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Ordinance Amendment No. 2022-01 - Commercial Cannabis Regulatory and Tax <br />Updates <br />May 3, 2022 <br />Page 11 <br />2 <br />5 <br />0 <br />8 <br />odor control and ventilation systems must be in place to eliminate any odors. Lastly, all <br />facilities or event operators must abide by odor control response measures specified in <br />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 and response. Moreover, the proposed amendments to <br />community benefit and sustainable business practice requirements reflect the OCGJ’s <br />recommendation to further streamline and unify such obligations by the licensed <br />commercial cannabis businesses operating in Santa Ana, and enable more routine and <br />accurate reporting of 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. <br />Community Benefits and Sustainable Business Practices <br />In response to recommendations from the OCGJ investigative report and industry <br />feedback, the City is also proposing modifications to its community benefit and <br />sustainable business practice requirements that would clarify and streamline obligations, <br />options, and reporting. The proposed amendments would sunset the requirement for <br />individual operating agreements but would require all commercial cannabis businesses <br />to maintain a community benefit and sustainable business practices plan on file with the <br />City. <br />Staff met with a focused group of industry representatives on April 21, 2022 to obtain <br />insight on the proposed code amendments. Representatives recommended modifications <br />to the required community benefits and sustainable business practices to reflect current <br />labor trends and industry practices. In addition, representatives expressed a desire to