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Ordinance Amendment No. 2022-01 - Commercial Cannabis Regulatory and Tax <br />Updates <br />September 20, 2022 <br />Page 12 <br />2 <br />5 <br />0 <br />8 <br />lounge in order to access a retail-only portion of the facility, and the lounges may only be <br />accessible to those aged 21 or older. Lounges and special events may also offer food <br />and non-alcoholic beverages, but the sale or consumption of alcohol or tobacco products <br />will be prohibited. Lastly, cannabis retailers would be able to construct specific spaces <br />within the retail area for the opening and limited consumption of cannabis products for <br />educational purposes, without the need to construct a dedicated consumption lounge. <br />In addition, smoking cannabis will be permissible subject to odor control and elimination, <br />and consumption or smoking of cannabis products shall not be visible from any public <br />place, public right-of-way, or area where minors may be present. If the consumption <br />lounge or event contains an outdoor area, the outdoor area shall be oriented so as to <br />eliminate visibility from any adjacent public place, public right-of-way, area where minors <br />may be present, or adjacent business, tenant space, or building. As with all other <br />commercial cannabis businesses, odor control and ventilation systems must be in place <br />to eliminate any odors. Lastly, all facilities or event operators must abide by odor control <br />response measures specified in the ordinance. <br />Orange County Grand Jury and Orange County Advocacy Alliance <br />On June 3, 2021, the Orange County Grand Jury (OCGJ) issued an investigate report <br />with findings and recommendations regarding the City’s licensed retail adult-use cannabis <br />program and regulatory framework. Subsequent staff reports were presented on the <br />matter to the City Council, most recently on September 7, 2021. Following the September <br />7 meeting, the City issued a letter on September 13, 2021 to the Honorable Erick Larsh, <br />Presiding Judge, with the City’ responses to six findings and three recommendations. The <br />proposed ordinance will maintain the City’s commercial cannabis regulatory framework in <br />keeping with these findings. Moreover, the proposed amendments to community benefit <br />and sustainable business practice requirements reflect the OCGJ’s recommendation to <br />further streamline and unify such obligations by the licensed commercial cannabis <br />businesses operating in Santa Ana, and enable more routine and accurate reporting of <br />such engagements. <br />Most recently, the Orange County Advocacy Alliance (OCAA) issued a letter to the City <br />Council urging a modification to commercial cannabis tax rates as “the number one <br />priority to create a sustainable, competitive, and profitable cannabis business <br />marketplace.” The proposed tax code amendments to reduce certain non-retail <br />commercial cannabis tax rates reflect not just OCAA’s sentiments, but also feedback <br />received by dozens of business operators and research that the Planning and Building <br />and Finance and Management Services agencies’ staff performed between 2020 and <br />2022 into competitive jurisdictions’ commercial cannabis tax rates.