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Urgency Cannabis Testing Laboratories Ordinance and Ordinance Amendment No. 2018-01 — Allow Commercial Cannabis Testing Laboratories and Resolution to Modify Commercial Cannabis Application Fees March 20, 2018 Page 5 Staff has reviewed the proposed amendments to ensure consistency with other provisions of the Santa Ana Municipal Code, including chapters 18, 40, and 41 (Zoning). Similar to commercial cannabis retail businesses, commercial cannabis testing facilities/laboratories will be required to enter into an operating agreement to pay fees to the City based on gross receipts (6 percent) or facility square footages ($2.00 per square foot), whichever is the greater of the two calculations. These operating agreements will ensure sustainable building and business practices, local hiring and sourcing, labor peace agreements, and community/youth benefit plans. It is recommended that application and fee revenues be dedicated to administration (one-third), enforcement (one-third), and community services (one-third), similarto commercial cannabis retail. Staff anticipates bringing forward an appropriation adjustment for City Council consideration at a future date. Based on the information and analysis in this report, staff recommends adopting Ordinance Amendment No. 2018-01. Uraencv Ordinance The urgency ordinance would permit and regulate commercial cannabis laboratory testing facilities immediately, subject to review and approval of the required Phase 1 and Phase 2 applications and operating agreements and all applicable operational and location standards contained in the ordinance. The urgency ordinance is identical to the permanent ordinance, including: location/buffer criteria, operational standards, permitting and enforcement process, and the requirement to enter into an operating agreement. A permanent ordinance, if approved, would then take effect 30 days after its second reading. Based on the current City Council meeting calendar, the permanent ordinance would take effect on Monday, May 7, immediately following the 45 -day urgency ordinance period. Resolution modifying application fees The City of Santa Ana requires that all commercial cannabis retail businesses permitted in Chapter 18 and Chapter 40 submit a Registration Application and a Regulatory Safety Permit (RSP), the latter of which is renewed annually. Currently, the fees may only be collected for applicants seeking to apply for or renew those permits associated with retail businesses. Pursuant to Chapter 40, all applicants for adult -use cannabis retail sales or testing laboratories must also submit a Registration Application ($1,690, one-time) and RSP ($12,086, renewed annually). In order to collect fees for these two applications, the existing fee description must be amended to apply to all commercial cannabis applicants, including testing laboratories. 75B-5