and the surrounding community. This section evaluates the applicant’s approach to premises security, surveillance, personnel training, and emergency response. The plan should outline measures to prevent theft, protect assets, and respond effectively to security incidents.
Criteria for Scoring:
1. Premises Security Measures
Assess the quality and comprehensiveness of the security plan, including surveillance camera placement, alarm systems, and access control. Points awarded for use of a security expert to prepare the security plan, and a consideration of the security expert’s qualifications, experience and credentials.
2. Security Training
Consider the qualifications and training protocols for security personnel and all staff, including their ability to respond to incidents and prevent unauthorized access.
3. Emergency Response Planning
Evaluate the applicant’s preparedness for emergency situations, such as power outages, security breaches, or natural disasters.
4. Use of Security Technology and Best Practices
Ensure that the security plan incorporates up-to-date technology and best practices in the cannabis industry, ensuring a high level of protection and incident prevention.
Section 9: Safety Plan (50 points)
Description:
The safety of employees, customers, and the public is paramount. A well-developed safety plan should cover everything from fire prevention and suppression to emergency evacuation procedures. This section evaluates the applicant’s approach to maintaining a safe environment, compliance with health and safety standards, and training programs for staff.
Criteria for Scoring:
1. Safety Procedures and Protocols
Assess the applicant’s procedures for maintaining a safe working environment, handling hazardous materials, and ensuring customer safety.
2. Training and Emergency Preparedness
Evaluate the comprehensiveness of training provided to staff, covering emergency response, fire safety, and health protocols.
3. Ongoing Safety Management
Consider the applicant’s plan for regularly reviewing and updating safety procedures to remain compliant and ensure continuous improvement.
4. Compliance with Health and Safety Regulations
Ensure that the safety plan meets all relevant health and safety regulations, including fire codes and occupational safety standards.
Section 10: Good Neighbor Policy and Community Engagement (50 points) 11 The Neighborhood Compatibility Plan assesses how well the business aligns with the expectations of the local Redondo Beach community in the site’s neighborhood. This section should include:
1. Good Neighbor Policy:
Assess commitment to positive relationships with neighbors, ongoing communication, and a clear feedback process. Establish a designated point of contact to handle concerns, and provide timely resolution of issues. Consider the applicant’s outreach efforts and outcomes
2. No Loitering, No Consumption Policy:
Evaluate effectiveness of measures prohibiting loitering and on-site cannabis consumption, supported by signage, trained personnel, and security measures to enforce compliance.
3. Light, Noise, and Odor Management:
Assess measures to prevent light spillover, reduce operational noise, and control odors using advanced HVAC systems. Regular maintenance and monitoring should be in place to ensure adherence to city standards.
4. Location Enforcement:
Evaluate security personnel or staff roles in monitoring and enforcing policies, preventing youth access, and managing on-site safety, including process for handling violations.
Section 3 – Other Considerations
This section outlines some other items for consideration in the consummation of the process, and discussion of other items that have arisen over the course of the last several council meetings.
1. Selection process – the current process states:
“The Permit Administrator, as a ministerial duty, shall have all applications rated 16 using the included standardized criteria to be used on each application. The top five (5) rated applicants will be invited to give a ten (10) -minute presentation before the City Council for consideration of award of Commercial Cannabis Retail Permit. The City Council will select up to two (2) of the top five (5) rated applicants for the award of a Commercial Cannabis Retail Permit.”
However, we would request adding an interim review step to the existing Commercial Cannabis Retail Permit selection process to ensure a more robust and balanced evaluation.
This step would involve a panel of three (3) City staff or outside experts interviewing the Owners and key team members from the top ten (10) applicants, or any applicant scoring above 90%, before a smaller group is then selected by the interview panel to advance to the City Council presentation. This additional layer of evaluation is in keeping with established best practices and offers enhanced scrutiny; review in an interview setting can provide specialized insights and reduce any potential biases in the initial scoring, ensuring that only the most qualified applicants are considered, and affords additional transparency, reinforcing the fairness and credibility of the process.
2. Revenue Tests – Revenue as an Unreliable Indicator of Success:
Revenue alone is not a comprehensive indicator of a cannabis business’s success or operational excellence. Several factors undermine the validity of revenue as a reliable metric:
12 Location and Market Dynamics: Revenue can be influenced by factors such as location, foot traffic, scarcity, encroachment by illegal operators, and general market conditions—factors that are often beyond an operator’s control and may not reflect the quality of operations or be repeatable.
Sustainability Concerns: High revenue does not always equate to sustainability. Many businesses have driven up revenue through aggressive pricing strategies, deep discounting, or excessive promotions, essentially “buying” revenue, often leading to short-term gains at the cost of long-term stability. This approach has led several cannabis operators into insolvency in the last 12 months.
Luck and Timing: Revenue can be as much a function of timing and market entry as it is of business acumen. Operators who launched earlier or secured prime locations may see higher revenue numbers, not because of operational excellence, but due to fortunate circumstances.
Given these limitations, as is indicated in our proposed scoring matrix, we recommend shifting the focus away from revenue as an indication of “good operations.” Instead, we submit evaluation should prioritize compliance, operational transparency, store longevity, community engagement, and a proven ability to navigate complex regulatory environments—factors that are more indicative of an operator’s capability and long-term viability.
Summary
The City of Redondo Beach’s foray into legal cannabis retail represents a monumental undertaking and commitment from the City, for which we are thankful. Having developed and burnished our local roots, Sweet Flower understands the community will be watching closely to see if the implementation is successful. Choosing an established, reputable operator with a strong track record ensures that the city is partnering with a business that can responsibly navigate this transition, minimize risks, and contribute positively to the community, and we hope the recommendations above will assist the City in that process.
We thank the City of Redondo Beach council, staff and the broader Redondo Beach community for its careful and diligent review and consideration, and we are happy to address these recommendations at the City’s convenience.
Sincerely,
Tim Dodd
CEO/Co-Founder
Sweet Flower
October 13, 2024
Dear Council, City Manager and Staff, City Attorney and City Clerk, Per the Mayors request at the last council meeting, I am writing to address the proposed guidelines, specifically regarding the experience and qualifications of applicants for cannabis retail licenses.
Our company, Supreme Retail, is a newly formed partnership comprised primarily of principals with extensive experience in the cannabis retail industry. We have successfully owned and operated nine retail locations across California, eight of which were acquired by a publicly traded company in 2022. Additionally, one of our principals currently serves as the Founder and Chairman of the Board for Native Roots, one of Colorado's largest retail chains, overseeing 20 high-revenue stores. I myself was a partner and the Chief Operating Officer of our former California chain.
Our A team (our A-team) consists of operational experts with strong personal and business roots in and around Redondo Beach. My wife’s family, also partners in our new entity, has owned the property (our proposed location) at 1002 South Pacific Coast Highway for over 50 years and operated Supreme Paints, a family-owned business, for decades. Furthermore, we have partnered with other local community members, including the iconic Dennis Jarvis of Spyder Surfboards in Hermosa Beach, to ensure we meet the needs of Redondo Beach and the surrounding area.
These factors uniquely position us to contribute to the cannabis market and deeply understand the local community in Redondo Beach. However, the current application guidelines— specifically Section 1, Number 1 of Qualifications of Applicants’ Owners and Managers—and several other criteria effectively allow only larger chains with currently operating stores to compete. These guidelines present barriers to small entities and favor larger, established retail chains over newly formed independent operators like ourselves, who possess the same, if not more, experience and access to capital as larger chains. Supreme Retail is not the only company facing this issue.
SUGGESTED REVISIONS TO GUIDELINES
To create a more equitable application process that accommodates both established large retail chains and independent operators, we propose the following adjustments to the guidelines. We respectfully request the removal or revision of the following points to better reflect the capabilities of independent operators:
1. Section 1, Criteria 1
o Original: Applicant must demonstrate cannabis retailer operations and ownership in California, with taxable gross sales of $3,000,000/year generated by at least one retail, storefront location.
o Proposed Revision: Applicant must demonstrate principals’ cannabis retailer operations and ownership within the past four years in California, and/or other states, with taxable gross sales of $3,000,000/year generated by at least one retail storefront location.
2. Section 1, Criteria 4
o Original: Applicant must provide the total taxable gross sales for their highest-grossing retail location in California. Scale of taxable gross sales for this single location will be scored progressively ($3,000,000 and above), with additional points awarded for every $1 million demonstrated, up to a maximum of 20 points.
o Proposed Revision: Remove this criterion, as revenue is not a sole indicator of a successful operator. Revenue is dependent on market conditions, including the size of the store, the number of licenses held, location, and demographics. There are operators who generate high gross revenue but may not manage their stores effectively. This criterion disadvantages smaller and emerging businesses, who qualify under your Criteria 3, and unfairly favors large operating chains.
