Item 28 - OC Grand Jury's Report, Findings, Recs. Regarding Santa Ana's Cannabis Program

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“Pot Luck”: Santa Ana’s Monopoly on Licensed Retail Adult-Use Cannabis in Orange County 2020-2021 Orange County Grand Jury Page 4 After completion of the application process, each applicant was required to obtain a Regulatory Safety Permit (RSP) which is a permit issued by the City of Santa Ana pursuant to Chapter 40 of its municipal code. The RSPs issued for Phase I and Phase II had fees associated with each phase of the process. The fees charged were based on city processing costs as follows: Phase I, initially $1,690, was subsequently raised to $1,752; Phase II, initially $12,086, was later raised to $12,530. The City’s Planning and Building Agency drafted a two-page Phase I and Phase II applicants’ information form advising interested parties of the steps in the application process (see Appendix 4). Cannabis Community Benefits Program All parties seeking a license to operate a cannabis dispensary in Santa Ana must submit a written operating agreement titled “Operating Agreement for Adult use (Non-Medicinal) Cannabis Retail Business.” One section of the agreement is entitled “Public Benefit.” In this section, the applicant for the proposed dispensary is encouraged to submit a “Community Benefit and Sustainable Business Practices Plan” (PLAN). The plan serves as a goodwill program sponsored by the dispensary for the benefit of the Santa Ana community. A review of the PLANs submitted by the applicants revealed a wide variety of current community service projects such as sponsoring a local debate team, supporting a community garden, organizing and/or funding toy/clothing/food drives, diversion or prevention educational programs, and neighborhood clean-up efforts. While these programs are a step towards goodwill in the community, there is no oversight or confirmation by the City that the dispensary operator is participating in the plan. It is up to each dispensary owner to decide how and to whom they will provide a “benefit.” There are no specific requirements in terms of money or volunteer hours that a dispensary must donate, and there is no obligation to provide proof of participation in the plan to the City. The OCGJ has concluded that there should be some process in place to set standards for and document participation in the Community Benefits Program. In addition, the benefits provided by the Retail Adult-Use Cannabis dispensaries should be reported to the City Council and made available to the general public. Community Safety The OCGJ learned through interviews with City officials and staff that there had been more than 120 unlicensed dispensaries operating illegally in Santa Ana before ordinance NS-2929 went into effect. That number has since been reduced to “less than a handful,” due to enforcement efforts by the City, especially the Planning and Building Agency, including Code Enforcement, and the Santa Ana Police Department. One third of the taxes and fees that the City receives from Retail Adult-Use Cannabis dispensaries is dedicated to Police and Code Enforcement. This money provides funding for a vice unit, including a sergeant and four officers. Other City agencies, such as Planning and