Susana Alcala Wood, City Attorney Jorge Oseguera, City Auditor Mindy Cuppy, City Clerk Howard Chan, City Manager John Colville, City Treasurer City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00107 January 18, 2022 Consent Item 03
Title: Grant: Department of Cannabis Control – Local Jurisdiction Assistance Grant
Location: Citywide
Recommendation: Adopt a Resolution authorizing the City Manager or the City Manager’s designee to: 1) execute any and all necessary documentation, including a standard agreement to accept the Department of Cannabis Control (DCC) – Local Jurisdiction Assistance Grant in the amount of $5,786,617; 2) establish the DCC Local Jurisdiction Assistance Grant operating grant project (G02420400); and 3) establish the revenue and expense budgets in the amount of $5,786,617 (Operating Grants, Fund 2702) in G02420400.
Contact: Davina Smith, Cannabis Manager, 916-808-4772, [email protected] ;
Christine Autio, Administrative Officer, 916-808-4773, [email protected], Office of Cannabis Management, Office of the City Manager
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution
3-Exhibit A – DCC Local Jurisdiction Assistance Grant Agreement
File ID: 2022-00107 Consent Item 03
January 18, 2022
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City of Sacramento
Description/Analysis
Issue Detail: The Department of Cannabis Control (DCC) appropriated $100 Million in grant funds to local jurisdictions to aid in transitioning high numbers of provisional cannabis licenses into annual licenses. The grant funding is intended to be used towards supporting local governments in processing substantial workloads associated with transitioning a significant number of businesses into the regulated market, creating a more streamlined local licensing process and facilitating the completion of California Environmental Quality Act (CEQA) requirements. Additional funding was available for jurisdictions with equity programs to further support equity provisional licensees’ pathways to annual licensure.
On November 15, 2021, the Office of Cannabis Management (OCM) applied for these grant funds. OCM was notified on December 24, 2021, that the City would be awarded $2,570,697 in grant program funding and an additional $3,215,919 due to having an equity program for a total award of $5,786,617. Per the grant agreement, these funds must all be utilized by June 30, 2025.
Policy Considerations: The recommendations contained in this report are consistent with Council Resolution 2021-0198 Section 11, which requires Council approval to accept grant funding, establish a grant project, and appropriate funding when the grant award is $250,000 or more, and when such action is required by a grantor.
Economic Impacts: None.
Environmental Considerations: This action is exempt from the California Environmental Quality Act (CEQA) because it is the adoption of an ordinance, rule, or regulation that requires discretionary review, including environmental review, and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity (CEQA Guidelines sections 15061(B)(1), California Business and Professions Code section 26055(h)) and because it does not have the potential for causing a significant effect on the environment (CEQA Guidelines section15061(b)(3)).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The DCC grant funds will allow the City to contract with consultants to provide direct technical assistance for applicants and licensees in the areas of cannabis regulatory compliance, planning, building, fire, security, as well as information technology (IT) database creation and maintenance, software upgrades and licenses, GIS mapping tool, and a web portal. OCM will also offer grants or rebates to assist applicants and licensees with obtaining security and other equipment for local compliance.
File ID: 2022-00107 Consent Item 03
January 18, 2022
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City of Sacramento
Financial Considerations: The grant funds will be utilized over a three-and-a-half-year grant term for consultants to provide direct technical assistance to applicants and licensees. The funding includes $1.083 million for IT database creation and maintenance, software upgrades and licenses, GIS mapping tool and web portal. There will be no impact to the General Fund.
Staff recommends establishing the DCC – Local Jurisdiction Assistance Grant operating grant project (G02420400) with a revenue and expenditure budget in the amount of $5,786,617 in the Operating Grants Fund (Fund 2702).
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO.
Adopted by the Sacramento City Council
GRANT: DEPARTMENT OF CANNABIS CONTROL
LOCAL JURISDICTION ASSISTANCE GRANT
BACKGROUND
A. Funding has been provided to the Department of Cannabis Control (DCC) to provide $100 million in grant funds to local jurisdictions to aid in transitioning high numbers of provisional cannabis licenses into annual licenses.
B. On November 15, 2021, the Office of Cannabis Management submitted an application to the DCC for the grant funds. On December 24, 2021, DCC awarded grant funds to the City in the amount of $5,786,617.
C. The City of Sacramento has determined it will utilize the DCC grant funds to provide direct technical assistance, security equipment grants/rebates, web portal and database creation and upgrading, mapping tools, and similar as approved by the DCC to assist cannabis applicants and licensees through the process of transitioning from a provisional to annual license.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Manager, or the City Manager’s designee, is authorized to execute any and all necessary documentation, including a standard agreement, to accept and utilize the Department of Cannabis Control Local Jurisdiction Assistance Grant in the amount of $5,786,617.
Section 2. The City Manager, or the City Manager’s designee, is authorized to establish the DCC Local Jurisdiction Assistance Grant operating grant project (G02420400).
Section 3. The City Manager, or the City Manager’s designee, is authorized to establish the revenue and expense budgets in the amount of $5,786,617 (Operating Grants, Fund 2702) in G02420400.
Section 5. Exhibit A is a part of this Resolution.
GRANT AGREEMENT
SIGNATURE PAGE
AGREEMENT NUMBER
- - -
1. This Agreement is entered into between the State Agency and the Recipient named below:
STATE AGENCY’S NAME
DEPARTMENT OF CANNABIS CONTROL (DCC)
RECIPIENT’S NAME
2. The Agreement Term is: through
3. The maximum amount of this Agreement is: $
4. The parties agree to comply with the terms and conditions of the following exhibits and attachments which are by this reference made a part of the Agreement:
Page(s)
Page(s)
Page(s)
Exhibit A-A1: A-Award Information and Scope of Work;
A-1 Permitting and Licensing Metrics - See Attachment 2 Exhibit B: General Terms and Conditions
Exhibit C-C1: C-Payment and Budget Provisions; C1 Budget Worksheet
Exhibit D : Special Terms and Conditions Page(s)
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.