3. Section 1, Criteria 5
o Original: Applicant must provide a description of their local experience and community involvement, highlighting their connections to the local community and any prior civic engagement. This shall include evidence of how the applicant has fulfilled the commitments outlined in Community Benefit Plans submitted to other cities. o Proposed Revision: The description should reflect past or present involvement of company’s principals’ stores in California or other states as well as demonstrate any recent or current community engagement within the City of Redondo Beach.
4. Section 1, Criteria 6
o Original: Applicant shall provide the total taxable gross sales and net profit for their first three years of operation at their highest revenue location. o Proposed Revision: Remove this criterion or revise it to: Applicant shall demonstrate principals ability to manage high-revenue locations through the submission of letters or testimonials, tax documentation, and/or sales reports from past or present stores of principals in California and/or or other states. Combining multiple forms of evidence will provide a robust and credible representation of the company's capabilities while allowing new entities with principals who met the criteria in other cannabis entities, past or present.
5. Section 3
o Original: Applicant must provide audited financial statements for at least three (3) years of operation.
o Proposed Revision: Eliminate the requirement for audited financial statements for the past three years of operation, as this criterion does not enhance the evaluation of owner qualifications and imposes unnecessary barriers on smaller, experienced operators.
6. Section 4, Criteria
o Original: Applicant must provide proof of General Liability Coverage with a minimum coverage of $2,000,000 and Workers' Compensation Insurance with a minimum coverage of $1,000,000.
o Proposed Revision: Applicants with new entities having no assets or employees yet cannot provide policies and coverage; allow applicant to submit a letter from a licensed insurance broker confirming that the necessary policies with this coverage amount will be obtained once assets and employees are in place.
By implementing these revisions, the application process will become more inclusive, allowing experienced independent operators to compete on a level playing field with established large retail chains.
The application process is competitive, every criterion is pivotal. Therefore, it is crucial that the guidelines uphold fairness and equity for all participants. We appreciate your consideration of these suggestions and look forward to contributing to the successful cannabis community in Redondo Beach.
Sincerely,
Myles Peck
Founder/CEO
Supreme Retail
1 Elizabeth Hause
From: Devon Julian
Sent: Tuesday, October 15, 2024 5:01 PM
To: James Light; Nils Nehrenheim; Todd Loewenstein; Paige Kaluderovic; Zein Obagi; Scott Behrendt; Mike Witzansky; Elizabeth Hause
Subject: Redondo Council Letter
CAUTION: Email is from an external source; Stop, Look, and Think before opening attachments or links.
Dear Honorable Mayor, City Council Members, City Manager Mr. Mike Witzansky, and Community Services Director Ms.
Elizabeth Hause,
Below are some comments about two issues and pitfalls in the latest draft of the application scoring process.
The bonus points section for each million dollars in revenue above $3 million up to $22 million dollars is not an objective criteria. This does not demonstrate how good an operator is,but instead how little competition there is around a store. A store in the City of Los Angeles will have revenues much lower than a store in Pomona as an example, because of the lack of legal cannabis access within many miles from the approved locations. However, a store who is able to operate profitably in the City of Los Angeles could very easily have a much stronger team because of the saturation of stores and the need to successfully compete. This does not protect the health and safety of the local Redondo community, but rather allow bonus points subjectively, nor guarantee the best operators.
There is a section about audited financials. Audited financials in the cannabis space require a niche CPA who will charge upwards of $20k to do an audit. Also, all CPA’s are not created equal. There might not even be enough CPA’s out there to audit all the applicant’s financials separately and objectively. Tax receipts, ability, and a history of paying local and state taxes is a much stronger criteria to show an operator’s success, and can easily be requested from local and state authorities.
Also, having an operator select one store to show, and prioritizing bloated revenue numbers does not tell the whole story. How profitable is that business? What is the corporate structure of that business and who is operating the store? Are they current with their local and state taxes? By selecting a store of an applicant’s choice, you are incentivizing the operator to show you what they want you to see, not what you are ultimately requesting as objective criteria.
While we appreciate all that you are doing and attention to detail, we ask that criteria remain as objective as possible.
Best,
Devon Julian
Culture Cannabis Club
Thanks,
M m m DEVON JULIAN
Chief Executive Officer
2 M m m
Want to book time with me? Click here https://calendly.com/djulian/devon-30-minute-immediate-clone for a 30 minute virtual phone call. 1 Elizabeth Hause
From: Zein Obagi
Sent: Monday, October 14, 2024 5:42 PM
To: Elizabeth Hause
Subject: Fw: Hashery LLC Recommendations of Redondo Beach Cannabis Application Zein E. Obagi, Jr.
Council Member, District 4
City of Redondo Beach │ City Council
415 Diamond Street │ Redondo Beach, CA 90277
310.318.0693 │ 310.379.9268 fax
[email protected]│ www.redondo.org
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Please note that email correspondence with the City of Redondo Beach, along with attachments, may be subject to the California Public Records Act, and therefore may be subject to disclosure unless otherwise exempt. The City of Redondo Beach shall not be responsible for any claims, losses or damages resulting from the use of digital data that may be contained in this email.
From: Len Coleman
Sent: Monday, October 14, 2024 4:45:37 PM
To: James Light <[email protected]>; Scott Behrendt <[email protected]>; Nils Nehrenheim <[email protected]>; Paige Kaluderovic <[email protected]>; Zein Obagi <[email protected]>; Todd Loewenstein <[email protected]> Cc: Samuel Jurist Rob Merkelbach
Subject: Hashery LLC Recommendations of Redondo Beach Cannabis Application CAUTION: Email is from an external source; Stop, Look, and Think before opening attachments or links.
Dear City Council of Redondo,
Hashery LLC appreciates the opportunity to make a few comments about the ongoing retail cannabis application process. Between our various companies, most notably Hashery LLC and SHO Companies, we think we may be able to provide some helpfulness with our experience in many aspects of the cannabis industry.
With business operations that include retail, manufacturing, distribution, and an ancillary business, we have been able to observe various questions that are more relevant than others during many application processes.
There are a few points we would like to bring to the City Council’s attention.
It is not specific in the application, but it should be understood that likely all applicants will need to create a new entity for their retail operation within Redondo. This separates liability, investors, cannabis operations etc. from existing businesses under the same management/ownership umbrella. This new entity clearly would not have any history of operation. Section (1) does refer to Applicant’s Owners and Managers, and we would You don't often get email from [email protected]. Learn why this is important 2 assume all questions in other sections about financials, experience, etc. would extend to our current businesses we own and manage.
Section (1)a. Up to 100 points - demonstrates cannabis retailer operations and ownership in California, that has taxable gross sales of $10,000,000/year per store.
Hashery LLC finds this qualification as well as the points attached to it to be out of line with the intention of the City Council. The City Council is certainly trying to find qualified individuals who run a profitable retail cannabis business. They are also trying to find individuals that have experience running cannabis operations within the State of California. The specifications of requiring cannabis retail experience, the monetary sum, and that same business to be conducted in California, would exclude many businesses from the pool of applicants you are trying to reward. For example, we are currently a cannabis manufacturer, distributor, and ancillary company within the State of California. We previously have owned a cultivation business in California.
Currently, our retail dispensary Hashery in Hackensack, NJ has well over $10,000,000 in taxable gross sales a year. Our qualifications operating a retail dispensary and our involvement in the California cannabis industry our second to none. The fact that we can prove success as a retail operator, as well as our cannabis experience in California, should more than qualify us for all the points this section should offer. The way this is currently is written does not, retail experience in any state should qualify the intent.
Another pertinent point Section (1) does not address is length of ownership in the cannabis industry. Many people have come and gone, obviously some being more successful than others. Being able to show staying power within the industry should be of importance. You want to partner with someone that you know will be invested in the community/business for the long-haul.
Section (2)e. Up to 10 points – A conceptual landscape plan with the percentage of landscaping in the parking lot, setback areas, and tree size and species.
We find this qualification to be unneeded and not in the control of actual businesses. If leasing, this is something that the business cannot do anything about. One should not be docked points for whatever landscaping plan their landlord may have in place, or what they may have planned for the future.
Section (3)c. Up to 15 points – A budget for construction, operation, maintenance, compensation of employees, equipment costs, utility costs, and other operating costs.
