HomeMy WebLinkAbout11-27-2018 Item 10 - Adopt Resolutions for Fee Schedule for Cannabis Business Regulation and Administration Meeting Date: 11/27/2018
FROM: Michael Codron, Community Development Director
Prepared By: Rachel Cohen, Associate Planner
Natalie Harnett, Administrative Analyst
SUBJECT: REVIEW OF A FEE SCHEDULE AND EVALUATION CRITERIA FOR
CANNABIS BUSINESS OPERATOR PERMITS
RECOMMENDATION
1. Adopt a Resolution establishing a fee schedule for both one-time application and ongoing
costs for cannabis business operator permits (Attachment A); and
2. Adopt a Resolution establishing criteria to be used in the evaluation of applications for
cannabis bu siness operator permits (Attachments B and C).
DISCUSSION
Background
1. Previous Review
On May 15, 2018, the City Council adopted Ordinance 1647 (2018 Series) establishing overall
regulations for cannabis businesses in the City and identifying the zones w here various business
types are allowed. The regulations establish a two-step process that first requires certification of
eligible business operators, and then approval of a land use permit for the specific site.
2. City Council Direction
On October 16, 2018, the City Council met to discuss cannabis business operator application
requirements and criteria for ranking operators. No action was taken; however, the Council did
provide staff with a list of directional items to incorporate into revised criteria that are evaluated
in this report. Attachment D includes Council’s directional items and indicates how staff has
responded to this direction with its current recommendations.
3. Election Results
Election Day was November 6, 2018, and the residents of San Luis Obispo voted to authorize
Measure F-18, a cannabis business tax that levies taxes based on the area of canopy under
cultivation in the City and based on gross receipts for other types of cannabis business activities.
Once results are finally certified (estimated to be November 30, 2018), Ordinance 1647 (2018
Series) will be in effect.
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Operator Criteria and Costs of Services Analysis
1. Proposed Operator Criteria
There are three separate sets of criteria identified and incorporated into Attachment C for
Council’s consideration. Based on Council direction, the criteria for retail storefront operators,
cultivators, and other cannabis business types differ. In addition, testing labs will not be
evaluated based on specific criteria but will still be requir ed to submit an application for approval
to ensure minimum qualifications are met . Micro-businesses with a retail storefront will be
evaluated based on the retail storefront criteria. Micro -businesses that include cultivation will be
evaluated based on the cultivation criteria. If a micro -business does not include retail or
cultivation, it will be evaluated based on the manufacturing, non-storefront retail, and
distribution criteria.
Retail Storefronts
Ordinance 1647 (2018 Series) allows for three retail storefronts to be established in the City, no
less than 1,000 feet apart from one another, and located along arterial streets on property with the
appropriate zoning. Given these limitations, the selection of operators for retail storefronts is
anticipated to be extraordinarily competitive. The purpose of establishing criteria that will be
used to rank operators is to ensure the qualifications of the highest-ranking operators, as well as
to encourage new cannabis businesses to incorporate certain community benefit and social equity
practices into their business plans.
Cultivators
Commercial cannabis cultivation is limited to a maximum of 70,000 square feet of canopy in the
entire City, with no single grow larger than 10,000 square feet. Applications for cu ltivation are
expected to be less competitive than for retail storefronts because more businesses will be
permitted. In addition, Ordinance 1647 includes specific limitations and requirements for
cultivators (e.g. no outdoor cultivation, zero-net energy requirement) that will make it more
difficult to establish this type of cannabis business.
Manufacturing, Non-Storefront Retail, and Distribution
Other cannabis business types that are permitted by Ordinance 1647 (2018 Series) do not have
specific limitations in terms of number of operators or size of the operations. As a result, these
business types are not strictly competitive. The City still has an interest in ensuring that these
businesses are operated by qualified entities and operator permit applications are required.
Although not specifically limited in number, operator permits will only be issued to businesses
that meet the minimum qualifications and score at least 70% of the points attained by the top
application during the current application per iod.
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2. Cost of Services Analysis
Regulatory Framework
Regulatory fees must be based on a n assessment of the reasonable costs incurred to provide the
regulatory service. To accomplish this, staff worked with its consultant, MuniServices, to
identify the personnel, equipment and supply costs needed to implement the City’s various
regulat ions relating to the review of operator applications (e.g. implementation) and annual
review (ongoing operating costs). Through a collaborative process, City staff develo ped cost
estimates based on the amount of staff time and the direct costs of supplies and equipment
needed to evaluate applications and then conduct appropriate oversight of permitted businesses.
Costs Identified
The following table provides a summary of the costs identified by staff. These costs are
classified depending on when the cost is incurred by the City (e.g. at application versus during
ongoing operations). In order to identify these costs, some assumptions were made about the
number of applications that would be received (20) and the number of businesses that would be
established during the first year of operations (18). These assumptions will be evaluated after the
first year of operations to determine if adjustments should be made. The workload analysis
prepared by staff identifies additional staff resources needed to handle the projected workload
(two police officers, one temporary code enforcement officer, and one part-time, temporary
assistant planner).
Implementation1
Costs to be covered by a one-time application fee
Department
Application
Evaluation
Business License
Award
Hours Cost Hours Cost
Police 1848 $335,629 176 $31,969
Administration 66 $11,658 40 $13,989
Finance 49.5 $4,523 79 $3,618
Community Development 28.6 $6,527 92 $18,331
Fire 0 $0 20 $1,840
City Attorney 0.55 $115 0 $0
Information Technology 0 $0 1 $111
MuniServices 49.5 $9,900 20 $3,960
Total 2042 $368,351 340 $73,817
Total Cost $442,169
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1. Based on 20 cannabis business applications.
First Year Operations, Administration, and Regulatory Oversight1
Costs to be covered by an annual fee
Department Admin & Regulatory
Oversight2
General
Administration
Actions3
Industry Specific
Administration
Actions4
Equipment
& Supplies5
Hours Cost Hours Cost Hours Cost Cost
Police 844.8 $153,430 0 $0 1920 $348,744 $94,000
Administration 209 $36,916 198 $34,973 0 $0 $0
Finance 22 $2,010 649 $59,297 0 $0 $2,500
Community Development 188.1 $35,045 120 $22,779 3860 $448,384 $26,500
Fire 99 $9,200 396 $36,800 450 $41,818 $0
City Attorney 22 $4,582 22 $4,582 0 $0 $0
Information Technology 22 $2,212 6 $553 0 $0 $0
Total 1407 $243,396 1390 $158,984 6230 $838,946 $123,000
Total Costs $1,364,326
1. Based on 18 cannabis businesses.
2. Administration & Regulatory Oversight includes cannabis business training and education, staff training and
education, and community outreach.
3. General Administration Actions includes business review, coordination and oversight, monthly return processing,
fire safety and financial review.
4. Industry Specific Administration Actions includes cannabis business inspections and decoy operations based on the
specific cannabis business type.
5. Equipment & Supplies includes items such as laptop computers, dedicated vehicles, cell phones, surveillance
equipment, cash counting machine, office equipment, and inspection equipment and supplies.
Based on these costs, the application fees for new cannabis business operator permits is $22,519.
Retail stores are required to pay the full fee at the time of applic ation. For all business types , the
initial application fee will be 33% of the total, or $7,431. The balance of the fee would be due
and payable for the business to receive an approved operator permit. Annual fees will range from
$65,890 for distributors, non-storefront retailers, and testing labs to $90,575 for retail stores. A
complete fee schedule is included as an exhibit to Attachment A.
Comparison with Other Jurisdictions
The following table summarizes current license application costs for various business types that
are allowed in the City of San Luis Obispo, as compared with other jurisdictions that have
recently adopted similar fee schedules.
