Item 35 - Ordinance Amendment No. 2022-01 - Commercial Cannabis Regulatory and Tax Updates

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Ordinance Amendment No. 2022-01 - Commercial Cannabis Regulatory and Tax Updates May 3, 2022 Page 12 2 5 0 8 standardize reporting to the City. Following this engagement, staff crafted more tailored community benefit and sustainable business practice options in the proposed ordinance. All commercial cannabis businesses will be required to report community benefit and sustainable business practice obligations on a twice-yearly basis as a condition of maintaining the regulatory safety permit in good standing and as a condition of annual renewal. The annual reporting will require descriptions of the following components: 1. Action – a thorough breakdown of all stated commitments/obligations and the actions taken by the business to satisfy those commitments/obligations. 2. Value – A detailed, quantitative description of the value of the commitments/obligations, either as money spent or time/resources committed by the business and its staff. 3. Community Benefit Value – A qualitative description of the resulting value of the commitments/obligations’ quantitative impacts, otherwise known as the “local multiplier effect” when one dollar is spent locally. 4. Local Engagement – A detailed narrative of engagement by business owners with local organizations, community groups, and civic/government organizations. Examples include coordination with the City’s Economic Development Division, the Santa Ana WORK Center, job fairs, local educational institutions’ skills training, and local community and not-for-profit organizations. A final component of the ordinance (Section 11) requires that the City return with recommendations to the City Council to revisit any staff recommendations for adoption of social equity policies or a social equity program. These policies or programs would consider measures to assist or prioritize applications submitted by individuals with previous cannabis-related criminal histories, members of disadvantaged communities, local applicants, and/or other individuals or entities identified at the time requiring assistance with application processes and/or filing fees, local tax payments, and other related components of the commercial cannabis application and buildout process in the City. The tax revenues generated by commercial cannabis consumption lounges would be utilized to further these goals and for the development and maintenance of social equity programs administered by the City. Programs may include workforce training, education, and development within the Santa Ana community in the cannabis industry. ENVIRONMENTAL IMPACT In accordance with the California Environmental Quality Act (CEQA), these actions are exempt from further CEQA analysis pursuant to CEQA Guidelines Section 15061(b)(3), as the proposed amendments address business activities already permitted in the City and will not result in any significant physical effect on the environment. A Notice of Exemption, Environmental Review (ER) No. 2022-15, will be filed for these actions. FISCAL IMPACT