There should be more points awarded to this. This is a great way to understand who has a real concept of what this project will entail. Groups that put time and effort into this point should stand out as people realistic and capable of completing this project.
Section (3)d. Up to 10 points – A description of the sources(s) of capital and use(s) of capital.
Companies should have to provide proof through banking means such as, letter of credit, bank statements from their operating businesses, private accounts. You do not want a capital raise holding up the opening of the Redondo retail business. Businesses should be able to prove funds that were set out in their budget/pro forma.
Section (3)e. Up to 10 points – Pro forma financial statements for at least three (3) years of operation.
This should be granted more points. Individuals who have experience in this field have thoughtful and realistic projections. They have a basis of which to plan around, and understand the cash flow needs to get through a couple of years in a new cannabis retail business. We would hope the City Council would add more points to thoughtful consideration of the business’s finances. Simply putting together a proforma with unrealistic projections should not qualify applying businesses.
3 Section (6)a. Up to 75 points – A “Good Neighbor Policy” that (1) includes policies and measures in place to protect adjacent uses from any potential impacts (e.g., noise, light, odor, traffic, etc.) related to the proposed cannabis retailer, including addressing parking and traffic impacts
These are a lot of points for a traffic plan. Being involved in many applications, this is at times duplicated and redundant. We do find that no available parking, either public or a private lot, can be a detriment to certain individuals within a town. The plan should address this need, but a full traffic survey is usually not needed and the points given seem out of proportion with the rest of the application.
Thank you for taking the time to read some of our thoughts and insights. As individuals who have been in the cannabis business in California for a long time, we greatly look forward to the opportunity to apply for a retail operation in Redondo. We have been very selective about the projects and businesses we launch, and can’t be more excited about the community of Redondo and the individuals in it.
Thanks,
Hashery
Leonard Coleman
Sam Jurist
Robert Merkelbach
--
Len Coleman
Website: hasherynj.com
1 Elizabeth Hause
From: Eleanor Manzano
Sent: Thursday, October 10, 2024 3:44 PM
To: Elizabeth Hause; Mike Witzansky
Cc: Lucie Colombo; Melissa Villa
Subject: Fwd: Comment For 10/15 City Council Meeting
See below email…
Sent from my iPhone
Begin forwarded message:
From: Tak Sato
Date: October 10, 2024 at 3:29:57 PM PDT
To: CityClerk <[email protected]>, Eleanor Manzano <[email protected]> Cc: "Stephanie L. Uy" <[email protected]>
Subject: Comment For 10/15 City Council Meeting
CAUTION: Email is from an external source; Stop, Look, and Think before opening attachments or links.
Dear Redondo Beach City Clerk,
Please see public comment below regarding City Council’s 10/15 discussion on the Cannabis Dispensary License Process to be included in the records:
Dear City of Redondo Beach,
Stiiizy has been actively engaged with the City of Redondo Beach and its constituents regarding cannabis the past 2 years. During the last City Council meeting discussion about cannabis, a few speakers expressed the opinion that an operator’s historical revenue numbers should not be taken into account in the scoring of an applicant. One speaker noted that high revenues could be from luck or having the right location.
I strongly disagree. While location does influence a cannabis store’s revenue, the key driver of a store’s revenue is its ability to attract and manage a large number of customers. Similar to any other industry, cannabis customers are more comfortable purchasing at brand stores that they trust and are familiar with. Second, customers also are more likely to shop at stores that are prepared to have a large number of customers with the proper amount of employees and large inventory levels so that customers can quickly complete their purchases for their desired products. At Stiiizy, our Downtown Los Angeles store and our Pomona store each exceeded $30 million dollars in sales the last two years. This is despite Downtown Los Angeles being the most saturated cannabis market in California with 11 licensed dispensaries and dozens of unlicensed dispensaries within 5 square miles.
I believe our brand’s popularity and our ability to provide the best customer experience even during the busiest periods are the two main reasons for the high revenue of our stores. Much like a Trader Joe’s or a Starbuck’s, customers come to our store because they trust our products and the customer experience they have become familiar with. In order to ensure Redondo Beach receives substantial amounts of cannabis tax revenue, picking operators with a history of operating high revenue stores is paramount. A company cannot be expected to have high revenue in Redondo Beach if they have not proven the ability Some people who received this message don't often get email from [email protected]. Learn why this is important 2 to do so in other cities. I therefore respectfully encourage the City to retain a scoring system where applicants are awarded points based on already operating high revenue stores.
Respectfully,
Tak Sato
President of STIIIZY
Tak Sato
President
STIIIZY Inc.
1 Elizabeth Hause
From: Devon Wardlow
Sent: Friday, October 25, 2024 2:14 PM
To: Elizabeth Hause
Subject: Embarc - Redondo Beach Follow up
Attachments: Embarc Overview Deck_2024-05-28[5][3][2].pdf; Embarc Community Advisory Board Overview[2][3] [2].pdf; Botvin_2023_10-02 (1)[2][2][3][2].pdf; App Procedure Guidelines Retail v1.1[1][3].pdf; AppProcedureGuidelinesReta[1][3].pdf
CAUTION: Email is from an external source; Stop, Look, and Think before opening attachments or links.
Hi Elizabeth,
I hope this finds you well! I appreciate all the hard worked you are doing to ensure Redondo Beach pursues the best approach to retail cannabis licensing. I know my CEO sent a leƩer to the City supporƟng Courtney Caron’s recommendaƟons to the most recent staff report changes.
As the City is contemplaƟng best pracƟces for retail cannabis licensing, I thought it may be helpful to share a few examples from ciƟes that are implemenƟng or have implemented merit-based processes. City of Santee - Here is the City of Santee’s applicaƟon procedures and review criteria and here is the governing Ord. Santee’s process is City Council as the final decision maker. Santee just opened their RFP last month and we have just submiƩed our app in that community yesterday. Note the city has not passed a cannabis tax and has include the tax as their community benefit fee.
AƩached you will find the City of Chico and the City of Redwood City App Procedures and Guidelines as well - which were processes that empowered the City Manager as final decision as opposed to Council.
The above processes provide examples of a City Council final decision maker process (Santee) and City Manager final decision maker process (Chico and Redwood City). If the council would prefer to consider an oral board or staff led board as the final decision maker, I am happy to discuss this and look into examples of ciƟes that have pursued this route as well.
Please let me know if you have some availability for an in person or zoom meeƟng someƟme in November or December or whenever would be the most appropriate Ɵme for your schedule.
Lastly, to provide a bit of background on who we are as a company, I have aƩached the following materials about Embarc:
Overview of Embarc: Highlights store footprint, press clips, tesƟmonials, photos of storefronts, approach to community benefits, summary of benefits we have delivered in other communiƟes Community Advisory Board 1 pager: Details role of Board members as serving on our local Community Advisory Board is in no way an endorsement of cannabis but rather an opportunity to ensure the financial benefits of legal cannabis are invested in the needs and prioriƟes of the community we seek to serve. Botvin Youth Drug PrevenƟon: Overview of the accredited youth drug prevenƟon educaƟon curriculum we have launched with Boys and Girls Clubs and other youth servicing non-profits throughout the state.
Thank you very much for your Ɵme and consideraƟon, Elizabeth. I look forward to staying in touch and please feel free to reach out to me anyƟme.
You don't often get email from [email protected]. Learn why this is important 2 All the best,
Devon
Vice President of Public Affairs
CONFIDENTIALITY NOTICE: The contents of this email message and any attachments are intended solely for the addressee(s) and may contain confidential and/or privileged information and may be legally protected from disclosure. If you are not the intended recipient of this message or their agent, or if this message has been addressed to you in error, please immediately alert the sender by reply email and then delete this message and any attachments. If you are not the intended recipient, you are hereby notified that any use, dissemination, copying, or storage of this message or its attachments is strictly prohibited.
City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 1 City of Chico
City Manager’s Office – Cannabis
411 Main Street
Chico, CA 95927
P: 530.896-7210
APPLICATION PROCEDURES & GUIDELINES FOR A
CANNABIS BUSINESS PERMIT
Retail Store Front Only
Request for Proposal Deadlines
OPENS – June 2, 2021
CLOSES July 16, 2021 @ 4:00 PM
Information on the Cannabis Business Permit process will be available on-line at the city website at https://chico.ca.us/cannabis-information and may include the following:
▪ California state regulations and resources
▪ Chico Municipal Code Chapters 5.42, 5R.42 and
Title 19.75
▪ Commercial Cannabis Business License
Application
▪ Frequently Asked Questions
▪ Limitations on City’s liability waiver
▪ Background Check form and/or Live
Scan
To be considered for issuance of a Cannabis Business Permit, final applications and fees must be submitted to the Community Development Department located at the address listed on these procedures. This application process is adopted pursuant to Chico Municipal Code Chapters 5.42, 5R.42 and Title 19.75.