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Annual Permit Fee per License
San Luis Obispo $65,890 - $90,436
Oakland $2,790 - $11,173
San Jose $131,846 - $138,416+
Davis $20,805 - $42,359
Monterey County $1,028 - $9,021
Grover Beach $5,000 - $20,000
Sacramento $2,290 - $30,400
*California State $2,208 - $75,000
* State license fees paid separately and in addition to local fees
The City’s fees fall on the higher end of the jurisdictions evaluated. The difference in the City’s
fees relates to its policy to achieve 100% cost recovery, the extent of background investigations
that will be performed by the Police Department, and overall scope o f the regulations contained
in Ordinance 1647.
In addition to the City’s application and annual permit costs, cannabis businesses face costs
associated with licensing required by the State. The costs that businesses face from the State
licensing process vary depending on the license type and the size of the business. Attachment D
shows the California State Annual Commercial Cannabis Fee structure.
Policy Analysis
User fees are proposed to be set to accomplish 100% cost recovery level. High cost recovery user
fees are appropriate because of the level of service demand specific to potential cannabis
business activity, as indicated by the City’s policies for cost recovery contained in the Financial
Plan (Attachment E). The services that go into new canna bis businesses are regulatory in nature
and active enforcement is a best practice to ensure that regulatory requirements are met for this
new, fast changing industry. Based on input from other successful jurisdictions, proactive
oversight, operations monit oring, training, education, and inspections will be implemented to
encourage strict regulatory compliance in this emerging and dynamic industry. The City Council
may, at any time, choose to reduce or establish different user fees if desired.
CONCURRENCES
A steering committee of City staff members including the Community Development Director,
City Attorney, Police Chief, Fire Chief, and Finance Director was convened to guide the process
of developing regulations for consideration by the City Council.
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ENVIRONMENTAL REVIEW
SB 94 amends the Business and Professions Code to exempt from CEQA review the adoption of
an ordinance, rule, or regulation by a local jurisdiction requiring discretionary review and
approval of permits and licenses for commercial canna bis activity (until July 1, 2019).
Depending on the nature of the activity for which an application is received, individual project
level environmental review may be required.
FISCAL IMPACT
The recommended fees are intended to accomplish 100% cost recovery for the City’s efforts to
process applications and regulate businesses permitted under the City regulations. As a result, the
proposed actions are intended to eliminate the fiscal impact associated with City efforts to permit
and regulate commercial cannabis business activities in the City. These efforts will also enable
substantial economic activity associated with the new cannabis industry and produce additional
tax revenue to support the City’s General Fund.
As legal cannabis sales and production is an emerging industry, staff has worked with two
different consultants, HdL and MuniServices, to develop an estimated amount of revenue to
expect from a cannabis business tax. Optimistically, cannabis business activities would begin at
the earliest in February or March 2019. However, it is expected to take some time for the City to
establish its permitting and regulatory protocols, and for businesses to find appropriate properties
and obtain the necessary permits to operate.
As a result, tax revenues fro m cannabis businesses are anticipated to increase to $1,500,000
through the next several years as businesses mature. Cannabis business tax revenue estimates
have been included in the City’s Fiscal Health Response Plan presented to Council on April 17,
2018. The plan includes an estimate of $100,000 for FY 2018-19. Tax revenues are intended to
support general services. Fees are designed to recover the specific and reasonable costs related
to the review and evaluation of permits and the ongoing related costs to ensuring compliance
with applicable regulations consistent with adopted Council financial policies. Should Council
approve both the application and ongoing regulatory fees, Staff intends to return as part of the
mid-year budget update with the necessar y budget amendments to add the forecasted additional
regulatory and application fee revenues and add contract positions to meet the anticipated
workload to both process applications and begin the administration of regulations.
ALTERNATIVES
1. Modify the Proposed Resolution. The City Council has the latitude to make modifications
to the Cannabis Operator Permit Application Requirements and Ranking Criteria and the
proposed Fee Schedule. The Council has the policy discretion to adjust fees and Staff will be
prepared to offer any ideas for any adjustments and overall the Council has the ability to
make modifications during the meetings.
2. Continue Consideration of the Resolution to a Future Date. The City Council could direct
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staff to conduct additional research or outreach on more or more components of the
recommended resolution. If this alternative is taken, the Council should provide direction to
staff regarding additional information needed to move forward.
Attachments:
a - Fee Study Resolution
b - Evaluation Criteria Resolution
c - Cannabis Scoring Worksheet (Exhibit A)
d - Response to Council Direction
e - California State License Categories and Fees
f - Financial Plan Cost Recovery Policies
g - Draft Commercial Cannabis Business Operators Permit Application
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R ______
RESOLUTION NO. _______ (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING THE CITY’S MASTER FEE
SCHEDULE WITH UPDATED USER AND REGULATORY FEES FOR
VARIOUS COMMERCIAL CANNABIS BUSINESS ACTIVITIES
WHEREAS, it is the City’s policy (User Fee Recovery Goals - Financial Plan Section H)
to assess service charges based on specific policies for cost recovery of services provided ; and
WHEREAS, on May 15, 2018, the City Council adopted Ordinance No. 1647 (2018
Series) establishing a comprehensive regulatory program for the evaluation and permitting of
commercial cannabis business operations within the City; and
WHEREAS, Section 9.10.050 of the Municipal Code says that the City Council shall adopt
fees necessary to implement the regulations in relation to Commercial Cannabis Operator Permits;
and
WHEREAS, the City has contracted with a consultant, MuniServices, to prepare cost and
resource allocation worksheets for the purpose of identifying appropriate fees to assess for various
activities and applications associated with the reviewing, ranking, permitt ing, and regulation of
commercial cannabis businesses in the City of San Luis Obispo ; and
WHEREAS, public outreach was conducted through outreach by staff members to
interested parties and through publication of the proposed fee schedule on the City’s website in
advance of the City Council’s consideration of the newly proposed fees ; and
WHEREAS, on November 27, 2018, the City Council held a public hearing to review and
discuss the proposed fee schedule, receive public input, and consider the recommendations of its
staff; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Findings. The City Council makes the following findings:
1. That the above recitals are true and correct.
2. That the proposed user and regulatory fees are consistent with the City’s cost recovery
goals (Financial Plan Section H), and that the established fees do not exceed the
estimated reasonable cost of providing the service or performing the activity for which
the fee is imposed.
SECTION 2. Action. The City Council takes the following actions:
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Resolution No. _____ (2018 Series) Page 2
R ______
1. The City’s Master Fee Schedule is hereby amended to include updated user and
regulatory fees for cannabis business operator applications and annual licenses as
provided in Exhibit A attached hereto.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 201 8.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
City Clerk
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Resolution No. _____ (2018 Series) Page 3
R ______
EXHIBIT A
CITY OF SAN LUIS OBISPO
Cannabis Fee Schedule
One Time Application Fees
Retail Store Front Application Fee $22,519
Other Commercial Cannabis Business Applicants:
Initial Application Fee $7,431
Final Application Fee when permit issues $15,087
Yearly License Renewal Fees
Retail Businesses $90,575
Manufacturing Businesses $72,034
Cultivation $72,243
Other Business $65,890
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R ______
RESOLUTION NO. _____ (2018 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING CANNABIS OPERATOR PERMIT
RANKING CRITERIA AND THE ANNUAL APPLICATION SUBMITTAL
PERIOD (CODE-1058-2017)
WHEREAS, in 2017, the California legislature passed, and Governor Brown signed
Senate Bill 94, which enacted the Medicinal and Adult -Use Cannabis Regulation and Safety Act
(“MAUCRSA”), repealed the Medical Cannabis Regulation and Safety Act (“MCRSA”) but
incorporated certain provisions of MCRSA into the licensing provisions established by Proposition
64; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing
in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on May 15,
2018 and adopted Ordinance 1647 that amended Title 17 (Zoning Regulations) of the Municipal
Code to establish land use regulations for the operation of commercial cannabis businesses, and
repealed and replaced Title 9, Public Peace, Morals and Welfare (Chapter 9.10.) of the Municipal
Code related to cannabis regulation; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing
on October 16, 2018 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo,
California, and continued the review of the Cannabis Operator Permit Ranking Criteria and the
annual application submittal period providing direction to staff on adjustments to be made to the
criteria; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing
on November 27, 2018 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo,
California, for the purpose of establishing the Cannabis Operator Permit Ranking Criteria (Exhibit
A) and the annual application submittal period.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Findings.
