Santa Ana Municipal Code § 40-3 Compliance with state and local licensing requirements

A. The purpose and intent of this article is to regulate commercial cannabis business activities, as defined in this article, in order to ensure the health, safety and welfare of the residents of the City of Santa Ana by establishing regulations necessary for commercial cannabis business operating in the City of Santa Ana to obtain and maintain a Regulatory Safety Permit ("RSP"). Any commercial cannabis businesses operating in the City of Santa Ana shall at all times be in compliance with current State Law and this article. All commercial cannabis facilities shall operate in accordance with the regulations in this article and with the conditions of approval associated with the applicable zone for the parcel of real property upon which the commercial cannabis activities are conducted. Any commercial cannabis business shall qualify for and receive a Regulatory Safety Permit from the City of Santa Ana as provided by this article and operate only in a zone in compliance with Santa Ana Municipal Code before commencing with any commercial cannabis business activity. Any commercial cannabis business without a Regulatory Safety Permit is in violation of this article. The regulations in this article, in compliance with the Compassionate Use Act, the Medicinal Marijuana Program Act, SB 94, AB 133, Proposition 64, and the California Health and Safety Code (collectively referred to as "State Law") do not interfere with the right to use adult-use cannabis or medicinal cannabis as authorized under State Law, nor do they criminalize the possession of cannabis as authorized under State Law.

B. Any person operating a medicinal marijuana collective/cooperative (as defined in Article II of this Chapter) as of December 14, 2017, or who has a RSP application pending to operate a medicinal collective/cooperative, and has met all of the requirements of Article II, shall be allowed to apply for a Regulatory Safety Permit for the sale of Adult-Use cannabis.

C. Community Benefits, Sustainable Business Practices, and Social Equity Plan Required.

1. Effective January 1, 2024, all commercial cannabis businesses operating in the City shall be required to provide community benefits through a Community Benefits, Sustainable Business Practices, and Social Equity Plan ("Plan") that promotes health and sustainability of the community in a format acceptable by the Executive Director of the Planning and Building Agency or his or her designee as reviewed and verified from time to time as a component of issuance of a regulatory safety permit (RSP). By January 1, 2025, all such Plans shall contain provisions for social equity obligations, as per the approved format established by the City.

2. The Plan shall document each of the business's commitment to local hiring, local sourcing, community engagement and contributions, sustainable business practices, and consideration of social equity goals through paying prevailing wages, hiring from disadvantaged communities, supporting local nonprofit organizations (NPOs), and job and skills training. The Plan shall quantify the value of each commitment therein.

3. Documentation of fulfillment of the aforementioned Plan shall be submitted to the Code Enforcement Division on an annual basis, including as part of a renewal application for an RSP during the annual renewal process. Said documentation shall detail said business's satisfaction of its commitments and shall be evaluated for satisfaction by the Executive Director of the Planning and Building Agency or his or her designee. Failure to provide the requested documentation shall result in a suspension or revocation of an RSP, delay or denial of an RSP renewal application, as applicable.

4. The Planning and Building Agency may enforce these provisions pursuant to Section 40-12 of this Chapter, including issuance of warnings, citations, and fines as authorized by the Santa Ana Municipal Code, and suspension and revocation, to enforce the commitments in each Plan.

5. Commercial cannabis retailers exempt. The Community Benefits, Sustainable Business Practices, and Social Equity Plan requirements of Section 40-1(C) shall not apply to those commercial cannabis retailers in compliance with Section 40-16 of this Chapter.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-2973, § 7, 9-3-19; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

The definitions are incorporated herein as fully set forth and are applicable to this article. All definitions are intended to comply with those set forth by the State of California for all commercial cannabis business activities.

1. "Applicant" means a person who is required to file an application for a permit under this article, including an individual owner, managing partner, officer of a corporation, or any other operator, manager, employee, or agent of a commercial cannabis business.

2. "Adult-Use" means cannabis or cannabis products that are intended to be used for non-medicinal purposes by a person twenty-one (21) years of age or older.

3. "Adult-Use Cannabis Retailer Operating Agreement" or "Operating Agreement" means the agreement entered into by and between the City and the commercial cannabis business operator which will specify terms for local hiring and sourcing, community benefit plans, and fees to compensate for authorized impacts on City services.

4. "Adult-Use cannabis retail business" means an Adult-Use retail business that obtains a Regulatory Safety Permit and engages in the delivery or sale of Adult-Use cannabis, or an Adult-Use cannabis product, except as related Business and Professions Code Section 19319, or Health and Safety Code Sections 11362.1 through 11362.45, as amended from time to time, excepting medicinal cannabis retail.

5. "Authorized City of Santa Ana representative" means any police officer, city employee, contractor or agent of the city designated by the director of any city department which has the authority and responsibility to enforce provisions as set forth in this article.

6. "Business owner" means any of the following:

a) A person with an aggregate ownership interest of twenty (20) percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance.

b) The chief executive officer of a nonprofit or other entity.

c) A member of the board of directors of a nonprofit.

d) An individual who will be participating in the direction, control, or management of the person applying for a license.

7. "Cannabis" or "cannabis product" means all parts of the Cannabis sativa Linnaeus, Cannabis Indica, or Cannabis Ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from marijuana. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this chapter, "cannabis" does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.

8. "City" means the City of Santa Ana, a charter city and municipal corporation.

9. "Commercial cannabis activity" means the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products as provided for this Chapter. Permitted commercial cannabis activities are listed in Land Use Table 40-5 of this Chapter and are allowed in the Commercial Cannabis Eligible Areas Map as adopted and modified from time to time by resolution of the City Council.

10. "Commercial cannabis business" means a business that obtains a Regulatory Safety Permit and engages in the cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, distribution, delivery, or sale of adult-use cannabis, medicinal cannabis or an adult-use cannabis or medicinal cannabis product, except as related Business and Professions Code Section 19319, or Health and Safety Code Sections 11362.1 through 11362.45, as amended from time to time.

11. "Cultivation" means to plant, grow, harvest, dry, cure, grade or trim cannabis, as defined by California Business and Professional Code Section 26001, as amended from time to time.

12. "Customer" means a natural person twenty-one (21) years of age or over.

13. "Delivery" means the commercial transfer of cannabis or cannabis products from a retail cannabis business to a customer up to an amount determined to be authorized by the State of California, or any of its departments or divisions. "Delivery" also includes the use by a retail cannabis business of any technology platform owned, controlled, and/or licensed by the retail cannabis business, or independently licensed by the State of California under the State law (as amended from time to time), that enables anyone to arrange for or facilitate the commercial transfer by a licensed retail cannabis business of cannabis or cannabis products. For the purposes of this article, "delivery" does not include distribution or purchase of cannabis from a licensed cultivator, and cannabis products from a licensed manufacturer, for sale to a licensed cannabis retail business.

14. "Delivery employee" means an individual employed by a licensed retail cannabis business who delivers cannabis goods from the permitted retail premises to a customer at a physical address.

15. "Display" means cannabis goods that are stored in the licensed retail business during the hours of operation.

16. "Distribution" means the procurement, sale, and transport of cannabis or cannabis products between Licensees.

17. "Edible cannabis product" means manufactured cannabis that is intended to be used, in whole or in part, for consumption. An edible cannabis product is not considered food as defined by Section 109935 of the California Health and Safety Code or a drug as defined by Section 109925 of the California Health and Safety Code.

18. "Free sample" means any amount of commercial cannabis goods provided to a purchaser of cannabis without cost or payment or exchange of any other thing of value.

19. "Labor Peace Agreement" means a legally binding agreement between an employer and a bona fide labor organization in which the employer agrees to remain neutral in the event its employees wish to unionize, as described more fully in Business and Professions Code 26001(z), as amended from time to time. For the purposes of this Chapter, a "Bona Fide Labor Organization" means any organization or any agency or employee representation committee or any local unit thereof in which employees participate, and exists for the purpose, in whole or in part, of working with employers concerning grievances, labor disputes, wages, hours of employment or conditions of work, which labor organization is not found to be or to have been financed in whole or in part, interfered with, dominated or controlled by the employer or any employer association.

20. "License/Licensee" means a license issued by the State and includes both an A-license (Adult-Use) and an M-license (Medicinal), and the holder of such license.

21. "Manufacturer" means a Licensee that conducts the production, preparation, propagation, or compounding of cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container.