Applicants should monitor the City’s web page for any additional information, FAQs, or updates. It is the responsibility of the Applicant to stay informed of this information.
AMENDMENTS TO THE APPLICATION
Applicants will not be allowed to make amendments to their application or to supplement their application, except as otherwise specifically permitted in these procedures, or posted on the City’s Website as a update clarification, or as authorized in writing by the City Manager or his/her designee.
During Phase I, City staff will conduct a preliminary evaluation of the applications for completeness and will reject any application that is missing a major component (i.e. Business Plan), notifying the applicant by email. Substantive evaluations of the applications will occur during Phase II. At that time, the City will notify applicants by email if their applications are found to be missing minor requirements (for example, signatures/dates on forms, proof of payment receipts or missing scanned pages in one of the scoring criteria documents). If this is the case Applicants may be granted five days from the date of the email to submit the required supplemental information. Furthermore, Applicants will be notified if their application is incomplete or if there is any other reason for which they will not be moving forward in the application process.
CITY’S RESERVATION OF RIGHTS
The City reserves the right to reject any and/or all proposals, with or without any cause or reason. The City may modify, postpone, or cancel the request for a Cannabis Business Permit application without City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 2 liability, obligation, or commitment to any party, firm, or organization. In addition, the City reserves the right to request and obtain additional information from any candidate submitting a proposal. Late proposals WILL BE REJECTED. Furthermore, a proposal RISKS BEING REJECTED for the following reasons:
1. It is not responsive to this request for a Cannabis Business Application and the Procedures & Guidelines.
2. The issuance of the Cannabis Business permit for the proposed location is inconsistent with State law, Title 19.75, Chapter 5.42, Chapter 5R.42 and other applicable City of Chico Municipal Codes.
In addition, it is anticipated that the City may be placing a Cannabis Tax Measure on the November 8, 2022 ballot for the voters to approve, or the City Council may establish a community benefit or operational fee agreement as authorized in CMC Section 5R.42.100 and 5.42.340. Therefore, every Applicant should be mindful that a community benefit fee or tax assessment be identified as a component of their Business Plan and failure to acknowledge or comply with this requirement may disqualify them from eligibility for a Cannabis Business Permit. We should note that any permit will not be fully operative until the successful applicant completes any other required process including but not limited to, State licensing, City Conditional Use Permit process, etc.
APPLICATION PROCESS
All applicants must do the following:
1) Review the information regarding the application process and which documents you will need. 2) Review your application in its entirety to ensure that it is complete and accurate. 3) Review the information regarding the Cannabis Business Permit application on the City webpage listed on page one.
The following procedures outline the application evaluation and selection process, required materials, and other information necessary to apply for a Cannabis Business permit to operate in the City of Chico.
CRIMINAL HISTORY CHECK
At the beginning of the application process, Each Owner must undergo a criminal history background check to demonstrate they do not provide “good cause” for denial per CMC Chapter 5R.42. This will consist of a provisional background check by means of an online portal available on the City’s website at https://hdlcompanies.formstack.com/forms/bc chico.
Upon completing the online background check form, each applicant will be required to print an online receipt which must be submitted with the application as proof of completion. Owners who do not meet the criminal history eligibility requirements of CMC Chapter 5R.42 will be disqualified.
In the final stages of the application process, each successful applicant selected by the City Manager will need to submit to a Live Scan prior to being issued a permit. This will involve submitting fingerprints to the Chico Police Department. Each Applicant’s primary contact will be notified by email with the instructions on how to schedule the Live Scan appointment when the City Manager determines which Applicants will be awarded a permit.
APPPLICATION SUBMITTAL REQUIREMENTS
Applicants must submit a complete comprehensive application package digitally in a PDF format. This can be done in person, FED EX, UPS or any other common carrier delivery service but must be City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 3 received by the deadline and a postmark will not be accepted as a timely submission. The City of Chico Cannabis Business Application Form, Indemnification Form, and Background Check Forms will be required in paper format with original signatures. The Application must respond to all requirements outlined in the “Application Procedures & Guidelines for a Cannabis Business.” The flash drive containing one complete comprehensive copy of the application, including the Application Form, and a signed copy of the application including attachments and the initial application fee must be received by the Community Development Department no later than July 16, 2021 at 4:00 PM.
Please Note: Responses to the Review Criteria (Sections 1-7 found in Appendix A of the Application Procedures Guidelines) shall be limited to 200 pages. Responses pertaining to Backgrounds, Proof of Capitalization, Zoning Verification Letter, and Property Owner Consent shall not be included in the 200- page limitation. Those responses should be saved in a PDF file that is separate from the Evaluation Criteria (see below). All materials must be submitted on a USB flash drive in a PDF format in the following files:
• PDF File #1 – CCB Initial Application with signatures • PDF File #2 – Review Criteria (Responses to Sections 1-7 of Appendix A limited to 200 pages) • PDF File #3 – Background Check documentation (All required documents for each owner, Board of Directors and person(s) who will control, direct or manage the operations of the facility) Upon submission of the online background application, applicants will receive an email confirmation.
This confirmation needs to be printed, scanned, and included within PDF File #3. • PDF File #4 – Proof of Capitalization (All bank statements, loan documents, promissory notes, financial and commitment letters)
• PDF File #5 – Zoning Verification Letter (City staff will include this upon completion) • PDF File #6 – A signed and notarized Property Owner Consent form, Lease Agreement, or a “Letter of Intention” to Lease.
FEES
All Retail Storefront applicants will be required to submit a non-refundable fee of $10,803 in which they will be charged for City staff and the Consultant’s time for reviewing applications and administrating the application process. There will also be additional cost in the process such as a Zoning Verification Letter fee of $156 per site which must be paid directly to the Community Development Department at the time of the request. In addition, a Provisional Background fee of $300 per person will need be paid on the background portal site. Finally, all the successful Applicants who are awarded a permit will subsequently be required to pay a $73 Live Scan fee at the Chico Police Department. Note: If zoning verification yields disqualification of location, application will be disqualified and the application fee only minus a $38 processing fee and $156 zoning fee will be refunded.
Payments must be made by a certified check, cashier’s check or money order made payable to the City of Chico. Please note the City will not accept cash or credit cards and application fees are nonrefundable.
APPLICATION EVALUATION PROCESS
SELECTION PROCESS
PHASE I: DETERMINATION OF ELIGIBILITY
Applications will be reviewed for completeness and compliance to meet the minimum submittal requirements. The determination of eligibility will be based on the criteria outlined in these procedures and as described in Appendix A. However, the criteria will be evaluated and scored in accordance with the process adopted in the Chapter 5R.42 as part of Phases II-A and Phase II-B.
City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 4 PHASE II-A: CRITERIA EVALUATION AND SCORING (1,200 POINTS) During Phase II-A, the City Manager or his/her designee will review and score each application using a merit-based system. Applicants scoring a minimum of 80% or higher (960 points) in Phase II-A will advance to Phase II-B. Notice of the results of Phase II-A will be provided in writing via email to the primary contact listed on the application. See APPENDIX A for a description of the evaluation criteria to be scored in this phase.
A. Business Plan (400 Points)
B. Labor and Local Enterprise Plan (100 Points)
C. Safety Plan (300 Points)
D. Security Plan (400 Points)
PHASE II-B: FURTHER EVALUATION, INTERVIEWS AND SCORING (1,600 POINTS) During Phase II-B, the City Manager or his/her designee will review and score each application using a merit-based system, evaluating the following categories based on the written materials provided, as well as the applicants interview:
A. Business Plan (600 Points)
B. Labor and Local Enterprise Plan ((300 Points)
C. Neighborhood Compatibility (300 Points)
D. Community Benefits and Investments Plan (400 Points) Upon the completion of Phase II-B, the City Manager’s designees will tabulate the aggregate scores of all applicants from Phases II-A and II-B to create a final ranking which will form the basis of the recommendation to the City Manager.
PHASE III: CITY MANAGER’S HEARING
The City Manager shall receive the final scores and recommendations indicating the ranking of the applicants. The City Manager designee shall then conduct a public administrative hearing as required by CMC Section 5R.42.050 to determine the most suitable applications. Applicants advancing to Phase III will be invited to attend this hearing to answer questions from the City Manager and therefore should be prepared to attend the hearing and make a presentation. The City Manager shall then determine which applicants will advance to Phase IV.
