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OPERATING AGREEMENT FOR ADULT -USE RETAIL
COMMERCIAL CANNABIS BUSINESSES
This Operating Agreement ("AGREEMENT") is dated December 11, 2020, between the City
of Santa Ana, a charter city and municipal corporation ("CITY") and The Source Santa Ana, dba
MedMen OC ("OPERATOR"), collectively referred to as "the Parties". This AGREEMENT shall
become effective on the date that OPERATOR is issued a Regulatory Safety Permit by CITY for
the operation of a commercial cannabis business conducting ADULT -USE RETAIL services in
whole or in part of its operations transacted and carried -on by OPERATOR at the following
subject property location, 2141 S Wright Street, Santa Ana, CA 92705.
Public Benefit.
A. Intent. The purpose of this Operating AGREEMENT is to ensure positive
community impacts from commercial cannabis business operations through local hiring and
local sourcing, community benefit and sustainable business practices, and the collection of
required fees and taxes as applicable for the operation of a commercial cannabis business
and to provide mitigation options to be used by CITY to compensate for impacts to CITY
services, residents, and/or businesses as set forth in Santa Ana Municipal Code Chapter 40.
The Parties agree that this AGREEMENT confers substantial private benefits on
OPERATOR which should be balanced by commensurate public benefits. As part of the
cannabis Regulatory Safety Permit process, OPERATOR agrees to enter into this
AGREEMENT. OPERATOR acknowledges that CITY and OPERATOR have had extensive
negotiations and proceedings prior to entering into this AGREEMENT. OPERATOR has
elected to execute this AGREEMENT as it provides OPERATOR with important economic
benefits. Accordingly, the Parties intend to provide consideration to the public to balance
the private benefits conferred on OPERATOR by providing mitigation measures to the public
and to pay for CITY services.
B. Local Hiring and Sourcing. OPERATOR agrees to use its reasonable efforts to
hire qualified City of Santa Ana residents living in Santa Ana to work at its commercial
cannabis businesses. OPERATOR shall also use reasonable efforts to retain the services
of qualified contractors and suppliers who are located in the City of Santa Ana or who
employ a significant number of City of Santa Ana residents. OPERATOR shall make a good
faith effort to advertise on various social media sites, at local job fairs, and through public
agencies and organizations.
C. Community Benefit and Sustainable Business Practices Plan. OPERATOR
agrees to submit a Community Benefit and Sustainable Business Practices Plan ("Plan") to
CITY that is hereby attached and incorporated into this AGREEMENT as ("EXHIBIT A").
Said Plan shall detail OPERATOR's experience working with community -based groups
such as school districts, college districts, city or county agencies, non-profit organizations,
artist or downtown groups. The Plan shall also include a description of OPERATOR's
efforts for recruiting and hiring local persons and businesses. Said Plan must also outline
commitments by OPERATOR to engage its staff in community service events or programs
in the City of Santa Ana. Plan must also outline and address sustainable business
practices. OPERATOR shall adequately document that it has met the Plan's obligations
and commitments as a condition of renewal/extension of this AGREEMENT upon expiration
of the initial term and any extensions.
2. Records Inspection, Examination and Audit
OPERATOR acknowledges and agrees that CITY is empowered under this Agreement
to inspect, examine and audit OPERATOR's books and records (including tax filings and
returns), to ascertain the amount of operating fees due and owing. CITY or its authorized
agents shall have the power and authority to conduct a full inspection, examination and
audit of such books and records (including tax filings and returns) at any reasonable time,
including but not limited to, during normal business hours. In the event any such books,
records, tax filings and returns cannot be made fully available within the City of Santa Ana,
OPERATOR acknowledges and agrees that it shall reimburse CITY for the cost of all
transportation, lodging, meals, portal-to-portal travel time, and other incidental costs
reasonably incurred by CITY or its authorized agents in obtaining said full inspection,
examination and audit. In the event that said records inspection, examination and audit
determines that a net operating agreement fee payment deficiency of greater than Five
Percent (5%) exists; OPERATOR acknowledges and agrees that it shall reimburse CITY for
the full cost of said records inspection, examination and audit reasonably incurred by CITY
or its authorized agents.
3. Term.
This AGREEMENT shall start on the date indicated above and shall terminate on
December 31, 2022 regardless of starting date unless terminated earlier in accordance with
Section 9 or 10 of this AGREEMENT.