RECIPIENT
RECIPIENT’S NAME (Organization’s Name)
BY (Authorized Signature)
DATE SIGNED
PRINTED NAME AND TITLE OF PERSON SIGNING
ADDRESS
STATE OF CALIFORNIA
AGENCY NAME
DEPARTMENT OF CANNABIS CONTROL
BY (Authorized Signature) DATE SIGNED
PRINTED NAME AND TITLE OF PERSON SIGNING
ADDRESS
DCC-2325 (12/2021)
EXHIBIT A
AWARD INFORMATION
Recipient:
Award Identification Number:
Award Date:
Amount Awarded: $
Effective Dates: through
Federal Award to State Agency is Research &
Development (Yes/No)
RECIPIENT AND PROJECT INFORMATION
1. Department of Cannabis Control (DCC) hereby awards an Agreement to the Recipient for the project described herein:
Project Title:
2.The Managers for this Agreement are:
FOR DCC: FOR RECIPIENT:
Name: Name:
Division/Branch: Organization:
Address: Address:
City/State/Zip: City/State/Zip:
Phone: Phone:
Email Address: Email Address:
FOR RECIPIENT:
3. The Grant Administrative Contacts for this Agreement are:
FOR DCC:
Name: Name:
Division/Branch: Organization:
Address: Address:
City/State/Zip: City/State/Zip:
Phone: Phone:
Email Address: Email Address:
DCC-2325 (12/2021)
FISCAL CONTACT FOR RECIPIENT
(if different from above):
Name:
Organization:
Address:
City/State/Zip:
Phone:
Email Address:
4. RECIPIENT: Please check appropriate box below:
Research and Development (R&D) means all research activities, both basic and applied, and all development activities that are performed by non- Federal entities. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other R&D activities and where such activities are not included in the instr uction function.
This award does does not support R&D.
5. For a detailed description of activities to be performed and duties, see Scope of Work and Budget.
DCC-2325 (12/2021)
X
EXHIBIT A
Scope of Work
Contract Grant
Executive Summary
The City of Sacramento (Sacramento) requests funding to assist equity and other applicants/permittees to gain and maintain annual licenses. Funding shall be used to hire consultants with expertise in planning, building, fire, security, and cannabis regulatory compliance to assist with the following activities:
• Prepare and complete CEQA Notices of Exemption;
• Ensure cannabis cultivation businesses have appropriate CDFW documentation; • Assist with Labor Peace Agreement documentation compliance; • Streamline and harmonize local permitting requirements to ensure that applicants/licensees have adequate time to transition to annual licenses;
• Assistance in navigating the local and state permitting processes; • Proactively work one-on-one with licensees/applicants to ensure they meet all requirements to timely qualify for an annual license; and
• Publicize key dates for moving from provisional to annual licenses, and send targeted outreach to individual applicants/licensees.
Funding is also sought for touchscreen tablets, software and licenses, Accela upgrades, and database creation and integration to assist in the permitting process and support licensees/permittees in timely meeting the annual license requirements by:
• Using GIS mapping to locate premises that are zoned and eligible for a CUP; • Collating information on these premises, including pending, open and expired permits, CUP square footage tabulations and tracking of submitted documents; and • Monitoring CUP, building, and operating permit submissions in real-time to respond with timely outreach, site visits, and other assistance to reduce delays and bottlenecks.
Using these technology devices and services will allow Sacramento to move applicants/licensees more quickly through the permitting process so that the deadlines for annual licensure will be met.
Finally, funding is sought to create a grant or rebate program to assist applicants/licensees in upgrading their security equipment to comply with CUP conditions and cannabis business security standards necessary for local authorization.
Application Narrative
Program Description
Provide a brief description of the current cannabis permitting process in your jurisdiction, including the following:
1. Identify the necessary requirements for a local permit for commercial cannabis activity to be issued. Describe or attach a visual of your permitting process. Clearly identify when site- specific CEQA is conducted.
The permitting process for commercial cannabis activities can be broken down into three major steps: 1) the land use entitlement process (Conditional Use Permit (CUP)) and CEQA compliance for the property; 2) the tenant improvement process to obtain a Certificate of Occupancy for the use of the premises; and 3) the Business Operating Permit (BOP) process for obtaining a business permit to operate a cannabis business at the premises.
These steps are outlined in the attached PowerPoint presentation.
The site-specific CEQA requirement is part of the land use entitlement process that occurs in step one of local permitting. However, because cannabis businesses are locating in pre- existing buildings in the manufacturing and industrial zones, the vast majority of cannabis projects are found to be categorically exempt from CEQA. Therefore, this process is satisfied through an alternate process described in the response to Question #2.
2. Describe the applicable environmental review process relevant to the cannabis permits that you allow for in your jurisdiction.
Environmental review takes place during the land use entitlement/Conditional Use Permit (CUP) process, which all cannabis businesses are required to obtain. Although each cannabis CUP project is evaluated individually, Sacramento is a built-out urban community and cannabis businesses are being located in pre-existing building in industrial and manufacturing-zoned areas. Out of the approximately 250 approved cannabis CUPs, one project for a cannabis campus constructed on bare land was approved with a negative declaration and the remaining cannabis projects were found to be categorically exempt from California Environmental Quality Act (CEQA) review.
This finding of categorical exemption from CEQA is a part of the Record of Decision (ROD) issued with the CUP approval. Applicants can obtain the signed Notice of Exemption (NOE) from the City’s Planning Division and file it with the Sacramento County Clerk and the City will transmit a copy of the NOE to the State Clearinghouse at the Office of Planning and Research.
