HomeMy WebLinkAboutBUD TECHNOLOGY, INCINSURANCE NOT ON FILE
WORK MAY NOT PROCEED
CLERK OF COUNCIL
DATE: OCT 0 4 2021
0-: P8A LAIf F.�(b)-r-T.
A-2017-369-56
OPERATING AGREEMENT FOR NON -RETAIL
COMMERCIAL CANNABIS BUSINESSES
This Operating Agreement ("AGREEMENT") is dated September 24, 2021 between the City of
Santa Ana, a charter city and municipal corporation ("CITY") and Bud Technology, Inc.
("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 AND MEDICINAL
DISTRIBUTION services in whole or in part of its operations transacted and carried -on by
OPERATOR at the following subject property location, 411 E. Alton Avenue, Santa Ana
California 92707
1. 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
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Practices. OPERATOR shall adequately document that it has met the Plan's bligations
and commitments as a condition of renewal/extension of this AGREEMENT upo expiration
of the Initial term and any extensions.
2. Records Insoectlon. 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 reasor able time,
including but not limited to, during normal business hours. In the event any SL ch 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 ost of all
transportation, lodging, meals, portal-to-portal travel time, and other incide tal 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 reimburs a CITY for
the full cost of said records inspection, examination and audit reasonably incurre I 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. i
4. Business License Regulred.
A valid City of Santa Ana Business License is required for all persons at gaged in
transacting and carrying on any commercial cannabis business activity in the Cit of Santa
Ana. It is unlawful for any person or legal entity to commence, transact or carry -or cannabis
business activity in the City of Santa Ana without first having procured a City of E ante Ana
cannabis business license.
5. Operating 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 accord' nce with
the procedures and requirements of Article 1 of Chapter 40, of the S nta Ana
Municipal Code; and
B. At such time as the State of California requires cannabis business fac'rities and
businesses to hold a valid license or permit issued by the State of Califon ia, 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
pertaining to commercial cannabis businesses.
D. OPERATOR shall remain in compliance with the operating requirements
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 I! bilities 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. OPERATC R agrees
to indemnify and reimburse CITY for any court costs and attorney fees :hat CITY
may be required to pay as a result of any legal challenge relate J to this
AGREEMENT and/or CITY's approval of a Regulatory Safety Permit. CIT Y may, at
its sole discretion, participate at its own expense in the defense of any s ch action,
but such participation shall not relieve the OPERATOR of its obligation her under.
7. OPERATOR Compliance with Laws
OPERATOR agrees to comply with the City of Santa Ana Charter and Munici al 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) daws' written
notice to OPERATOR. Cause as used in this section, is defined as: 1
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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 F�ermit and
as operating;
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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 ¢they 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
inspection, examination and audit of OPERATOR's commercial canr
books and records (including tax filings and returns).
its in any
business
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 f ils to cure
the default within thirty (30) days of the date of the notice of terminationor 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 r$newed by
CITY, or
II. OPERATOR transfers its Regulatory Safety Permit pursuant to Santa Ana
Municipal Code section 40-12.
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9. Termination Without Cause.
Upon mutual written agreement of the Parties, this AGREEMENT may be
with thirty (30) days' notice.
10. Termination -Effect on PH LObligations
Upon any termination of this AGREEMENT, OPERATOR's obligation to report and remit
operating agreement fees due and payable under the terms of this AGREEMEN 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, i Past due
penalties and late interest charges shall continue to accrue and be applicably 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 continueuntil 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 relie available
for the breach of any provision of this AGREEMENT, except that CITY sh II 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, incl ding 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 Riles and
Procedures. Judgment on the Award may be entered in any court having ju isdiction.
This clause shall not preclude parties from seeking provisional
arbitration from a court of appropriate jurisdiction.
12. Reimbursement Clause.
In consideration of the time and costs incurred by CITY in the
Implementation of this AGREEMENT, OPERATOR agrees to pay 12,M to
thirty (30) days of execution of this AGREEMENT.