Upon the completion of Phase II, the City Managers designee(s) or (Review Committee) will tabulate scores of all applicants from Phase I and Phase II to create a final ranking in which they will make a final recommendation to the City Manager.
Although the City Manager will recommend the most suitable applicants to be awarded a Cannabis Business Permit as allowed by CMC Section 5R.42.050, the City Council reserves the right to award a lesser number of Cannabis Business Permits than there are applicants, or to award no permits at all. In addition, only those applicants on the final list will be eligible to be issued a Cannabis Business Permit from the initial permit process.
After the City Manager recommends the Applicants who will potentially be granted a Cannabis Business Permit any Applicant wishing to appeal the City Manager’s final recommendation may submit an appeal to the City Council or an appointed hearing officer within ten (10) days from receiving a notice that they will not move forward in the application process or be issued a permit. Such appeals shall comply with the requirements of Chico Municipal Code Section 5.42.160.
Phase IV: FINAL SELECTION BY CITY MANAGER
Prior to the City Manager’s final selection of permittees, the City reserves the right to request and obtain additional information from any candidate who advanced to Phase IV. The City Manager will review the totality of the record and decide which applicants are to receive commercial cannabis permits. As part of the final selection process the top applicants or finalists should be prepared to attend a public hearing before the City Manager to address any additional questions before a final decision is rendered. The City Manager’s selection of the prevailing applicants shall be final. Unsuccessful applicants shall have the right to appeal pursuant to Section 5.42.160 of the Chico Municipal Code.
When the City Manager receives the final scores and recommendation, he/she will use this information to prepare a report to submit to the City Council on the final ranking and selection for pursuant to CMC Section 5R.42.050.
PLEASE NOTE – Applicants who have been awarded a license will be required to pay five (5) percent of gross receipts annually to a community benefits fund.
ZONING VERIFICATION LETTER (ZVL) – Applicants will be required to obtain a Zoning Verification Letter from the Community Development Department as part of the selection process. The letter will verify if the submitted site is eligible for cannabis retail as outlined in Title 19 of the Chico Municipal Code. All locations shall be subject to a ZVL to confirm that the proposed location is properly zoned and meets all the minimum sensitive buffer requirements. Please be advised that the City will only accept up to three Zoning Verification Letters (ZVL) per property. Once it receives the maximum number for each location it will no longer accept request to review them. When requesting a ZVL the Applicant will need to show that it either owns the property, signed a lease agreement, or received a letter of “Intention to Lease” from the property owner.
Zoning Verification Letters require a written request to the Community Development Department and will not be completed over the counter to allow for research and review. The review process typically takes approximately ten (10) working days. The ZVL will cost $156 and payment is due at the time of application submission.
Please note the issuance of a ZVL does not constitute written evidence of permission given by the City of Chico or any of its officials to operate a Cannabis Business, nor does it establish a “permit” within the meaning of the Permit Streamlining Act, nor does it create an entitlement under the Zoning or Building Codes. Although a ZVL will be issued and added to the application, the identification of sensitive uses will continue up until the final issuance of a permit and Conditional Use Permit, and where a sensitive use in operation prior to the date of application is identified, the application will be deemed disqualified.
LAND USE & BUILDING PERMIT PROCESS
The final selected applicants with a Cannabis Business Permit are then required to submit for a Conditional Use Permit (CUP) which will be reviewed by the Planning Commission and may require a CEQA review. After land use entitlements are obtained, the Applicant may then submit for Building Permits for renovation or construction.
Furthermore, being awarded a Cannabis Business Permit does not constitute a land use entitlement and does not waive or remove the requirements of applying for and receiving permits for all construction including: electrical, plumbing, fire, planning permits or reviews, and any other permits, licenses, or reviews as may be required by the relevant departments or governmental entities in charge of said permits. Nor does it guarantee that the plans submitted via the application process meet the standards or requirements in Chapter 5.42, Title 19 or any other permit requirements from other City departments or agencies.
City of Chico g uidelines for Cannabis Business Permit – Storefront Retail Only 5 City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 6
PROOF OF INSURANCE AND INDEMNITY
The Applicant shall provide proof of insurance in the form of a certificate of insurance with the appropriate minimum coverage specified in the City’s Cannabis License Application. All Applicants are required to sign the application, and by so doing they confirm their indemnification of the City and thereby release the City from liability for any claim arising from commercial cannabis activity generally, any repeal or amendment of the City Code regarding commercial cannabis activity, or any related violation of state or federal laws.
PAYMENT OF APPLICATION FEE
The applicant will provide the application and zoning verification fee at the time of the application submission.
CONTACT INFORMATION
If you have any questions or would like an update on the status of your application, please email [email protected].
City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 7 APPENDIX A: EVALUATION CRITERIA
While the following identify a standardized set of criteria for use in preparing applications, any and all provisions of Chico Municipal Code Chapters 5.42, 5R.42 and Title 19.75, other local codes and State laws and regulations serve as additional criteria for evaluating applications. Thus, it is the applicant’s responsibility to ensure a high-quality submission which addresses all relevant requirements for the specific Cannabis business type.
SECTION A: BUSINESS PLAN
1. Owners Experience – Resumes are not to exceed one (1) page per owner. The owners should provide any experience they have in operating a retail establishment, a regulatory business, or managing employees. If you have any experience operating a cannabis business please provide the location of such activity and a copy of any permits, licenses, or other written forms of permission for such activity by a local or state government entity. In addition, list all college degrees, certificates, or professional licenses that you have obtained which would demonstrate other technical knowledge that may guide you to successfully run a business organization.
2. Finances – A budget for construction, operations, maintenance, compensation of employees, equipment, property lease, security equipment and staff, City fees, state fees, utility costs, product purchases and other anticipated contingency costs. The budget must demonstrate sufficient capital in place to pay startup costs and at least three months of operating costs, as well as a description of the sources and uses of funds.
A. Proof of capitalization, in the form of documentation of cash or other liquid assets on hand, Letters of Credit or other equivalent assets which can be verified by the City.
B. A pro forma for at least three years of operations.
C. A schedule for beginning operation, including a narrative outlining any proposed construction and improvements and a timeline for completion.
3. Daily Operations – With as much detail as possible, the Business Plan should describe the dayto-day operations which meet industry best practices for a retail cannabis license. This should include at a minimum the following criteria.
A. Describe customer check-in procedures.
B. Identify location and procedures for receiving deliveries during business hours.
C. Identify the name of the Point-of-sale system to be used and the number of Point-of-Sale locations.
D. Estimate the number of customers to be served per hour/day.
E. Describe the proposed product line to be sold and estimate the percentage of sales of flower and manufactured products.
F. If proposed, describe delivery service procedures, number of vehicles and product security during transportation.
4. How the Cannabis Business will conform to local and state laws. See CMC Title 19.75, and Sections 5.42 and 5R.42 as they pertain to retail establishments in the City of Chico.
5. How cannabis and cannabis products will be tracked and monitored to prevent diversion.
Describe the Point of Sale system to be used and how it will interact with the state’s mandated track and trace system.
SECTION B: LABOR & LOCAL ENTERPRISE PLAN
1. The application should describe to what extent the Cannabis Business will adhere to heightened pay and benefits standards and practices, including recognition of the collective bargaining rights of employees.
2. Identify number of employees at initial opening and the maximum number of employees when the business is at full capacity.
3. Identify any social equity programs that will be developed as part of the business model to ensure employees are provided equal opportunities for development.
4. Identify all positions and their responsibilities.
5. Describe compensation to and opportunities for continuing education and training for employees.
City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 8 SECTION C: SAFETY PLAN
1. The detailed Safety Plan shall be prepared by a California professional fire prevention and suppression consultant.
2. This plan will describe all fire prevention and suppression measures, fire extinguisher locations, evacuation routes and alarm systems the facility will have in place.
3. Accident and incident reporting procedures.
4. Waste management locations and procedures.
SECTION D: SECURITY PLAN
1. The security plan shall be prepared by a professional security consultant. (Security plans will not be made public) The plan should demonstrate how they wish to develop the floor plan and address other security issues on the property.
2. Premises Diagram: In addition to the site plans submitted for the Proposed Location, a Premises Diagram must be included with the Security Plan section of the application. The diagram must meet the requirement of the Bureau of Cannabis Control CCR Title 16, Division 42, §5006.
Premises Diagram.
A. The diagram shall show the boundaries of the property and the proposed location to be licensed, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, windows, and doorways, and shall include a brief statement or description of the principal activity to be conducted therein.
