HomeMy WebLinkAboutR-11370 approving amendments to the Cannabis Operator Permit Ranking CriteriaR 11370
RESOLUTION NO. 11370 (2022 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING AMENDMENTS TO THE
CANNABIS OPERATOR PERMIT RANKING CRITERIA
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and Safety Act (“MAUCRSA”), repealed the Medical Cannabis Regulation and Safety Act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 No. 1647 (2018 Series) 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operation of commercial cannabis businesses, and repealed and replaced Title 9, Public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
regulations; and
WHEREAS, the City Council of the City of San Luis Obispo adopted on November
27, 2018 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo,
California, a resolution that established the Cannabis Operator Permit Ranking Criteria
and the annual application submittal period as required by Section 9.10.070 of the
Municipal Code; and
WHEREAS, the City Council of the City of San Luis Obispo adopted on December
3, 2019 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California,
a resolution amending the Cannabis Operator Permit Ranking Criteria; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public
hearing on September 20, 2022 in the Council Chamber of City Hall, 990 Palm Street,
San Luis Obispo, California, for the purpose of amending the Cannabis Operator Permit
Ranking Criteria (Exhibit A).
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 Section 9.10.070 (A) which requires City Council, by
resolution, to adopt criteria by which all applications will be reviewed and, in the
case of retail and cultivation businesses, also ranked.
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
Resolution No. 11370 (2022 Series) Page 2
R 11370
SECTION 2. Environmental Review. The California Environmental Quality Act
(CEQA) does not apply to the recommended action in this repot because the action does
not constitute a “Project” under CEQA Guidelines Sec. 15378. The adoption of the
updated Cannabis Operator Permit Ranking Criteria is an administrative activity of a
government agency that will not result in direct or indirect physical impact on the
environment.
SECTION 3. Action. The City Council hereby approves the amended Cannabis
Operator Permit Ranking Criteria as outlined in Exhibit A subject to the following
conditions:
1. This resolution supersedes Resolution No. 11067 (2019 Series) to the extent
inconsistent herewith.
Upon motion of Council Member Pease, seconded by Vice Mayor Christianson, and on
the following roll call vote:
AYES: Council Member Marx, Pease, Shoresman, Vice Mayor Christianson,
and Mayor Stewart
NOES: None
ABSENT: None
The foregoing resolution was adopted this 18th day of October 2022.
___________________________
Mayor Erica A. Stewart
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, on ______________________.
___________________________
Teresa Purrington, City Clerk
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
10/21/2022 | 4:17 PM PDT
EXHIBIT A
CITY OF SAN LUIS OBISPO
Cannabis Business Operator Permit Scoring
Guidelines
1. Applicant will provide one hard copy and a digital copy in a readable PDF form of each application and
proposal.
2. City will compile any additional information related to the applicant for consideration.
3. Discussion between the reviewers during the evaluation will be limited to clarification to ensure an equal
understanding of the application.
4. Questions can also be directed to the consultant.
5. Each reviewer will complete a score sheet for each proposal.
6. Points may be awarded in an amount up to the possible points in each scoring criteria.
7. Each completed score sheet will be given to the consultant.
8. The consultant will review the score sheets for each proposal.
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.
10. An adjusted score may be agreed upon by the reviewers and the consultant.
11. Once all criteria scores are reviewed and agreed upon, the total aggregate score for the review panel will
be totaled then divided by the number of reviewers to obtain the final score.
12. For an applicant to qualify for a contingent operator permit, the applicant must score from an average of
all scorers at or above 70% of the total available points on the application of that application period.
Applicant:
Reviewer:
Automatic Fail Criteria:
·Application received after the final filing date.
·Application is incomplete or inaccurate.
·Facility does not meet City business licensing standards.
·Only one license applicant allowed per location. Applicants must ask potential landlords if
they have existing, competing cannabis business applicants.
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Adult-Use Retail Cannabis Merit-Based Criteria and Possible Points
All applications for a permit 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.
Definitions:
All applicable definitions regarding the Commercial Cannabis Business Operator Permit Application can
be found in 9.10 Cannabis Regulations of the City’s Municipal Code. It is the responsibility of the applicant
to understand and comply with all definitions of the Municipal Code and accurately present information
reflecting the applicable definitions specified in the Municipal Code in the Commercial Cannabis Business
Operator Permit Application. It is the obligation of the Applicant to request any necessary clarifications in
writing to the City in advance of submission of an application. The failure of the Applicant to request such
clarification that results in the submission of false or misleading information in the application process shall
subject the Application to disqualification or other penalties as set forth in the Municipal Code.