1. The proposed Cannabis Operator Permit Ranking Criteria (Exhibit A) establishes the
ranking criteria for individuals who apply for a Cannabis Operator Permit to operate a
cannabis business activity in the City consistent with Municipal Code Chapter 9.10,
Section 9.10.070 (A).
2. The proposed timeframe in which applications are submitted annually is consistent with
Municipal Code Chapter 9.10, Section 9.10.070 (B).
SECTION 2. Environmental Review. The project is exempt from environmental review
per the Business and Profess ions Code (Section 26055(h)) because the project includes the
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Resolution No. _____ (2018 Series) Page 2
R ______
adoption of ordinances, rules, or regulations for the purpose of regulating cannabis business
activity in the City. The City’s cannabis business regulations require discretionary review and
approval of permits, licenses, or other authorizations to engage in commercial cannabis activity.
Future applications for commercial cannabis business activities in the City will be subject to
CEQA, per the normal environmental review process.
SECTION 3. Action. The City Council hereby approves Cannabis Operator Permit
Ranking Criteria (Exhibit A) and annual application submittal timeframe subject to the following
conditions:
1. All Cannabis Businesses shall be evaluated by the Cannabis Operator Permit Ranking
Criteria as outlined in E xhibit A.
2. The first annual application submittal period shall coincide with the first three weeks
of 2019 (January 7 through close of business on January 29, 2019). Following this
initial application period, the City Council delegates its authority to the City Manager
to open up new application periods on an as needed basis to include July 1 through July
31 of each calendar year.
3. The City Manager is authorized to make minor modifications to this evaluation criteria
to ensure that the application process is implemented in a manner that is consistent with
the intent of Ordinance 1647. Any future changes to the criteria outlined in Exhibit A
will be published at least 10 days in advance of any application period opening.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
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Resolution No. _____ (2018 Series) Page 3
R ______
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo , California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington
City Clerk
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10. An adjusted score may be agreed upon by the reviewer and the consultant.
Applicant:
Reviewer:
6. Points may be awarded in an amount up to the possible points in each scoring criteria.
5. Each reviewer will complete a score sheet for each proposal.
4. Questions can also be directed to the consultant.
3. Discussion between the reviewers during the evaluation will be limited to clarification to ensure an equal
understanding of the application.
2.City will compile any additional information related to the applicant for consideration.
1. Applicant will make three copies of each proposal.
All applications for a license will be evaluated using the merit criteria outlined below. Applicants must
submit supplemental documentation or references with the application that support the statements below
for review by the City.
Adult-Use Retail Cannabis Merit-Based Criteria and Possible Points
Definitions:
An "applicant" is the entity petitioning for the license and "principals" are the individual members of the
applicant team.
A "primary principal" is defined as an individual who has a 10% or greater ownership stake of the applicant
business.
An "operator" is an applicant that has been licensed and conducts or conducted active operations.
A "majority" is defined as a greater number; more than half. An equal number does not constitute a majority.
Automatic Fail Criteria:
ꞏ Application received after the final filing date.
ꞏ Application incomplete.
ꞏ Facility does not meet City business licensing standards.
ꞏ Only one license applicant allowed per location. Applicants must ask potential landlords if they have existing,
competing cannabis business applicants.
11. Once all criteria scores are reviewed and agreed upon, the total aggregate score for all three reviewers
will be totaled then divided by three to obtain the final score.
9. If there is a scoring deviation between reviewers on any scoring criteria of more than 30% , the
consultant will discuss this specific score with the reviewers.
8. The consultant will review all three score sheets for each proposal.
7. Each completed score sheet will be given to the consultant.
CITY OF SAN LUIS OBISPO
Cannabis Business License Scoring Guidelines
EXHIBIT A
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Manufacturing, Distribution and Non-Storefront Retail Evaluation Criteria
Community Benefit (A): Applicant demonstrates a commitment to City through local
hiring and community support. Select all that apply within each category and total
score.(Up to 20 Points – Deviation Threshold 6 Points)
Possible
points
Applicant
score
Over 90% of employees will be San Luis Obispo County residents. (10 points)
or 60% - 90% of employees will be San Luis Obispo County residents. (5 points)
Over 80% of supply and equipment expense (non-labor, non-rent expense) will be
sourced from businesses within 90 miles. (10 points)
or 50% - 80% of supply and equipment expense (non-labor, non-rent expense) will
be sourced from local businesses within 90 miles. (5 points)
Total Community Benefit (A)20
Community Benefit (B): Continued support of community programs in San Luis
Obispo (i.e. park cleanups, facility improvements, donating supplies/equipment to
youth programs). (Up to 10 Points - Deviation Threshold 3 points)
Possible
points
Applicant
score
Providing over 20 hours per month of community support. (5 points)
or Providing over 10-20 hours per month of community support. (2 points)
Provide over $1,000 per month for community support. (5 points)
or Provide up to $1,000 per month for community support. (2 points)
Total Community Benefit (B)10
Total Merit Criteria 1.0 30
Merit Criteria 1.0 - Community Benefit
10
10
5
5
EXHIBIT A
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Applicant commits to equity ownership and competitive compensation in comparison
to other mainstream commercial businesses. Applicants commitment will be
confirmed during annual permit renewal process. Select all that apply and total score.
(Up to 20 Points – Deviation Threshold 9 Points)
Possible
points
Applicant
score
Applicant includes 3 or more primary principals who have earned at or below the
median household income at the time of application. (8 points)
or Applicant includes 1 or 2 primary principals who have earned at or below the
median household income at the time of application. (4 points)
Business will have an average pay rate for entry and mid-level positions of at least
40% more than the median local income for similar positions in other mainstream
businesses. (8 points)
or Business will have an average pay rate for entry and mid-level positions of at
least 20% more than the median local income for similar positions in other mainstream
businesses. (4 points)
Base wages of employees exceed the minimum wage by at least $3.00/hr.2
Business will allow "labor peace agreement" at 10 or more non-management
employees. 2
Total Merit Criteria 2.0 20
8
Merit Criteria 2.0 - Equity and Labor
8
EXHIBIT A
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Financial Investment: Applicant has plans and capital to support a vibrant business
within the City. (Up to 25 Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
Applicant demonstrates financial capacity to capitalize, start up, and sustain business
operations.10
Applicant commits to develop raw land that has been zoned for commercial use for a
commercial cannabis facility.10
Applicant commits to major improvements, including façade rehabilitation, building
expansion, site improvements and/or other investments in an
underutilized/underdeveloped site that has been zoned for commercial use for a
commercial cannabis facility.