B. The diagram shall show and identify commercial cannabis activities that will take place in each area of the premises and identify all limited-access areas.
C. The diagram shall show where all cameras are located and assign a number to each camera for identification purposes.
D. The diagram should be accurate, dimensioned and to-scale (minimum scale of 1/4”).
E. If the proposed location consists of only a portion of a property, the diagram must be labeled indicating which part of the property will be used for the licensed premise and what activities will be used for the remaining property.
3. Description of operational security, including but not limited to general security for access/visitor control, inventory control and cash handling procedures for internal controls and for removing it off the premises to financial institutions or armor carriers.
4. Description of perimeter security, on-site security guards, light, and parking.
5. Identify transportation techniques and security procedures.
6. Employee training and general security policies.
SECTION E: NEIGHBORHOOD COMPATIBILITY PLAN
1. Describe how the CCB will proactively address and respond to complaints related to noise, light, odor, vehicle, and pedestrian traffic.
2. Describe how the CCB will be managed to avoid becoming a nuisance or having impacts on its neighbors and the surrounding community.
3. Describe odor mitigation practices:
A. Identify potential sources of odor from any cannabis or cannabis products being sold.
B. Describe odor control devices and techniques employed to ensure that odors from cannabis are not detectable beyond the licensed premises.
C. Describe all proposed staff training, and system maintenance plans.
D. Describe the waste management plan. The plan shall include waste disposal locations, security measures, methods of rendering all waste unusable and unrecognizable, and the process or vendor in charge of disposal.
4. The application should include the following information on the proposed location:
A. Physical address and a detailed description of the proposed location, including the overall property, building and interior floor plan.
City of Chico - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 9 B. Description of all known nearby State and local sensitive use areas. The cannabis business must have the appropriate zoning and meet all the locational requirements as described in CMC Title 19.75.
C. Proof of ownership, lease agreement, or a “Letter of Intent” to lease.
D. Vicinity map.
E. Photographs of existing site and buildings on the property.
F. Evidence that the location has access to public transportation for employees or customers.
G. Site diagram for each proposed location, including at a minimum:
1) Location and dimensions of all buildings and structures – including square footage. 2) Location of all parking areas and driveways and means of ingress and egress to the property.
3) Uses for all buildings and structures indicated on the site plan. 4) If any exterior alterations are proposed for the existing building(s), attach proposed site plans.
H. Floor diagram for each proposed location, including at a minimum:
1) Interior and exterior walls and partitions, entrances and exits, rooms, doorways, and windows.
2) Dimensions and square footage of all interior spaces. 3) Proposed use of all interior spaces.
SECTION F: COMMUNITY BENEFITS AND INVESTMENTS PLAN
The CCB Application should describe the benefits the business will provide to the local community, for example by directly aiding, participating in, or funding the work of local non-profits, communitybased organizations, civic organizations, or social services organizations. Benefits may be in the form of volunteer services, monetary donations, financial support of City-sponsored activities or organizations, in-kind donations to the City or other charitable organizations and/or any other economic incentives to the City.
*Should an applicant wish the financial information to be treated as confidential, they should clearly identify it on each page as such. However, applicants should be aware that the information may be subject to disclosure under Government Code Section 6254. **Security Plans will not be made public pursuant to Government Code Section 6254(f).
City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 1 Redwood City
Office of the City Manager
1017 Middlefield Road
Redwood City, CA 94063
P: (650) 780-7204
APPLICATION PROCEDURES & GUIDELINES FOR A
CANNABIS BUSINESS PERMIT
Storefront Retailer Only
APPLICATION PERIOD
OPENS – January 11, 2021
CLOSES February 25, 2021 @ 4:00 PM
Information on the Cannabis Business Permit (CBP) process is available on the Redwood City (City) website at www.redwoodcity.org/CBP and includes the following:
§ City Manager’s Rules, Regulations and Process
§ RCMC Chapter 32, Article V, Division 7, and RCZO Article 5 § Cannabis Business Permit Application
§ Financial Responsibility, Indemnity and Consent
to Inspection Terms Agreement
§ Agreement of Limitations of City Liability
The application period to apply for a Cannabis Business Permit to operate storefront retail in the City will open on January 11, 2021, and will close on February 25, 2021 at 4:00 p.m. To be considered for issuance of a Cannabis Business Permit (CBP), applications must be submitted to the Police Department Front Desk located at 1301 Maple Street, Redwood City, CA 94063 by February 25, 2021 at 4:00 p.m. Late applications will not be accepted.
Applicants should monitor the City’s web page for any additional information, FAQs, or updates. It is the responsibility of the Applicant to stay informed of any updates.
ORIENTATION MEETING
The City will hold a “Kick Off” virtual orientation meeting on January 13, 2021 from 1pm-3pm. Pre-registration for the orientation meeting is highly recommended. The registration link is available at:
www.redwoodcity.org/CBP.
AMENDMENTS TO THE APPLICATION
Applicants will not be allowed to make amendments to their application or to supplement their application, except as otherwise specifically permitted in these procedures, or posted on the City’s website as an update clarification, or as authorized in writing by the City Manager or their designee.
LIMITATIONS
Applicants possessing an ownership interest of ten percent (10%) or more in any one storefront retail cannabis business permit applicant will be limited to submitting a maximum of one application during the current application period.
City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 2 CITY’S RESERVATION OF RIGHTS
The City reserves the right to reject or deny any and all applications in accordance with RCMC Chapter 32, Article V, Division 7, City Manager’s Regulations or these procedures and guidelines. The City may modify, postpone, or cancel the application period or review process without liability, obligation, or commitment to any party, firm, or organization. In addition, the City reserves the right to request and obtain additional information from any Applicant submitting an application in order to conduct a complete review of the application or an investigation into the truthfulness of the statements set forth in the application or provided at any stage of the application process.
APPLICATION PROCESS
This application process is adopted pursuant to RCMC Chapter 32, Article V, Division 7, and the City Manager’s Regulations. Review the information regarding the application process and which documents you will need. Before submitting your application, review your application in its entirety to ensure that it is complete and accurate. Review the information regarding the Cannabis Business Permit application process for storefront retailers on the City webpage provided on page one.
The following procedures outline the application evaluation and selection process, required materials, and other information necessary to apply for a Cannabis Business Permit to operate storefront retail in the City of Redwood City.
APPPLICATION SUBMITTAL REQUIREMENTS
Applications must respond to all requirements outlined in the “Application Procedures & Guidelines for a Cannabis Business Permit.” Applicants must submit all required application materials together in one complete comprehensive application package. This can be done in person, FED EX, UPS or any other common carrier delivery service but must be received by the deadline and a postmark will not be accepted as a timely submission.
The application package must include all the following documents with original signatures for each document. (a) Cannabis Business Permit Application;
(b) Financial Responsibility, Indemnity and Consent to Inspection Terms Agreement; (c) Agreement on Limitations of City’s Liability and Indemnification to City; and (d) Application fee and Background Check fee(s)
In addition, all Applicants must submit a USB flash drive containing one complete copy of the application submittals requirements as outlined in the below format. The application package and application fee must be received by the Police Department Front Desk no later than February 25, 2021 at 4:00 PM.
Responses to the Evaluation Criteria (Sections A-H found in Appendix A of the Application Procedures & Guidelines) shall be limited to 200 pages. Responses pertaining to Backgrounds, Proof of Capitalization, Zoning Verification Letter, and Property Owner Consent/Lease Agreement/Letter of Intention and Property Owner/Landlord Affidavit shall not be included in the 200-page limitation. Those responses should be saved in PDF files that are separate from the Evaluation Criteria (see below). All materials must be submitted on a USB flash drive in a PDF format in the following files:
City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 3 • PDF File #1 – Cannabis Business Permit Application (pages 1-3), Financial Responsibility, Indemnity and Consent to Inspection Terms Agreement (pages F1-F3,) and Agreement on Limitations of City Liability and Indemnification to City (pages F4-F6) with required signatures for all four documents. • PDF File #2 – Evaluation Criteria (Responses to Sections A-H of Appendix A limited to 200 pages) • PDF File #3 – Background Check documentation (All required documents for each owner). Upon submission of the online background application, Applicants will receive an email confirmation. This confirmation needs to be printed, scanned, and included within PDF File #3. • PDF File #4 – Proof of Capitalization (All bank statements, loan documents, promissory notes, financial and commitment letters)
• PDF File #5 – Zoning Verification Letter
• PDF File #6 – A signed and notarized Property Owner Consent form, Lease Agreement, or a “Letter of Intention” to Lease and Property Owner/Landlord Affidavit.
