§ 128.06 CHAPTER 127 PRIORITY CANNABIS RETAILER APPLICATION PROCEDURE.

(A) The people of the city find that:

(1) The City Council permitted the operation of numerous cannabis businesses engaged in commercial cannabis production activity under Chapter 127 of the City Municipal Code;

(2) The vast majority of the cannabis businesses permitted under Chapter 127 of the City Municipal Code have failed to successfully commence commercial cannabis production activity and comply with the requirements of the development agreement they entered into with the city under Chapter 127 of the City Municipal Code;

(3) However, certain cannabis businesses permitted under Chapter 127 of the City Municipal Code have successfully commenced commercial cannabis production activity and substantially complied with the requirements of the development agreement they entered into with the city under Chapter 127 of the City Municipal Code;

(4) Providing the owners of cannabis businesses permitted under Chapter 127 of the City Municipal Code that have successfully commenced commercial cannabis production activity and substantially complied with the requirements of the development agreement they entered into with the city under Chapter 127 of the Municipal Code priority in the issuance of retail cannabis business permits under this chapter carries out the purpose and intent of the Measure;

(5) Because of its history as an illegal industry, unfair and substandard labor practices proliferate throughout the cannabis industry;

(6) A proven track-record of cannabis business operations with high labor standards and commitment to labor peace carries out the purpose and intent of the Measure; and

(7) Providing the owners of licensed cannabis businesses with a proven track- record of cannabis business operations with high labor standards and commitment to labor peace, as demonstrated by an active, long-term collective bargaining agreement with a labor organization that currently represents cannabis workers in the United States, priority in the issuance of retail cannabis business permits under this chapter carries out the purpose and intent of the Measure.

(B) Within 30 days following the effective date of this chapter, the Chief Executive Officer, pursuant to § 128.21, shall, as a ministerial duty, make available the necessary forms, adopt any necessary application rules for the submission, intake, review, and approval of retail cannabis business permit applications for cannabis retailers meeting the following criteria:

(1) An owner or owners of the applicant with an aggregate ownership interest of 50% or more are or were an owner or owners on or prior to July 1, 2021, with an aggregate ownership interest of 50% or more of a cannabis business (and remains an owner or owners with an aggregate ownership interest of 50% or more on the date of the application submission under this section) in the city that entered into a development agreement approved pursuant to Chapter 127 of the City Municipal Code prior to January 1, 2018;

or owners on or prior to July 1, 2021, with an aggregate ownership interest of 50% or more of a cannabis business (and remains an owner or owners with an aggregate ownership interest of 50% or more on the date of the application submission under this section) in the city that entered into a development agreement approved pursuant to Chapter 127 of the City Municipal Code prior to January 1, 2018;

(2) The cannabis retailer will be located on the property that is referenced in the development agreement entered into and approved pursuant to Chapter 127 of the City Municipal Code prior to January 1, 2018, referenced above in division (B)(1);

(3) The cannabis retailer will be located on a property that is or was covered by (whole or in part) a state license to conduct one or more forms of commercial cannabis production activity issued by a licensing authority prior to January 1, 2019;

(4) The cannabis retailer will be located on a property that is or was covered by (whole or in part) a certificate of occupancy to conduct one or more forms of commercial cannabis production activity issued by the City’s Building & Safety Division prior to January 1, 2021;

(5) An owner or owners of the applicant with an aggregate ownership interest of 50% or more are or were an owner or owners on or prior to July 1, 2021, with an aggregate ownership interest of 50% or more of a cannabis business (and remains an owner or owners with an aggregate ownership interest of 50% or more on the date of the application submission under this section) in the city that paid at least one calendar quarter of mitigation fees due under a development agreement approved pursuant to Chapter 127 of the City Municipal Code following issuance of a certificate of occupancy to conduct one or more forms of commercial cannabis production activity to the cannabis business; and

(6) The individual or natural person owner or owners of the applicant (disregarding any intervening or intermediary entity owner or owners of the applicant) with an aggregate ownership interest of 100% have entered into a collective bargaining agreement with a labor organization that currently represents cannabis workers in the United States effective since at least July 1, 2021, inclusive of renewals (and remaining effective, inclusive of renewals, on the date of the application submission under this section) or an owner or owners of the applicant with an aggregate ownership interest of 100% are an owner or owners on or prior to July 1, 2021, with an aggregate ownership interest of 50% or more of a cannabis business (and remains an owner or owners with an aggregate ownership interest of 50% or more on the date of the application submission under this section) that entered into a collective bargaining agreement with a labor organization that currently represents cannabis workers in the United States effective since at

least July 1, 2021, inclusive of renewals (and remaining effective, inclusive of renewals, on the date of the application submission under this section).