13. Attornev Fees and Costs.
In any action or proceeding between CITY and OPERATOR brought to
enforce this AGREEMENT, or which in any way arises out of the existei
AGREEMENT or is based upon any term or provision contained herein, the
party" in such action or proceeding shall be entitled to recover from the non-prev
in addition to all other relief to which the prevailing party may be entitled purse
AGREEMENT, the prevailing parry's reasonable attorneys' fees and litigation c
amount to be determined by the court. The prevailing party shall be determined I
in accordance with California Code of Civil Procedure Section 1032. Fees
recoverable pursuant to this Section 17 include those incurred during any appi
underlying judgment and in the enforcement of any judgment rendered in any sui
proceeding.
14. Notice.
in aid of
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within
pret or
of this
ng party,
nt to this
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the court
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Any notice, tender, demand, delivery, or other communication pursue t 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: Bud'Technology, Inc
411 E. Alton Avenue
SANTA ANA, CA 92707
Tel (949) 933-7961
Email ray@budtechnology.com
A party may change its address by giving signed notice in writing to the ot her party.
Thereafter, any communication shall be addressed and transmitted to the new a ldress. If
sent by mail, communication shall be effective or deemed to have been given thre (3) days
after it has been deposited in the United States mail, duly registered or certfied, 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 giventwenty-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 da
excluded. t s shall be
15. Excluslvlty and Amendment.
This AGREEMENT represents the complete and exclusive statement betweenICITY and
OPERATOR, and supersedes any and all other agreements, oral or written, be ween the
parties. This AGREEMENT may not be modified except by written instrument •igned by
CITY and by an authorized representative of OPERATOR. Each party to this AG EEMENT
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. I
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 writtel consent
shall be considered null and void.
17. Discrimination.
OPERATOR shall not discriminate because of race, color, creed, religion, sdx, marital
status, sexual orientation, age, national origin, ancestry, disability, gender identit , 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 Californiand the
validity, interpretation, performance, and enforcement of any of the clause 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
AGREEMENT.
19. Severability.
of this
If any part of this AGREEMENT is found to conflict with applicable local or st Ite 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 b 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 conditii
AGREEMENT or any Regulatory Safety Permit issued pertaining to OPERAT
hereinabove specified property location, California commercial cannabis
transporters, distributors, cannabis testing facility/laboratory businesses or POSSE
still be subject to arrest by state or federal officers and prosecuted under state
law. The Federal Controlled Substances Act, 21 USC § 801 et. seq., pn
manufacture, manufacturing, and possession of cannabis without any exen
medical or non -medicinal use.
22. Authority to Bind.
Each undersigned represents and warrants that its signature hereinbelo,
power, authority and right to bind their respective parties to each of the ter
AGREEMENT, and shall indemnify CITY fully, including reasonable costs and
fees, for any injuries or damages to CITY in the event that such authority or pow(
fact, held by the signatory or is withdrawn,
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A-2017-369-56
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT the date and year
first above written.
ATTEST:
naz
OY
DAISY GOMEZ
Jerk of the Council
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
By:
Jose Montoya
Deputy City Attorney
FOR APPROVAL:
Minh Thai, Executive Director
Planning & Building Agency
CITY OF SANTA ANA
KRISTINE RIDGE
City Manager
OPERATOR
LEGAL
NAME: Bud Technology, Inc
SIGNATORY
NAME: Ray Iskander
TITLE: CEO
TAXPAYER ID: 81-5238493
Signature
EXHIBIT A
COMMUNITY BENEFIT AND SUSTAINABLE BUSINESS PRACTICES
Community Benefit and Sustainability Business Plan
Bud Technology is excited to present to the City of Santa Ana the following Communit1/ Benefits
and Sustainability Business Plan as its part to partner with the community and promote public
benefits to the citizens of Santa Ana, California.
Public Benefit:
Employment:
Bud Technology (BT) is committed to hiring within the City of Santa Ana for potential tew
employment to work in a few positions that are already available. BT is looking for whouse
staff, filling station employees to help maintain successful inventory control, Metrc copliant(
labeling products, quality control inspections, filling jars, filling mylar bags, child proofing, final
inspection of product, transportation specialist, and office personal.
