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Andrea Zinder 324 President International Vice President Matt Bell A Voice for Working California Secretary-Treasurer To: Santa Ana City Staff&Council From: Matt Bell, Secretary Treasurer, United Food and Commercial Workers Local 324 Re: Suggested Modifications to Proposed Cannabis Ordinance On behalf of the 20,000 members of United Food and Commercial Workers (UFCW) Local 324, including approximately 250 cannabis workers within the City of Santa Ana, we want to express our appreciation for the City's interest in exploring new ideas to maintain the economic viability of the cannabis industry. Santa Ana was the first city to regulate cannabis in Orange County, and we believe that it continues to be a model for future cities in the region. It is our understanding that the City of Santa Ana is considering the expansion of cannabis permits to lounges and events, as well as the reduction of taxes on both the supply side and retail, and several other regulatory changes. Undoubtedly, these changes would be done to improve the profitability of cannabis operators. UFCW has always been a partner with the industry to support these kinds of measures because we believe that a healthy and profitable industry will benefit workers. However, we must note that many of the licensed cannabis operations within the city continue to offer minimum wage jobs with little to no benefits. Under the circumstances, we believe that the City should demand greater assurances that any loss in tax revenue for the people of Santa Ana will be offset with the assurance of better jobs in this industry. Given the scope of the changes that are being considered, we advocate that any tax break must be coupled with defined performance standards with respect to wages, local hiring, and job training. ESTABLISHING TAX CREDITS FOR RETAIL OPERATIONS Rather than lowering the retail tax rate for all operations from 8%, we propose that the City establish criteria that, if achieved, result in a tax rebate. We suggest that the following criteria would both improve job quality and increase local access to these jobs. ■ Rebate for retail operations that pay all employees in excess of 115% of the California minimum wage. This percentage should increase over time to ensure that wages don't become stagnant. • Rebate for operations where at least 40% of employees reside in low-income census tracts in the City of Santa Ana • Rebate for operations that can demonstrate that 25% of its qualifying employees completed at least one training offered by a High Road Training Partnership that is recognized by the State of California. Proof of active participation in this program must be demonstrated with a signed letter confirming State recognition. DEFINING "BONA FIDE LABOR ORGANIZATION" Currently, Santa Ana Municipal Code Section 40-2 uses the California Business and Professions Code 26001(x) to define "Labor Peace". While that definition requires an agreement with a "Bona Fide Labor Organization", it does not go on to define "Bona Fide". 8530 Stanton Ave., P.O. Box 5004, Buena Park, CA 90622-5004 • (714) 995-4601 • (800) 244-UFCW • Fax(714)995-8214 •www.ufcw324.org