HomeMy WebLinkAbout10/16/2018 Item 20, Andre
From: Nick Andre < >
Sent: Monday, October 15, 2018 9:59 PM
To: E-mail Council Website
Subject: Feedback on Cannabis Ranking Criteria
Hello Mayor& Council,
Below are some thoughts on the cannabis application ranking criteria that comes before you tomorrow evening:
Under GENERAL MERIT CRITERIA:
•3.0 Local Experience -Something should be added here that gives points for the "operators" of the facility being
a local company/brand. What many out of town companies will do is find a few locals to put on the
application as "principals"to meet the proposed criteria. However, in reality it is the out of town company (or
national brand)that operates everything and the profits get shipped out of our community. Choosing
companies that are actually based locally is what matters.The closest criteria l see listed is "Majority of
primary principals have operated a business in San Luis Obispo County for 5 or more years".This would be
better if it specifically said "operated a local cannabis business" and if it was more than a simple majority.
•4.0 Equity and Labor Criteria: "Applicant includes 3 or more primary principals who historically have earned 80%
or less of the median local income". I understand and agree with the intent, but this seems unrealistic and
unwise. Do you want owners who do not have the proper capital to run the business?There is a reason only 2
of the 4 licensed dispensaries in Grover Beach have opened. It is a significant capital investment and you need
experienced people who have the financial means to pull it off. Cannabis business cannot write off business
expenses on their taxes, except for cost of goods sold, and therefore margins are tight and it increases the
need for their to be financial security among the ownership. I know that"primary principal" is also defined as
directors or officers, but that still seems like overreach. Maybe lowering it to 1 would be better as an upper
limit, or I would instead encourage an incentive to make well paid manager positions available to those under
the median income. However, how will this all be verified?Are you going to ask for past income verification?
Seems intrusive to non-owners.
•"Business will allow collective bargaining at 10 or more employees". Does this include management? It is not
clarified, and management are technically employees (it shouldn't include management or primary
principals). What if the shop will have less than 10 employees? Does that disqualify them from the points?
That needs to be clarified. Also, because these businesses cannot write off the wages/salaries/benefits that
are provided to employees, asking for unionization at this point is not practical. Once the state and IRS lift
those restrictions and the business can operate like any other business then I would be all for this, but now is
not the time.
•5.0 Responsible Use Messaging: "Business plans to only advertise in mediums (Radio, print, web)with audience
of 30%or fewer under 18 years of age." State regulations require that the audience must be 70%+over 21,
not 18.
Under SUPPLEMENTAL MANUFACTURING, CULTIVATION AND OTHER COMMERCIAL CANNABIS BUSINESS CRITERIA
•Will this section apply to retail applications? It says "other commercial cannabis business" so it is unclear.
• If so:
•"Applicant will utilize certified organic practices".There is no standardized organic certification program within
the cannabis industry at this time. Per state testing rules cannabis growers actually have to implement
1
practices that are more stringent than a typical organic farm that grows produce.This already applies to
everyone as a condition of state licensing.
•"Applicant will devote more than 80%of its operations to products with beneficial uses".The way beneficial
uses is defined is pretty strict and this is likely not going to be reality. A dispensary that promises this may not
be able to follow through. 30-50%is a better upper limit.The dispensaries in Grover are probably at 30%or
less under this definition the way that I interpret the phrase "limited psychoactive properties".
•"Applicant will devote more than 80%of its operations to research and development of products with beneficial
uses".This should not apply to retail or delivery services,they do not do research and development like a
manufacturer would.
Other than those items I think this proposal was put together very well.Thank you for considering my thoughts.
Nick Andre
2