4. Business License Required.
A valid City of Santa Ana Business License is required for all persons engaged in
transacting and carrying on any commercial cannabis business activity in the City of Santa
Ana. It is unlawful for any person or legal entity to commence, transact or carry -on cannabis
business activity in the City of Santa Ana without first having procured a City of Santa Ana
cannabis business license.
6. Operatina Commercial Cannabis Business.
OPERATOR shall not operate a commercial cannabis business authorized under the
Santa Ana Municipal Code unless:
A. It is the holder of a valid Regulatory Safety Permit issued by CITY in accordance with
the procedures and requirements of Article 1 of Chapter 40, of the Santa Ana
Municipal Code; and
B. At such time as the State of California requires cannabis business facilities and
businesses to hold a valid license or permit issued by the State of California, it also
holds such license or permit; unless, however, such permit or license is subsequently
not required by the State of California for the type of cannabis facility or business
operation that is the subject of this AGREEMENT.
C. OPERATOR remains in compliance with any and all other laws and regulations
pertaining to commercial cannabis businesses.
D. OPERATOR shall remain in compliance with the operating requirements applicable
to commercial cannabis businesses contained in the City's Municipal Code.
6. OPERATOR Indemnification of CITY.
A. OPERATOR will indemnify CITY from any claims, damages, injuries, or liabilities of
any kind whatsoever sustained or incurred by CITY resulting from entering Into this
AGREEMENT, and OPERATOR's performance and/or breach of this AGREEMENT.
B. OPERATOR agrees to defend, at its sole expense, any action against CITY, its
agents, officers, and employees related to this AGREEMENT. OPERATOR agrees
to indemnify and reimburse CITY for any court costs and attorney fees that CITY
may be required to pay as a result of any legal challenge related to this
AGREEMENT and/or CITY's approval of a Regulatory Safety Permit. CITY may, at
its sole discretion, participate at its own expense in the defense of any such action,
but such participation shall not relieve the OPERATOR of its obligation hereunder.
7. OPERATOR Compliance with Laws.
OPERATOR agrees to comply with the City of Santa Ana Charter and Municipal Code,
including but not limited to Chapters 18, 21 and 40, and the laws and regulations of the
State of California.
8. Default and Termination for Cause.
This AGREEMENT may be terminated by CITY for cause with thirty (30) days' written
notice to OPERATOR. Cause as used in this section, is defined as:
A. Failure to comply with the terms of the City of Santa Ana Cannabis Regulatory
Safety Permit issued to OPERATOR by CITY;
B. Failure of OPERATOR to maintain a valid active City of Santa Ana Business License
as the commercial cannabis business approved by the Regulatory Safety Permit and
as operating;
C. Failure of OPERATOR to comply with the requirements of the Community Benefits
and Sustainable Business Practices Plan;
D. Unauthorized transfer by OPERATOR of the City of Santa Ana cannabis business
Regulatory Safety Permit issued by CITY;
E. Failure by OPERATOR to accurately report gross receipts information or other data
necessary for CITY to calculate/confirm operating agreement fees;
F. Failure by OPERATOR to pay operating agreement fees and related reimbursement
costs within thirty (30) days of the date those fees are due;
G. Failure by OPERATOR to cooperate with CITY or CITY's authorized agents in any
inspection, examination and audit of OPERATOR's commercial cannabis business
books and records (including tax filings and returns).
H. OPERATOR shall cure the default resulting from the cause for termination within
thirty (30) days of the date of the notice of termination. If OPERATOR fails to cure
the default within thirty (30) days of the date of the notice of termination for cause,
this AGREEMENT will be terminated.
I. This AGREEMENT will automatically terminate if:
I. OPERATOR's Regulatory Safety Permit is revoked by CITY or is not renewed by
CITY, or
ii. OPERATOR transfers its Regulatory Safety Permit pursuant to Santa Ana
Municipal Code section 40-12.
9. Termination Without Cause.
Upon mutual written agreement of the Parties, this AGREEMENT may be terminated
with thirty (30) days' notice.
10. Termination • Effect on Prior Obligations.
Upon any termination of this AGREEMENT, OPERATOR's obligation to report and remit
operating agreement fees due and payable under the terms of this AGREEMENT for each
month or fraction of a month of a cannabis business operation engaged in within the City of
Santa Ana prior to termination of this AGREEMENT shall continue to be in effect. Past due
penalties and late interest charges shall continue to accrue and be applicable until all
operating fees due under this AGREEMENT are paid in full. OPERATOR's liability for any
remaining unpaid past due penalties and/or late interest charges shall continue until fully
satisfied.