FEES
All Applicants will be required to submit an application fee of $22,604 in which they will be charged for City staff and the Consultant’s time for reviewing applications and administrating the application process. Furthermore, all Applicants will be required to pay a Background Check fee of $1,259 per owner which will need to be included as a separate check with their application.
Payments made by a certified check, cashier’s check or money order must be made payable to the City of Redwood City. Please note the City will not accept cash due to the COVID-19 pandemic. Application fees are nonrefundable.
BACKGROUND CHECK
At the beginning of the application process, each Owner must undergo a background check to demonstrate they do not provide “good cause” for denial per RCMC Section 32.161 (B). This will consist of a background check by means of an online portal available on the City’s website at hdlcompanies.formstack.com/forms/bc redwood city. As a further reminder, Applicants will not be paying the background fee online, but instead will submit a separate check from the application fee along with the application. However, Applicants can make one check for all background checks if more than one individual is being processed.
Upon completing the online background check form, each applicant will be required to print an online receipt which must be submitted with the application as proof of completion. Owners who do not meet the background eligibility requirements of RCMC Section 32.161 (B) will be disqualified.
In the final stages of the application process, each owner of each successful Applicant selected by the City Manager or their designee will need to submit to a Live Scan prior to being issued a Cannabis Business Permit.
This will involve submitting fingerprints to the Redwood City Police Department. Each Applicant’s primary contact will be notified by email with the instructions on how to schedule the Live Scan appointment when the City Manager determines which Applicants will be awarded a permit.
ZONING VERIFICATION LETTER (ZVL) AND PROPERTY OWNER/LANDLORD AFFIDAVIT Applicants will be required to obtain a ZVL from the Community Development and Transportation Department as part of the application process. The letter will verify if the submitted site is eligible for cannabis storefront retail as outlined in RCZO Article 59. All locations shall be subject to a ZVL to confirm that the proposed location is properly zoned and meets all the minimum sensitive buffer requirements. Please be advised that the City will only consider one applicant per property. In addition to the ZVL, Applicant must submit a notarized affidavit from property owner City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 4 or landlord confirming that there is only one lease agreement/letter of intention to lease for the subject parcel and that said lease agreement/letter of intention to lease is with the subject applicant. Should the City receive multiple applications for the same property, all applications involving the same property will be disqualified.
ZVL requires a Planning Application (Link) to the Community Development and Transportation Department and will not be completed over the counter to allow for research and review. The review process typically takes approximately ten (10) working days. The ZVL will cost $129 and payment is due at the time of the appointment.
Please note the issuance of a ZVL does not constitute written evidence of permission given by the City of Redwood City or any of its officials to operate a Cannabis Business, nor does it establish a “permit” within the meaning of the Permit Streamlining Act, nor does it create an entitlement under the Zoning or Building Codes.
The ZVL is based on current zoning details known to the City at the time of the ZVL request. The cannabis business must have the appropriate zoning and meet all the locational requirements as described in RCZO Article 59 at the time of Cannabis Business Permit issuance.
PROOF OF INSURANCE AND INDEMNITY
The Applicant shall provide proof of insurance in the form of a certificate of insurance with the appropriate minimum coverage or proof of insurability as specified in the City’s Cannabis Business Permit Application form.
All Applicants are required to sign the Agreement on Limitations of City Liability and Indemnification to City, and by so doing they confirm their indemnification of the City and thereby release the City from liability for any claim arising from commercial cannabis activity generally, any repeal or amendment of the City Codes regarding commercial cannabis activity, or any related violation of state or federal laws.
APPLICATION REVIEW, SCORING AND SELECTION PROCESS
APPLICATION PERIOD (January 11 – February 25, 2021)
PHASE I: DETERMINATION OF COMPLETENESS
During Phase I, designees will review applications for completeness based on the criteria outlined in these procedures and as described in Appendix A. The primary contact listed on the application will be notified by e-mail if the application is found to be missing requirements. Applicants will be granted five days from the date of the email notification to submit the required missing information. Any application that remains incomplete at the conclusion of the five-day period will be denied. Additionally, any application with a ZVL showing that the proposed location is not properly zoned and/or does not meet all the minimum sensitive buffer requirements will be denied. Written notice of the denial will be emailed to the Applicant. Complete applications with eligible proposed locations will advance to Phase II.
PHASE II: CRITERIA EVALUATION AND SCORING (1,200 POINTS) During Phase II, designees will review and score each application using a merit-based system, based on the written materials provided and using the following categories and weighting (points per category):
A. Business Plan (400 Points)
B. Labor, Diversity, Equity, and Inclusion Plan (200 Points) C. Safety Plan (200 Points)
D. Security Plan (400 Points)
City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 5 See APPENDIX A for a description of the evaluation criteria for the specific categories scored in this phase.
The top twelve (12) Applicants which score a minimum of 90% or higher (1080 points) in Phase II will advance to Phase III.
PHASE III: FURTHER EVALUATION, INTERVIEWS AND SCORING (2,000 POINTS) During Phase III, a Selection Committee designated by the City Manager will review and score each application using a merit-based system, based on the written materials provided and the Applicants’ interview and using the following categories and weighting:
A. Qualifications of Owners (600 Points)
B. Labor, Diversity, Equity and Inclusion Plan (300 Points) C. Neighborhood Compatibility (400 Points)
D. Community Benefits and Investments Plan (400 Points) E. Proposed Location (300 Points)
See APPENDIX A for a description of the evaluation criteria for the specific categories scored in this phase.
Upon the completion of Phase III, the Selection Committee will tabulate the aggregate scores of all applicants from Phases II and Phase III to create a final ranking. However, Applicants will be forcedranked against other applicants in Phase III. Therefore, a numerical score alone will not necessarily determine the final results. The purpose of the rankings is to produce an Eligibility List, which the City Manager will use to make the final selection of permittee(s) and establishing a list of other prospective permittees in the event that an Applicant awarded a permit is disqualified or is unable to continue in the process for any reason.
PHASE IV: CITY MANAGER FINAL SELECTION
The City Manager shall receive the final scores, ranking and recommendations. Prior to the City Manager’s final selection of permittee(s), the City reserves the right to request and obtain additional information from any Applicant who advanced to Phase IV in order to conduct a complete review of the application or an investigation into the truthfulness of the statements set forth in the application or provided at any stage of the application process. The City Manager will review the totality of the records and decide which Applicants are to receive Cannabis Business Permits.
The City Manager may award only as many Cannabis Business Permits for storefront retail as allowed by the Redwood City Municipal Code. However, the City Manager reserves the right to award a lesser number of Cannabis Business Permits, or to award no permits at all. In addition, only those applicants on the Eligibility List will be eligible to be issued a Cannabis Business Permit from the storefront retail permit process.
Notice of the results of Phase IV will be provided in writing via email to the primary contact listed on the application.
LAND USE & BUILDING PERMIT PROCESS
When a use permit pursuant to Article 42 of the Zoning Ordinance is required in order to operate the cannabis storefront retail, the final selected applicant must apply for and receive a use permit. After any required use City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 6 permit is obtained, the Applicant may then submit for Building Permits for renovation or construction. If a use permit is not required in order to operate the cannabis storefront retail, the final selected applicant may immediately submit for Building Permits for renovation or construction.
Furthermore, being awarded a Cannabis Business Permit does not constitute a land use entitlement and does not waive or remove the requirements of applying for and receiving permits for all construction which includes:
electrical, plumbing, fire, planning permits or reviews, and any other permits, licenses, or reviews as may be required by the relevant departments or governmental entities in charge of said permits. Nor does it guarantee that the plans submitted via the application process meet the standards or requirements in RCMC Chapter 32, Article V, Division 7, RCZO Article 59 or any other permit requirements from other City departments or agencies.
CONTACT INFORMATION
If you have any questions or would like an update on the status of your application, please contact Susan Barnes in the Office of the City Manager at (650) 780-7204 or by email at [email protected].
City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 7 APPENDIX A: EVALUATION CRITERIA
The City is a public agency subject to the California Public Records Act (“CPRA”). In the event a request for information under the CPRA seeks disclosure of application materials marked by Applicant as “Confidential information,” the City will make reasonable efforts to provide notice to Applicant prior to such disclosure to allow Applicant to seek a protective order, injunctive relief, or other appropriate remedy. If Applicant contends any designated application materials are exempt from the CPRA and wishes to prevent disclosure, it is required, at its own, cost, liability, and expense to obtain a protective order, injunctive relief or other appropriate remedy from a court having jurisdiction over the matter at least two (2) days before City’s deadline to respond to the CPRA request. If Applicant fails to obtain such a remedy before the deadline for the City’s response to the CPRA request, the City will disclose the requested information and shall not be liable or responsible for such disclosure.
