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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />NOVEMBER 7, 2017 <br />TITLE: <br />APPROVE AN IN -LIEU FEE AGREEMENT <br />TEMPLATE AND MERIT -BASED CRITERIA <br />DRAFT FOR COMMERCIAL CANNABIS <br />BUSINESSES PURSUANT TO CHAPTER 40 OF <br />THE SANTA ANA MUNICIPAL CODE — CITY OF <br />SANTA ANA, APPLICANT <br />{STRATEGIC PLAN NOS. 3, 2, 3, 5} <br />'41A MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />U»:iNkyl q <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 1� Reading <br />❑ Ordinance on 2 n Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />1. Approve the in -lieu fee agreement template and authorize the City Manager and Clerk of <br />the Council to execute agreements with qualified businesses. <br />2. Approve the merit -based criteria required for all new commercial cannabis businesses <br />pursuant to Chapter 40. <br />BACKGROUND <br />To comply with the Adult Use of Marijuana Act (AUMA)/Proposition 64, on October 17, 2017, the <br />City Council approved the first reading of the new commercial cannabis ordinance that expands <br />commercial cannabis business activities in the city's industrial areasmit Pursuant to the <br />ordinance's requirements contained in Chapter 40, all applications for new commercial cannabis <br />businesses will be evaluated using a merit -based criteria system through which permits will be <br />awarded to the applications scoring the highest points. The selected applicants must then enter <br />into an in -lieu fee agreement with the City to remit a percentage of gross receipts or a minimum <br />fee based on each facility's square footage. <br />The in -lieu fee agreement (Exhibit 1) for commercial cannabis businesses is intended to collect <br />fees for commercial cannabis businesses and for the purposes of providing a fee for mitigation <br />options used by the City to compensate for impacts to City services and Santa Ana residents <br />and/or businesses. Each commercial cannabis business is required.to enter into an agreement <br />for each type of business activity, including adult -use retail, as well as any form of <br />warehousing/distribution, manufacturing, cultivation, or product testing. As a component of the in - <br />lieu fee agreement, each business owner is required to agree to take reasonable steps to hire <br />75E-3-1 <br />