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Ordinance Amendment No. 2018-02 — Allow Commercial Cannabis Cultivation, Manufacturing, and Distribution Business Activities April 17, 2018 Page 4 Table 1 — Proposed Amendments to Cha ter 18 and Chapter 40 Item Pro osed Amendment I Impact Chapter 18 edits Amends Chapter 18 to ensure Ensures consistency between various SAMC consistency with Chapter 40 (Commercial chapters and compliance with State law. Cannabis). 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). All new commercial cannabis business will be required to enter into an operating agreement to pay fees to the City based on gross receipts. These fees are proposed at 8 percent or ten dollars per square foot, whichever is the greater of the two calculations (cultivation and manufacturing) and 8 percent or four dollars per square foot, whichever is the greater of the two calculations (distribution). 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), similar to 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. 2018-02. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #3 - Economic Development, Objective #2 (create new opportunities for business/job growth and encourage private development through new General Plan and Zoning Ordinance policies), Objective #3 (promote a solutions -based customer focus in all efforts to facilitate development and investment in the community), and Objective #5 (leverage private investment that results in tax base expansion and job creation citywide). Approval of this item also supports the City's efforts to meet Goal #4 - City Financial Stability, Objective #3 (achieve a structurally balanced budget with appropriate reserve levels). FISCAL IMPACT Should the ordinance allowing commercial cannabis cultivation, manufacturing, and distribution activities be approved, funds will be deposited into the following accounts: • Adult -Use Commercial Cannabis $1,690.00 (01116002-51619). • Adult -Use Commercial Cannabis $1,690.00 (01116002-51620). • Adult -Use Commercial Cannabis $1,690.00 (01116002-51621). Cultivation Registration one-time fee per application Manufacturing Registration one-time fee per application Distribution Registration one-time fee per application 75C-4