11. Remedies.
A. It is acknowledged by the parties that CITY would not have entered into this
AGREEMENT if it were to be liable in damages under this AGREEMENT, or with
respect to this AGREEMENT or the application thereof, except as hereinafter
expressly provided.
B. Each of the parties hereto may pursue any remedy at law or equitable relief available
for the breach of any provision of this AGREEMENT, except that CITY shall not be
liable in monetary damages, unless expressly provided for in this AGREEMENT.
C. Any dispute, claim or controversy arising out of or relating to this Agreement or the
breach, termination, enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this agreement to arbitrate, shall be
determined by arbitration in Orange County California before three arbitrators. The
arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration
Rules and Procedures pursuant to JAMS' Streamlined Arbitration Rules and
Procedures. Judgment on the Award may be entered in any court having jurisdiction.
0
This clause shall not preclude parties from seeking provisional remedies in aid of
arbitration from a court of appropriate jurisdiction.
12. Reimbursement Clause.
In consideration of the time and costs incurred by CITY in the drafting and
implementation of this AGREEMENT, OPERATOR agrees to pay $2,500 to CITY within
thirty (30) days of execution of this AGREEMENT.
13. Attornev Fees and Costs,
In any action or proceeding between CITY and OPERATOR brought to interpret or
enforce this AGREEMENT, or which in any way arises out of the existence of this
AGREEMENT or is based upon any term or provision contained herein, the "prevailing
party" in such action or proceeding shall be entitled to recover from the non -prevailing party,
in addition to all other relief to which the prevailing party may be entitled pursuant to this
AGREEMENT, the prevailing party's reasonable attorneys' fees and litigation costs, in an
amount to be determined by the court. The prevailing party shall be determined by the court
in accordance with California Code of Civil Procedure Section 1032. Fees and costs
recoverable pursuant to this Section 17 include those incurred during any appealfrom an
underlying judgment and in the enforcement of any judgment rendered in any such action or
proceeding.
14. Notice.
Any notice, tender, demand, delivery, or other communication pursuant to this
AGREEMENT shall be in writing and shall be deemed to be properly given if delivered in
person or mailed by first class or certified mail, postage prepaid, or sent by fax or other
telegraphic communication in the manner provided in this section, to the following persons:
To CITY: Clerk of the City Council
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, CA 92702-1988
Fax 714-647-6956
Copies to: Executive Director— Planning and Building Agency
City of Santa Ana
20 Civic Center Plaza (M-20)
P.O. Box 1988
Santa Ana, California 92702-1988
Fax 714-973-1461
City Attorney
City of Santa Ana
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702-1988
Fax 714-647-6515
To OPERATOR: Zeeshan Hyder
The Source Santa Ana, dba MedMen OC
2141 S Wright Street
SANTA ANA, CA 92705
Mailing Address: 1of 15 Jefferson Blvd
Culver City, CA 92705
Tel (323) 593-5110
Email dan.edwards@medmen.com
A party may change its address by giving signed notice in writing to the other party,
Thereafter, any communication shall be addressed and transmitted to the new address. If
sent by mail, communication shall be effective or deemed to have been given three (3) days
after it has been deposited in the United States mail, duly registered or certified, with
postage prepaid, and addressed as set forth above. If sent by fax or email document
attachment, communication shall be effective or deemed to have been given twenty-four
(24) hours after the time set forth on the transmission report issued by the transmitting
facsimile machine, addressed as set forth above. For purposes of calculating these time
frames, weekends, federal, state, County or City holidays, or City Hall closure dates shall be
excluded.
16. Exclusivity and Amendment.
This AGREEMENT represents the complete and exclusive statement between CITY and
OPERATOR, and supersedes any and all other agreements, oral or written, between the
parties. This AGREEMENT may not be modified except by written instrument signed by
CITY and by an authorized representative of OPERATOR. Each party to this AGREEMENT
acknowledges that no representations, inducements, promises or agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of any party, which are
not embodied herein.
16. Assignment.
OPERATOR may not assign or transfer any interest herein without the prior written
consent of CITY and any such assignment or transfer without CITY's prior written consent
shall be considered null and void.