3. Identify what requirements must be met by your permittee when providing the state with local authorization response for each of the following:
a. “In compliance”
To receive an “in compliance” status, the business must hold an annual cannabis Business Operating Permit (BOP) for the kind of cannabis activity and the premises listed on the State’s local verification email.
b. “Compliance under way”
To receive a “compliance underway” status, a valid application for a BOP must be submitted and in pending status for the activity and premises listed on the State’s local verification email
c. “Not in compliance”
A non-compliance status is provided when there is no BOP application submitted for the activity listed or the premises provided on the State’s local verification email.
Statement of Needs/Problem Statement
1. Describe the challenges in the local jurisdiction permitting process that impede the timely transition of your permittees’ license from a provisional license to an annual license.
The challenges in timely transitioning permittees to an annual license include a lack of personnel to work with the permittee one-on-one to assist them in understanding what is preventing them from obtaining an annual license, how to obtain what needs to be submitted, and assist them to submit it within the deadline to receive an annual license. An additional challenge is that several of the City divisions that play a role in approving local authorization for cannabis businesses do not have computer notepads/tablets to do inspections and upload the results from the field, and they lack linked databases to access each other’s records. To check permittee/licensee status requires a phone call/email and a staff member to find and email the requested information. Apart from being time-consuming, this prevents the ability to do real- time monitoring to immediately address issues and bottlenecks as they occur and ensure that permittees/licensees move through the necessary approvals expeditiously. Additional challenges, particularly for equity applicants, include the difficulty businesses have in locating premises that are eligible for a cannabis land use entitlement due to zoning and sensitive use restrictions, and funding security and related items necessary to receive local authorization.
2. If you have an equity program, describe any additional challenges in implementing the equity program in your local jurisdiction and/or challenges faced by equity applicants in receiving local permits and annual state licenses.
The primary challenges faced by equity applicants in receiving local permits are the absence of tools to make the process of finding a viable location for a cannabis business more accessible, the need for one-on-one assistance in navigating the state and local permitting process, and a lack of funding to pay for the necessary improvements to obtain local compliance.
Goals and Intended Outcomes
1. List the goals and intended outcomes of this funding opportunity.
Goals should explain how funding will be utilized to impact the issue areas stated in the problem statement. Outcomes should describe specific change(s) or result(s) when the goal is achieved.
At a minimum, the following should be addressed:
• How CEQA compliance will be achieved
• How obstacles will be removed from the permitting process, including opportunities to reduce time to permit issuance.
• How these goals will align with the statutory deadlines mandated for maintenance of a provisional license.
• Local coordination necessary to reach specific outcomes, if multiple departments, divisions, or offices are involved.
Goal: Provide individualized assistance for state and local regulatory compliance issues to assist licensees/applicants in timely obtaining annual state licenses.
Action Intended Outcome
Hire consultants to provide one-on-one
assistance to licensees/applicants
Knowledgeable consultants available to
timely assist licensees/applicants on an
individual basis through state annual
permitting and local compliance
requirements
Consultants will provide individualized
outreach and deadline notification to
licensees/applicants
Licensees/applicants will be aware of
what is needed to be done to obtain an
annual license and what date it must be
done by
Consultants will create NOEs based on
CUP RODs for execution and filing and
ascertain if any CDFW documentation is
outstanding
Licensees/applicants will have achieved
CEQA compliance and be eligible for an
annual license
Consultants will review local permitting
requirements and suggest areas to
streamline in order to remove obstacles
and reduce permitting timelines for staff
consideration and implementation.
Staff will be able to consider and move
forward systemic revisions to local
permitting; and applicants/licensees will
benefit from reduced local permitting
timeframes and the ability to more easily
meet annual permitting deadlines
Goal: Quickly upload and share information necessary to ascertain local compliance and provide real-time monitoring of bottlenecks and stalled applications
Action Intended Outcome
Purchase Tablet/Notepad computers
and Accela and Adobe licenses for
field/inspection staff
Enable immediate drafting and
uploads of applicant/permittee
inspections and status reports
Database creation and integration, and
Accela upgrades, which will include:
• Automated creation of CEQA
Notice of Exemption forms with
options on the rationale for
exemption
• Automated notifications of
licensees and applicants of the
deadlines for provisional
licensing
• Automated outreach to alert
applicants on the expiration of
licenses/permits, the number of
days remaining in a renewal
window, expiration of an
application or a temporary
application that has not been
submitted, payment due dates
and assessment of late fees.
• Total rebuild of the workflow
system to streamline the permit
review and approval process
• Archiving of all correspondence
and comments, creating a single
clearinghouse for all
Enable various city divisions
responsible for local compliance to
easily and quickly view
applicant/licensee status across
divisions and be notified when local
compliance progression is stalled for
any reason; assist applicants and
permittees in satisfying CEQA
requirements; and allow automatic
notification of applicants and
permittees of key dates and timelines
communications and notes on an
application
• Link Business Operating Permit
(BOP) records to a Conditional
Use Permit and/or Building
Permit file through hyperlinks or
manually creating parent-child
relationships or related records
between inter-department files
Pay for necessary software licenses for
the grant period, including
• Accela software licenses for five
consultant types to access and
add information to the database
(consultants listed on B1-B5 in
Budget). It is anticipated there
will be more than one consultant
for each consultant type
• Accela and Adobe software
licenses will be required for the
digital notepads taken into the
field by inspectors (B8 in Budget)
• Specific software licenses
needed for the mapping tool and
web portal (B7 in Budget) are still
being determined and so the
names are as yet unknown.
However, the City will need read-
only software licenses for the
County Assessor and Tax
Collector databases
Allow City staff and consultants to
utilize applicable software to meet the
Goal
Create GIS mapping tool/portal to timely
assist applicants with locating premises
that are zoned for cannabis and are not
impacted by sensitive uses. The
mapping tool/portal (B7 in Budget) will
be custom-built using different existing
databases, including Accela, GIS
mapping system, County Tax Collector
and Assessor’s data to identify sensitive
uses, zoning for various cannabis
business types, proximity to other
cannabis businesses, and related
factors to assist cannabis business
applicants in finding a viable location.