22. "Manufacturing" means all aspects of the extraction and/or infusion processes, including processing, preparing, holding, storing, packaging, or labeling of cannabis products. Manufacturing also includes any processing, preparing, propagating, holding, or storing of components and ingredients.

22.5.

"Shared Manufacturing" means manufacturers who work in a shared-use facility. Shared-use facilities are places where multiple shared manufacturers engaging in cannabis extraction using butter or cooking oils, infusion, and/or packaging and labeling rotate on a schedule and share space and equipment. All or part of manufacturing premises may be registered as a shared-use facility.

23

"Medicinal cannabis patient" is a person whose physician has recommended the use of cannabis to treat a serious illness, including cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which cannabis provides relief.

24. "Microbusiness" means a commercial cannabis business that cultivates cannabis on an area less than ten thousand (10,000) square feet and acts as a licensed distributor, Level 1 manufacturer, and retailer.

25. "Nursery" means a commercial cannabis Licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis.

26. "Medicinal/medical cannabis" or "Medicinal cannabis product," means cannabis or a product containing cannabis, including, but not limited to, concentrates, and extractions, intended to be sold for use by medicinal cannabis patients in California pursuant to the Compassionate Use Act of 1996, found at Section 11362.5 of the California Health and Safety Code. Medicinal cannabis retail is regulated by this Chapter 18 and Chapter 21 of the Santa Ana Municipal Code.

27. "Outdoor cultivation" means the cultivation of cannabis outside a permanent enclosed building. Outdoor cultivation is prohibited within the City of Santa Ana.

28. "Ownership interest" means an interest held by a person who is an owner as defined by State of California commercial cannabis regulations or who has a financial interest in the commercial cannabis business of twenty (20) percent or more.

29. "Package" and "Packaging" means any container or wrapper that may be used for enclosing or containing any cannabis goods for final retail sale. "Package" and "packaging" does not include a shipping container or outer wrapping used solely for the transport of cannabis goods in bulk quantity to a Licensee.

30. "Person" includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.

31. "Premises" means the designated structure(s) and land specified in the application that are in possession of and used by the applicant or Licensee to conduct the commercial cannabis activity.

32. "Primary Caregiver" has the same meaning as that term is defined in Section 11362.7 of the Health and Safety Code, as amended from time to time.

33. "Private Residence" shall have the same definition as that contained in Health and Safety Code section 11362.2(5) and also means a lawfully established structure, suitable for human occupancy as required by section 17922 and 17958 of the California Health and Safety Code. A recreational vehicle does not constitute a lawfully established structure for the purposes of this article.

34. "Private security officer" has the same meaning as that term as defined in the State of California Business and Professions Code section 7574.01.

35. "Purchase" means obtaining cannabis goods in exchange for consideration.

36. "Purchaser" means a person who is engaged in a transaction with a Licensee for purposes of obtaining cannabis goods.

37. "Qualified patient" has the same meaning as such term is defined in California Health and Safety Code section 11362.5, as amended from time to time, and means a person whose physician has recommended the use of cannabis to treat a serious illness, including cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which cannabis provides relief.

38. "Responsible person" means any of the following:

a) A person who causes a Code violation to occur.

b) A person who maintains or allows a Code violation to continue by way of his or her action or failure to act.

c) A person whose agent, employee, or independent contractor causes a Code violation by its failure to act.

d) A person who is the owner of, and/or a person who is a lessee or sub lessee with the current right of possession of, real property where property-related Code violation occurs.

e) A person who is the on-site manager of a business who normally works daily at the site when the business is open and is responsible for the activities of such premises.

39. "Retail business" means a premises where cannabis, cannabis products, or devices for the use of cannabis or cannabis products are offered, either individually or in any combination for retail sale, including an establishment that delivers cannabis or cannabis products as part of a retail sale.

39.1.

For the purposes of this Chapter, "Consumption lounge" means a facility for the onsite retail sale and consumption or smoking of cannabis or cannabis products that is a licensed premises that is a physical location from which commercial cannabis activities are conducted, as defined by Business and Professions Code Section 26070 as amended from time to time. For the purposes of this definition, "consumption" and "smoking" shall also include inhalation, vaping, and/or ingestion.

39.2.

For the purposes of this Chapter, "Temporary Consumption Event" shall mean an event organized by a commercial cannabis retail business where people can sell and consume cannabis subject to full compliance with local, County, and State licensing requirements.

39.3.

For the purposes of this Chapter, "Temporary Consumption Festival" shall mean a large-scale event organized and held by the City of Santa Ana where people can sell and consume cannabis subject to full compliance with local, County, and State licensing requirements.

39.4.

For the purposes of this Chapter, "Commercial Cannabis Adult-Use Retail Business" shall mean a retail business operation which engages in the sale of commercial adult-use cannabis pursuant to a State issued A-license, and that does not engage in the sale of medicinal cannabis.

39.5.

For the purposes of this Chapter, "Commercial Cannabis Medicinal Retail Business" shall mean a retail business operation which engages in the sale of medicinal cannabis pursuant to a State issued M-license (Medicinal), and that does not engage in the sale of commercial adult-use cannabis.

40. "Regulatory Safety Permit (RSP)" means a permit issued by the City pursuant to this article to a commercial cannabis business.

41. "Sell," "sale," and "to sell" include any transaction whereby, for any consideration, title to cannabis is transferred from one (1) person to another, and includes the delivery of cannabis goods pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of cannabis goods by a Licensee to the Licensee from whom such cannabis goods were purchased.

42. "State" means the State of California.

43. "Testing Facility" or "Testing Laboratory" defined in the Business and Professions Code section 26001, as amended from time to time, means a laboratory, facility, or entity in the State that offers or performs tests of cannabis or cannabis products and that is both of the following:

a) Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the State; and,

b) Licensed by the Bureau of Cannabis Control.

44. "Wholesale" means the sale of cannabis goods to a distributor for resale to one (1) or more retail cannabis businesses.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-2973, § 8, 9-3-19; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

A. Any commercial cannabis business as defined by the State of California and the City of Santa Ana shall operate in conformance with all regulations and standards set forth in this article to assure that the operations of any commercial cannabis business as defined by the State of California and allowed by the City of Santa Ana are in compliance with local and State law and are established to mitigate any adverse secondary effects from its operations.

B. Commercial cannabis businesses shall be required to obtain a Regulatory Safety Permit (RSP) from the City of Santa Ana and a State license, and shall comply with any applicable State licensing requirements, such as operational standards and locational criteria.

C. Co-location of commercial cannabis businesses proposed on any one (1) site shall occur only if authorized by the State and the City of Santa Ana and only if allowed pursuant to the City's Zoning Code. Any commercial cannabis activity not specifically permitted by this article is prohibited.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

A. In no case shall the maximum number of regulatory safety permits for commercial cannabis retail businesses be less than thirty (30).

B. All commercial cannabis retail businesses may sell medicinal and adult-use cannabis.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

Commercial cannabis activities are expressly prohibited in all zones in the City of Santa Ana; however, specific commercial cannabis businesses are permitted in the Light Industrial (M1), Heavy Industrial (M2), and select Specific Development and Professional zoning districts of an industrial nature in areas as specified on the Commercial Cannabis Eligible Areas Map as adopted by resolution of the City Council. The allowed current permit types are described in Table 40-5 and the City of Santa Ana's zoning ordinance as a requisite for obtaining a Regulatory Safety Permit. No commercial cannabis business may operate in the City of Santa Ana without a Regulatory Safety Permit.

This Land Use Table 40-5 shall be used to determine whether a commercial cannabis business is permitted — "P," or not permitted — "X." Any commercial cannabis business in the City of Santa Ana shall also operate in compliance with the City's zoning ordinance. If a Zoning District is not listed in the Land Use Table in this section, then the use is expressly not permitted.

City of Santa Ana Municipal Code Table 40-5

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-2973, § 9, 9-3-19; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

A. Commercial cannabis businesses may only operate within an area in accordance with the Commercial Cannabis Eligible Areas Map as adopted by resolution of the City Council.

B. No commercial cannabis retail business shall be located within five hundred (500) feet of another retail cannabis business, as measured from primary entrance of the business to primary entrance of the other business.