BT uses Indeed.com to source employment into the cannabis industry and will place I 'cal
preferred status on its job placement, but please note BT is an equal employer and does not
discriminate on any employee or potential employment. BTwill create a goal and make all
efforts to achieve a 50% employment pool directly residing In the City of Santa Ana. Curren
BT offers full time and part time employment at a rate of $16.00 per hour as an entry Bevel
position. BT offers its full-time employees the following benefits.
- One week (40 hours ) paid vacation after one year of continuous full time employment
- 5 paid sick days, after one year of continuous employment
- Holiday Pay for New Year's, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day.
- Promotion from within: BT strives to provide tools for employees to have the Benefit to
promote within the company as opportunities become available through grow4h of the
company.
- BT is an Equal Opportunity Employer who pledges to not discriminate against a ployees
based on race, color, religion, sex, national origin, age, disability, or genetic information.
Local Sourcing:
BT is committed to local sourcing for many of the items needed to be the best distril
City of Santa Ana. BT wants to support and stimulate the local economy by utilizing
in the City of Santa Ana to help support Its ongoing operations. In addition, we will c
enjoy the Inviting atmosphere and generous hospitality of various local restaurants f
meetings and when providing staff lunch from time to time. The following are a few
items that are needed to sustain the operations.
- Home Depot
1750 E. Edinger Avenue
Santa Ana California 92705
or in the
mpanies
tinue to
business
o Cleaning supplies, air filters, waste products, gloves, COVID supplies, ar�d light
bulbs.
Grow Generations Hydroponic
1727 Boyd Street
Santa Ana, California 92705
o Air Active Carbon filters for smell control
o Air Active Carbon filers for each storage room
o Bags used to store product
o Scales
- Express OC facility —
1724 S Grand Avenue
Santa Ana, California 92705
o Janitorial Services
o Power Washing
o Disinfecting Services (if/when needed)
This is a very short list of companies that will be needed on an ongoing basis to keep
operations clean and up to standards in accordance with the DCC and City of Santa P
Community Involvement
It is BT's goal to be a good community partner, support local groups and nonprofit
organizations within the City of Santa Ana. We will focus on the organizations that hel support
a better quality of life for children, seniors, women, military and promote the economy growth
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of Santa Ana. Although we have identified some of the organizations that we believe will
benefit, BT believes the City should create a single source benefactor committee lead by the
Cannabis industry to send funds around the City based on the current need. It would be the
desire to one day see a group of industry leaders and City leaders' direct community funds so
that they do not come directly from the cannabis companies itself. It is very difficult to supply
time and money to some non -profits because of the persona around the cannabis ind stry even
though it was voted in by the community and is legal in the State of California. Until hat time
comes the following is the commitment from BT to City of Santa Ana non-profit communities.
o BT is going to give back to the community 5% of net payroll dollars each quarter
Example: Net Payroll equals $75,000
BT would donate 5% of total or $3,750 to community each quarter
o BT will also encourage all its employees to attend local events and make it
mandatory to volunteer at least two times per year for a total of 10 ho rs.
Those hours of volunteer will be paid time provided by BT employments
Examples of this time is cleaning parks, food shelter, and feed the horn less
BT has identified a couple local nonprofit organizations that they would like to suppori during
this time of community need. i
o WISEPlace
1411 Broadway
Santa Ana, California 92706
714-542-3577
This is great non-profit that supports homeless, drug addiction, second
domestic violence and loss for children and women.
o Orange County Veterans Employment Committee
801 North Ross Street
Santa Ana, California 92701
BT will not only donate in kind but offer employment to this group of veierans
who are struggling to find a job. Each will need to have on the job training the in
the cannabis space and BT will provide that training and paycheck to beater their
lives.
BT is excited to establish a prosperous business in the City of Santa Ana and committed to work
with the community and local business to better its synergies. As a distributor the company will
be working hard to sell its brands to the local dispensaries to also help with improving {ax
revenue and created a sustainable business plan.
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