(C) Within 30 days of receipt of a retail cannabis business permit application for a cannabis retailer submitted under division (B) of this section, the Chief Executive Officer shall, as a ministerial duty, review the retailer application for the following minimum requirements:

(1) Payment of an application fee established by resolution of the City Council within 30 days following the effective date of this chapter to cover all costs incurred by the city in the application process under this section; (2) Sufficient evidence of the legal right to use the proposed property for the proposed use, to include a lease, sublease, purchase agreement, assignment of purchase agreement, or lease or purchase option, in the name of the applicant, which may include nominal consideration and be contingent upon issuance of a retail cannabis business permit or other approvals. The city shall only consider one applicant per County Assessor’s Identification Number. In the event that more than one applicant applies for a retail cannabis business permit application at a given property address or a given County Assessor’s Identification Number, the Chief Executive Officer shall, as a ministerial duty, only accept the retail cannabis business permit application with the earliest dated evidence of the legal right to use the proposed property for the proposed use in the name of the applicant;

(3) Sufficient evidence to demonstrate that an owner or owners of the applicant with an aggregate ownership interest of 50% or more are or were an owner or owners on or prior to July 1, 2021, with an aggregate ownership interest of 50% or more of a cannabis business (and remains an owner or owners with an aggregate ownership interest of 50% or more on the date of the application submission under this section) in the city that entered into a development agreement approved pursuant to Chapter 127 of the City Municipal Code prior to January 1, 2018;

(4) Sufficient evidence to demonstrate that the cannabis retailer will be located on the property that is referenced in the development agreement entered into and approved pursuant to Chapter 127 of the City Municipal Code prior to January 1, 2018, referenced above in division (C)(3) of this section;

(5) Sufficient evidence to demonstrate that the cannabis retailer will be located on a property that is or was covered by (whole or in part) a state license to conduct one or more forms of commercial cannabis production activity issued by a licensing authority prior to January 1, 2019;

(6) Sufficient evidence to demonstrate that the cannabis retailer will be located on a property that is or was covered by (whole or in part) a certificate of occupancy to conduct one or more forms of commercial cannabis production activity issued by the City’s Building & Safety Division prior to January 1, 2021;

(7) Sufficient evidence to demonstrate that an owner or owners of the applicant with an aggregate ownership interest of 50% or more are or were an owner or owners on or prior to July 1, 2021, with an aggregate ownership interest of 50% or more of a cannabis business (and remains an owner or owners with an aggregate ownership interest of 50% or more on the date of the application submission under this section) in the city that paid at least one calendar quarter of mitigation fees due under a development agreement approved pursuant to Chapter 127 of the City Municipal Code following issuance of a certificate of occupancy to conduct one or more forms of commercial cannabis production activity to the cannabis business;

(8) Sufficient evidence to demonstrate that (1) the individual or natural person owner or owners of the applicant (disregarding any intervening or intermediary entity owner or owners of the applicant) with an aggregate ownership interest of 100% have entered into a collective bargaining agreement with a labor organization that currently represents cannabis workers in the United States effective since at least July 1, 2021, inclusive of renewals (and remaining effective, inclusive of renewals, on the date of the application submission under this section) or (2) an owner or owners of the applicant with an aggregate ownership interest of 100% are an owner or owners on or prior to July 1, 2021, with an aggregate ownership interest of 50% or more of a cannabis business (and remains an owner or owners with an aggregate ownership interest of 50% or more on the date of the application submission under this

section) that entered into a collective bargaining agreement with a labor organization that currently represents cannabis workers in the United States effective since at least July 1, 2021, inclusive of renewals (and remaining effective, inclusive of renewals, on the date of the application submission under this section);

(9) A premises diagram meeting the requirements of § 15006 of Division 19 of Title 4 of the State Code of Regulations; and

(10) A completed background check application and receipt for each owner and manager of the applicant pursuant to § 128.18(L).

(D) The Chief Executive Officer shall, as a ministerial duty, reject any retail cannabis business permit application that fails to meet the minimum requirements contained in division (C) of this section. However, prior to such rejection, the Chief Executive Officer shall, as a ministerial duty, provide a detailed and comprehensive deficiency notice to the applicant providing the applicant 30 days to cure and/or resubmit application components in order to meet the minimum requirements contained in division (C) of this section.

(E) The Chief Executive Officer shall, as a ministerial duty, cease acceptance of retail cannabis business permit applications for retailers pursuant to this section 60 days after making available the necessary forms and adopting any necessary application rules for the submission, intake, review, and approval of retail cannabis business permit applications for retailers pursuant to this section.

E) The Chief Executive Officer shall, as a ministerial duty, cease acceptance of retail cannabis business permit applications for retailers pursuant to this section 60 days after making available the necessary forms and adopting any necessary application rules for the submission, intake, review, and approval of retail cannabis business permit applications for retailers pursuant to this section.

(F) Upon timely receipt of a retail cannabis business permit application, the Chief Executive Officer shall direct the Chief of Police to conduct background checks in accordance with § 128.18(L). Upon the completion of an applicant’s background checks by the Chief of Police in accordance with § 128.18(L), the Chief Executive Officer shall, as a ministerial duty, issue retail cannabis business permits to applicants with complete applications under division (C) of this section. However, the Chief Executive Officer shall not issue a retail cannabis business permit to any applicant with an owner or manager that:

(1) Provided false or misleading information on the applicant’s retail cannabis business permit application; (2) Has been convicted of (or pled no contest to) “an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made” as that term is defined in § 26057(b)(4) of the State Business & Professions Code; or

(3) Has been sanctioned by a licensing authority or a city, county, or state for unlicensed commercial cannabis activities or has had a license suspended or revoked under MAUCRSA in the three years immediately preceding the date the application was submitted.

(G) Any decision of the Chief Executive Officer or City Council under this section shall be a final administrative decision not subject to administrative appeal under any provisions of this chapter or any provisions of the City Municipal Code but, rather, subject to judicial review and remedies. (Ord. 1501, passed 4-5-23)