C. No commercial cannabis business shall be located within one thousand (1,000) feet of any:

1. School (K-12) as defined by Section 11362.768 of the Health and Safety Code, as indicated by the Commercial Cannabis Eligible Areas Map; or

2. Park, as indicated by the Commercial Cannabis Eligible Areas Map; or

3. Residential zoning district, as indicated by the Commercial Cannabis Eligible Areas Map.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

(a) Relocation of an existing medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business as defined in this Chapter is permitted within the City of Santa Ana subject to the following:

(1) The medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business must hold a valid RSP, business license, and the appropriate State commercial cannabis license, and be operating with all required permits and licenses. For the purposes of this sub-section, "operating" means a medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business currently holding a valid RSP and Santa Ana business license.

(2) The existing RSP holder and existing location must be in good standing, including, but not limited to, full compliance with all requirements of the Santa Ana Municipal Code, no active code enforcement and/or building safety violations, no violations of regulations imposed by the State of California and County of Orange, and have no outstanding business license fees and taxes, except those subject to and performing under a Finance and Management Services Agency approved payment plan agreement.

(3) An application to relocate to a proposed new location may be filed after October 1, 2023.

(4) The proposed new location of the medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business is in full compliance with the zoning and separation requirements for commercial cannabis retail businesses as outlined in Sections 40-5 and 40-6 of the Santa Ana Municipal Code.

(5) The proposed new location of the medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business must comply with separation requirements of this Chapter except that the proposed new location must also satisfy said separation requirements from any location identified on the Qualified Registration Applicant List ("Waitlist"), as defined in Section 40-104 of this chapter and from any entity selected during the City's evaluative process in 2018.

(b) Any operating medical marijuana collective, medical marijuana cooperative, and/or adult-use cannabis retail business wishing to relocate shall be required to concurrently: (1) File an application for an RSP by and (2) Submit all required construction plans for plan check by the City, subject to the requirements of this Chapter and other applicable chapters of the Santa Ana Municipal Code, and operate within 180 days of construction permit issuance. An extension may be issued for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the Director of Planning and Building or his or her designee.

(c) Upon issuance of the RSP for the new location, the previous location's RSP and certificate of occupancy immediately becomes null and void and the location must cease to operate.

(d) Within sixty (60) days of issuance of the RSP for the new location, the applicant must provide the City documentation demonstrating that any State-issued commercial cannabis retailer license associated with the previous location has been cancelled, rescinded, or updated to reflect the new location.

(Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

Editor's note— Ord. No. NS-3026, § 6, adopted October 4, 2022, in effect, repealed § 40-7. Former § 40-7 pertained to separation requirements for non-retail (cultivation, manufacturing, testing laboratory, and distribution, and testing facility/laboratory) selection process and derived from Ord. No. NS-2929, § 4, adopted November 21, 2017; Ord. No. NS-2941, § 6, adopted March 20, 2018; Ord. No. NS-2942, § 3, adopted April 3, 2018; and Ord. No. NS-2944, § 5, adopted May 1, 2018.

1. Regulatory Safety Permit Required.

a. Each commercial cannabis business shall obtain a Regulatory Safety Permit (RSP) specific to the business activity or activities defined by the State pertaining to that activity. The only allowed current activity types pursuant to this article are for commercial cannabis retail sales and cultivation, distribution, manufacturing, and testing laboratories/facilities. Co-location is permitted pursuant to Section 40-9.3.1.

b. It shall be unlawful for any person, as defined by this chapter, to engage in, conduct or carry on, in or upon any premises within the City of Santa Ana any commercial cannabis business without a RSP. A commercial cannabis business shall register and obtain a RSP from the City of Santa Ana prior to operation. The RSP applicant shall pay an annual non-refundable application fee in an amount established by the City Council.

c. A copy of the RSP shall be displayed at all times in a place visible to the public.

d. A RSP shall be valid for a period of one (1) year from the date of issuance, unless sooner revoked. No permit granted herein shall confer any vested right to any person or business for more than the above-referenced period.

2. Maintenance of Records and Reporting. All records shall be maintained by the commercial cannabis business for a period of five (5) years and shall be made available by the commercial cannabis business to an authorized City of Santa Ana representative upon request. If they are not produced as requested, the City may seek a search warrant, subpoena, or court order. In addition to all other formats that the commercial cannabis business may maintain, these records shall be stored by the business at the location in a printed format in a fireproof safe or filing cabinet. Any loss, damage or destruction of the records shall be reported to the Police Department within twenty-four (24) hours of the loss, destruction or damage.

a. The business shall obtain and maintain a valid Seller's Permit from the California Department of Tax and Fee Administration (CDTFA).

b. Financial records include, but are not limited to: bank statements, sales invoices, receipts, tax records, and all records required by the CDTFA under Title 18 California Code of Regulations section 1968.

c. Personnel records, including each employee's full name, address, phone number, social security, or individual tax payer identification number, date of beginning employment, and date of termination of employment if applicable.

d. Training records, including, but not limited to, the content of the training provided and the names of the employees that received the training.

e. Contracts with other businesses regarding commercial cannabis business activity.

f. Permits, licenses, and other local authorizations to conduct the commercial cannabis business activity.

g. Security records, as outlined in the Operational Standards for All Commercial Cannabis Business Activities.

h. Proof of building ownership or landlord letter acknowledging business type.

i. Proof of insurance.

3. Operational Standards for All Commercial Cannabis Business Activities.

a. The location, interior and exterior, shall be monitored at all times by web-based closed circuit television for security purposes. The camera and recording system must be of adequate quality, color rendition and resolution to allow the ready identification of any individual committing a crime anywhere on or adjacent to the location. The recordings shall be maintained unaltered in a secure location for a period of not less than ninety (90) days. The Police Department may request the recordings in connection with an investigation.

b. All controlled access areas, security rooms and all points of ingress/egress to limited access areas and all point of sale (POS) areas shall have fixed camera coverage capable of identifying activity occurring within a minimum of twenty (20) feet.

c. The surveillance system storage device or cameras shall be transmission control protocol/TCP capable of being accessed through the internet by the police department or their designee on request.

d. If applicable, the applicant shall conduct and pay for any required CEQA reviews and analyses, and pay for all costs, including those of the City, associated with project review under CEQA.

e. Commercial cannabis businesses shall create and maintain an active account within the State's track and trace system prior to commencing any commercial cannabis retail activity. In the event of system failure, the business shall keep a hard copy record and transfer the information to the track and trace system within twenty-four (24) hours of the system being available.

f. No physical modification of the licensed premises is allowed without written prior permission by the City of Santa Ana and payment of any additional fees required by the City.

g. Commercial cannabis business businesses shall provide adequate off-street parking and comply with the City of Santa Ana Municipal Code parking requirements in order to service customers without causing negative impact.

h. The commercial cannabis business shall provide adequate disabled access parking per the requirements in the California Building Code.

i. The commercial cannabis business shall minimize nuisances such as trash, litter, and graffiti.

j. Any and all signage, packaging, and facilities shall not be "attractive," as it is defined by the State, to minors.

k. Commercial cannabis business facilities shall be required to provide an air treatment system that ensures off-site odors shall not result from its operations. This requirement at a minimum means that the facility shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location is not detected outside the building, in any adjacent tenant suites, on adjacent properties or public rights-of-way, or within any other unit located within the same building as the facility if the use occupies only a portion of a building.

l. The commercial cannabis business shall comply with all State regulations regarding:

i. Testing, labeling and storage of all cannabis products.

ii. Use of appropriate weighing devices.

iii. Electrical and plumbing regulations subject to periodic and unannounced inspections to ensure compliance.

iv. State deadlines for applying for a State license and receiving a State license within six (6) months after the date the State begins issuing licenses. This may be waived if the State has longer delays in issuing licenses of the type the commercial cannabis business seeks.

m. The commercial cannabis business shall maintain a comprehensive general liability combined single occurrence insurance policy issued by an "A" rated insurance carrier in an amount no less than two million dollars ($2,000,000.00), with primary coverage, naming the City of Santa Ana as additional insured.

n. No free samples of any cannabis or cannabis product may be distributed at any time.

o. Badges shall be worn by any individuals as required to do so pursuant to the California Code of Regulations, Title 4, Section 15043 and California Business and Professions Code Section 7582.28, as amended from time to time.

p. All private security officers acting for or employed by a commercial cannabis business shall be licensed by the State and issued a security/patrol services business license from the City of Santa Ana.

q. The commercial cannabis business shall have a centrally monitored fire and burglar alarm system which shall include all perimeter entry points and perimeter windows and the building or portion of the building where the business is located shall contain a fireproof safe or fireproof filing cabinet and include a safety and security plan.

r. The commercial cannabis business shall ensure a licensed alarm company operator or one (1) or more of its registered alarm agents installs, maintains, monitors and responds to the alarm system. The alarm company shall obtain a City of Santa Ana business license.

s. The commercial cannabis business shall provide the name and phone number of an on-site staff person to the police department and the Code Enforcement Division of the Planning and Building Agency for notification if there are operational problems with the establishment.

t. The commercial cannabis business must obtain and maintain a valid City business license at all times as a condition for receiving, renewing, and maintaining its regulatory safety permit.

u. Occupancy shall not exceed that required under the Uniform Building Code and Uniform Fire Code, and the maximum occupancy load shall be posted at the main entrance.

v. For any commercial cannabis business with two (2) or more employees, the business owner shall attest that he/she has entered into a labor peace agreement and provide a copy of the agreement to the City.

w. Any individual with an ownership interest shall complete a live scan and submit the results to the City.

x. All signage for the commercial cannabis business must comply with Article XI of Chapter 41 of the Santa Ana Municipal Code.

y. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours.