5
The proposed cannabis business site can accommodate the required number of parking
spaces with safe and convenient access for customers/employees.5
Total Merit Criteria 3.0 30
Total GENERAL Merit Criteria Points Available 80
Total GENERAL Merit Criteria Points Awarded
Merit Criteria 3.0 - Financial Investment
Totals
Total %
EXHIBIT A
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Cultivation Evaluation Criteria
Community Benefit (A): Applicant demonstrates a commitment to City through local
hiring and community support. Select all that apply within each category and total
score.(Up to 20 Points – Deviation Threshold 6 Points)
Possible
points
Applicant
score
Over 90% of employees will be San Luis Obispo County residents. (10 points)
or 60% - 90% of employees will be San Luis Obispo County residents. (5 points)
Over 80% of supply and equipment expense (non-labor, non-rent expense) will be
sourced from businesses within 90 miles. (10 points)
or 50% - 80% of supply and equipment expense (non-labor, non-rent expense) will
be sourced from local businesses within 90 miles. (5 points)
Total Community Benefit (A)20
Community Benefit (B): Continued support of community programs in San Luis
Obispo (i.e. park cleanups, facility improvements, donating supplies/equipment to
youth programs). (Up to 10 Points - Deviation Threshold 3 points)
Possible
points
Applicant
score
Providing over 20 hours per month of community support. (5 points)
or Providing over 10-20 hours per month of community support. (2 points)
Provide over $1,000 per month for community support. (5 points)
or Provide up to $1,000 per month for community support. (2 points)
Total Community Benefit (B)10
Total Merit Criteria 1.0 30
Merit Criteria 1.0 - Community Benefit
10
10
5
5
EXHIBIT A
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Applicant commits to equity ownership and competitive compensation in comparison
to other mainstream commercial businesses. Applicants commitment will be
confirmed during annual permit renewal process. Select all that apply and total score.
(Up to 20 Points – Deviation Threshold 9 Points)
Possible
points
Applicant
score
Applicant includes 3 or more primary principals who have earned at or below the
median household income at the time of application. (8 points)
or Applicant includes 1 or 2 primary principals who have earned at or below the
median household income at the time of application. (4 points)
Business will have an average pay rate for entry and mid-level positions of at least
40% more than the median local income for similar positions in other mainstream
businesses. (8 points)
or Business will have an average pay rate for entry and mid-level positions of at
least 20% more than the median local income for similar positions in other mainstream
businesses. (4 points)
Base wages of employees exceed the minimum wage by at least $3.00/hr.2
Business will allow "labor peace agreement" at 10 or more non-management
employees. 2
Total Merit Criteria 2.0 20
Medical Retail Commitment (up to 10 points)Possible
points
Applicant
score
Applicant commits to retain a California state medicinal cannabis cultivation license. 10
Total Merit Criteria 3.0 10
Merit Criteria 2.0 - Equity and Labor
8
8
Merit Criteria 3.0 - Medical Retail Commitment
EXHIBIT A
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Applicant demonstrates past experience in and/or commits to sustainable and
environmental business or building practices utilizing recognized industry standards.
Applicants actions will be confirmed during annual permit renewal process. Select all
that apply and total score. (Up to 20 Points – Deviation Threshold 6 Points)
Possible
points
Applicant
score
Applicant will recycle waste water (utilize purple pipe when available).5
Applicant will utilize certified organic practices. 3
Applicant will utilize carbon free power sources for majority of power.5
Applicant will utilize energy efficient lighting.4
Applicant has plan to reduce water waste.3
Total Merit Criteria 4.0 20
Financial Investment: Applicant has plans and capital to support a vibrant business
within the City. (Up to 25 Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
Applicant demonstrates financial capacity to capitalize, start up, and sustain business
operations.10
Applicant commits to develop raw land that has been zoned for commercial use for a
commercial cannabis facility.10
Applicant commits to major improvements, including façade rehabilitation, building
expansion, site improvements and/or other investments in an
underutilized/underdeveloped site that has been zoned for commercial use for a
commercial cannabis facility.
5
The proposed cannabis business site can accommodate the required number of parking
spaces with safe and convenient access for customers/employees.5
Total Merit Criteria 5.0 30
Merit Criteria 4.0 - Sustainability
Merit Criteria 5.0 - Financial Investment
EXHIBIT A
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Total Merit Criteria Points Available 110
Total Merit Criteria Points Awarded
Totals
Total %
EXHIBIT A
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Retail Evaluation Criteria
Community Benefit (A): Applicant demonstrates a commitment to City through local
hiring and community support. Select all that apply within each category and total
score.(Up to 20 Points – Deviation Threshold 6 Points)
Possible
points
Applicant
score
Over 90% of employees will be San Luis Obispo County residents. (10 points)
or 60% - 90% of employees will be San Luis Obispo County residents. (5 points)
Over 80% of supply and equipment expense (non-labor, non-rent expense) will be
sourced from businesses within 90 miles. (10 points)
or 50% - 80% of supply and equipment expense (non-labor, non-rent expense) will
be sourced from local businesses within 90 miles. (5 points)
Total Community Benefit (A)20
Community Benefit (B): Continued support of community programs in San Luis
Obispo (i.e. park cleanups, facility improvements, donating supplies/equipment to
youth programs). (Up to 10 Points - Deviation Threshold 3 points)
Possible
points
Applicant
score
Providing over 20 hours per month of community support. (5 points)
or Providing over 10-20 hours per month of community support. (2 points)
Provide over $1,000 per month for community support. (5 points)
or Provide up to $1,000 per month for community support. (2 points)
Total Community Benefit (B)10
Total Merit Criteria 1.0 30
10
Merit Criteria 1.0 - Community Benefit
10
5
5
EXHIBIT A
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Record of compliant current or previous business operations: Applicant has
previous record of operating a compliant commercial cannabis (including medical).
A compliant business operation does not have a documented history of local or state
level violations relating, but not limited to: business code, public safety,
environmental impacts, employment, and financial payments. (Up to 30 Points –
Deviation Threshold 9 Points)
Possible
points
Applicant
score
91% to 100% of the primary principals have operated a local compliant commercial
cannabis business for 5 or more years. 35
or 81% to 90% of the primary principals have operated a local compliant
commercial cannabis business for 5 or more years.30
or 71% to 80% of the primary principals have operated a local compliant
commercial cannabis business for 5 or more years.25
or 61% to 70% of the primary principals have operated a local compliant
commercial cannabis business for 5 or more years.20
or 51% to 60% of the primary principals have operated a local compliant
commercial cannabis business for 5 or more years.15
10-50% of the primary principals operated a compliant commercial cannabis business
outside of SLO County for 5 or more years.10
or 10-50% of the primary principals operated a compliant commercial cannabis
business outside of SLO County for less than 5 years.5
Total Merit Criteria 2.0 35
Merit Criteria 2.0 - Experience
EXHIBIT A
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Applicant commits to equity ownership and competitive compensation in comparison
to other mainstream commercial businesses. Applicants commitment will be
confirmed during annual permit renewal process. Select all that apply and total score.
(Up to 20 Points – Deviation Threshold 9 Points)
Possible
points
Applicant
score
Applicant includes 3 or more primary principals who have earned at or below the
median household income at the time of application. (8 points)
or Applicant includes 1 or 2 primary principals who have earned at or below the
median household income at the time of application. (4 points)
Business will have an average pay rate for entry and mid-level positions of at least
40% more than the median local income for similar positions in other mainstream
businesses. (8 points)
or Business will have an average pay rate for entry and mid-level positions of at
least 20% more than the median local income for similar positions in other mainstream
businesses. (4 points)
Base wages of employees exceed the minimum wage by at least $3.00/hr.2
Business will allow "labor peace agreement" at 10 or more non-management
employees. 2
Total Merit Criteria 4.0 20
Merit Criteria 4.0 - Equity and Labor
8
8
EXHIBIT A
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Applicant commits to responsible use messaging practices. Select all that apply and
total score. (Up to 10 Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
Business articulates strategy to keep cannabis from being diverted to minors including
advertising that is appropriately targeted to adult audiences.5
Business promotes responsible use including messaging on packaging, offering lower
dose THC product options, offering to track use via "user determined quotas", posting
information on cannabis use disorder and cautions re: development of the adolescent
brain.