The City will also be publicizing this
tool/portal and offering to highlight
The mapping tool/portal will assist
cannabis business applicants and
licensees in more easily locating
commercial spaces where they can
open a new business and receive an
annual license rather than a
provisional one or relocate an existing
business to allow a transition from a
provisional to an annual license.
For some existing businesses, the
reason they have a provisional license
could be related to their location and
having to quickly find a new location
will allow them to qualify for an annual
license and have the least disruption
of their business
locations where the property either has
a cannabis land entitlement or the
property owner/broker has requested
that their location be highlighted
because they are open to a cannabis
business on their property. One of the
primary support components needed is
that once sensitive uses are identified
and mapped, they must be re-checked
regularly for any changes (e.g. a new
convenience store would likely qualify
as a “tobacco retailer” – a sensitive use
for some cannabis permit types, which
would change the availability for those
cannabis business to open in those
areas). Additional support components
relate to the need to keep the
highlighted “available” properties current
and remove the highlighting once the
space is secured by either a cannabis or
non-cannabis use.
Equity applicants have repeatedly
cited to the difficulty in finding
appropriate cannabis business
premises due in part to an inability to
afford consultants to assist with this
function. The mapping tool/portal will
provide an easy to use DIY solution to
this problem and allow equity
applicants to more quickly find and
secure locations, enabling them to
apply and qualify for an annual license
Create and maintain web portal, acquire
Zoom licenses and necessary datasets
Provide a “one-stop shop” to answer
questions, provide resources and
directions, and enable virtual contact
with a consultant to assist
applicants/licensees with navigating
local and state annual license
requirements
Goal: Help remove barriers to obtaining local compliance by providing financial assistance for security and mechanical equipment required for permit issuance and renewal
Action Intended Outcome
Provide grants or rebates to
applicants/licensees to obtain security and
other mechanical equipment and upgrades
required for local compliance. Security
conditions for cannabis conditional use permits
and business operating permits were
increased this year due to a rise in burgleries
and robberies at cannabis businesses. Local
operating permits will not be approved or
renewed if these new and upgrade security
equipment is not installed. In the event funds
cannot be used for rebates, we would ask that
the requested funds (B6 in Budget) be used for
grants to help business applicants and
licensees pay for the security equipment
Applicants/licensees will be issued a
local permit or a renewal of a local
permit because they have installed the
required security and mechanical
equipment. Without a local permit, the
applicant/licensee would not be able
to qualify for an annual license.
required to obtain local licensing and local
license renewal.
These security upgrades include
• Metal Latch Guards at $20-$40 dollars
each, not including installation, for all
exterior doors (see, e.g.
https://www.doorware.com/specials/help
-center/Latch-Guard-Basics.cfm)
• Hidden Shackle padlocks at $40-$70
each for secured rooms (see e.g.
https://www.grainger.com/search/securit
y/locks/keyed-padlocks-padlock-
keys/keyed-alike-padlocks/keyed-alike-
hidden-shackle-
padlocks?sst=4&ts_optout=true&search
Query=hidden+shackle+padlock&categ
oryIndex=1)
• Steel frames and doors (not including
installation) at $2400 to $4200 each for
areas of secured storage with the
addition of a metal latch guard and
hidden shackle padlock or a vault room
door and frame at $1700 to $9400 (see,
e.g.
https://www.safeandvaultstore.com/colle
ctions/vault-doors-for-panic-rooms-walk-
in-safes?page=1 and
https://www.grainger.com/category/secu
rity/door-and-door-frames/security-
doors-with-
frames?attrs=Item%7CSteel+Security+
Door+with+Frame&filters=attrs&gwwRe
moveElement=true)
• For locations, like delivery businesses,
that don’t have an entire room for
secured cash and cannabis storage,
safe(s) will substitute for secured
storage and cost between $1500 and
$3000, depending on the size and
features (see, e.g.
https://www.grainger.com/product/MES
A-SAFE-COMPANY-14-4-cu-ft-Gun-
Safe-33UJ50)
• Video monitoring and recording systems
must cover the interior of the facility and
exterior approaches. Costs vary based
upon the numbers and types of cameras
needed, and installation costs, but can
range from $2200 to $4000 for a smaller
facility (see, e.g.
https://costhack.com/surveillance-
system-installation-cost/)
• Knox boxes approved by the
Sacramento Police Department to allow
emergency access to locked premises
for police and fire are $600.
2. For those jurisdictions that have been identified as eligible to receive additional funding due to the status of the local equity program, address the following in your goal(s):
a. How this funding, particularly the dollars provided due to local equity program status will:
i. Support local equity applicants in entering the regulated cannabis industry; ii. Allow local equity applicants to receive cannabis permits and annual licenses more quickly; and
iii. Further support local and/improve equity program implementation.
This funding will assist local equity applicants in entering the regulated cannabis industry and timely receive local permits and annual state licenses by providing the tools to more quickly and easily locate premises that can be approved for a cannabis business; provide personalized assistance and information, and proactively reach out and support equity applicants who get stalled to determine what assistance is needed to assist in getting their applications progressing again. Providing a grant or rebate program for security and other expensive items needed for local compliance will also help eliminate financial barriers experienced by equity members. Local regulatory streamlining will reduce the amount of time from application to permit issuance and thereby reduce the carrying costs that equity members have to bear. The funding will further support the City’s equity program by increasing the numbers of equity businesses with annual licenses.
3. If your local jurisdiction has not adopted or is not operating a local equity program, please indicate whether the local jurisdiction is considering adopting a local equity program, including a potential timeline for this decision.
N/A
DCC-2325 (12/2021)
EXHIBIT B
GENERAL TERMS AND CONDITIONS
1. Approval
This Agreement is of no force or effect until signed by both parties. The Recipient may not invoice for activities performed prior to the commencement date or completed after the termination date of this Agreement.