4. Additional Operational Standards for Cannabis Retail Business.

a. At all times the cannabis retail business is open, it shall provide at least one (1) private security guard who is licensed, possesses a valid Department of Consumer Affairs "security guard card," and has a valid business license from the City of Santa Ana as a security/private patrol service.

b. The private security guard and retail cannabis business personnel shall monitor the site and the immediate vicinity of the site to ensure that patrons immediately leave the site and do not consume cannabis in the vicinity of the retail business or on the property or in the parking lot.

c. Exterior signage shall comply with Article XI of Chapter 41 of the Santa Ana Municipal Code. Interior signage or advertising may not be visible from the exterior. Retail cannabis businesses must comply with the advertising and marketing provisions of Business and Professions Code §§ 26150—26155.

d. There shall be no on-site sales of alcohol or tobacco products, (excluding rolling papers and lighters) and no on-site consumption of alcohol or tobacco by patrons. Food may not be consumed on site, except as permitted by Section 40-8(10) of this chapter.

e. Hours of operation shall be limited to: 7:00 a.m. to 11:00 p.m. daily. No licensed retail business shall be open to the public between the hours of 11:01 p.m. and 6:59 a.m. of any day.

f. The cannabis retail business shall notify patrons of the following both verbally and through posting of a sign in a conspicuous location:

i. Secondary sale, barter or distribution of adult-use cannabis is a crime and can lead to arrest.

ii. That loitering on and around the retail site is prohibited by California Penal Code § 647(e) and that patrons must immediately leave the site and not consume cannabis in the vicinity of the retail site or on the property or in the parking lot.

iii. A warning that patrons and/or employees may be subject to prosecution under federal cannabis laws.

iv. That the use of cannabis may impair a person's ability to drive a motor vehicle or operate machinery.

g. No one under the age of twenty-one (21) shall be allowed to enter a cannabis retail facility unless the licensed cannabis facility holds a medicinal use cannabis RSP issued by the City and retail license issued by the State, and the licensed premises for the cannabis license and medicinal cannabis license are the same in accordance with Business and Professions Code section 26140.

h. If non-cannabis food is distributed, the retail business shall comply with all relevant State laws, County and City ordinances pertaining to the preparation, distribution and sale of food.

i. All cannabis retail businesses shall establish and implement a program to incentivize the recycling of used containers. Failure to establish and implement a program to incentivize the recycling of used containers will result in a violation of the terms of the required commercial cannabis Operating Agreement requiring sustainable building or business practices.

j. Cannabis retail businesses shall also record on the video surveillance system point-of-sale areas and areas where cannabis goods are displayed for sale.

k. Adequate signage shall clearly state who has inspected any cannabis product for pesticides, or other regulated contaminants, distributed at this location.

l. Shipments of cannabis goods may only be accepted during regular business hours.

m. Inventory shall be secured using a lockable storage system during non-business hours.

n. No cannabis product shall be visible from the exterior of the business.

o. All required labelling shall be maintained on all product, as required by State law, at all times.

p. Educational tours of retail cannabis businesses shall be allowed.

q. A permitted commercial cannabis retail business shall have one hundred eighty (180) days after construction permit issuance by the City of Santa Ana to operate. A permitted commercial cannabis retail business that ceases to operate for more than ninety (90) calendar days shall be deemed "abandoned" and the permit shall be forfeited. A permitted commercial cannabis business may temporarily suspend operations for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the Director of Planning and Building or his or her designee. For the purposes of this section, "operate" shall mean that the gross receipts fees charged for the business exceed the fee per square foot calculations by the end of the one hundred eighty (180) day period. A pending commercial cannabis retail business shall be required to concurrently: (1) File an application for an RSP and (2) Obtain all required construction permits for the facility from the City within six (6) months of the effective date of this ordinance, subject to the requirements of this Chapter and other applicable chapters of the Santa Ana Municipal Code, and open within one hundred eighty (180) days of construction permit issuance. An extension may be issued for a period of time as may be reasonably required to affect upgrades, modifications, repairs, or other property issue mitigations as approved by the Director of Planning and Building or his or her designee. Failure to satisfy these requirements by that deadline will disqualify the applicant from the RSP Eligibility List and the Waitlist described in Article II of this Chapter. Relocation is permitted pursuant to Section 40-7 of this Chapter.

r. A licensee that is authorized to conduct medicinal and/or adult-use retail sales may donate cannabis or cannabis products and the use of equipment in compliance with any State compassionate use, equity, or other similar program in accordance with Section 26071 to the Business and Professions Code.

s. Subject to approval of an operations plan by the Executive Director of the Planning and Building Agency, the opening of cannabis packages and demonstration of cannabis products at a commercial cannabis retail business is permitted for educational purposes without establishment of a consumption lounge, subject to the following requirements:

i. The maximum amount of cannabis product which may be consumed in such a setting is one-half (½) of one gram.

ii. There shall be a separate room dedicated for such purposes. Activities in said dedicated room shall be limited to the opening of packages, use demonstration, and consumption for consumer education purposes, by the consumer only.

iii. The dedicated room shall be limited to one hundred (100) square feet maximum size, shall be included as part of the facility's ventilation and odor control methods, and shall be monitored using video surveillance systems.

iv. Such activities shall be subject to an administrative permit issued by the Planning and Building Agency. As part of the permit application, the applicant shall include administrative policies ensuring the opening of packages, demonstration and education, and limited consumption are restricted to the room and for ensuring such activities do not pose a threat to the health, safety, and welfare of other consumers, employees of the business, and visitors to the surrounding area.

5. Additional Operational Standards for Commercial Cannabis Retail Delivery Services.

a. Commercial cannabis retail deliveries may be made only from a commercial cannabis retail business permitted by the City in compliance with this article, and in compliance with all State regulations.

b. All employees who deliver cannabis shall have valid identification and a copy of the commercial cannabis retail business' Regulatory Safety Permit and State license at all times while making deliveries.

c. All commercial cannabis retail businesses shall maintain proof of vehicle insurance for any and all vehicles being used to transport cannabis goods as required by State law.

d. Deliveries may only take place during normal business hours of the commercial cannabis retail business.

e. During delivery, the delivery employee shall maintain a physical or electronic copy of the delivery request and shall make it available upon request by the licensing authority and law enforcement officers. The delivery request documentation shall comply with State law.

f. A licensed delivery employee shall not leave the State of California while possessing cannabis products.

g. A commercial cannabis retail business shall maintain a list of all deliveries, including the address delivered to, the amount and type of product delivered, and any other information required by the State.

h. A manifest with all information required in this section shall accompany any delivery person at all times during the delivery process and delivery hours.

i. Any delivery method shall be made in compliance with State law, as amended, including use of a vehicle that has a dedicated GPS device for identifying the location of the vehicle (cell phones and tablets are not sufficient).

j. Each delivery request shall have a receipt prepared by the commercial cannabis retail business with the following information:

i. Name and address of the commercial cannabis retail business.

ii. The name of the employee who delivered the order.

iii. The date and time the delivery request was made.

iv. The complete delivery addresses.

v. A detailed description of the cannabis goods requested for delivery including the weight or volume, or any accurate measure of the amount of cannabis goods requested.

vi. The total amount paid for the delivery including any fees or taxes.

k. At the time of the delivery, the date and time delivery was made, and the signature of the person who received the delivery.

l. No cannabis delivery vehicle shall display signs, decals or any other form of advertisement with the exception of a maximum four-inch by four-inch decal.

m. Inspections by an authorized City of Santa Ana representative may be conducted anytime during regular business hours.