5
Total Merit Criteria 5.0 10
Medical Retail Commitment (up to 10 points)Possible
points
Applicant
score
Applicant commits to provide retail medical cannabis products to consumers.10
Total Merit Criteria 6.0 10
Merit Criteria 5.0 - Messaging
Merit Criteria 6.0 - Medical Retail Commitment
EXHIBIT A
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Control of business location: Applicant demonstrates control of a site to ensure a
successful and timely transition from being awarded a license to opening the business.
Incomplete purchase or lease agreements do not constitute site control. (Up to 10
Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
Majority ownership in site property. 10
Minority ownership in site property. 8
10+ years future lease of site property. 8
5-10 years future lease of site property. 5
2-5 years future lease of site property. 3
Less than 2 years future lease of site property. 1
Total Merit Criteria 7.0 10
Financial Investment: Applicant has plans and capital to support a vibrant business
within the City. (Up to 25 Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
Applicant demonstrates financial capacity to capitalize, start up, and sustain business
operations.10
Applicant commits to develop raw land that has been zoned for commercial use for a
commercial cannabis facility.10
Applicant commits to major improvements, including façade rehabilitation, building
expansion, site improvements and/or other investments in an
underutilized/underdeveloped site that has been zoned for commercial use for a
commercial cannabis facility.
5
The proposed cannabis business site can accommodate the required number of parking
spaces and safe and convenient access for customers/employees.5
Total Merit Criteria 8.0 30
Merit Criteria 7.0 - Property Control
Choose one:
Merit Criteria 8.0 - Financial Investment
EXHIBIT A
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Total Merit Criteria Points Available 145
Total Merit Criteria Points Awarded
Totals
Total %
EXHIBIT A
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COUNCIL DIRECTION ON THE CANNABIS OPERATOR PERMIT APPLICATION
REQUIREMENTS, RANKING CRITERIA, AND ANNUAL APPLICATION
SUBMITTAL PERIOD:
The following direction provided on changes to the evaluation criteria:
1. Define terms for Applicants, Operators, and Principals.
Definitions have been included as a part of the Cannabis Scoring Worksheets (Attachment
C). The definitions are listed below:
Applicant - The entity petitioning for the Cannabis Business Operator Permit.
Principal(s) - The individual members of the applicant team.
Primary Principal - An individual who has a 10% or greater ownership stake of the
applicant business, which includes partners, officers, directors, and stockholders of every
corporation, limited liability company, or general limited partnership that owns at least
10% of the stock, capital, profits, voting rights, or membership interest of the commercial
cannabis business or that is one of the partners in the commercial cannabis business; the
managers of the commercial cannabis business.
Operator - An applicant that has been licensed and conducts or conducted active cannabis
operations.
Majority - A greater number; more than half. An equal number does not constitute a
majority.
2. Clarify the scope of the product list.
Modified language of the application form to request applicants provide a general
description of products and services (Attachment G, Commercial Cannabis Business
Operators Permit Application).
3. After initial application period, allow applications from all business types other than
retail storefronts and cultivators at any time.
The Evaluation Criteria Resolution (Attachment B) gives the City Manager the authority
to adjust application periods and to open up new application periods on an as needed basis
in addition to the annual application period of July 1 through July 31 of each calendar year.
The first application period will be January 7, 2019 through January 29, 2018.
4. Modify the form so there is greater clarity regarding the specific criteria that will be
applied to the different application types.
The Cannabis Scoring Worksheets have been modified into three, separate forms based on
the type of cannabis business being permitted: 1) retail storefront, 2) cultivation, and 3)
manufacturing, distribution, and non-storefront retail (delivery). Each evaluation criteria
have been modified incorporate information that is pertinent for the identified business
groupings (see Att achment C).
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Council Direction on the Cannabis Operator Permit Application Requirements, Ranking Criteria, and Annual
Application Submittal Period.
Page 2
5. Define supplies and equipment, for purposes of local procurement criteria.
Terminology has been changed in Section 1.0A to state “supply and equipment expense
(non-labor, non-rent expense) will be sourced from local businesses within 90 miles”
Originally the section stated, “supplies and equipment will be sourced from local
businesses” (Attachment C, Cannabis Scoring Worksheets).
6. Increase point value for 3.0 (local experience) to emphasize value of local cannabis
business experience.
Section 2.0, under the Retail Evaluation Criteria, has been modified to include more points
for an applicant that has operated a local, compliant commercial cannabis business
(Attachment C, Cannabis Scoring Worksheets).
7. 4.0 (Equity and Labor Criteria) reduce point value to 20 points and redistribute
points within this category accordingly.
Section 4.0, under the Retail Evaluation Criteria, has been revised to have a maximum
point value of 20 points (Attachment C, Cannabis Scoring Worksheets).
8. 5.0 (Responsible Use Messaging) Look at consolidating messaging criteria to increase
point value of individual criteria.
Section 5.0, under the Retail Evaluation Criteria, has been revised to two criteria, each with
a maximum point value of 5 points (Attachment C, Cannabis Scoring Worksheets).
9. Application criteria to be modified to reduce upfront requirements for site specific
architectural plans.
The application form has been modified to request only dimensioned site and floor plans
as a part of the Cannabis Operator Permit application (Attachment G, Commercial
Cannabis Business Operators Permit Application).
10. Simplify the application and operator permit process for laboratory testing uses.
Laboratory testing businesses will be required to submit an application to evaluate that they
qualify as an applicant, but no additional evaluation is required for these businesses.
11. Strike Section 9.0, Beneficial Uses.
This section has been removed (Attachment C, Cannabis Scoring Worksheets).
12. 10.0 (Land Development) Clarify that raw land development still requires
appropriate zoning.
Section 8.0 has been amended to include a revised evaluation criterium that states the
“Applicant commits to develop raw land, that has been zoned for commercial use, for a
commercial cannabis facility.” Original language stated, “Applicant commits to develop
raw land for commercial cannabis business facility” (Attachment C, Cannabis Scoring
Worksheets).
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Council Direction on the Cannabis Operator Permit Application Requirements, Ranking Criteria, and Annual
Application Submittal Period.
Page 3
13. 2.0 (Record of compliant business operations) Increase points from 20 to 30 and add
points for applications that “Demonstrate financial capacity to capitalize start up and
sustain business operations.”
The reference to “Financial Capacity” has been moved to Section 8.0 (Financial
Investment) and a maximum of 10 points may be allotted to a business where an “Applicant
demonstrates financial capacity to capitalize, start up, and sustain business operations.” An
applicant may receive a total maximum point score of 30 for Section 8.0 (Attachment C,
Cannabis Scoring Worksheets).