2. Agreement Execution
Unless otherwise prohibited by state law, regulation, or Department or Recipient policy, the parties agree that an electronic copy of a signed Agreement, or an electronically signed Agreement, has the same force and legal effect as an Agreement executed with an original ink s ignature. The term "electronic copy of a signed Agreement" refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed Agreement in a portable document format. The term "electronically signed Agreement" means an Agreement that is executed by applying an electronic signature using technology approved by all parties.
3. Assignment
This Agreement is not assignable by the Recipient, either in whole or in part, without the prior consent of the DCC Agreement Manager or designee in the form of a formal written amendment.
4. Governing Law
This Agreement is governed by and will be interpreted in accordance with all applicable State and Federal laws.
5. State and Federal Law
It is the responsibility of the Recipient to know and understand which State, Federal, and local laws, regulations, and ordinances are applicable to this Agreement and the Project, as described in Exhibit A. The Recipient shall be responsible for observing and complying with all applicable State and Federal laws and regulations. Failure to comply may constitute a material breach.
6. Recipient Commitments
The Recipient accepts and agrees to comply with all terms, provisions, conditions and commitments of the Agreement, including all incorporated documents, and to fulfill all assurances, declarations, representations, and statements made by the Recipient in the application, documents, amendments, and communications in support of its request for funding.
7. Performance and Assurances
The Recipient agrees to faithfully and expeditiously perform or cause to be performed all Project work as described in the Scope of Work, and to apply grant funds awarded in this Agreement only to allowable Project costs.
8. Mutual Liability
Parties shall, to the extent allowed by law, each be individually liable for any and all claims, losses, causes of action, judgments, damages, and expenses to the extent directly caused by their officers, agents, or employees.
9. Unenforceable Provision
In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the parties agree that all other provisions of this Agreement shall remain operative and binding.
DCC-2325 (12/2021)
10. Contractors/Consultants
The Recipient assumes full responsibility for its obligation to pay its Contractors/Consultants. The Recipient is responsible to ensure that any/all contractors/consultants it engages to carry out activities under this Agreement shall have the proper licenses/certificates required in their respective disciplines. The Recipient’s use of contractors/consultants shall not affect the Recipient’s responsibilities under this Agreement.
11. Non-Discrimination Clause
The Recipient agrees that during the performance of this Agreement, it will not discriminate, harass, or allow harassment or discrimination against any employee or applicant for employment based on race, religious creed, color, national origin, ancestry, p hysical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. The Recipient agrees to require the same of all contractors and consultants retained to carry out the activities under this Agreement.
The Recipient agrees that during the performance of this Agreement, the evaluation and treatment of its employees and applicants for employment are free from discrimination and harassment. The Recipient will comply with the provisions of the Fair Employment and Housing Act (Government Code section 12990 et seq.) and the applicable regulations promulgated there under (California Code of Regulations, Title 2, section 7285 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code section 12990 (a- f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations, are incorporated into this Agreement by reference and made a part hereof as if set forth in full. The Recipient will give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining unit or other Agreement. The Recipient must include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under this Agreement.
The Recipient agr ees to require the same of all contractors and consultants retained to carry out activities under this Agreement.
12. Excise Tax
The State of California is exempt from federal excise taxes and no payment will be made for any taxes levied on employees' wages. The DCC will pay for any applicable State of California or local sales or use taxes on the services rendered or equipment or parts supplied pursuant to this Agreement. California may pay any applicable sales and use tax imposed by another State.
13. Disputes
The Recipient must continue with the responsibilities under this Agreement during any dispute. In the event of a dispute, the Recipient must file a "Notice of Dispute" with the DCC Agreement Manager, identified in Exhibit A, or designee within ten (10) calendar days of discovery of the problem. The Notice of Dispute must contain the Agreement number. Within ten (10) calendar days of receipt of the Notice of Dispute, the DCC Agreement Manager or designee must meet with the Recipient for the purpose of resolving the dispute. In the event of a dispute, the language contained within this Agreement prevails.
14. Te
rmination for Convenience
This Agreement may be terminated by either party upon written notice. Notice of termination must be delivered to the other party at least thirty (30) calendar days prior to the intended date of termination. Notice of termination does not nullify obligations already incurred prior to the date of termination. In the event of Termination for Convenience of this Agreem ent by DCC, DCC must pay all responsible costs and non- cancellable obligations incurred by the Recipient as of the date of termination.
DCC-2325 (12/2021)
15. Termination for Cause
Either party may terminate this Agreement for cause in the event of a material breach of this Agreement, provided that the non-breaching party provides written notice of the material breach and ten (10) calendar days to cure the breach. If the breach is not cured to the satisfaction of the non- breaching party within ten (10) calendar days of receipt of notice, this Agreement shall automatically terminate and the DCC shall reimburse the Recipient for all documented costs incurred up to the date of the notice of termination, including all non-cancellable obligations.
16. Acceptable Failure to Perform
The Recipient shall not be liable for any failure to perform as required by this Agreement, to the extent such failure to perform is caused by any of the following: labor disturbances or disputes of any kind, accidents, or the inability to obtain any required government approval to proceed, civil disorders, acts of aggression, acts of God, energy or other cons ervation measures, failure of utilities, mechanical breakdowns, materials shortages, disease, pandemics, or similar occurrences.
17. Breach
Reimbursement under this Agreement may be suspended, terminated, or both, and the Recipient may be subject to debarment if DCC determines that the Recipient has breached the terms of this Agreement. A determination of breach may be appealed in writing to the DCC. The appeal must be post marked within ten (10) calendar days of the date the Recipient received notification and addressed to the DCC Legal Affairs Division or emailed to: [email protected].