6. Additional Operational Standards for Commercial Cannabis Testing Facilities or Laboratories.

a. A licensed cannabis testing facility or laboratory business, its owners and employees may not hold an interest in any other cannabis business except another testing laboratory business.

b. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours.

c. Educational tours of cannabis testing facility/laboratory businesses shall be allowed.

7. Additional Operational Standards for Commercial Cannabis Manufacturing Facilities.

a. A licensed commercial cannabis manufacturing facility may conduct all activities permitted by the State. This includes, but is not limited to: extractions, repackaging and relabeling, infusions and extractions.

b. Any manufacturing that will be conducted by the commercial cannabis business shall be included on the application. No additional manufacturing activity can be conducted without notifying the Executive Director of the Planning and Building Agency or his or her designee, after which a determination will be made if the new activity may commence with or without modification to the RSP or if a new RSP is required.

c. At all times, the commercial cannabis manufacturing facility will be compliant with all State regulations for cannabis manufacturing including Health and Safety Code § 11362.775, as amended from time to time. Signage shall be posted regarding the type(s) of chemicals being used at the manufacturing facility.

d. Cannabis manufacturing facilities shall not contain an exhibition or product sales area or allow for retail distribution of products at that location unless the facility is co-located with an approved commercial cannabis retail business with a RSP.

e. Extraction equipment and extraction process utilizing hydrocarbon solvents shall be located in a room or area dedicated to extraction.

f. All commercial cannabis manufacturing/processing facilities shall comply with any and all applicable safety guidelines adopted by the Orange County Fire Authority, the State of California, and/or the City of Santa Ana for cannabis plant processing and extraction.

8. Additional Operational Standards for Indoor Commercial Cannabis Cultivation Facilities.

a. There shall be no exterior evidence of cannabis cultivation from a public right-of-way.

b. The Building Official may require additional specific standards to meet the California Building Code and Fire Code, including, but not limited to, installation of fire suppression sprinklers.

c. Compliance with Section 13149 of Water Code as enforced by the State Water Resources Control Board is required.

d. All commercial cannabis cultivation facilities shall comply with any and all applicable safety guidelines adopted by the Orange County Fire Authority, the State of California, and/or the City of Santa Ana for cannabis carbon dioxide enrichment systems.

e. Cannabis cultivation facilities shall not contain an exhibition or product sales area or allow for retail distribution of products at that location unless the facility is co-located with an approved commercial cannabis retail business with a RSP.

9. Additional Operational Standards for Commercial Cannabis Distribution Facilities.

a. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours.

b. A distributor shall ensure that all cannabis goods stored in compliance with all applicable State regulations to ensure conformance to any and all applicable Track and Trace systems required by the State.

c. Employee breakrooms, eating areas, changing facilities, locker rooms and bathrooms shall be completely separated from the storage areas.

10. Additional Operational Standards for Consumption Lounges and Onsite Cannabis Consumption.

a. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the business's regular business hours.

b. Consumption lounges are permitted as an ancillary use to a licensed commercial cannabis medicinal or adult-use retail business.

c. Consumption lounges must be on the same site as and physically contiguous to a licensed commercial cannabis retail business.

d. All retail sales transactions for the purposes of onsite consumption shall be conducted using point-of-sales equipment and reported separately in a format satisfactory to the Executive Director of the Finance and Management Services Agency.

e. Two (2) parking spaces per one thousand (1,000) square feet of gross building square footage shall be provided for any building expansion constructed for a consumption lounge.

f. Consumption lounges shall be designed such that a patron need not enter a consumption lounge in order to access a retail-only portion of the facility. There shall be no connection between a consumption lounge and another tenant suite.

g. Medicinal or adult-use cannabis and cannabis products may be sold on the premises of a consumption lounge, subject to the following:

i. The operator must hold a valid adult-use and/or medicinal retail business RSP.

ii. Products shall be sold for on-site consumption only. Products may not be sold for off-site consumption. All cannabis products purchased and opened at the facility must be smoked or consumed on site and shall not be permitted to leave the facility unless in a resealed package that meets all State guidelines.

iii. All products consumed or smoked on premises shall be sold at the consumption lounge. Operators shall not permit patrons to bring their own personal cannabis or cannabis products to the consumption lounge.

h. Outdoor smoking is permitted with the installation of odor-control mechanisms as reviewed and approved by the Planning and Building Agency.

i. Food may be consumed in the consumption lounge; however, the sale or consumption of alcohol or tobacco products is prohibited.

j. Access to the consumption lounge shall be restricted to persons twenty-one (21) years of age or older, or as allowed by State law.

k. The consumption or smoking of cannabis products shall not be visible from any public place, public right-of-way, or area where minors may be present. If the consumption lounge contains an outdoor area, the outdoor area shall be oriented so as to eliminate visibility from any adjacent public place, public right-of-way, area where minors may be present, or adjacent business, tenant space, or building.

l. Commercial cannabis consumption lounges shall be required to provide an air treatment system that ensures off-site odors shall not result from its operations. The facility shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location is not detected outside the building, in any adjacent tenant suites, on adjacent properties or public rights-of-way, or within any other unit located within the same building as the facility if the use occupies only a portion of a building.

m. Odor control response.

i. Within twenty-four (24) hours of any complaint concerning odors emanating from or originating at the facility, the operator shall respond to the complaint in question and shall timely file a written disclosure to the Planning and Building Agency documenting any and all actions taken and planned to address the odor complaint(s). The City, upon determination of the continued existing of detectable odor from the facility, may require an operator to submit an implementation plan and/or a performance schedule, above and beyond this written disclosure filed within twenty-four (24) hours, to ensure the employment of measures to control the odor.

ii. The Executive Director of the Planning and Building Agency shall have the authority to require an operator of a consumption lounge to amend any implementation plan and/or performance schedule submitted pursuant to this sub-section to cause compliance herewith.

iii. Any failure to timely submit a written disclosure, a more detailed implementation plan and/or performance schedule or amendment thereto, to timely adhere to terms of either, or to complete any required improvements within the timeframe specified by the Executive Director of the Planning and Building Agency shall be grounds for revocation of the RSP.

iv. Odors from a consumption lounge are identified as a public nuisance pursuant to the Santa Ana Municipal Code. The City may pursue all administrative, civil, and criminal remedies available in relation to any nuisance determined to exist with respect to the operation of a consumption lounge in violation of this sub-section.

n. All consumption lounges shall be equipped with point-of-sale or similar equipment to distinguish sales of products made for onsite consumption from sales of retail products for offsite consumption.

11. Additional Operational Standards for Temporary Consumption Events and Temporary Consumption Festivals.

a. Inspections by an authorized City of Santa Ana representative may be conducted anytime during the event.

b. All retail sales transactions for the purposes of onsite consumption during a temporary consumption event shall be conducted using point-of-sales equipment and reported separately in a format satisfactory to the Executive Director of the Finance and Management Services Agency.

c. Temporary Consumption Festivals.

i. Temporary consumption festivals may be held on public or private property as approved by the City.

ii. Temporary consumption festivals may only be organized and held by the City of Santa Ana.

iii. Temporary consumption festivals are subject to all applicable standards promulgated by this Chapter for temporary consumption events.

iv. All cannabis products and food available for purchase must be sourced locally from Santa Ana-based businesses.

d. Temporary consumption events are permitted as an ancillary use to each commercial cannabis medicinal or adult-use retail business, subject to review and approval of a Land Use Certificate (LUC), pursuant to Section 41-675 through 41-677 of the Santa Ana Municipal Code, and verification of any applicable required valid business licenses required pursuant to Chapter 21, Articles XII and XIII of this Code. The number of temporary consumption events permissible per business per calendar year is subject to establishment by resolution of the City Council.

e. Live entertainment may be provided only in conjunction with an approved LUC.

f. Applications for temporary consumption event LUCs must be submitted at least forty-five (45) days prior to the event date.

g. Applicant(s) for a temporary consumption event must provide a copy of all final application materials submitted to the State of California pursuant to California Code of Regulations Section 15002.1 (Temporary Cannabis Event Application) as amended from time to time.