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California State Annual Commercial Cannabis Fee Structure
Cultivation
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BUDGET AND FISCAL POLICIES
USER FEE COST RECOVERY GOALS A. Ongoing Review Fees will be reviewed and updated on an ongoing basis to ensure that they keep pace with changes in the cost-of-living as well as changes in methods or levels of service delivery. In implementing this goal, a comprehensive analysis of City costs and fees should be made at least every five years. In the interim, fees will be adjusted by annual changes in the Consumer Price Index. Fees may be adjusted during this interim period based on supplemental analysis whenever there have been significant changes in the method, level or cost of service delivery. B. User Fee Cost Recovery Levels In setting user fees and cost recovery levels, the following factors will be considered: 1. Community-Wide Versus Special Benefit. The level of user fee cost recovery should consider the community-wide versus special service nature of the program or activity. The use of general-purpose revenues is appropriate for community-wide services, while user fees are appropriate for services that are of special benefit to easily identified individuals or groups. 2. Service Recipient Versus Service Driver. After considering community-wide versus special benefit of the service, the concept of service recipient versus service driver should also be considered. For example, it could be argued that the applicant is not the beneficiary of the City's development review efforts: the community is the primary beneficiary. However, the applicant is the driver of development review costs, and as such, cost recovery from the applicant is appropriate. 3. Effect of Pricing on the Demand for Services. The level of cost recovery and related pricing of services can significantly affect the demand and subsequent level of services provided. At full cost recovery, this has the specific advantage of ensuring that the City is providing services for which there is genuinely a market that is not overly-stimulated by artificially low prices. Conversely, high levels of cost recovery will negatively impact the delivery of services to lower income groups. This negative feature is especially pronounced, and works against public policy, if the services are specifically targeted to low income groups. 4. Feasibility of Collection and Recovery. Although it may be determined that a high level of cost recovery may be appropriate for specific services, it may be impractical or too costly to establish a system to identify and charge the user. Accordingly, the feasibility of assessing and collecting charges should also be considered in developing user fees, especially if significant program costs are intended to be financed from that source. C. Factors Favoring Low Cost Recovery Levels Very low cost recovery levels are appropriate under the following circumstances: 1. There is no intended relationship between the amount paid and the benefit received. Almost all "social service" programs fall into this category as it is expected that one group will subsidize another. 2. Collecting fees is not cost-effective or will significantly impact the efficient delivery of the service. 3. There is no intent to limit the use of (or entitlement to) the service. Again, most "social service" programs fit into this category as well as many public safety (police and fire) emergency response services. Historically, access to neighborhood and community parks would also fit into this category.
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4. The service is non-recurring, generally delivered on a "peak demand" or emergency basis, cannot reasonably be planned for on an individual basis, and is not readily available from a private sector source. Many public safety services also fall into this category. 5. Collecting fees would discourage compliance with regulatory requirements and adherence is primarily self-identified, and as such, failure to comply would not be readily detected by the City. Many small-scale licenses and permits might fall into this category. D. Factors Favoring High Cost Recovery Levels The use of service charges as a major source of funding service levels is especially appropriate under the following circumstances: 1. The service is similar to services provided through the private sector. 2. Other private or public sector alternatives could or do exist for the delivery of the service. 3. For equity or demand management purposes, it is intended that there be a direct relationship between the amount paid and the level and cost of the service received. 4. The use of the service is specifically discouraged. Police responses to disturbances or false alarms might fall into this category. 5. The service is regulatory in nature and voluntary compliance is not expected to be the primary method of detecting failure to meet regulatory requirements. Building permit, plan checks, and subdivision review fees for large projects would fall into this category. E. General Concepts Regarding the Use of Service Charges The following general concepts will be used in developing and implementing service charges: 1. Revenues should not exceed the reasonable cost of providing the service. 2. Cost recovery goals should be based on the total cost of delivering the service, including direct costs, departmental administration costs and organization-wide support costs such as accounting, personnel, information technology, legal services, fleet maintenance and insurance. 3. The method of assessing and collecting fees should be as simple as possible in order to reduce the administrative cost of collection. 4. Rate structures should be sensitive to the "market" for similar services as well as to smaller, infrequent users of the service. 5. A unified approach should be used in determining cost recovery levels for various programs based on the factors discussed above. F. Low Cost-Recovery Services Based on the criteria discussed above, the following types of services should have very low cost recovery goals. In selected circumstances, there may be specific activities within the broad scope of services provided that should have user charges associated with them. However, the primary source of funding for the operation as a whole should be general-purpose revenues, not user fees.
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1. Delivering public safety emergency response services such as police patrol services and fire suppression. 2. Maintaining and developing public facilities that are provided on a uniform, community-wide basis such as streets, parks and general-purpose buildings. 3. Providing social service programs and economic development activities. G. Recreation Programs The following cost recovery policies apply to the City's recreation programs: 1. Cost recovery for activities directed to adults should be relatively high. 2. Cost recovery for activities directed to youth and seniors should be relatively low. In those circumstances where services are similar to those provided in the private sector, cost recovery levels should be higher. Although ability to pay may not be a concern for all youth and senior participants, these are desired program activities, and the cost of determining need may be greater than the cost of providing a uniform service fee structure to all participants. Further, there is a community-wide benefit in encouraging high-levels of participation in youth and senior recreation activities regardless of financial status. 3. Cost recovery goals for recreation activities are set as follows: High-Range Cost Recovery Activities - (60% to 100%) a. Adult athletics b. Banner permit applications c. Child care services d. Facility rentals (indoor and outdoor; excludes use of facilities for internal City uses) Mid-Range Cost Recovery Activities - (30% to 60%) e. Triathlon f. Golf g. Summer and Spring Break Camps h. Classes i. Major commercial film permit applications Low-Range Cost Recovery Activities- (0 to 30%) j. Aquatics k. Community gardens l. Junior Ranger camp m. Minor commercial film permit applications n. Skate park o. Parks and Recreation sponsored events (except for Triathlon) p. Youth sports q. Teen services r. Senior/boomer services
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4. For cost recovery activities of less than 100%, there should be a differential in rates between residents and non-residents. However, the Director of Parks and Recreation is authorized to reduce or eliminate non-resident fee differentials when it can be demonstrated that: a. The fee is reducing attendance. b. And there are no appreciable expenditure savings from the reduced attendance. 5. Charges will be assessed for use of rooms, pools, gymnasiums, ball fields, special-use areas, and recreation equipment for activities not sponsored or co-sponsored by the City. Such charges will generally conform to the fee guidelines described above. However, the Director of Parks and Recreation is authorized to charge fees that are closer to full cost recovery for facilities that are heavily used at peak times and include a majority of non-resident users. 6. A vendor charge of at least 10 percent of gross income will be assessed from individuals or organizations using City facilities for moneymaking activities. 7. Director of Parks and Recreation is authorized to offer reduced fees such as introductory rates, family discounts and coupon discounts on a pilot basis (not to exceed 18 months) to promote new recreation programs or resurrect existing ones. 8. The Parks and Recreation Department will consider waiving fees only when the City Manager determines in writing that an undue hardship exists. H. Development Review Programs The following cost recovery policies apply to the development review programs: 1. Services provided under this category include: a. Planning (planned development permits, tentative tract and parcel maps, rezonings, general plan amendments, variances, use permits). b. Building and safety (building permits, structural plan checks, inspections). c. Engineering (public improvement plan checks, inspections, subdivision requirements, encroachments). d. Fire plan check. 2. Cost recovery for these services should generally be very high. In most instances, the City's cost recovery goal should be 100%. 3. However, in charging high cost recovery levels, the City needs to clearly establish and articulate standards for its performance in reviewing developer applications to ensure that there is “value for cost.” I. Comparability with Other Communities In setting user fees, the City will consider fees charged by other agencies in accordance with the following criteria: 1. Surveying the comparability of the City's fees to other communities provides useful background information in setting fees for several reasons:
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a. They reflect the "market" for these fees and can assist in assessing the reasonableness of San Luis
Obispo’s fees.
b. If prudently analyzed, they can serve as a benchmark f or how cost-effectively San Luis Obispo
provides its services.
