City Council
Report
City Council Meeting: March 19, 2024
Agenda Item: 5.H
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Adoption of Resolution Authorizing Receipt of State of California Cannabis Equity Grant Funding for $40,000 for Preparation of a Cannabis Equity Assessment and Authorization for City Manager to Execute All Necessary Associated Documents
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Adopt the attached resolution authorizing the acceptance of a grant awarded in the amount of $40,000 from the Governor’s Office of Business and Economic Development for the Cannabis Equity Grants Program for Local Jurisdictions.
3. Authorize the City Manager to execute all necessary documents to accept the grant and all grant renewals.
4. Authorize budget changes as outlined in the Financial Impacts & Budget Actions section of this report.
Summary
In response to City Council’s direction at the June 13, 2023, adult-use cannabis study session, City Planning Division staff applied for the Cannabis Equity Grants Program for Local Jurisdictions Type 1 Grant funding from the Governor’s Office of Business and Economic Development to conduct a cannabis equity assessment for the City of Santa Monica. The grant was awarded on January 19, 2024, for the maximum amount of $40,000 to conduct the assessment. The funds will be allocated to consultant professional services after a solicitation process and minimal reimbursement for City staff project management.
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The equity assessment will help document the historical criminalization of cannabis and its disproportionate impact on specific populations in Santa Monica. The equity assessment will analyze both quantitative data including cannabis criminal arrest and demographic data along with qualitative data from surveys and community engagement to develop key findings and recommendations.
This report recommends Council’s approval of the attached resolution to authorize the acceptance of the California Cannabis Equity Type 1 Grant and to authorize the City Manager to execute all necessary documents to accept the grant.
Discussion
On June 13, 2023, the City Council held a study session to answer key policy questions regarding adult-use cannabis. Council directed staff to move forward with developing an adult-use cannabis ordinance and conducting a cannabis equity assessment to inform the development of a cannabis equity program.
Conducting the cannabis equity assessment is the first phase of developing a greater adult-use cannabis ordinance and program. On October 2, 2023, the Governor’s Office of Business and Economic Development announced the 2023-2024 fiscal year grant solicitation for the Cannabis Equity Grants Program for Local Jurisdictions. The $40,000 grant is for the exclusive purpose of conducting a cannabis equity assessment which will inform a cannabis equity program and the ordinance. The maximum allowable funding request for the equity assessment was $40,000. City Planning Division staff, in collaboration with the Diversity, Equity & Inclusion Office, submitted the grant application on December 12, 2023, and was awarded the grant on January 19, 2024, pending necessary receipt requirements. A Council-adopted Resolution is required to be submitted to the State by March 25, 2024, and the final grant agreement must be executed by the City Manager by April 1, 2024, as requirements for accepting the grant.
The equity assessment will identify populations that were disproportionately impacted by the criminalization and enforcement of cannabis in the past and how they can benefit from participation in the cannabis industry moving forward. The scope of the cannabis 3 of 6
equity assessment is expected to consist of collecting and analyzing census data, data from conviction records, community engagement including interviews with affected populations, comparative analysis with peer cities, and reporting out on findings to inform policy recommendations.
The cannabis industry has unique barriers to entry due to the lack of traditional business development support and financing available. As a result, the equity assessment will inform the level of assistance necessary to support participation in the cannabis industry. This may involve financial literacy training, business development support, workforce development, direct or indirect financial assistance, priority selection, and/or streamlined permitting processes. Without the equity assessment, it will be difficult to know how best to focus program development and the level of local government assistance necessary to open doors to the cannabis industry.
The City Planning Division will coordinate and manage the multi-department effort to conduct the cannabis equity assessment in collaboration with the City Attorney, Police Department, and Diversity, Equity & Inclusion staff in the City Manager’s Office. The City will issue a Request for Proposals (RFP) to solicit a consultant to conduct the cannabis equity assessment. The consultant will provide the City with technical assistance and associated materials and services to complete a thorough and comprehensive assessment. The equity assessment will analyze both quantitative data including cannabis criminal arrest and demographic data along with qualitative data from surveys and community engagement to develop key findings and program recommendations.
It is anticipated that upon selection of a consultant to prepare the cannabis equity assessment, the scope and budget of $40,000 grant will include the following tasks and associated expenses:
Administrative Expenses
• City Planning and other various relevant departments’ staff time to prepare the cannabis equity assessment and oversee the project team. 4 of 6
Preparation of Assessment
• Data collection, management, and analysis of historical criminal records from the Santa Monica Police Department and District Attorney’s Office for cannabisrelated offenses. • Gathering and analysis of census data including demographic statistics and proportion of the City population by race and ethnicity. • Community outreach:
o Initial Phase: Materials, organization and development, and outreach implementation.
o Subsequent Phase: Report back on findings to ensure that targeted communities are engaged in cannabis policy development and implementation.
• Public meetings/hearings:
o Consultant preparation of public presentations.
o Consultant attendance at public meetings/hearings.
Inform Cannabis Equity Program Development
• Development of models to illustrate where impacted populations exist within Santa Monica.
• Development of options to create a cannabis equity program for populations that were disproportionately impacted by the war on drugs and cannabis prohibition, specifically in the City of Santa Monica.
The anticipated schedule of activities for the equity assessment is as follows:
• March 2024: Receive grant funding/execute the grant agreement; conduct City Council Study Session on cannabis equity assessment; issue Request for Proposals (RFP) to solicit consultants to conduct cannabis equity assessment. • May 2024: Select and award consultant contract for cannabis equity assessment; research and partner with local agencies to begin outlining an assessment strategy.
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• May – December 2024: Collect and analyze historical data and findings; conduct community outreach; conduct comparative analysis of peer cities’ cannabis equity assessments/programs; receive direction from City Council and apply for Cannabis Equity Program Grant (Type 1) to develop cannabis equity program if directed by Council.
The findings of the cannabis equity assessment will inform the adult-use cannabis ordinance and potential forthcoming development of a cannabis equity program.
Additional grant funding may be applied for in the future through this grant program to assist with preparing a cannabis equity program. The amount available for request varies each year based on available State funds.
Environmental Analysis
The acceptance and use of grant funding is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The grant activities are covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The grant will allow the City Planning Division to prepare a Cannabis Equity Assessment as the first step of developing an Adult-Use Cannabis Program. Therefore, it can be seen with certainty that the grant would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Past Council Actions
Meeting Date Description
06/13/23 (Attachment A) Adult-Use Cannabis Study Session Financial Impacts and Budget Actions
Staff seeks authority to accept the State of California Cannabis Equity Grant Funding.
Staff also recommends the following budget changes to establish the awarded revenue 6 of 6
budget and appropriate the corresponding expenditure budget to the Community Development Department in the Miscellaneous Grant Fund.
FY 2023-24 Grant Budget Changes
Establish Revenue Budget Appropriate Funds
Account Number Amount Account Numbers Amount
20700002.406060 $40,000 20700002.556710 $40,000
Total $40,000 Total $40,000
If renewals or additional grant funding is awarded, budget changes will be included in subsequent year budgets, contingent on Council budget approval.
Prepared By: Tony Kim, Principal Planner
Approved Forwarded to Council
Attachments:
A. June 13, 2023 Council Meeting Adult-Use Cannabis Study Session (Web Link) B. Resolution Authorizing State of California Cannabis Equity Act Grand Funding