SECTION A: BUSINESS PLAN- Criteria to be scored in Phase 2
1. Finances – Provide a budget addressing construction, start-up, operational costs, maintenance, compensation of employees, equipment, property lease, security equipment and staff, City fees, state fees, utility costs, product purchases and other anticipated contingency costs. The budget must demonstrate sufficient capital in place to pay startup costs and at least three months of operating costs, as well as a description of the sources and uses of funds.
A. Provide proof of capitalization, in the form of documentation of cash or other liquid assets on hand, Letters of Credit or other equivalent assets which can be verified by the City.
B. Provide a pro forma for at least three years of operations.
C. Provide a schedule for beginning operation, including a narrative outlining any proposed construction and improvements and a timeline for completion.
2. Daily Operations –Provide a Business Plan describing, in as much detail as possible, the day-to-day operations which meet industry best practices for a retail cannabis license. This plan should include at a minimum the following criteria:
A. Description of customer check-in procedures.
B. Identification of location and procedures for receiving deliveries during business hours.
C. Identification of the name of the Point-of-Sale system to be used and the number of Point-of-Sale locations.
D. Estimate of the number of customers to be served per hour/day.
E. Description of the proposed product line to be sold and estimate of the percentage of sales of flower and manufactured products.
F. If proposed, description of delivery service procedures, number of vehicles and product security during transportation.
G. Fully describe cash handling procedures, opening, mid-day, and closing procedures, whether cash will be stored on or offsite; security measures for storing on the premise and during transportation.
3. Describe how the business will conform to local and state laws. See RCMC Chapter 32, Article V, Division 7, RCZO Article 59 and the City Manager’s Regulations as they pertain to retail establishments in the City of Redwood City.
4. Describe how cannabis and cannabis products will be tracked and monitored to prevent diversion.
Describe the Point-of-Sale system to be used and how it will interact with the state’s mandated track and trace system.
SECTION B: LABOR, DIVERSITY, EQUITY & INCLUSION PLAN-Criteria to be scored in Phase 2 & 3
1. Describe to what extent the business will adhere to living wage and benefits standards and practices, including recognition of the collective bargaining rights of employees.
2. Identify the number of employees at initial opening and the maximum number of employees when the City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 8 business is at full capacity.
3. Describe any diversity, equity and inclusion plans and programs that will be developed as part of the business model which will create a rich and diverse work force with a diverse set of perspectives, work and life experiences and will provide equal opportunities for employee development.
4. Describe how the business will have local ownership or local preference in its hiring practices and how they plan to achieve this goal.
5. Identify all positions and their responsibilities.
6. Describe compensation to employees and opportunities for employees to participate in continuing education and training.
SECTION C: SAFETY PLAN - Criteria to be scored in Phase 2
1. Provide a detailed Safety Plan prepared by a California professional fire prevention and suppression consultant. This plan must describe all fire prevention and suppression measures, fire extinguisher locations, evacuation routes and alarm systems the facility will have in place.
2. Describe the business’ accident and incident reporting procedures.
3. Describe the business’ waste management locations and procedures.
4. Describe the business’ safety procedures and training for all fire and medical emergencies.
SECTION D: SECURITY PLAN- Criteria to be scored in Phase 2
1. Provide a security plan that was prepared by a professional security consultant. The plan should demonstrate how Applicant wishes to develop the floor plan and address other security issues on the property.
2. Premises Diagram: In addition to the site plans submitted for the response to Section F - Proposed Location, provide a Premises Diagram with the response to this Security Plan section of the application.
The diagram must meet the requirements of 16 CCR § 5006.
A. The diagram shall show the boundaries of the property and the proposed location to be licensed, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, windows, and doorways, and shall include a brief statement or description of the principal activity to be conducted therein.
B. The diagram shall show and identify commercial cannabis activities that will take place in each area of the premises and identify all limited-access areas.
C. The diagram shall show where all cameras are located and assign a number to each camera for identification purposes.
D. The diagram should be accurate, dimensioned and to-scale (minimum scale of 1/4”).
E. If the proposed location consists of only a portion of a property, the diagram must be labeled indicating which part of the property will be used for the licensed premise and what activities will be used for the remaining property.
3. Provide a description of operational security, including but not limited to general security for access/visitor control, inventory control and cash handling procedures.
4. Provide a description of perimeter security, on-site security guards, light, and parking.
5. Identify transportation techniques and security procedures.
6. Describe employee training and general security policies.
SECTION E: NEIGHBORHOOD COMPATIBILITY PLAN- Criteria to be scored in Phase 3
1. Describe how the business will proactively engage with the surrounding neighborhood and address and respond to complaints related to noise, light, odor, vehicle, and pedestrian traffic.
2. Describe how the business will be managed to avoid becoming a nuisance or having impacts on its neighbors and the surrounding community.
3. Describe odor mitigation practices, including:
City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 9 A. Identification of potential sources of odor;
B. Description of odor control devices and techniques employed to ensure that odors from cannabis are not detectable beyond the licensed premises;
C. Description of all proposed staff training, and system maintenance plans; and D. Description of the waste management plan. The plan shall include waste disposal locations, security measures, methods of rendering all waste unusable and unrecognizable, and the vendor in charge of disposal.
SECTION F: PROPOSED LOCATION - Criteria to be scored in Phase 3 In addition to the location related details submitted in other sections of the application, provide the physical address and a thorough description of the proposed location, including but not limited to the overall property, building and floor plan. Applicant must provide:
A. A description of all known nearby State and local sensitive use areas.
B. A vicinity map.
C. Photographs of the existing site and building (including the front (street facing) side of the building) and surrounding buildings. In the event the proposed location is undeveloped land, photographs shall depict the property from all vantage points of the property.
D. Evidence that the location has access to public transportation for employees or customers.
E. A Premises (Site) Diagram for the proposed location, including at a minimum: i) Location and dimensions of all buildings and structures – including square footage, ii) Location of all parking areas and driveways and means of ingress and egress to the property, iii) Uses for all buildings and structures indicated on the site plan, and iv) If any exterior alterations are proposed for the existing buildings, attach proposed site plans. The premise/site diagram should focuses on the overall property, building and floor plan. (Blueprints and engineering site plans are not required at this point of the application process). A Premise (Site) Diagram must be accurate, dimensioned and to-scale (minimum scale of ¼”). The diagram shall provide a detailed description of all available/shared parking spaces, driveway locations, and auxiliary buildings on the parcel.
F. A description of interior and exterior walls and partitions, entrances and exits, rooms, doorways, and windows, including dimensions and square footage of all interior spaces and proposed use of all interior spaces.
SECTION G: COMMUNITY BENEFITS AND INVESTMENTS PLAN- Criteria to be scored in Phase 3 Describe the benefits the business will provide to the local community to address the City Council’s priorities in the 2020 Redwood City Strategic Plan, which include Housing-Homeless, Transportation and Children/Youth programs. This can be done for example by directly aiding, participating in, or funding the work of local non-profits, community-based organizations, civic organizations, or social services organizations. Benefits may be in the form of volunteer services, monetary donations, financial support of City-sponsored activities or organizations, in-kind donations to the City or other charitable organizations and/or any other economic incentives to the City.
City of Redwood City - Application Procedures & Guidelines for Cannabis Business Permit – Storefront Retail Only 10 SECTION H: QUALIFICATIONS OF OWNERS -Criteria to be scored by City staff during Phase 3
1. Owners Experience – Provide any experience owners have in operating a retail establishment, a regulatory business, or managing employees. If owners have any experience operating a cannabis business, please provide the location of such activity and a copy of any permits, licenses, or other written forms of permission for such activity by a local or state government entity. In addition, list all college degrees, certificates, or professional licenses that owners have obtained which would demonstrate other technical knowledge that may guide them to successfully run a business organization.
2. Cannabis Industry Knowledge- Describe owners’ overall knowledge of the cannabis industry, including identification of how the industry best practices and state regulations have been incorporated in existing/prior legal businesses.
3. Ownership Team - Describe the involvement of the ownership team in the day-to-day operation of the business.
4. For purposes of this section, Evaluation Criteria Section H – Qualification of Owners - Owner shall be anyone who meets the definition of owner in RCMC § 32.158(S) or the State definition of owner set forth in 16 CCR § 5003.