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Manufacturing, Distribution and Non-Storefront Retail Evaluation Criteria
Merit Criteria 1.0 - Community Benefit
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
1.1A
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)
10
1.2A
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)
10
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 15 Points - Deviation Threshold 3 points)
Possible
points
Applicant
score
1.1B
Providing over 20 hours per month of community support. (5 points)
or Providing 10-20 hours per month of community support. (2 points)
5
1.2B
Provide over $1,000 per month for community support. (5 points)
or Provide up to $1,000 per month for community support. (2 points)
5
1.3B Applicant can demonstrate a history of supporting local community programs for
the past one to two years. (5 points) 5
Total Community Benefit (B) 15
Total Merit Criteria 1.0 35
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 2.0 - Equity and Labor
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 18 Points – Deviation Threshold 9 Points)
Possible
points
Applicant
score
2.1
Applicant includes 3 or more principals with 2% equity or higher 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)
8
2.2
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)
8
2.3
Base wages of employees exceed the minimum wage by at least $3.00/hr.
2
Total Merit Criteria 2.0 18
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 3.0 - Financial Investment
Financial Investment: Applicant has plans and capital to support a vibrant
business within the City. (Up to 30 Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
3.1 Applicant demonstrates financial capacity to capitalize, start up, and sustain
business operations.
1-10
3.2 Applicant commits to develop raw land that has been zoned for commercial use
for a commercial cannabis facility.
1-10
3.3
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.
1-5
3.4 The proposed cannabis business site can accommodate the required number of
parking spaces with safe and convenient access for customers/employees.
1-5
Total Merit Criteria 3.0 30
Totals
Total GENERAL Merit Criteria Points Available 83
Total GENERAL Merit Criteria Points Awarded
Total %
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Cultivation Evaluation Criteria
Merit Criteria 1.0 - Community Benefit
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
1.1A
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)
10
1.2A
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)
10
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 15 Points - Deviation Threshold 3 points)
Possible
points
Applicant
score
1.1B
Providing over 20 hours per month of community support. (5 points)
or Providing over 10-20 hours per month of community support. (2 points)
5
1.2B
Provide over $1,000 per month for community support. (5 points)
or Provide up to $1,000 per month for community support. (2 points)
5
1.3B Applicant can demonstrate a history of supporting local community programs for the
past one year. (5 points)
5
Total Community Benefit (B) 15
Total Merit Criteria 1.0 35
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 2.0 - Equity and Labor
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 18 Points – Deviation Threshold 9 Points)
Possible
points
Applicant
score
2.1
Applicant includes 3 or more principals with 2% equity or higher 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)
8
2.2
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)
8
2.3
Base wages of employees exceed the minimum wage by at least $3.00/hr.
2
Total Merit Criteria 2.0 18
Merit Criteria 3.0 - Medical Retail Commitment
Medical Retail Commitment (up to 10 points) Possible
points
Applicant
score
3.1 Applicant commits to retain a California state medicinal cannabis cultivation
license. 10
Total Merit Criteria 3.0 10
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 4.0 - Sustainability
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
4.1
Applicant will recycle waste water (utilize purple pipe when available).
5
4.2
Applicant will utilize certified organic practices.
3
4.3
Applicant will utilize carbon free power sources for majority of power.
5
4.4
Applicant will utilize energy efficient lighting.
4
4.5
Applicant has plan to reduce water waste.
3
Total Merit Criteria 4.0 20
Merit Criteria 5.0 - Financial Investment
Financial Investment: Applicant has plans and capital to support a vibrant
business within the City. (Up to 30 Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
5.1 Applicant demonstrates financial capacity to capitalize, start up, and sustain
business operations.
1-10
5.2 Applicant commits to develop raw land that has been zoned for commercial use
for a commercial cannabis facility.
1-10
5.3
Applicant commits to major improvements, including façade rehabilitation,
building expansion, site improvements, removing visual blight, and/or other
investments in an underutilized/underdeveloped site that has been zoned for
commercial use for a commercial cannabis facility.
1-5
5.4
The proposed cannabis business site can accommodate the required number of
parking spaces with safe and convenient access for customers/employees.