Department of Cannabis Control
Legal Affairs Division
2920 Kilgore Road
Rancho Cordova, CA 95670
18. Non-Material Breach
The Recipient may be in material breach under this Agreement if it fails to comply with any term of this Agreement. In the event of a material breach, DCC shall provide in writing a Notice of Breach to the Recipient within ten (10) calendar days upon discovery of breach. The Recipient shall have ten (10) calendar days from receipt of the notice to cure the breach. If the Recipient fails to cure the breach within the time prescribed by this Agreement, DCC may do any of the following:
A. Suspend payments;
B. Demand repayment of all funding;
C. Terminate the Agreement; or
D. Take any other action deemed necessary to recover costs.
If DCC determines that the Recipient is not in material breach but that the Project is not being implemented in accordance with the provisions of this Agreement, or that the Recipient has failed in any other respect to comply with the provisions of this Agreement, and the Recipient has failed to remedy any such failure in a reasonable and timely manner, DCC may withhold all or any portion of the grant funding and take any other action that DCC deems necessary to protect its interests.
Where a portion of the grant funding has been disbursed to the Recipient and DCC notifies the Recipient of its decision not to release funds that have been withheld pursuant to paragraph 17, the portion that has been disbursed shall thereafter be repaid immediately. DCC may consider the Recipient’s refusal to repay the requested disbursed amount a material breach.
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If DCC notifies the Recipient of its decision to withhold the entire funding amount from the R ecipient pursuant to this paragraph, this Agreement shall terminate upon receipt of such notice by the Recipient and DCC shall no longer be required to provide funds under this Agreement and the Agreement shall no longer be binding on either party.
In the event DCC finds it necessary to enforce this provision of this Agreement in the manner provided by law, the Recipient agrees to pay all enforcement costs incurred by DCC including, if DCC should prevail in a civil action, reasonable attorneys’ fees, legal expenses, and costs related to the action.
19. Publicity and Acknowledgement
The Recipient agrees that it will acknowledge DCC’s support whenever projects funded, in whole or in part, by this Agreement are publicized in any news media, brochures, publications, audiovisuals, presentations or other types of promotional material and in accordance with the SOW attached to this Agreement. The Recipients may not use the DCC logo.
20. News Releases/Public Conferences
The Recipient agrees to notify the DCC in writing at least two (2) business days before any news releases or public conferences are initiated by the Recipient or its Contractors/Consultants regarding the project described in the Attachments, Scope of Work and Budget and any project results.
21. Scope of Work and Budget Changes
Changes to the Scope of Work, Budget, or the Project term, must be requested in writing to DCC Grant Administrative Contact no less than thirty (30) days prior to the requested implementation date.
Any changes to the Scope of Work and Budget are subject to DCC approval and, at its discretion, DCC may choose to accept or deny any changes. If accepted and after negotiations are concluded, the agreed upon changes will be made and become part of this Agreement. DCC will respond in writing within ten (10) business days as to whether the proposed changes are accepted.
22. Reporting Requirements
The Recipient agrees to comply with all reporting requirements specified in Scope of Work incorporated by reference to this Agreement as an attachment.
23. California State Auditor
This A greement is subject to examination and audit by the California State Auditor for a period of three (3) years after final payment under the Agreement.
24. Equipment
Purchase of equipment not included in the approved Budget requires prior approval. The Recipient must comply with applicable state requirements regarding the use, maintenance, disposition, and reporting of equipment.
25. Closeout
The Agreement will be closed out after the completion of the Project or project term, receipt and approval of the final invoice and final report, and resolution of any performance or compliance issues.
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26. Confidential and Public Records
The Recipient and DCC understand that each party may come into possession of information and/or data which may be deemed confi dential or proprietary by the person or organization furnis hing the information or data. Such information or data may be subject to disclosure under the California Public Records Act or the Public Contract Code. D CC had the sole authority to determine w hether the information is rel easable. Each party agre es to maintain such information as confidential and notify the other party of any requests for release of information.
27. Amendments
Changes to funding amount or Agreement term require an amendment and must be requested in writing to the DCC Agreement Manager or designee no later than sixty (60) calendar days prior to the requested implementation date. Amendments are subject to DCC approval, and, at its discretion, may choose to accept or deny these changes. No amendments are possible if the Agreement is expired.
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EXHIBIT C
PAYMENT AND BUDGET PROVISIONS
1. Invoicing and Payment
A. For activities satisfactorily rendered and performed according to the attached Scope of Work and Budget, and upon receipt and approval of the invoices, DCC agrees to reimburse the Recipient for actual allowable expenditures incurred in accordance with the rates specified herein, which is attached hereto and made a part of this Agreement.
B. Invoices must include the Agreement Number, performance period, type of activities performed in accordance with this Agreement, and when applicable, a breakdown of the costs of parts and materials, labor charges, and any other relevant information required to ensure proper invoices are submitted for payment.
C. Unless stated in the Scope of Work, quarterly invoices must be submitted to the DCC Administrative Contact, within thirty (30) calendar days after the end of each quarter in which activities under this Agreement were performed.
D. Unless stated in the Scope of Work, a final invoice will be submitted for payment no more than thirty (30) calendar days following the expiration date of this Agreement, or after project is complete, whichever comes first. The final invoice must be clearly marked “Final Invoice” thus indicating that all payment obligations of the DCC under this Agreement have ceased and that no further payments are due or outstanding.
2. Allowable Expenses and Fiscal Documentation
A. The Recipient must maintain adequate documentation for expenditures of this Agreement to permit the determination of the allowability of expenditures reimbursed by DCC under this Agreement. If DCC cannot determine if expenditures are allowable under the terms of this Agreement because records are nonexistent or inadequate according to Generally Accepted Accounting Principles, DCC may disallow the expenditures.
B. If mileage is a reimbursable expense, using a privately -owned vehicle will be at the standard mileage rate established by the United States (U.S.) Internal Revenue Service (IRS) and in effect at the time of travel. The standard mileage rate in effect at the time of travel can be found on IRS’s website regardless of funding source/type.
