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Ordinance Amendment No. 2019-01 — Commercial Cannabis Ordinance Updates <br />August 20, 2019 <br />Page 9 <br />Immediately following the passage of Proposition 64, the State created two commercial cannabis <br />manufacturing categories: non-volatile (Type 6 license) and volatile (Type 7 license). Since the <br />two categories were established, the list of chemicals considered "volatile" has been reduced as <br />changes to Fire and Building safety policies have been adopted across local jurisdictions, <br />including the Orange County Fire Authority (OCFA). Existing Fire and Building safety policies for <br />other industrial activities of a similar nature that are already allowed in the industrial zoning <br />districts will be applied to non-volatile and volatile cannabis manufacturing activities. <br />Eliminating the non-volatile and volatile manufacturing distinctions in Santa Ana's local ordinance <br />will also help the City retain its competitive edge by aligning the ordinance with State <br />requirements, and will ensure that all commercial cannabis manufacturing businesses comply <br />with up-to-date Building Code and OCFA policies, as updated and adopted from time to time. <br />Administration and Implementation Amendments <br />Various updates to the City's commercial cannabis ordinances in Chapters 18 and 40 of the <br />SAMC are required to keep pace with changes to State law, create internal consistency, and <br />ensure that Santa Ana maintain its competitive position in the statewide commercial cannabis <br />industry. These amendments will: <br />• Clarify that a single Operating Agreement is required for co -located businesses, per <br />location; <br />• Allow the microbusiness license types for certain businesses, enabling business owners to <br />consolidate payments on State -issued license fees; <br />• Streamline the application process for commercial cannabis business applicants and <br />maintain consistency between Chapters 18 and 40 by requiring background checks (live <br />scans) to take place during the Phase 2 (Regulatory Safety Permit/RSP) process; and <br />• Address closeout audits and fix minor grammar and syntactical errors to ensure consistent <br />interpretation, administration, and implementation of the City's commercial cannabis <br />ordinances. <br />Operating Agreement Modifications <br />The City Council adopted Resolution No. 2017-074 on November 21, 2017, authorizing the City <br />Manager to execute operating agreements with commercial cannabis businesses in Santa Ana. <br />Each commercial cannabis operating agreement contains a required Community Benefit and <br />Sustainable Business Practices Plan ("Community Plan"), which requires commitments to efforts <br />to secure local sourcing and local hiring, community engagement, and sustainable/green building <br />practices. Revisions to the operating agreement template are proposed to strengthen and <br />enhance the commitments with measurable results. <br />Local hiring is a critical component of a Community Plan; this requirement is proposed to be <br />revised to require 50 percent of the labor at all commercial cannabis businesses in Santa Ana be <br />local and annually certified as such during the RSP renewal process. In addition, the Community <br />Plan will require community reinvestment commitments from commercial cannabis businesses, <br />identifying social equity goals and requirements in the operating agreements to reflect the City's <br />commitment to promote equitable owner, pp an� employment opportunities in the cannabis <br />