1-5
Total Merit Criteria 5.0 30
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Totals
Total Merit Criteria Points Available 113
Total Merit Criteria Points Awarded
Total %
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Retail Evaluation Criteria
Merit Criteria 1.0 - Community Benefit
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
1.1A
Over 90% of employees will be San Luis Obispo County residents. (10 points)
10
or 60% - 90% of employees will be San Luis Obispo County residents. (5 points)
1.2A
Over 80% of supply and equipment expense (non-labor, non-rent expense) will be
sourced from businesses within 90 miles. (10 points)
10
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 15 Points - Deviation Threshold 3 points)
Possible
points
Applicant
score
1.1B
Providing over 20 hours per month of community support. (5 points)
5
or Providing 10-20 hours per month of community support. (2 points)
1.2B
Provide over $1,000 per month for community support. (5 points)
5
or Provide up to $1,000 per month for community support. (2 points)
1.3B Applicant can demonstrate a history of supporting local community programs
for the past one year.
5
Total Community Benefit (B) 15
Total Merit Criteria 1.0 35
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 2.0 - Experience
Record of compliant current or previous business operations: Applicant has
previous record of operating a compliant cannabis operation (including medical).
A compliant operation is defined as having a substantially compliant record (may
have some minor resolved/corrected violations) without a documented history of
unresolved local or state level violations relating, but not limited to: business code,
public safety, environmental impacts, employment, and financial payments. (Up
to 35 Points – Deviation Threshold 9 Points)
Possible
points
Applicant
score
2.1
91% to 100% of the primary principals have operated a local compliant cannabis
operation for 5 or more years.
35
or 81% to 90% of the primary principals have operated a local compliant
cannabis operation for 5 or more years.
30
or 71% to 80% of the primary principals have operated a local compliant
cannabis operation for 5 or more years.
25
or 61% to 70% of the primary principals have operated a local compliant
cannabis operation for 5 or more years.
20
or 51% to 60% of the primary principals have operated a local compliant
commercial cannabis operation for 5 or more years.
15
2.2
10-50% of the primary principals operated a compliant cannabis operation outside
of SLO County for 5 or more years.
10
or 10-50% of the primary principals operated a compliant cannabis operation
outside of SLO County for less than 5 years.
5
Total Merit Criteria 2.0 35
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 3.0 - Equity and Labor
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 18 Points – Deviation Threshold 9 Points)
Possible
points
Applicant
score
3.1
Applicant includes 3 or more principals with 2% equity or higher who have earned
at or below the median household income at the time of application. (8 points)
8
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)
3.2
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)
8
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)
3.3 Base wages of employees exceed the minimum wage by at least $3.00/hr. 2
Total Merit Criteria 3.0
18
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 4.0 - Messaging
4.1
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
4.2
Business articulates strategy to keep cannabis from being diverted to minors
including advertising that is appropriately targeted to adult audiences.
1-5
4.3
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.
1-5
Total Merit Criteria 4.0 10
Merit Criteria 5.0 - Medical Retail Commitment
Medical Retail Commitment (up to 10 points) Possible
points
Applicant
score
5.1
Applicant commits to provide retail medical cannabis products to consumers.
10
Total Merit Criteria 5.0 10
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
EXHIBIT A
Merit Criteria 6.0 - Property Control
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
Choose one:
6.1
Majority ownership in site property.
10
6.2
Minority ownership in site property.
8
6.3
10+ years future lease of site property.
8
6.4
5-10 years future lease of site property.
5
6.5
2-5 years future lease of site property.
3
6.6
Less than 2 years future lease of site property.
1
Total Merit Criteria 6.0 10
Merit Criteria 7.0 - Financial Investment
Financial Investment: Applicant has plans and capital to support a vibrant
business within the City. (Up to 20 Points – Deviation Threshold 3 Points)
Possible
points
Applicant
score
7.1 Applicant demonstrates financial capacity to capitalize, start up, and sustain
business operations.
1-10
7.2
Applicant commits to major improvements, including façade rehabilitation,
building expansion, site improvements, removing visual blight, and/or other
investments in an underutilized/underdeveloped site that has been zoned for
commercial use for a commercial cannabis facility.
1-5
7.3 The proposed cannabis business site can accommodate the required number of
parking spaces and safe and convenient access for customers/employees.
1-5
Total Merit Criteria 7.0 20
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9
Totals
Total Merit Criteria Points Available 138
Total Merit Criteria Points Awarded
Total %
DocuSign Envelope ID: 68198E7D-F1C6-4C62-B842-EA630FBCC1A9