C. If domestic travel is a reimbursable expense, receipts must be maintained to support the claimed expenditures. The maximum rates allowable for travel within California are those established by the California Department of Human Resources ( CalHR). The maximum rates allowable for domestic travel outside of California are those established by the United States General Services Administration (GSA).
If domestic travel is a reimbursable expense, receipts must be maintained to support the claimed expenditures. The maximum rates allowable are those established by the Federal Travel Regulation, issued by General Services Administration (GSA), including the maximum per diem and subsistence rates prescribed in those regulations.
D. If foreign travel is a reimbursable expense, receipts must be maintained to support the claimed expenditures. The maximum rates allowable are those established in a per diem supplement to Section 925, Department of State Standardized Regulations.
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E. The Recipient will maintain and have available, upon request by DCC, all financial records and documentation pertaining to this Agreement. These records and documentation will be kept for three (3) years after completion of the Agreement period or until final resolution of any performance/compliance review concerns or litigation claims.
3. Prompt Payment Clause
Payment will be made in accordance with, and within the time specified in, California Government Code Title 1, Division 3.6, Part 3, Chapter 4.5, commencing with Section 927 - The California Prompt Payment Act.
4. Budget Contingency Clause
If funding for any fiscal year is reduced or deleted for purposes of this program, the DCC has the option to either cancel this Agreement with no liability occurring to the DCC or offer to amend the Agreement to reflect the reduced amount.
EXHIBIT C1
Budget Worksheet
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EXHIBIT D
SPECIAL TERMS AND CONDITIONS
This California Local Jurisdiction Assistance Grant Program Agreement (“Agreement”) is by and between [local jurisdiction] (“Grantee”), and the Department of Cannabis Control (“Department”), hereinafter jointly referred to as the “Parties” or individually as the “Party.” Unless otherwise specified in this Agreement, all definitions, rules, guidelines, and requirements specified in the California Local Jurisdiction Assistance Grant Program Guidelines (Grant Guidelines) issued on [date], shall apply to this Agreement. The identification number for this Agreement is [Agreement#].
In consideration of t he mutual convents and promises i n this Agreement, the Parties agree as follows:
1. Authorit
y. This Agreement is authorized and entered into pursuant to the Budget Act of 2021, Item 1115-101-0001 – For local assistance. The Local Jurisdiction Assistance Grant Funding allows for direct assistance to local jurisdictions’ commercial cannabis programs to transition provisional licenses to annual licenses.
2. Grant T
erm. The performance period of this Agreement shall be from the specified date of the Grant Funding Expenditure Period through March 31, 2025 (“Grant Term”). Grant funds shall be expended only during the Grant Term.
3. Grant A
ward. Based on the Department’s review of the Grantee’s application and Annual Plan, which constitutes the Scope of Work for this Agreement and is incorporated herein by reference as Exhibit A, and pursuant to the Grant Guidelines, and conditioned upon the requirements set forth in this Agreement, the Department shall provide Grantee a grant award amount as specified in the Grant Award Notification for the term of this Agreement. The Grant Award and Grant funding is to be used for the purposes specified in the Grant Guidelines, and pursuant to the Scope of Work. In no event shall the Department be obligated to pay any amount in excess of the awarded amount.
Grantee waives any and all claims against the Department and the State of California for any costs that exceed the grant award amount identified in the Grant Award Notification.
4. Unused Gr
ant Funds. Any amount of grant funds provided for under this Agreement that is not expended by the end of the Grant Term, or at the termination of this Agreement, whichever is sooner, shall be returned to the Department. Grantee shall notify Department of such unused funds and Department shall provide Grantee with instructions as to how to return the funds.
5. Funding Continge
ncy Clause. The funding for this Agreement is allocated pursuant to the Local Jurisdiction Assistance Grant Funding. Grantee agrees that the Department’s obligation to pay any sum under this Agreement is contingent upon availabi lity of funds disbursed from the Local Jurisdiction Assistance Grant Funding. If there is insufficient funding, the Department shall have the option to either: 1) terminate this Agreement, whereby no party shall have any further obligations or liabilities under this Agreement, or 2) negotiate an Agreement amendment with Grantee to reduce the grant award and scope of work to be provided under this Agreement.
6. Grant Fund D
isbursement. Grant funds awarded pursuant to the Local Jurisdiction Assistance Grant Funding will be issued directly to Grantee in one disbursement, upon execution of this Agreement, and passing of a resolution or similar approving authority by the local jurisdiction.
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7. Subcontractors. No amount of the grant award may be used to subcontract any of the commitments contemplated in this Agreement to another entity or person, unless with the written approval of the Department pursuant to section 13 of this Agreement or if the subcontract work is included the Grantee’s Annual Plan and Application Budget Form that was submitted and approved by the Department.
8. Docum
entation and Reporting Requirements. Grantee must be able to demonstrate to the satisfaction of the Department that the grant funds were expended for eligible uses and consistent with the activities identified in its application, and under the Grant Program. Grantee must provide progress and annual reports as specified in the Grant Guidelines. Grantee must maintain records detailing the expenditure of all grant funds for a period of seven (7) years after the end of the Grant Term and shall provide this information to the Department upon request.
9. Audit
. Grantee agrees that the Department, the California State A uditor, or their designated representative shall have the right to review and to copy any records and supporting documentation pertaining to the performance of this Agreement. The books, accounts, files, receipts, and other records of Grantee which are applicable to this Agreement shall be made available for inspection, review, and audit immediately upon request by the Department and its representatives to verify proper use of the grant award, in accordance with the Grant Guidelines. Grantee agrees to allow the auditor(s) access to such records and to allow interviews of any employees who might reasonably have information related to such records. Further, Grantee agrees to include a similar right of the State to audit records and interview staff in any subcontract related to performance of this Agreement.