2. However, fee surveys should never be the sole or primary criteria in setting City fees as there are many
factors that affect how and why other communities have set their fees at their levels. For example:
a. What level of cost recovery is their fee intended to achieve compared with our cost recovery
objectives?
b. What costs have been considered in computing the fees?
c. When was the last time that their fees were comprehensively evaluated?
d. What level of service do they provide compared with our service or performance standards?
e. Is their rate structure significantly different than ours and what is it intended to achieve?
3. These can be very difficult questions to address in fairly evaluating fees among different communities.
As such, the comparability of our fees to other communities should be one factor among many that is
considered in setting City fees.
ENTERPRISE FUND FEES AND RATES
A. Water, Sewer, and Parking. The City will set fees and rates at levels which fully cover the total direct and
indirect costs—including operations, capital outlay, and debt service—of the following enterprise programs:
water, sewer, and parking.
B. Transit. Based on targets set under the Transportation Development Act, the City will strive to cover at least
twenty percent of transit operating costs with fare revenues.
C. Ongoing Rate Review. The City will review and adjust enterprise fees and rate structures as required to
ensure that they remain appropriate and equitable.
D. Cost of Service Fees. The City will treat the water and sewer funds in the same manner as if they were
privately owned and operated. This means assessing reasonable cost of service fees in fully recovering
service costs.
The purpose of the cost of service fee is reasonable cost recovery for the use of the City’s services such as
street rights-of-way and public safety. The appropriateness of charging the water and sewer fund a reasonable
cost of service fee for the use of the City streets is further supp orted by the results of studies from Arizona,
California, Ohio, and Vermont which concluded that the leading cause of street resurfacing and
reconstruction is street cuts and trenching for Utilities.
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CITY OF SAN LUIS OBISPO
Community Development Department
919 Palm Street, San Luis Obispo, CA 93401
(805) 781-7170
Commercial Cannabis Business Operators Permit Application
A. Business Information
Business Name:
Property Address:
Assessor Parcel Number:
Zoning Designation:
B. Business Type (Check all that apply)
Cultivation - Specialty (Up to 5,000
Sq. Ft. Max)
Cultivation - Small (5,001 - 10,000
Sq. Ft. Max)
Cultivation – Nursery (Up to 10,000
Sq. Ft. Max)
Manufacture (Non-volatile Raw
Product Extraction)
Manufacture (Cannabis Infusion)
Manufacture (Itinerant – No
permanent facility)
Manufacturer (Research and
Development)
Distributor
Testing Laboratory
Retailer Storefront (Adult-use)
Retailer Storefront (Medical)
Retailer Storefront (Adult-use and
Medical)
Retailer Non-storefront (Adult-use)
Retail Non-Storefront (Medical)
Retail Non-storefront (Adult-use and
Medical
Transporter
Microbusiness (No more than 50%
GR* from cultivation, distribution
and manufacturing)
Microbusiness (More than 50% GR*
from cultivation, distribution and
manufacturing)
*GR – Gross Receipts
C. Definitions
Applicant - The entity petitioning for the Cannabis Business Operator Permit.
Principal(s) - The individual members of the applicant team.
Primary Principal - An individual who has a 10% or greater ownership stake of the applicant business , which
includes partners, officers, directors, and stockholders of every corporation, limited liability compa ny, or general
limited partnership that owns at least 10% of the stock, capital, profits, voting rights, or membership interest of
the commercial cannabis business or that is one of the partners in the commercial cannabis business; the
managers of the commercial cannabis business.
Operator - An applicant that has been licensed and conducts or conducted active cannabis operations.
Majority - A greater number; more than half. An equal number does not constitute a majority.
D. Applicant Information
Name of Primary Responsible Party Completing the Application:
Title:
DOB:
Social Security No:
If applicant is a not for profit, corporation, partnership or other business entity, please identify:
Name of Business Entity:
Type of Ownership:
Federal Tax Id:
Start Date:
Mailing Address:
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Primary Phone No:
Alt. Phone No:
Email Address:
Preferred method of contact (check one) Mail Phone Email
E. Additional Responsible Party Information
Name:
Title:
DOB:
Social Security No:
Mailing Address:
Primary Phone No:
Alt. Phone No:
Email Address:
Preferred method of contact (check one) Mail Phone Email
Please attach additional sheets if there are more than 2 Responsible Parties.
F. Information on Property Owner or Landlord
Name:
Mailing Address:
Primary Phone No:
Alt. Phone No:
Email Address:
Preferred method of contact (check one) Mail Phone Email
If the applicant is not the legal owner of the property, the application must be accompanied by a notarized Owner’s
Statement of Consent to operate a commercial cannabis business on the property.
G. Related License Information
The applicant and/or responsible parties has been associated with a commercial cannabis business permit in the
past 10 years.
Yes No (If yes, please provide the following information)
Name:
City or County:
Start Date: End Date:
Business Name:
Business Type:
Please attach additional sheets if necessary.
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Required Submissions (Please check the box for each attachment)
Please attach the following documents to your application:
Business Operations Plan
• Business Plan: A plan describing how the cannabis cultivation business will operate in accordance with City
code, state law, and other applicable regulations. The busines s plan must include plans for handling cash and
transporting cannabis and cannabis products to and from the cultivation site.
• Community Relations Plan: A plan describing who is designated as being responsible for outreach and
communication with the surrounding community, including the neighborhood and businesses, and how the
designee can be contacted.
• State Licenses: Copies of the state licenses relating to the commercial cannabis business licenses, the
applicant holds (when available).
• Tax Compliance: A current copy of the applicant’s city business operations tax certificate, state sales tax
seller’s permit, and the applicant’s most recent year’s financial statement and tax returns (for first time
applicants, the business operations tax account will be set up in-house after the application has been
submitted).
• Insurance: The applicant’s certificate of commercial general liability insurance and endorsements and
certificates of all other insurance related to the operation of the cultivation business.
• Budget: A copy of the applicant’s most recent annual budget for operations (If available)
• Financial Capacity: Financial information such as bank balances, available loans and other sources of
funding the enterprise.
• Products and Services: A list/description of the general products and services the business will provide.
Community Benefit: The applicant shall demonstrate to the satisfaction of the City of its intent to local hiring
and community support.
Education Plan: A plan describing the type of cannabis education and prevention efforts that will be provided
by the business to the community.
Security Plan: A detailed security plan outlining the measures that will be taken to ensure the safety of persons
and property on the business site. The security plan must be prepared by a qualified professional.
Lighting Plan: A detailed lighting plan showing existing and proposed exterior and interior lights that will
provide adequate security lighting for the business site.
Site and Floor Plans: A dimensioned site plan of the business site, including all buildings, structures,
driveways, parking lots, landscape areas and boundaries. Also provide dimensioned floor plans for each level of
each building that makes up the business site, including the entrances, exits, walls and cultivation areas, if
applicable. The plans shall also include the following information about the site: current zoning, parking
requirements, consistency with development standards for the zone, if new development planned for the site,
and any other site development information.
Water Efficiency Plan: The applicant shall demonstrate to the satisfaction of the City that sufficient water
supply exists for the use.
Odor Control Plan: A detailed plan describing how the applicant will prevent all odors generated from the
cultivation, manufacturing and storage of cannabis from escaping from the buildings on the business site, such
that the odor cannot be detected by a reasonable person of normal sensitivity outside the buildings.
Hazardous Materials Plan: To the extent that the applicant intends to use any hazardous materials in its
operations, the applicant shall provide a hazardous materials management plan that complie s with all federal,
state and local requirements for management of such substances .
Energy Efficiency Plan: Documentation that the applicant has identified the best way, including carbon free
power sources to provide reliable and efficient energy solutions for their business.
