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1NSUR4NCE NOT REQUIRED A-2017-387 <br />WORK MAY PROCEED <br />CLERK Or COUNCIL <br />n ATr- AUG 3 0 2019 <br />OPERATING AGREEMENT FOR NON -MEDICINAL RETAIL <br />0 `0) COMMERCIAL CANNABIS BUSINESSES <br />This Operating Agreement ("AGREEMENT") is dated June 20, 2019, between the City of <br />Santa Ana, a charter city and municipal corporation ("CITY") and 1920 E Warner LLC dba <br />PacWest Distribution ("OPERATOR"), collectively referred to as "the Parties". This <br />AGREEMENT shall become effective on the date that OPERATOR is issued a Regulatory <br />Safety Permit by CITY for the operation of a commercial cannabis business conducting ADULT - <br />USE DISTRIBUTION services in whole or in part of its operations transacted and carried -on by <br />OPERATOR at the following subject property location, 1920 E Warner Ave Suite 3-C, Santa <br />Ana, CA 92705. <br />1. Public Benefit. <br />A. Intent. The purpose of this Operating AGREEMENT is to ensure positive <br />community impacts from commercial cannabis business operations through local hiring and <br />local sourcing, community benefit and sustainable business practices, and the collection of <br />required fees and taxes as applicable for the operation of a commercial cannabis business <br />and to provide mitigation options to be used by CITY to compensate for impacts to CITY <br />services, residents, and/or businesses as set forth in Santa Ana Municipal Code Chapter 40. <br />The Parties agree that this AGREEMENT confers substantial private benefits on <br />OPERATOR which should be balanced by commensurate public benefits. As part of the <br />cannabis Regulatory Safety Permit process, OPERATOR agrees to enter into this <br />AGREEMENT. OPERATOR acknowledges that CITY and OPERATOR have had extensive <br />negotiations and proceedings prior to entering into this AGREEMENT. OPERATOR has <br />elected to execute this AGREEMENT as it provides OPERATOR with important economic <br />benefits. Accordingly, the Parties intend to provide consideration to the public to balance <br />the private benefits conferred on OPERATOR by providing mitigation measures to the public <br />and to pay for CITY services. <br />B. Local Hiring and Sourcing. OPERATOR agrees to use its reasonable efforts to <br />hire qualified City of Santa Ana residents living in Santa Ana to work at its commercial <br />cannabis businesses. OPERATOR shall also use reasonable efforts to retain the services <br />of qualified contractors and suppliers who are located in the City of Santa Ana or who <br />employ a significant number of City of Santa Ana residents. OPERATOR shall make a good <br />faith effort to advertise on various social media sites, at local job fairs, and through public <br />agencies and organizations. <br />C. Community Benefit and Sustainable Business Practices Plan. OPERATOR <br />agrees to submit a Community Benefit and Sustainable Business Practices Plan ("Plan") to <br />CITY that is hereby attached and incorporated into this AGREEMENT as ("EXHIBIT A"). <br />Said Plan shall detail OPERATOR's experience working with community -based groups <br />such as school districts, college districts, city or county agencies, non-profit organizations, <br />artist or downtown groups. The Plan shall also include a description of OPERATOR's <br />efforts for recruiting and hiring local persons and businesses. Said Plan must also outline <br />commitments by OPERATOR to engage its staff in community service events or programs <br />in the City of Santa Ana. Plan must also outline and address sustainable business <br />1 <br />