10. Eligib
le Uses. Grant funds shall be used for the purpose of assisting local applicants and local licensees in that local jurisdiction to transition from provisional licenses to annual license, and to successfully operate in, the state’s regulated cannabis marketplace and consistent with the Grant Guidelines and the Grantee’s application for Local Jurisdiction Assistance Grant Funding. As determined by the Department, upon its review, Grantee shall reimburse the Department for any ineligible or improper uses of grant funds.
11. Ter
mination of Agreement . This Agreement may be terminated by the Department upon action, or inaction by the Grantee that constitutes a material breach of this Agreement. A material breach includes, but is not limited to, refusal or inability to complete the commitments contemplated in this Agreement or the Grant Guidelines, improper expenditure of grant funds, failure to properly maintain records or allow the Department access to records as required under this Agreement or the Grant Guidelines, and failure to timely complete and submit the reports required under this Agreement or the Grant Guidelines. The Department will notify Grantee in writing if it intends to terminate the Agreement pursuant to this section and provide Grantee an opportunity to cure the breach within thirty (30) calendar days.
12. Ass
ignment. This Agreement is not assignable by Grantee, either in whole or in part, without the consent of the Department in the form of a written amendment.
13. Ame
ndment. This Agreement may be amended or modified only in writing signed by all parties.
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14. Grantee – Representations and Warranties. Grantee represents and warrants that:
a. Grantee is an eligible applicant as set forth in the Grant Guidelines; b. It is not a party to any agreement, written or oral, creating obligations that would prevent it from entering into this Agreement or satisfying the terms herein; c. All of the information in its grant application and all materials submitted to the Department are true and accurate;
d. Grantee’s governing body has authorized the Grantee to enter into this Agreement and has designated by title the individual authorized to sign the Agreement on behalf of Grantee;
15. Nondis
crimination. Grantee shall comply with all applicable federal and state laws and statutes related to nondiscrimination, including, but not limited to, race, color, national origin, gender, handicap or disability, sexual preference, drug addiction, and alcoholism.
16. Unio
n Activities. Grantee acknowledges that Government Code Section 16645.2 applies to this Agreement. Pursuant to Government Code Section 16645.2, Grantee certifies that none of the grant award will be used to assist, promote, or deter union organizing. If Grantee makes expenditures to assist, promote, or deter union organizing, it shall maintain records sufficient to show that no portion of the grant award was used for those expenditures. Grantee shall provide those records to the Attorney General upon request.
17. Medi
a Release. Grantee may elect to issue a press release related to this Agreement, but any release shall be approved by the Department in writing prior to such release. Such approval shall not be unreasonably withheld.
18. Indem
nification/Warranty and Disclaimer/Limitation of Liability. Grantee shall defend, indemnify, and hold the Department and its agents or assigns, harmless from and against all claims, damages, and liabilities (including reasonable attorneys’ fees) arising from this Agreement due to the Grantee’s breach of this Agreement, or the result of the Grantee’s negligence or willful misconduct.
Under no circumstances will the State of California, the Department, its agents, or employees, be liable to the grantee for any direct, indirect, incidental, special, or consequential damages that arise from this agreement.
19. Force
Majeure. If by reason of force majeure Grantee’s performance hereunder is delayed or prevented, then the performance by Grantee may be extended for the amount of time of such delay or prevention. The term “force majeure” shall mean any fire, flood, earthquake, or public disaster, strike, labor dispute or unrest, embargo, riot, war, insurrection or civil unrest, any act of God, any act of legally constituted authority, or any other cause beyond the Grantee’s control which would excuse Grantee’s performance as a matter of law.
20. Noti
ce of Force Majeure. Grantee agrees to provide the Department written notice of an event of force majeure under this Agreement within ten (10) days of the commencement of such event and within ten (10) days after the termination of such event, unless the force majeure prohibits Grantee from reasonably giving notice within this period. Grantee will give such notice at the earli est possible time following the event of force majeure.
21. Inte
gration. This Agreement (including the exhibits hereto and any documents explicitly incorporated by reference, and any written amendments hereof executed by the Parties) constitutes the entire Agreement between the Parties related to this grant award and supersedes all prior agreements and understandings, oral and written, between the Parties with respect to the grant
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award described herein.
22. Not
ice. Within thirty (30) calendar days of the effective date of this Agreement, Grantee shall notify the Department, in writing, of the name, address, phone number, and email of its contact person for future communication relating to this Agreement. In addition, Grantee agrees to immediately inform the Department of any changes to the name, address, phone number, and email of its contact person. Unless otherwise specified in this Agreement, any notice required or permitted to be given under this Agreement to the Department shall be emailed to [email protected].
23. Ambi
guities. Each Party has had the opportunity to seek the advice of counsel or has refused to seek the advice of counsel. Each Party and its counsel, if appropriate, have participated fully in the negotiation, drafting, review, and revision of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in interpreting this Agreement. The language in this Agreement shall be interpreted as to its fair meaning and not strictly for or against any Party.
24. Necessar
y Acts, Further Assurances. The Parties shall at their own cost and expense execute and deliver any further documents and shall take such other actions as may be reasonably required or appropriate to carry out the intent and purposes of this Agreement.
25. Sec
tions and Other Headings. The section and other headings contained in the Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
26. Repr
esentation on Authority of Parties/Signatories. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each Party represents and warrants to the other that the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder have been duly authorized, and that this Agreement is a valid and legal agreement binding on such Party and enforceable in accordance with its terms.
27. Sever
ability. If any portion of this Agreement is to any extent invalid, illegal, or incapable of being enforced, such portion shall be excluded to the extent of such invalidity, illegality, or unenforceability; all other terms hereof shall remain in full force and effect.
28. Gove
rning Law and Consent to Jurisdiction. The Agreement will be governed, construed, and enforced according to the laws of the State of California without regard to its conflict of laws rules.
Each party hereby irrevocably consents to t he exclusive jurisdiction and venue of any state court located within Sacramento County, State of California in connection with any matter arising out of this Agreement or the transactions contemplated under this Agreement.