h. The event shall last no longer than forty-eight (48) hours and in all cases shall begin no earlier than 8:00 a.m. and end no later than 10:00 p.m. The duration of setup and dismantling activities associated with the event shall be specified on the LUC application.

i. Location. Temporary consumption events must be on the same site as a commercial cannabis medicinal or adult-use retail business.

j. Medicinal or adult-use cannabis and cannabis products may be sold on the premises during temporary consumption events, subject to the following:

i. The operator must hold a valid adult-use and/or medicinal retail business RSP.

ii. Products shall be sold for on-site consumption only. All unconsumed cannabis products purchased and opened at the facility must be resealed prior to leaving the facility.

iii. All products consumed or smoked on premises shall be sold at the facility. Operators shall not permit patrons to bring their own personal cannabis or cannabis products to the event.

k. Outdoor smoking is permitted with the installation of odor-control mechanisms as reviewed and approved by the Planning and Building Agency.

l. Food may be consumed; however, the sale or consumption of alcohol or tobacco products on the premises is prohibited.

m. Access to the temporary consumption and/or special event shall be restricted to persons twenty-one (21) years of age or older.

n. The consumption or smoking of cannabis products shall not be visible from any public right-of-way or area where minors may be present. If the temporary consumption event takes place in an outdoor area, the outdoor area shall be oriented to eliminate visibility from any adjacent public place, public right-of-way, area where minors may be present, or adjacent business, tenant space, or building, and shall be oriented to minimize odor intrusion onto adjacent tenant spaces and properties.

o. All events shall be required to provide an air treatment system that ensures off-site odors shall not result from its operations. The site shall be designed to provide sufficient odor absorbing ventilation and exhaust systems so that any odor generated inside the location is not detected outside the building, in any adjacent tenant suites, on adjacent properties or public rights-of-way, or within any other unit located within the same building as the facility if the use occupies only a portion of a building. Outdoor smoking, including vaping and the use of other electronic inhalation devices, must take place within ventilated enclosures subject to the satisfaction of the Planning and Building Agency and Orange County Fire Authority.

p. Odor control response.

i. Odors from a temporary consumption event are identified as a public nuisance pursuant to the Santa Ana Municipal Code. The City may pursue all administrative, civil, and criminal remedies available in relation to any nuisance determined to exist with respect to the operation of a consumption lounge in violation of this Chapter.

ii. Upon receipt of any complaint concerning odors emanating from or originating at the temporary consumption event, the Planning and Building Agency may suspend or revoke the LUC.

q. All temporary consumption events shall be equipped with point-of-sale or similar equipment to distinguish sales of products made for onsite consumption from sales of retail products for offsite consumption.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-2973, § 10, 9-3-19; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

1. Commercial Cannabis—Registration Application and Regulatory Safety Permit Required.

a. For applicants prior to January 1, 2018: Existing medicinal cannabis business operators, or those with pending applications for a medicinal RSP, who desire to operate an adult cannabis retail business shall apply for the cannabis Regulatory Safety Permit ("RSP") on or before December 14, 2017. The Director of Planning and Building shall review such application and issue the RSP, without consideration of the merit based point system, so long as they satisfy all other requirements of this Chapter.

b. The Regulatory Safety Permit ("RSP") selection process will be conducted in two (2) phases, Phase 1 (Registration Application) and Phase 2 (Regulatory Safety Permit Application). Registration Applications will be reviewed by the Director of Planning and Building or designees(s) for completeness and compliance, and if eligible, will be notified in writing to enter into the Phase 2 Regulatory Safety Permit Application process. In Phase 2, the City of Santa Ana has established a merit based point system for adult-use commercial cannabis retail businesses to objectively award permits as described in the Regulatory Safety Permit Application.

2. Phase 1—Registration Application.

a. Following the adoption of this article, the Director of Planning and Building shall prepare commercial cannabis business registration application forms and a related administrative policy. Each commercial cannabis business interested in operating pursuant to this article may submit an application together with a non-refundable processing fee in an amount established by the City Council.

b. The Registration Application period shall be thirty (30) calendar days from the date the applications are released. Following the application period, the Director of Planning and Building or designee(s) shall stop accepting applications and review all applications received in Phase 1. Each application that is complete and in compliance with the application requirements in Phase 1 shall be notified in writing whether they are a "RSP Eligible Applicant" or not. Each complete and compliant applicant may then choose to file an application for a RSP in Phase 2.

c. The requirements for Phase 1 include, but are not limited to:

i. All application documents required in the City's Phase 1 Registration Application package.

ii. Application was submitted during the application period.

iii. Application forms are filled out completely.

iv. Phase 1 application fee is paid.

v. A signed statement that the proposed location of the commercial cannabis business on the application meets the zoning criteria established in this article including, but not limited to, any and all sensitive use separation criteria required by this article.

vi. Proof of site control for commercial cannabis retail businesses submitting Phase 1 applications on or after July 1, 2018.

d. The Director of Planning and Building or his or her designee(s) shall review each application upon submission and ensure that the application is complete. Incomplete applications will be promptly rejected and the applicant shall be notified in writing of the deficiencies. The applicant shall be given an opportunity to cure any incomplete or deficient application prior to the conclusion of the application processing term, if such time period is applicable.

3. Phase 2—Regulatory Safety Permit Application.

a. Each complete and compliant applicant may choose to complete and file a RSP application to the Director of Planning and Building. The application shall be filed together with a non-refundable fee as established by resolution of the City Council, to defray the cost of investigation required by this article.

b. The RSP application period shall be open for thirty (30) calendar days and may run concurrently with the Phase 1 review period. Following the RSP application period, the Director of Planning and Building or designee(s) shall stop accepting applications and review all applications received in Phase 2.

c. The Director of Planning and Building or designee(s) will review all application documents required in the City's Phase 2 application package plus the additional requirements in subsection (d) below. The Director of Planning and Building or his or her designee(s) will use a merit based point system to review and rank each of applications from the most to the least points and objectively award the top applicants a RSP. A complete description of the merit based point system and all merit based point considerations shall be included with the application forms.

d. Phase 2 requirements include, but are not limited to:

i. All application documents required in the City's Phase 2 RSP application package.

ii. Phase 2 application fee is paid and a comprehensive background check is completed on all owners, managers, security guards, and/or agents.

iii. The Building Official or designee has inspected all structures in which the use is located to determine that all applicable standards and requirements are met. If a building permit is required for site improvements, Permit issuance will be deferred until a certificate of occupancy or other building permit approval is issued. Additionally, the Building Official has determined that there are no notices of nuisance or other code compliance issues recorded or on the property.

iv. The Planning Manager or designee has issued zoning clearance documenting compliance with the following:

a. The use is permitted;

b. All land use permits, if any, have been approved and all conditions of approval have been met or are in good standing; and,

c. No zoning violations exist on the property.

e. The Director of the Planning and Building Agency or his or her designee(s) shall review each application upon submission and ensure that the application is complete. Incomplete applications will be promptly rejected and the applicant shall be notified that business day of the deficiencies. The applicant shall be given an opportunity to cure any incomplete or deficient application prior to the conclusion of the application processing term, if such time period is applicable.

3.1

Commercial Cannabis—Registration Application and Regulatory Safety Permit for Additional Commercial Cannabis Business Activities on the Same Premises (Co-Location).

a. An existing commercial cannabis business with an RSP may co-locate additional non-retail commercial cannabis business activities (cultivation, distribution, and/or manufacturing) by applying for a new RSP for the additional use(s). The new RSP must meet the all requirements of the Santa Ana Municipal Code except that background checks (live scans) shall only be required for any new owners as outlined in Section 40-8. A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter.

b. New or pending RSP applicants wishing to co-locate additional non-retail (cultivation, distribution, and/or manufacturing) uses may submit a new RSP for any of the non-retail commercial cannabis business activities. The additional RSP must meet the all requirements of the RSP except that background checks (live scans) shall only be required for any new owners as outlined in Section 40-8. A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter.

c. New commercial cannabis business applicants—co-location.

1. New commercial cannabis retail applicants wishing to co-locate additional non-retail (cultivation, distribution, and/or manufacturing) uses shall submit separate RSPs for the proposed retail activity and another RSP for any of the non-retail (cultivation, distribution, and/or manufacturing) commercial cannabis business activities. Each RSP application will be evaluated independently and must meet any applicable requirements of the RSP as outlined in Sections 40-8 and 40-9, including, but not limited to, merit evaluation and additional separation requirements for the retail RSP. A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter.