17. Discrimination.
OPERATOR shall not discriminate because of race, color, creed, religion, sex, marital
status, sexual orientation, age, national origin, ancestry, disability, gender identity, gender
expression, medical condition, genetic information, military or veteran status. as defined and
prohibited by applicable law, in the recruitment, selection, training, utilization, promotion,
termination or other employment related activities. OPERATOR affirms that it is an equal
opportunity employer and shall comply with all applicable federal, state and local labor laws
and regulations.
18. Jurisdiction -Venue.
This AGREEMENT has been executed and delivered in the State of California and the
validity, interpretation, performance, and enforcement of any of the clauses of this
AGREEMENT shall be determined and governed by the laws of the State of California.
Both parties further agree that Orange County, California, shall be the venue for any action
or proceeding that may be brought or arise out of, in connection with or by reason of this
AGREEMENT.
19. Severabilm.
If any part of this AGREEMENT' is found to conflict with applicable local or state laws or
regulations, such part shall be inoperative, null and void insofar as it conflict.with said laws
or regulations, or may be modified or suspended as may be necessary to comply with any
local or state law or regulation but the remainder of the AGREEMENT shall continue in full
force and effect.
20. Counterparts.
This AGREEMENT may be executed in counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same instrument. The
execution of this AGREEMENT may be by actual, facsimile or electronic signature.
21. Disclaimer.
Despite California's commercial cannabis laws and the terms and conditions of this
AGREEMENT or any Regulatory Safety Permit issued pertaining to OPERATOR or the
hereinabove specified property location, California commercial cannabis cultivators,
transporters, distributors, cannabis testing facility/laboratory businesses or possessors may
still be subject to arrest by state or federal officers and prosecuted under state or federal
law. The Federal Controlled Substances Act, 21 USC § 801 et. seq., prohibits the
manufacture, manufacturing, and possession of cannabis without any exemptions for
medical or non -medicinal use.
22. Authority 1Bind.
Each undersigned represents and warrants that its signature hereinbelow has the
power, authority and right to bind their respective parties to each of the terms of this
AGREEMENT, and shall indemnify CITY fully, including reasonable costs and attorney's
fees, for any injuries or damages to CITY in the event that such authority or power is not, in
fact, held by the signatory or is withdrawn.
-Signature Page Below-
A-2017-369-31
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT the date and year
first above written.
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
By:
Jose Montoya
Deputy City Attorney
RECOMMENDED FOR APPROVAL:
0
Minh Thai, xecutive Directo
Planning & Building Agency
CITY OF SANTA ANA
KRIb'TINE RIDGE,
City Manager
OPERATOR
LEGAL
NAME: The Source Santa Ana
SIGNATORY
NAME: Zeeshan Hyder
TITLE: CFO
TAXPAYER ID: 90-1132757
Sign re
EXHIBIT A
COMMUNITY BENEFIT AND SUSTAINABLE BUSINESS PRACTICES PLAN
MedMen
To: City of Santa Ana
From: The Source Santa Ana
Re: Exhibit A - Community Relations and Neighborhood Responsibility Plan
Date: December 21, 2020
Being a Good Neighbor
We have a moral obligation to provide high 9uality compassionate care to the patients and
consumers we serve and the city we live in. Our goal is to contribute to the rich history of
Santa Ana and make a positive impact on the city. We are committed to being a good
neighbor and helping the city thrive. This means fully integrating our operations and
charitable aspirations into the community. To build a lasting benevolent legacy, we will
implement a multipronged Community Relations and Neighborhood Responsibility Plan.
Additionally, the general manager of the dispensary will be on call 24/7 to service the
surrounding community, neighborhood and businesses in case of emergency.
Giving Back to the Community
MedMen advocates for sensible, clear and just drug laws that strengthen communities.
MedMen has historically been one the largest financial donor to the Marijuana Policy Project,
the nation's leading cannabis advocacy group responsible for landmark legislation since 1995.
Locally, MedMen has supported West Hollywood's annual PRIDE Parade and the annual Voice
Awards - a partnership between the Los Angeles Unified School District and the Gay Men's
Chorus of Los Angeles to bring anti -bullying, tolerance and acceptance round table
discussions and campaigns to schools. MedMen West Hollywood also partners with Being
Alive, a non-profit organization serving Los Angeles County's HIV impacted patients by ending
stigma, engaging people in wellness, removing barriers to care and restoring dignity.