Testing Facility State Standards (Testing Facilities only): Provide documentation that the proposed
testing facility meets state standards.
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H. City Authorization
I, the applicant, provide authorization and consent for the City Manager or his/her designee to seek verification
of the information contained on this application.
I. Indemnification
I, the applicant, agree to the fullest extent permitted by law, any actions taken by a public officer or employee
under the City of San Luis Obispo regulations for Commercial Cannabis Businesses, shall not become a personal
liability of any public officer or employee of the City. To the maximum extent permitted by law, the permittee shall
defend (with counsel acceptable to the City), indemnify and hold harmless the City of San Luis Obispo, the San Luis
Obispo City Council, and its respective officials, officers, employees, representatives, agents and volunteers from
any liability, damages, actions, claims, demands, litigations, loss (direct or indirect), causes of action, proceedings,
or judgments (including legal costs, attorneys’ fees, expert witness or consultant fees, City Attorney or staff time,
expenses or costs) against the City to attach, set aside, void or annul, any cannabis-related approvals and actions
and strictly comply with the conditions under which such permit is granted, in any. The City may elect, in its sole
discretion, to participate in the defense of said action and the permittee shall reimburse the City for its reasonable
legal costs and attorneys’ fees.
J. Nonrefundable Filing Fee
I, the applicant, understand and accept that the nonrefundable filling fee must be submitted with the competed
Commercial Cannabis Business Operators Permit Application and will be retained by the City regardless of the out-
come of the application review.
K. Background – Request for Live Scan Services
I, the applicant, understand that a completed and processed Request for Live Scan Service, State of California
Form BCIA 8016, as determined by the City of San Luis Obispo, by a duly authorized business must be provided for
the applicant and all interested parties. All applicable fees and charges are the responsibility of the applicants and
interested parties.
L. Disqualification
• Application was received late
• Application is incomplete or inaccurate
• Facility does not meet City business licensing standards
• More than one application is received for the same cannabis business type on one property (stacking of
applications)
M. Applicant’s Certification
I agree to abide by and conform to the conditions of the permit and all provisions of the San Luis Obispo Municipal
Code pertaining to the establishment and operation of the commercial cannabis business. I acknowledge that the
approval of the Commercial Cannabis Business Operators Permit shall, in no way, permit any activity contrary to the
San Luis Obispo Municipal Code, or any activity which is in violation of any applicable law.
I certify under penalty of perjury under the laws of the State of California, that I have personal knowledge of the
information contained in this application, and that the information contained herein is true and correct .
Signature:
Date:
The information contained on this document is subject to disclosure under the Public Records Act.
Applicants providing false or misleading information in the permitting process will result in rejection of the
application and/or nullification or revocation of any issued permit. All commercial cannabis permits must be
approved by the City Council. The City may attach conditions to the permit. A commercial cannabis permit may be
denied if any of the following findings are made:
(i) The application does not meet all requirements of the commercial cannabis ordinance; or DRAFTItem 10
Packet Pg. 274
(ii) Approval would very likely result in harm to public safety, health, or welfare; or
(iii) Potential negative impacts of the use cannot be mitigated with conditions or through the ordinance
requirements.
Applicants will be notified regarding application completeness DRAFTItem 10
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COMMERCIAL CANNABIS BUSINESS OPERATORS PERMIT APPLICATION
OWNER’S STATEMENT OF CONSENT
If the applicant is not the owner of record of the subject site, the following Statement of Consent must be
completed by the owner or the owner’s authorized representative, granting the applicant permission to apply for a
cannabis cultivation business permit. This form must be notarized.
To: City of San Luis Obispo
(Department)
(Address)
San Luis Obispo, CA 93401
I, the undersigned legal owner of record, hereby grant permission to:
Applicant: ___________________________________ Phone:___________________________
Mailing Address: ________________________________________________________________
To operate a commercial cannabis business on the property described below. I agree to abide by and conform to
the conditions of the permit and all provisions of the San Luis Obispo Municipal Code pertaining to the
establishment and operation of the commercial cannabis business. I acknowledge that the approval of the
Commercial Cannabis Business Operator Permit shall, in no way, permit any activity contrary to the San Luis Obispo
Municipal Code, or any activity which is in violation of any applicable law.
The subject property is located at: _________________________________________________
Assessor’s Parcel Number: ________________________________________________________
Printed Name of Owner of Record: _________________________________________________
Address of Owner of Record: ______________________________________________________
Phone: __________________________Email address: _________________________________
Signature of Owner of Record: _______________________________Date: ________________
DRAFTItem 10
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THENewspaper of the Central Coast
SLO CITY CLERK
3825 South Higuera • Post Office Box 112 • San Luis Obispo, California 93406-0112 • (805) 781-7800
In The Superior Court of The State of California
In and for the County of San Luis Obispo
AD #3953567
CITY OF SAN LUIS OBISPO
STATE OF CALIFORNIA
SS.
County of San Luis Obispo
I am a citizen of the United States and a resident of the
County aforesaid; I am over the age of eighteen and not
interested in the above entitled matter; I am now, and at
all times embraced in the publication herein mentioned
was, the principal clerk of the printers and publishers of
THE TRIBUNE, a newspaper of general Circulation,
printed and published daily at the City of San Luis
Obispo in the above named county and state; that notice
at which the annexed clippings is a true copy, was
published in the above-named newspaper and not in any
supplement thereof — on the following dates to wit;
NOVEMBER 17, 2018 that said newspaper was duly
and regularly ascertained and established a newspaper of
general circulation by Decree entered in the Superior
Court of San Luis Obispo County, State of California, on
June 9, 1952, Case #19139 under the Government Code
of the State of California.
I certify (or declare) under the penalty of perjury that the
foregoing is true and correct.
w t .
kA=Z---
(SigUtUre of Principal Clerk)
DATE: NOVEMBER 17, 2018
AD COST: $183.28
CM OF
SqIZMW OBiSPO
SAN LUIS OBISPO CITY COUNCIL
NOTICE OF PUBLIC HEARING
The San Luis Obispo City Council invites
all interested persons to attend a public
hearing on Tuesday, November 27, 2018,
at 6:00- p.m. in the City Hall Council
Chamber, 990 Palm Street, San Luis Obi-
spo, California, relative to the following:
1. The Council will consider adopting
resolutions concerning a fee schedule
and evaluation criteria for cannabis
business operator permits.
For more information, contact Rachel Co-
hen of the City's Community Development
Department at (805) 781-7574 or by email
at
2. Introduce an Ordinance addressing
follow-up items from the City Council's
approval of the comprehensive update
to the City's Zoning Regulations (Title
17) of the Municipal Code including tiny
homes, owner occupancy requirement
and lot coverage requirements for ac-
cessory dwelling units, electric vehicle
parking, downtown overlay zone, and
additional miscellaneous clean up
items.
For more information, contact Kyle Bell of
the City's Community Development Depart-
ment at (805) 781.7524 or by email at
The City Council may also discuss other
hearings or business items before or after
the items listed above. If you challenge the
proposed project in court, you may be limit-
ed to raising only those issues you or
someone else raised at the public hearing
described in this notice, or in written corre-
spondence delivered to the City Council at,
or prior to, the public hearing.
Reports for this meeting will be available
for review in the City Clerk's Office and ori -
line at www.slocity.org on Wednesday, No-
vember 21, 2018. Please call the City Cler-
k's Office at (805) 781-7100 for more Infor-
mation. The City Council meeting will be
televised live on Charter Cable Channel
20 and live streaming on www.slocitV.org.
Teresa Purrington, City Clerk
City of San Luis Obispo
Noyamba!r 17, 2018 3953567