2. New non-retail commercial cannabis applicants wishing to co-locate additional non-retail (cultivation, distribution, and/or manufacturing) uses may submit a single RSP for the proposed activity or activities. The RSP application must meet any applicable requirements of the RSP as outlined in Sections 40-8 and 40-9. A single RSP that lists any and all approved cannabis business activity/activities may be renewed annually thereafter.

3. Regulatory Safety Permit Annual Renewal.

a. Applications for the renewal of a permit shall be filed with the Director of Planning and Building or designee(s) at least sixty (60) calendar days before the expiration of the current permit. Temporary permits will not be issued. Any permittee allowing their permit to lapse or which permit expired during a suspension shall be required to submit a new application, pay the corresponding original application fees and be subject to all aspects of the selection process.

b. Any person desiring to obtain a renewal of their respective permit shall file a written application under penalty of perjury on the required form with the Director of Planning and Building or his or her designee(s) who will conduct a review. The application shall be accompanied by a non-refundable filing fee established by the City Council to defray the cost of the review required by this article. An applicant shall be required to update the information contained in their original permit application and provide any new and/or additional information as may be reasonably required by the Director of Planning and Building or designee(s) in order to determine whether said permit should be renewed based on compliance with all applicable provisions of the Santa Ana Municipal Code.

c. Compliance with Section 40-1(C) to provide for community benefits is required for all commercial cannabis businesses seeking renewal of the RSP.

5. Appeal of Denial of Regulatory Safety Permit/Denial of RSP Renewal. The Executive Director of the Planning and Building Agency or his or her designee(s) will review all Regulatory Safety Permit applications and renewal requests, along with all other relevant information, and determine if a RSP should be granted and/or renewed based on compliance with all applicable provisions of the Santa Ana Municipal Code. If the Executive Director of the Planning and Building Agency determines that the permit shall not be granted and/or renewed, the reasons for denial shall be provided in writing to the applicant. No such denial shall become effective until the applicant for the regulatory safety permit and/or renewal has been notified in writing by certified mail of the right to appeal the denial decision pursuant to the provisions of Chapter 3 of this Code. If a timely appeal is filed, the denial shall be effective only upon decision of a hearing officer as provided for in Chapter 3 of the Santa Ana Municipal Code. Otherwise, the denial shall become effective after the timely appeal period has passed. The matter may be subject to judicial review under the provisions of California Code of Civil Procedure Sections 1094.5 and 1094.6.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-2973, § 10, 9-3-19; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

1. Non-Retail Commercial Cannabis Businesses—Registration Application (Phase 1) and Regulatory Safety Permit (Phase 2) Required.

a. Every Non-Retail Commercial Cannabis Business shall apply for the Phase 1 (Registration Application) and Phase 2 (Regulatory Safety Permit Application) in the manner described in Section 40-9, except that the Director of the Planning and Building Agency or his or her designee may accept Phase 1 and Phase 2 applications for a Non-Retail Commercial Cannabis Business concurrently, and shall review such applications and issue the Regulatory Safety Permit Application without consideration of the merit based point system, insofar as the applications satisfy all other requirements of this article.

b. Applications for a Non-Retail Commercial Cannabis Business shall be accepted during normal City Hall business hours and are not subject to the thirty (30) day Phase 1 or Phase 2 application periods.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-2973, § 10, 9-3-19; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

1. After the adoption of this chapter, the Executive Director of the Planning and Building Agency shall prepare application forms to evaluate a proposed commercial cannabis consumption lounge. Each commercial cannabis retail business interested in operating a consumption lounge pursuant to this article may submit an RSP application together with a non-refundable processing fee in an amount established by the City Council.

a. Beginning the effective date Ordinance No. NS-3026 (January 1, 2023) and for one year thereafter (until January 1, 2024), the City shall only accept RSP applications for commercial cannabis consumption lounges from those licensed commercial cannabis retail business with a valid RSP in the City of Santa Ana that are in compliance with and having provided the attestation form signed by a Bona Fide Labor Organization pursuant to Section 40-16 of this Chapter.

b. Beginning January 1, 2024, the City shall accept RSP applications for commercial cannabis consumption lounges from any other licensed commercial cannabis retail business with a valid RSP in the City of Santa Ana.

2. The Director or his or her designee shall determine whether each RSP application demonstrates compliance with this article as prescribed by Section 40-9 of this Chapter and notify the applicant of the outcome of the application as either eligible or ineligible.

3. Qualified Consumption Lounge Applicants shall be notified by the City that they may submit any/all required documentation and plan drawings to complete the City's plan check and permitting process to construct a consumption lounge.

4. Upon notification of eligibility, applicants shall have one hundred eighty (180) days to complete the plan check and construction process, and be issued a certificate of occupancy, unless an extension is granted by the Executive Director of the Planning and Building Agency to resolve required building or site upgrades, modifications, repairs, or other property issue mitigations tied directly to construction of the lounge.

(Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

Annual audits. No later than September 30 of every year, each licensed commercial cannabis business, except commercial cannabis businesses licensed and operating solely as shared manufacturers, shall be liable to file with the City an independent audit or financial review of its operations of the previous calendar year. Provided, however, that licensed commercial cannabis businesses which operate as microbusiness, or that operate on a vertically or horizontally integrated basis as established in Chapter 21, Article XIII of this Code, or that are co-located on shared premises may file a consolidated independent audit or financial review. The form and contents of the document shall be specified by the Executive Director of Finance and Management Services, or his or her designee(s). The Executive Director of Finance and Management Services, or his or her designee(s) may waive this requirement for certain licensed commercial cannabis businesses in accordance with guidelines established by the Finance and Management Services Agency.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-2973, § 11, 9-3-19; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

The Code Enforcement Division of the Planning and Building Agency may enter and inspect the location of any commercial cannabis business between the hours of 7:00 a.m. and 10:00 p.m., or at any reasonable time, to ensure compliance with this article. In addition, any police officer may enter and inspect the location of any commercial cannabis business and the recordings and records maintained as required by this article, except that the inspection and copying of private medical records shall be made available to the police department only pursuant to a properly executed search warrant, subpoena, or court order. It is unlawful for any owner, responsible person, landlord, lessee, member including, but not limited to, a member engaged in the management), or any other person having any responsibility over the operation of the commercial cannabis business to refuse to allow, impede, obstruct or interfere with an inspection, review or copying of records and closed-circuit monitoring authorized and required under this article, including, but not limited to, the concealment, destruction, and falsification of any recordings, records, or monitoring.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

1. Violation/enforcement. Each and every violation of this article shall constitute a separate violation and shall be subject to all remedies and enforcement measures authorized by this Code. Additionally, as a nuisance per se, any violation of this article shall be subject to injunctive relief, revocation of the commercial cannabis business Regulatory Safety Permit, revocation of the certificate of occupancy for the location, disgorgement and payment to the City of any and all monies unlawfully obtained, costs of abatement, costs of investigation, attorney fees, and any other relief or remedy available at law or equity. The City may also pursue any and all remedies and actions available and applicable under local and State laws for any violations committed by the commercial cannabis business and persons related or associated with the business.

2. Suspension or revocation. When an authorized City of Santa Ana representative finds that any person holding a Regulatory Safety Permit under the provisions of Chapter 40 has violated the provisions of this chapter or is found guilty of conduct which would form the basis of denial of the Regulatory Safety Permit as set forth in Article XIII of this Chapter 18, s/he may revoke or suspend the permit. No such revocation shall become effective until the Regulatory Safety Permit holder has been notified in writing by certified mail of the right to appeal the revocation decision pursuant to the provisions or Chapter 3 of this Code. If a timely appeal is filed, the revocation shall be effective only upon decision of a hearing officer as provided for in Chapter 3 of the Santa Ana Municipal Code. Otherwise, the revocation shall become effective after the timely appeal period has passed.