MedMen recognizes that to be successful, it must become a valuable and welcomed member of
the community. We commit to hiring a local, diverse, and skilled workforce that understands
MedMen
10115 Jefferwn Blvd Culver Cify, CA 90232
(8551292-8399• MedMen.com
MedMen
the needs of the people we serve.
MedMen will organize, along with its other SACA colleagues, to identify local opportunities
for non-profit giving and/or charitable donations. It is our goal to offer support to those in
need. As such, we look forward to initiating an enduring partnership with local non-profit
organizations to help members of the Santa Ana community. We recognize that the Orange
County's workforce starts with strong educational opportunities, and thus it is our
responsibility as a local business to support and promote job \raining and opportunities to
foster long-term economic growth.
Hiring Local Workers
The health of community is directly correlated to the amount of jobs it provides. MedMen
is excited to be a leading employer in the area. Our goal is to be a major economic engine
for Santa Ana. We commit to hiring a local, diverse, and skilled workforce to create the best
customer service experience for our patients. Hiring local workers means MedMen is
uniquely qualified to understand the needs of the people we serve.
Communicating with Our Neighbors
MedMen knows the first step towards building trust and support among neighbors is to have
an open and honest dialog. Therefore, we will use multiple communication platforms to
engage the people of Santa Ana and address any concerns they may have. Each
communication platform will be consistently staffed to respond to inquiries.
Communication Platforms
Canvassing
Active Social Media Account
Regularly Monitored Email and Website Contact Form
It is MedMen's practice to canvass all residences and businesses within 1000 feet of the
dispensary to introduce ourselves, offer tours of the dispensary, and answer any questions
community members may have, prior to opening the dispensary.
MedMen
10115 Jefferson Blvd. Culver Cily, CA 90232
(855) 292-8399 • MedMencom
MedMen
Due to extensive planning and community outreach, MedMen does not anticipate any concerns
or complaints from our operations. However, should a complaint arise we will take immediate
action to address the concern and develop a solution. To facilitate this outcome, the General
Manager will be the city's main point of contact. The General Manager will be responsible for
immediately developing action plans to address any concerns, complaints, issues, or problems
arising from the community.
Designated community liaisons shall serve as the direct contact for all first responders,
neighborhood associations, elected officials, business owners, and any other local leaders.
MedMen puts a tremendous value on having an open dialog with our elected officials and law
enforcement.
To enable community conversations, they will actively attend and participate in a wide range
of civic engagements. Engagements will include - neighborhood association meetings,
chamber of commerce meetings, town halls, county fairs, city council meetings, et cetera.
They will solicit feedback on MedMen's operation and respond to any inquires made at the
engagement.
Integrating with the Community
Our mission is to be a valuable member of the community. This means fully integrating ourselves
into the neighborhood and people we serve. Our team has researched the community to
ensure our architecture seamlessly reflects the neighborhood and enhances the area. We have
developed a comprehensive odor mitigation plan. Therefore, we anticipate no complaints
relating to any nuisances.
The location of our dispensary was carefully chosen to maximize service to our patients and
consumers as well as maintain compliance with state and local laws. MedMen is in full
compliance with local and state zoning requirements.
MedMen
10115 Jefferson Blvd Culver Cily, CA 90232
1855) 292-8399 • MedMeacom
MedMen
To: City of Santa
From: The Source Santa Ana
Re: Exhibit A - Sustainability Practices
Date: December 21, 2020
MedMen prides itself in using sustainable building, architecture, design and electrical practices over
and above Title 24. As best practice, MedMen carefully follows Title 24 in all of its retail build outs.
Below are the additional measures beyond Title 24 that MedMen employs:
SUSTAINABILITY PRACTICES
Architecture & Design:
o All paint is 0% VOC
o All fixtures are LED Title 24 complaint
o All fixtures (toilet, lavatory) meet California Plumbing Code for water usage Floor
sealer
o All furniture used throughout is locally fabricated Wood
paneling sealer contains 0% VOC
o Concrete sealer is VOC complaint, low odor and UCDA+ FDA approved
Electrical:
o Redundant controls for back of house areas (motion sensors and timeclock) to gain
further efficiency, above Title 24 Controls.
o Additional local bypass switches to allow option for further costs savings above
standard Title 24 auto shut off control.
MedMen
10115 Jefferson Blvd Culver Ofy, CA 90232
1855) 292-8399 • MedMen<om