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EXHIBIT A-1 ARTICLE XIII. COMMERCIAL CANNABIS BUSINESSES Sec. 21-132. Purpose. This article is required for the purpose of fixing the rate of taxation for commercial cannabis businesses including delivery, distribution, manufacturing, cultivation, testing and retail sales of cannabis and related products. This article does not apply to medical marijuana collectives/cooperatives (also referred to as medicinal cannabis retail businesses) which are subject to a business license tax under article XII of this chapter. The taxes required to be paid under this article are declared to be required pursuant to the taxing power of the City of Santa Ana solely for the purpose of obtaining revenue and are not regulatory permit fees. Sec. 21-133. Commercial cannabis businesses—Annual business license tax assessment. Every person engaged in a "commercial cannabis business" or "commercial cannabis activity" shall pay an annual business license tax as outlined below. This article shall not apply to medical marijuana cooperatives/collectives also referred to as medicinal cannabis retail businesses which are governed by article XII of this chapter or to personal cultivation as defined in section 18-611(n) of this code. (a) For each branch establishment or separate property location of a commercial cannabis business transacted and carried on in the city, and for each separate type of commercial cannabis business conducted at the same location, the higher of the two (2) following tax rates shall be due to the city for each monthly reporting period: (1) . Up to ten percent (10%) of each dollar of gross receipts received or generated for each monthly reporting period. (2) Up to $35.00 per square foot (annual tax rate) prorated monthly to one - twelfth (1/12th) of the annual tax rate amount. (b) These tax rates shall not be adjusted for inflation pursuant to section 21-121 of this chapter. (c) Notwithstanding the tax rates imposed herein under subsection (a), the city council may, in its discretion, at any time by resolution implement any lower tax rate it deems appropriate, and may by resolution increase such tax rate from time to time, not to exceed the maximum rates established by subsection (a). (d) As of the operative date of this article, the business license gross receipts tax rates and square footage tax rates application to specific commercial cannabis business activities shall be established as follows: Commercial Cannabis Business Gross Receipts Gross Square Activity Tax Rate Footage Tax Rate Resolution 2018-049 Page 8 of 16 55A-52