3. State License Suspension/Revocation. Revocation or suspension of a Licensee's State issued commercial cannabis business permit or license by the State shall constitute a violation of this article and result in revocation of the Licensee's RSP.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

1. Upon the transfer of any interest in a commercial cannabis business, the Regulatory Safety Permit shall be null and void. Any person, firm or entity desiring to own and operate the commercial cannabis business shall make a new Regulatory Safety Permit application. Prior to or concurrent with the submission of said application the transferee shall obtain all required business licenses, post all required security deposits, acquire all necessary, certificates, permits or other licenses allowing the doing of any act which the person paying or holding the same would not otherwise be entitled to do; and any permit, license, variance or other instrument of approval or evidence that any conditions exist as required by any other section of this Code or by any statute or code provisions of the state must first be obtained or complied with before the doing of any act or thing for which it is required. A fee as established by resolution of the City Council shall be payable for each such application involving transfer of any interest in an existing commercial cannabis retail business. The provisions of this section shall apply to any person, firm, or entity applying for a Regulatory Safety Permit for premises previously used as such establishment.

2. Any such transfer of any interest in an existing commercial cannabis business or any application for an extension or expansion of the building or other place of business of the commercial cannabis retail business shall require inspection and compliance with section 40-11 of this article.

3. The owner or operator of a commercial cannabis business shall be responsible for notifying the City of any intention to rename, change management, or convey the business to another person/entity. Notification to the City must be made a minimum of sixty (60) days prior to such transfer.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

To the fullest extent permitted by law, the City shall not assume any liability whatsoever, with respect to approving any Regulatory Safety Permits pursuant to this article or the operation of any commercial cannabis business approved pursuant to this chapter. As a condition of approval of a Regulatory Safety Permit as provided in this chapter, the applicant or its legal representative shall:

1. Execute an agreement indemnifying the City from any claims, damages, injuries or liabilities of any kind associated with the registration or operation of the commercial cannabis business or the prosecution of the applicant or business or its members for violation of federal or State laws;

2. Maintain insurance in the amounts and types that are acceptable to the City Attorney or his or her designee;

3. Name the City as an additionally insured on all City required insurance policies;

4. Agree to defend, at its sole expense, any action against the City, its agents, officers, and employees related to the approval of a Regulatory Safety Permit; and

5. Agree to indemnify and reimburse the City for any court costs and attorney fees that the City may be required to pay as a result of any legal challenge related to this chapter and/or the City's approval of a Regulatory Safety Permit. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve the operator of its obligation hereunder.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

All commercial cannabis businesses shall pay applicable fees and taxes, which shall include one (1) or more of the following:

1. Application Fees. The business owner shall submit a non-refundable fee to cover the cost of processing an application for the commercial cannabis business. These fees may be divided into two (2) fees according to Registration Application Fee (Phase 1) and RSP Application Fee (Phase 2).

2. Regulatory Safety Permit Renewal Fees. The business owner shall submit a non-refundable fee to cover the cost of processing an application renewal annually.

3. Business License Taxes. The business owner shall at all times maintain a current and valid City of Santa Ana business license and shall pay all business license taxes, deposits, charges, fees, deficiencies, penalties, interest, and other associated assessments as may be required pursuant to ordinances of the City of Santa Ana and/or the Santa Ana Municipal Code.

4. Operating Agreement Fees.

5. Additional cannabis-specific gross receipts, excise taxes, or other municipal tax approved by the voters of the City of Santa Ana.

6. All required state taxes including sales and use taxes, business/franchise or income taxes, payroll taxes, etc.

7. All required federal taxes.

(Ord. No. NS-2929, § 4, 11-21-17; Ord. No. NS-2941, § 6, 3-20-18; Ord. No. NS-2942, § 3, 4-3-18; Ord. No. NS-2944, § 5, 5-1-18; Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)

Commercial cannabis retail businesses opting-in to the social equity measures described in this subsection shall, upon confirmation of their certification as a Qualified Social Equity Commercial Cannabis Business Operator by the City of Santa Ana Planning and Building Agency, be eligible for the applicable rate of Commercial Cannabis Retail Business taxes payable on the socially equitable retail activities specified in their City of Santa Ana business license(s), as set forth in Section 21-133(d) of the Santa Ana Municipal Code. These activities are to include: Socially Equitable Adult-use Cannabis Retail Business (including Delivery and Consumption Lounge) and Socially Equitable Adult-use Cannabis Retail Business Temporary Consumption and/or Special Events. Qualified Social Equity Commercial Cannabis Retail Business tax rates become effective on the first day of the first calendar month following the issuance of a confirmation of qualification notification as set out hereunder by the City of Santa Ana Executive Director of the Planning and Building Agency or his or her designee.

A Commercial Cannabis Retail Business seeking certification as a Qualified Social Equity Commercial Cannabis Retail Business shall provide documentation showing that it commits to and satisfies the following social equity measures to be eligible for Socially Equitable Adult-use Cannabis Retail Business tax rates:

1. Full-time jobs. Sixty (60) percent of its workforce is hired for full-time work (paid hourly wages for an average of at least thirty-two (32) hours per week or one thousand six hundred sixty-four (1,664) hours per year).

2. Wages. Employees, not including supervisors, must receive wages that exceed one hundred fifteen (115) percent of the California minimum wage at the time of hire. This wage shall increase to one hundred twenty (120) percent within three (3) years of the effective date of this Ordinance.

3. Delivery Drivers. Delivery drivers must be reimbursed for mileage according to the Internal Revenue Service's Standard Mileage Rates.

4. High Road Training Partnerships. Applicant participates in a High Road Training Partnership of the sort defined by Unemployment Insurance Code Section 14005 as amended from time to time and that is recognized by the State of California.

5. Social Equity Policy. The commercial cannabis retail business owner maintains a written social equity policy that describes:

a. How the cannabis retail business owner aims to recruit, hire, and retain employees who reside in low-income census tracts in Santa Ana where at least fifty-one (51) percent of the current residents have a household income at or below eighty (80) percent of the County Area Median Income;

b. How the cannabis retail business owner will partner with Community Benefit Organizations or its High Road Training Program to recruit, hire, and retain employees arrested or convicted for a crime relating to the sale, possession, use or cultivation of cannabis prior to November 8, 2016 that could have been prosecuted as a misdemeanor or citation under Current California law, or currently receiving unemployment benefits.

c. Any other measures or employee benefits aimed to address the disproportionate impact of the War on Drugs in certain communities affected by it.

6. Equity Opportunities.

a. An "Equity Employee" is a natural person who resides in low-income census tracts in Santa Ana where at least fifty-one (51) percent of the current residents have a household income at or below eighty (80) percent of the County Area Median Income.

b. On or before January 1, 2024, Applicants must demonstrate that forty (40) percent of all employees employed in the last tax period were Equity Employees, or demonstrating that hourly, non-supervisorial employees receive employee stock ownership options or other equity.

7. Local Hiring. The commercial cannabis business owner demonstrates that:

a. Beginning January 1, 2023, the cannabis retail business owner demonstrates that twenty (20) percent of its employees reside within the City of Santa Ana, then

b. Beginning January 1, 2024, the cannabis retail business owner demonstrates that forty (40) percent of its employees reside within the City of Santa Ana.

The Executive Director of the Planning and Building Agency or his or her designee shall determine whether each RSP application demonstrates compliance with this article as prescribed by Section 40-16 of this Chapter, and as prescribed by subsections 1 and 2 below. The Director or his or her designee shall notify the Finance and Management Services Agency of the outcome of the application as either eligible or ineligible for the socially equitable Adult-use Cannabis Retail Business tax rates referenced by this subsection.

1. To demonstrate conformance with the social equity measures promulgated by Section 40-16 of this Chapter, commercial cannabis retail business owners must submit an attestation form signed by a Bona Fide Labor Organization, as defined by Section 40-2(19) of this Chapter, and a copy of an active Collective Bargaining Agreement with a Bona Fide Labor Organization that indicates the business is in compliance with the social equity measures of this subsection. The City may require any supplemental documentation as needed to review and verify the submitted attestation.

2. Proof of active participation in High Road Training Partnership recognized by the State of California can be demonstrated only by providing a signed letter on official letterhead from an administrator or trustee of the 501(c)(3), 501(c)(4), or 501(c)(5) entity responsible for managing the Training Partnership. The letter must confirm the High Road Training Partnership's State recognition and the business's participation, and shall describe the High Road Training Partnership, its constituent organizations, goals, and trainings offered to cannabis employees. A copy of a grant contract with the State of California that recognizes the program as a High Road Training Partnership shall be attached to the letter.

The Responsible Agency shall create and maintain on file the required attestation form to be signed by a Bona Fide Labor Organization.

(Ord. No. NS-3026, § 6, 10-4-22, eff. 1-1-23)